United Airlines Holdings, Inc. · NASDAQ:UAL
United Airlines — IPO Roadshow (June 2023)
35 slides from United Airlines's IPO roadshow presentation, Jun 12, 2023
Slide 1: United Airlines Series 2023-1 EETC Investor Presentation
United Airlines Series 2023 - 1 EETC June 12, 2023 Investor Presentation
Slide 2: Disclaimer and Forward-Looking Statements
2 The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates . Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete inform
Slide 3: Agenda
Agenda 2. Company Update 3. Aircraft Collateral Summary 1. EETC Overview Appendix A – Additional Aircraft Characteristics Appendix B – United’s Fleet & EETC Program Appendix C – Reconciliation of GAAP to Non - GAAP Financial Measures
Slide 4: 1. EETC Overview
1. EETC Overview
Slide 5: Offering overview of Series 2023-1A Certificates
5 1.Issuance Date Initial LTV for the Class A Certificates is calculated as of June 20, 2023, which is assumed to be the closin g d ate of the offering (with the actual closing date being referred to herein as the “Issuance Date”). Maximum LTV for the Class A Certificates is calculated as of January
Slide 6: United Series 2023-1 EETC structural summary
6 United Series 2023 - 1 EETC structural summary 2023 - 1 Class A Face Amount $1,320,110,000 Requested Ratings (Moody’s / S&P) A3 / A Initial LTV / Max LTV 1 62.5% / 63.5% Weighted Average Life (years) 9.5 Regular Distribution Dates January 15 / July 15 Final Expected Distribution Date 2 January 15
Slide 7: Key structural elements
7 Key structural elements Cross - Collateralization and Cross - Default ▪ The Equipment Notes will be cross - collateralized by all aircraft in the collateral ▪ All indentures will include cross - default provisions Buyout Rights ▪ After a Certificate Buyout Event, if subordinated Certificates have
Slide 8: 2. Company Update
2. Company Update
Slide 9: United is strongly positioned going forward via the United Next Plan
9 United is strongly positioned going forward via the United Next Plan United Next is expected to lead to higher margins and accelerate United’s progress in strengthening its balance sheet Aligns United’s network, fleet and products to the hubs it flies to and customers it serves, unlocking United’s
Slide 10: United has bolstered liquidity through efficient mix of debt issuances
10 United has bolstered liquidity through efficient mix of debt issuances 2026 2025 2023 3.4 2024 2027 5.2 2.9 3.9 2.4 Annual debt payments ($B) 2 1. Source: Form 10 - Q for United Airlines Holdings, Inc. for quarterly period ended March 31, 2023 2. Source: Form 10 - K for United Airlines Holdings,
Slide 11: United is committed to reducing net debt and leverage
11 United is committed to reducing net debt and leverage 18.7 17.7 25.7 0.0 5.0 10.0 15.0 20.0 25.0 30.0 2019 2020 2021 25.6 Adjusted Net Debt 1 ($B) Adjusted Net Debt 1 to Adjusted EBITDAR 2 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 2022 2018 2.5x 3.0x 2023 United Next Target 3 2018 1. Adjusted Net D
Slide 12: Favorable macroenvironment for all airlines
12 Favorable macroenvironment for all airlines ▪ Domestic revenue to GDP expected to be at 2019 levels 1 , at least ▪ Global long - haul environment looks particularly strong ▪ Industry capacity plans expected to be slower than advertised...once again Supply/Demand Financial Operations ▪ Cost conver
Slide 13: Expect revenue to GDP relationship to recover at least to 2019 levels
13 Expect revenue to GDP relationship to recover at least to 2019 levels ▪ 2023 nominal GDP expected to be up ~24% 2 versus 2019 ▪ United achieved pre - tax margin and adjusted pre - tax margin 3 of 9% in 2H22 2022 2021 2020 2019 2011 - 2018 2001 - 2010 2023E 0.71 % 0.54% 0.49% 0.49% 0.19% 0.30% 0.4
Slide 14: Continuing to invest in new aircraft to grow global network
14 United is continuing to invest in new aircraft to grow its global network and capture the long - haul flying opportunity Boeing 737 MAX ▪ In December 2022, United exercised a purchase option for 44 Boeing 737 MAX aircraft to be delivered between 2024 and 2026. United also ordered an additional 56
Slide 15: United Next aircraft order will enable premium seat growth
15 United Next aircraft order will enable premium seat growth and better match hub demographics 104 146 2019 2026 E 40% Total seats per short - haul departure North America mainline + regional fleet 15 E Estimated, based on internal delivery and retirement projections; Reflects plans as of March 15,
Slide 16: Global long-haul margins expected to grow in 2023
16 Global long - haul margins expected to grow in 2023 with industry capacity reset to 2019 levels Network peers 1 UA Leading global airlines 1 +12% (9%) (5%) Widebody fleet count YE22 vs. YE19 United will lean into global long - haul in 2023 – consistent with plans since early days of the pandemic
Slide 17: United's hubs are in the largest markets and business centers
17 United’s hubs are in the largest markets and business centers, with the strongest international demand New York Chicago Los Angeles Atlanta San Francisco Miami Denver Dallas Washington D.C. Houston Seattle Minneapolis Passenger demand Total passengers – YE 2019 United’s hubs are a unique demograp
Slide 18: Route network is well positioned for global recovery
18 Route network is well positioned for global recovery Notes: Peak day; markets and spokes exclude Canada/Micronesia, include Puerto Rico/USVI; as found in public schedules (sourc e: Diio ). 1. Eleven new routes were added across the Atlantic in 2022 ; last largest announcement was in 1991 with pur
Slide 19: 3. Aircraft Collateral Summary
3. Aircraft Collateral Summary
Slide 20: Aircraft collateral summary - base values
20 Base Value ($mm) Aircraft No. Aircraft Type Narrow / Widebody Manufacturer's Serial Number Engine Type Delivery Month ASG BK mba LMM 1 737 MAX 8 Narrowbody 67523 LEAP - 1B28 Aug - 22 51,288,214 54,484,212 52,800,000 52,800,000 2 737 MAX 8 Narrowbody 67526 LEAP - 1B28 Sep - 22 51,288,214 54,790,87
Slide 21: Aircraft collateral summary - base values (cont.)
