United Airlines Holdings, Inc. · NASDAQ:UAL
United Airlines — Q3 2019 Earnings Presentation
26 slides from United Airlines's earnings presentation, Oct 16, 2019
Slide 1: 3Q 2019 Earnings Call
3Q 2019 Earnings Call October 16, 2019
Slide 2: Forward-looking statements
2 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 ris
Slide 3: Opening Remarks
Opening Remarks Oscar Munoz Chief Executive Officer
Slide 4: Diluted earnings per share grew 31% year-over-year
4 Diluted earnings per share grew 31% year - over - year; 33% on an adjusted basis ▪ Reported pre - tax earnings of $1.3B with a pre - tax margin of 11.9%, up 230bps versus 3Q18 ▪ Reported adjusted pre - tax earnings 1 of $1.4B with an adjusted pre - tax margin 1 of 12.1%, up 250bps versus 3Q18 ▪ An
Slide 5: Raised full year 2019 adjusted diluted EPS guidance
5 Raised full year 2019 adjusted diluted EPS guidance ▪ Third consecutive quarter of pre - tax margin expansion and fourth consecutive quarter of adjusted pre - tax margin expansion ▪ On track to deliver our full year adjusted diluted EPS targets for 2019 and 2020 Initial Guidance 2019E July Update
Slide 6: Business Update
Business Update Scott Kirby President
Slide 7: Operational Update
Operational Update Greg Hart Executive Vice President and Chief Operations Officer
Slide 8: United continued to run a great operation in the third quarter
8 United continued to run a great operation in the third quarter ▪ #1 in on - time departures at all hubs where we face a large competitor – #1 in D:00 for 15 th month in a row in LAX – #1 in D:00 for 31 st month in a row in ORD – #1 in D:00 for 55 th month in a row in DEN ▪ We faced double the rate
Slide 9: Digital Update
Digital Update Linda Jojo Executive Vice President Technology and Chief Digital Officer
Slide 10: Continually innovating to benefit customers and employees
10 Continually innovating to benefit customers and employees Employees Customers ▪ 60,000 mobile devices for frontline employees ▪ Leveraging machine learning and artificial intelligence to make informed aircraft swaps ▪ Pre - payment for bags at ticket purchase with automatic refund if customer cha
Slide 11: Commercial Update
Commercial Update Andrew Nocella Executive Vice President and Chief Commercial Officer
Slide 12: Geographic region overview – consolidated 3Q PRASM up 1.7%
12 Geographic region overview – consolidated 3Q PRASM up 1.7% year - over - year Domestic Latin Pacific Atlantic 1 Based on full year 4 Q 18 - 3 Q 19 capacity . 2 During the third quarter of 2019 , United implemented a new revenue accounting software system which allowed it to more precisely determi
Slide 13: Commercial initiatives expected to drive long-term impact
13 Commercial initiatives expected to drive long - term impact Loyalty ▪ Announced MileagePlus miles no longer expire ▪ Replaced MileagePlus upgrade certificates with PlusPoints that can be managed through the United mobile app Segmentation ▪ Recently started selling Premium Plus seats on select fli
Slide 14: Financial Update
Financial Update Gerry Laderman Executive Vice President and Chief Financial Officer
Slide 15: Third quarter 2019 diluted earnings per share up 31%
15 Third quarter 2019 diluted earnings per share up 31% year - over - year 1 Includes non - fuel operating expense and non - operating expense. $M 3Q19 3Q18 H/(L) Total revenue $11,380 $11,003 3.4% Fuel expense $2,296 $2,572 (10.7%) Non - fuel expense 1 $7,735 $7,373 4.9% Pre - tax earnings $1,349 $
Slide 16: Third quarter 2019 adjusted diluted EPS up 33%
16 Third quarter 2019 adjusted diluted earnings per share up 33% year - over - year $M 3Q19 3Q18 H/(L) Total revenue $11,380 $11,003 3.4% Fuel expense $2,296 $2,572 (10.7%) Adjusted n on - fuel expense 1,2 $7,707 $7,372 4.5% Adjusted pre - tax earnings 2 $1,377 $1,059 30.0% Adjusted net income 2 $1,
Slide 17: Total CASM decreased 0.9% in third quarter 2019
17 Total CASM decreased 0.9% in third quarter 2019 Total CASM YOY H/(L) 1 Excludes special charges. While the company anticipates that it will record special charges throughout the year, at this time t he Company is unable to provide an estimate of these charges with reasonable certainty. (0.9%) ~0.
Slide 18: Non-fuel CASM increased 2.1% in third quarter 2019
18 Non - fuel CASM increased 2.1% in third quarter 2019 2.1% 3Q19 4Q19E 2 ~3.5% 1 Non - fuel CASM (operating expense per available seat mile) excludes fuel, profit sharing, third - party business expenses and speci al charges. For a GAAP to non - GAAP reconciliation, see Appendix A. 2 While the comp
Slide 19: Balance sheet and fleet update
19 Balance sheet and fleet update ▪ Repurchased $363M worth of shares in the third quarter of 2019 ▪ Raised $1.2B of EETC debt at a blended interest rate of ~2.8% ▪ During the quarter, took delivery of nine new Embraer E175 aircraft and six used Airbus A319 aircraft ▪ Purchased 11 mainline and 26 re
Slide 20: Fourth quarter 2019 guidance summary
20 Fourth quarter 2019 guidance summary 4Q19 Capacity ~3.0% PRASM Flat - 2.0% CASMex 1 ~3.5% Fuel price 2 $1.99 - $2.09 Adjusted pre - tax margin 3 7.0% - 9.0% 1 Non - fuel CASM (operating expense per available seat mile) excludes fuel, profit sharing, third - party business expenses and speci al ch
Slide 21: Full year 2019 guidance summary
21 Full year 2019 guidance summary FY19 January Guidance FY19 April Guidance FY19 July Guidance FY19 Update Capacity 4.0% - 6.0% 4.0% - 5.0% 3.0% - 4.0% ~3.5% CASMex 1 Flat to better ~Flat 0.5% - 1.0% ~1.2% Adjusted diluted EPS 2 $10.00 - $12.00 $10.00 - $12.00 $10.50 - $12.00 $11.25 - $12.25 Adjust
Slide 22: Question & Answer Session
Question & Answer Session
Slide 23: UNITED SY
UNITED SY
Slide 24: Appendix A: reconciliation of GAAP to Non-GAAP financial measures
24 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 Am eri ca (GAAP) and Non - GAAP financial measures, including adjusted pre - tax income (loss), adjusted p
Slide 25: Appendix A: reconciliation of GAAP to Non-GAAP (continued)
25 Appendix A: reconciliation of GAAP to Non - GAAP financial measures (continued) (in millions) Three Months Ended September 30, Adjusted Non - Fuel Expense 2019 2018 Operating expenses (GAAP) $9,907 $9,816 Less: Aircraft fuel (2,296) (2,572) Add: Total nonoperating expense 124 129 Non - fuel expen
Slide 26: Appendix A: reconciliation of GAAP to Non-GAAP (continued)
26 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 exc luding special charges, third - party business expenses, fuel and profit sharing. UAL be
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