United Airlines Holdings, Inc. · NASDAQ:UAL
United Airlines — United Continental Holdings — Q3 2018 Earnings Presentation
25 slides from United Airlines's earnings presentation, Oct 17, 2018
Slide 1: Forward-looking statements
Certain statements included in this presentation are forward-looking and thus reflect our current expectations and beliefs with respect to certain current and future events and anticipated financial and operating performance. Such forward-looking statements are and will be subject to many risks and
Slide 2: Opening Remarks
Opening Remarks Oscar Munoz Chief Executive Officer
Slide 3: Strong year-over-year earnings per share led by 11% total revenue growth
Strong year-over-year earnings per share led by 11% total revenue growth Reported pre-tax earnings of $1.1B with a pre-tax margin of 9.6% Reported adjusted pre-tax earnings1 of $1.1B with an adjusted pre-tax margin1 of 9.7% Served record number of passengers in quarter Recaptured ~100% of the year-o
Slide 4: Raised full-year 2018 adjusted EPS guidance a third time
Raised full-year 2018 adjusted EPS guidance a third time in 2018 to $8.00-$8.75 Currently expect to recover approximately 90% of the year-over-year increase in fuel costs in 2018 Incremental full-year 2018 fuel headwind versus January guidance currently expected to be $700M Commercial initiatives an
Slide 5: Operations and Revenue Update
Operations and Revenue Update Scott Kirby President
Slide 6: Best in class operations and improved customer service drove record 3Q passengers and revenue
Best in class operations and improved customer service drove record 3Q passengers flown and revenue 3Q18 Passengers Flown (millions) 9% 2018 2017 2016 YTD181 D:002 WN 49.3% AA 64.9% DL 69.1% UA 69.6% 1Year-to-date through September 30, 2018 2 Consolidated system flights Source: masFlight 11% 2018 $1
Slide 7: Our growth plan is working
Our growth plan is working Healthy close-in yields and leisure demand Strong premium cabin performance International PRASM +4.5% Domestic PRASM +6.7% Mid-Continent Hubs1 Rest of System PRASM Capacity 3Q18 System Metrics Year-over-year H/(L) 1 Includes DEN, IAH and ORD flying 9.7% 2.3% 6.8% 5.6%
Slide 8: Progress towards adjusted EPS target of $11-$13 in 2020
Progress towards adjusted earnings per share1 target of $11-$13 in 2020 Delivered top-tier operational performance Achieved common metal under the Flight Attendant Joint Collective Bargaining Agreement Focused on meeting or exceeding our short and long-term financial targets Expect to return to marg
Slide 9: Commercial Update
Commercial Update Andrew Nocella Executive Vice President and Chief Commercial Officer
Slide 10: Geographic region overview – consolidated PRASM up 6.1% year-over-year
Geographic region overview – consolidated PRASM up 6.1% year-over-year Domestic Latin Pacific Atlantic 1 Based on capacity from 4Q17-3Q18 We expect fourth-quarter year-over-year consolidated PRASM to be up 3.0% to 5.0% % ASMs1 3Q18 YOY PRASM H/(L) Notes 56% 6.7% Strong close-in yields 18% 7.1% Led b
Slide 11: Commercial initiatives continue to deliver results
Polaris Network Loyalty Commercial initiatives continue to deliver results New United Explorer Visa card launched in June 2018 Pace of second-half card acquisitions trending well ahead of first half 2018 Seat rollout continues on one widebody aircraft every 10 days, on average Los Angeles Polaris Lo
Slide 12: Financial Update
Financial Update Gerry Laderman Executive Vice President and Chief Financial Officer
Slide 13: Third-quarter 2018 diluted earnings per share up 42% year-over-year
Third-quarter 2018 diluted earnings per share up 42% year-over-year 1 Includes non-fuel operating expense and non-operating expense $M 3Q18 3Q17 H/(L) Total revenue $11,003 $9,899 11.2% Fuel expense $2,572 $1,809 42.2% Non-fuel expense1 $7,370 $7,097 3.8% Pre-tax earnings $1,061 $993 6.8% Net income
Slide 14: Third-quarter 2018 adjusted diluted earnings per share up year-over-year