21 Aircraft collateral summary – base values 1 (cont.) 1. Weighted by the LMM of the maintenance adjusted appraised base values of the aircraft as appraised by ASG, BK and mba as of March 31, 2023 Base Value ($mm) Aircraft No. Aircraft Type Narrow / Widebody Manufacturer's Serial Number Engine Type
Slide 22: Aircraft collateral - key observations
22 $- $200 $400 $600 $800 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Feb-23 Mar-23 Apr-23 May-23 737 MAX 8 737 MAX 9 B y D e li v e r y D a te: 0.5 Y e a r s A v e r a g e A g e 1 Aircraft collateral – key observations Highlights NB / WB Value Distribution 1 Collateral Value by Aircraft Type 1 1. Weighted b
Slide 23: Aircraft collateral significance to United's fleet
23 16.7 1.6 2.7 0.5 0.4 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 Fleet 737 MAX 8 737 MAX 9 737 MAX 8 737 MAX 9 Aircraft collateral significance to United’s fleet 1. Weighted by the LMM of the maintenance adjusted appraised base values of the aircraft as appraised by ASG, BK and mba as of March 3
Slide 24: MAX - leading fuel efficiency advancements
24 737 MAX – leading fuel efficiency advancements New technologies on the MAX family include advanced winglets, efficient engine architecture and superior aerodynamics. The LE AP engines facilitate a material portion of the efficiency and CO2 emissions improvements. Advanced Technology Winglets More
Slide 25: Appendix A Additional Aircraft Characteristics
Appendix A Additional Aircraft Characteristics
Slide 26: Boeing 737 MAX 8 aircraft characteristics
26 Sources: The Boeing Company; United Airlines, Inc.; FlightGlobal The Boeing 737 MAX 8 is the second largest variant of the 737 MAX family currently in service ▪ Large single - aisle, transcontinental range narrowbody aircraft ▪ High degree of commonality with other MAX family aircraft – Same pilo
Slide 27: Boeing 737 MAX 9 aircraft characteristics
27 Sources: The Boeing Company; United Airlines, Inc.; FlightGlobal The Boeing 737 MAX 9 is the largest variant of the 737 MAX family currently in service ▪ Large single - aisle, transcontinental range narrowbody aircraft ▪ High degree of commonality with other MAX family aircraft – Same pilot pool
Slide 28: Appendix B United's Fleet & EETC Program
Appendix B United’s Fleet & EETC Program
Slide 29: Position of Series 2023-1 collateral in United's fleet
29 Position of Series 2023 - 1 collateral in United’s fleet 1 1. Number of aircraft in United’s operating fleet projected as of March 31, 2023. Source: United Airlines, Inc. 2. Includes one additional 737 MAX 9 and two additional 737 MAX 8 aircraft that are part of 2023 - 1 EETC collateral pool but
Slide 30: United's EETC Program
30 United’s EETC Program Class Distribution Outstanding 1 Values in mm ▪ United currently has $10,471.3 1 million of outstanding EETC debt as of June 1, 2023 ▪ In the past, United frequently financed widebody aircraft, however, in the 2023 - 1 EETC there is a 100% concentration of new narrowbody air
Slide 31: Appendix C Reconciliation of GAAP to Non-GAAP financial measures
Appendix C Reconciliation of GAAP to Non - GAAP financial measures
Slide 32: Reconciliation of GAAP to Non-GAAP financial measures
32 ▪ United evaluates its financial performance utilizing various accounting principles generally accepted in the United States of America (GAAP) and Non - GAAP financial measures, including adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) and rent (adjusted
Slide 33: Adjusted Total Debt and Adjusted Net Debt
33 Reconciliation of GAAP to Non - GAAP financial measures Adjusted Total Debt and Adjusted Net Debt (in millions) March 31, 2023 December 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 December 31, 2018 Current maturities of long-term debt 3,206$ 2,911$ 3,002$ 1,911$ 1,407$ 1,230$ C
Slide 34: Adjusted EBITDA and Adjusted EBITDAR
34 Reconciliation of GAAP to Non - GAAP financial measures (cont’d) Adjusted EBITDA and Adjusted EBITDAR (In millions) Twelve Months Ended March 31, 2023 December 31, 2022 December 31, 2019 December 31, 2018 Net income (loss) (GAAP) 1,920 737 3,009 2,122 Adjusted for: Depreciation and amortization 2
Slide 35: Adjusted pre-tax income and adjusted pre-tax margin
35 Reconciliation of GAAP to Non - GAAP financial measures (cont’d) Adjusted pre-tax income and adjusted pre-tax margin (In millions) Second Half 2022 Total Operating Revenue 25,277$ Pre-tax income (loss) (GAAP) 2,283$ Adjusted to exclude: Special charges (credits) 36 Unrealized (gains) losses on in