Third-quarter 2018 adjusted diluted earnings per share up 36% year-over-year Note: For a GAAP to non-GAAP reconciliation, see Appendix A 1 Includes non-fuel operating expense and non-operating expense 2 Excludes special charges, the mark-to-market impact of equity investments and imputed interest on
Slide 15: Total CASM increased 6.4% in the third quarter of 2018
Total CASM increased 6.4% in the third quarter of 2018 Total CASM Year-over-year H/(L) FY18E1 ~5.3% 3Q18 4Q18E1 2Q18 1Q18 ~5.7% 1 While the Company anticipates that it will record special charges throughout the year, at this time the Company is unable to provide an estimate of these charges with rea
Slide 16: Non-fuel CASM decreased 0.4% in the third quarter of 2018
Non-fuel CASM decreased 0.4% in the third quarter of 2018 4Q18E2 3Q18 (0.4%) (1.0%) – flat 1 Non-fuel CASM (operating expense per available seat mile) excludes fuel, profit sharing, third-party business expenses and special charges. For a GAAP to non-GAAP reconciliation, see Appendix A 2 While the C
Slide 17: Capital allocation and fleet update
Capital allocation and fleet update Capital Allocation Repurchased $34M worth of shares in quarter Year-to-date through 3Q18, repurchased ~$1B worth of shares at average price of $68.16 ~$2.0B in repurchase authority remaining Fleet Update Took delivery of two used Boeing 767-300ER and one Boeing 73
Slide 18: Fourth-quarter 2018 guidance summary
Fourth-quarter 2018 guidance summary 4Q18 Capacity 5.0% - 6.0% PRASM 3.0% - 5.0% CASM ex1,2 (1.0)% - flat Fuel price3 $2.41 - $2.46 Adjusted pre-tax margin4 5.0% - 7.0% 1 Non-fuel CASM (operating expense per available seat mile) excludes fuel, profit sharing, third-party business expenses and specia
Slide 19: Full-year 2018 guidance summary
Full-year 2018 guidance summary FY18 January Guidance FY18 April Guidance FY18 July Guidance FY18 Update Capacity 4.0% - 6.0% 4.5% - 5.5% 4.5% - 5.0% ~4.9% CASM ex1,2 (1.0%) - flat (1.0%) - flat (1.0%) - flat (0.3%) – (0.1%) Fuel price3 ~$2.11 $2.11- $2.18 $2.21 - $2.26 $2.26 - $2.31 Adjusted Capex4
Slide 20: Full-year 2018 guidance summary
Full-year 2018 guidance summary FY18 January | FY18 Apri FY18 July Cael ~4.9% CASM ex'2 (0.3%) - (0.1%) Fuel price? $2.26 - $2.31 Adjusted Capext Adjusted EPS, diluted> ‘Nene CASM (operating expense per avalabie seat mie) excludes ul prot sharing, id-pary business expenses and special charges. Fora
Slide 21: Question & Answer Session
Question & Answer Session
Slide 22: Appendix A: reconciliation of GAAP to Non-GAAP financial measures
Appendix A: reconciliation of GAAP to Non-GAAP financial measures UAL evaluates its financial performance utilizing various accounting principles generally accepted in the United States of America (GAAP) and Non-GAAP financial measures, including adjusted pre-tax income (loss), adjusted pre-tax marg
Slide 23: Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued)
Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued) (in millions) Three Months Ended September 30, Adjusted Non-Fuel Expense 2018 2017 Operating expenses (GAAP) $9,800 $8,761 Less: Aircraft fuel (2,572) (1,809) Add: Total nonoperating expense 142 145 Non-fuel expense 7,370
Slide 24: Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued)
Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued) CASM is a common metric used in the airline industry to measure an airline’s cost structure and efficiency. UAL reports CASM excluding special charges, third-party business expenses, fuel and profit sharing. UAL believes t
Slide 25: Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued)
Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued) ‘cAStis acorn mete veda earn ty feu a an cose ad efeny UAL rept CASM excug ape charge, i party busines expenses, a oft hare, UAL fetes tasty spec cores uel eres because pil Che fe el nce of UA emgongprtomerce UAL ao beeves
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