United Airlines Holdings, Inc. · NASDAQ:UAL
United Airlines — UAL — JP Morgan Aviation and Transportation Conference 2009
35 slides from United Airlines's conference presentation, Mar 10, 2009
Slide 1: UAL Corporation - JP Morgan Aviation and Transportation Conference
UAL CORPORATION (NASDAQ: UAUA) Kathryn Mikells - Chief Financial Officer JP Morgan Aviation and Transportation Conference March 10, 2009
Slide 2: Safe Harbor Statement And Non-GAAP Reconciliation
Safe Harbor Statement And Non-GAAP Reconciliation The information included in this presentation contains certain statements that are "Forward-Looking Statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of assumptions, risks
Slide 3: Fuel Costs Overshadowed Our 4th Quarter Results
Fuel Costs Overshadowed Our 4th Quarter Results Fourth quarter pre-tax loss of $547 million, excluding net non- cash mark-to-market hedge losses and certain accounting items Consolidated PRASM* grew 4.7% year over year in the fourth quarter, excluding special items and Mileage Plus impacts. *Exclude
Slide 4: United Delivered Competitive RASM and Non-Fuel CASM
United Delivered Competitive RASM and Non- Fuel CASM Mainline CASM Excluding Fuel Twelve Months Ended Dec. 31, 2008 Mainline RASM Twelve Months Ended Dec. 31, 2008 12.5800000000014 13.1900000000015 13.0100000000015 0.110000000000012 12.5100000000014 12.4600000000014 10.6700000000012 DAL AMR 12.69 UA
Slide 5: Pre-Tax Earnings Impacted By Fuel Price And Fuel Hedging
Pre-Tax Margin Twelve Months Ended Dec. 31, 2008 Pre-Tax Earnings Impacted By Fuel Price And Fuel Hedging -2.70000000000031 -2.80000000000032 -5.00000000000057 -6.60000000000075 -6.70000000000076 4.50000000000051 -1.8000000000002 LCC LUV DAL CAL AMR UA YOY Pts (3.3) (10.4) (10.3) (6.5) (6.9) (7.0) S
Slide 6: The Industry Is Better Prepared To Deal With A Recession Than Ever Before
The Industry Is Better Prepared To Deal With A Recession Than Ever Before Jet A and WTI Spot Prices Jet A ($/gal) WTI Crude Oil ($/barrel) -0.500000000000057 -3.80000000000043 -7.10000000000081 - -0.5% 2007 - -3.8% 2008 - -7.1% 2009F Domestic Industry Capacity Year-Over-Year Change 2.00000000000023
Slide 7: United's Actions Have Positioned It Well To Deal With Current Challenges
United's Actions Have Positioned It Well To Deal With Current Challenges Industry-leading capacity reductions Redeployment of assets and ancillary revenue streams Top-tier cost control Improving operational performance Solid cash position and limited fixed obligations
Slide 8: United's Capacity Reductions Are Both Earlier and Deeper than Peers'
United's Capacity Reductions Are Both Earlier and Deeper than Peers' -12.0000000000014 -8.50000000000097 -8.40000000000096 -6.90000000000078 -6.00000000000068 - -12.0% UA - -8.5% AMR - -8.4% LCC - -6.9% CAL - -6.0% DAL First Quarter 2009 Year-Over-Year Consolidated Capacity -7.50000000000085 -7.0000
Slide 9: United Is Also Leading the Industry Response to Softening International Demand
United Is Also Leading the Industry Response to Softening International Demand -14.5000000000016 -4.00000000000045 -2.80000000000032 1.00000000000011 - -14.5% UA - -4.0% AMR - -2.8% CAL 1.0% DAL First Quarter 2009 Year-Over-Year International Capacity -5.50000000000063 -4.00000000000045 -2.500000000
Slide 10: United Is Maintaining the Breadth And Strength Of Its Network
United Is Maintaining the Breadth And Strength Of Its Network As It Reduces Capacity Destinations Served 1Q 2008: 221 cities 1Q 2009: 218 cities
Slide 11: New International Product Right Sizes Premium Cabins
New International Product Right Sizes Premium Cabins And Drives Customer Satisfaction Installing the new United First Suite and full lie-flat seats in Business Class reduces premium seat counts by over 20% Over 25% of conversions completed by the end of 2008 B767s and B747s will be completely conver
Slide 12: United Is Leading The Development Of New And Innovative Ancillary Revenue Streams
United Is Leading The Development Of New And Innovative Ancillary Revenue Streams p. 12 Ticketing Fee Revenue Expansion First/Second Bag Fee ($15 First Bag/$25 Second Bag) Economy Plus And First / Business Class Seat Upsell Door to Door Baggage ($149 One-way Per Bag) Award Accelerator ~$1,200M Premi
Slide 13: Capacity Reductions Are Being Achieved Cost Effectively
Capacity Reductions Are Being Achieved Cost Effectively Permanent retirement of the entire B737 fleet by the end of 2009 Grounded 48 of 94 B737s by the end of 2008 Elimination of entire fleet will reduce complexity of operations and maintenance Permanent retirement of 6 B747s from the international
Slide 14: United Is Improving Relative Non-Fuel Unit Cost Despite Capacity Reductions
United Is Improving Relative Non-Fuel Unit Cost Despite Industry Leading Capacity Reductions 1.60000000000018 2.80000000000032 5.00000000000057 6.20000000000071 6.80000000000077 6.2% 1.6% UA 2.8% DAL 6.8% AMR LCC 5.0% CAL Sources: Company press releases and Earnings Calls. Adjusted for Special items
Slide 15: Carrying Cost Control Momentum Into 2009
Sources: Company press releases and Earnings Calls. Numbers represent mid-point of guidance provided. Excludes Fuel, Profit Sharing, Special items and certain accounting charges 3.00000000000034 3.00000000000034 5.40000000000061 6.00000000000068 9.20000000000105 LCC 3.0% 3.0% UA* 5.4% CAL 6.0% 9.2%
Slide 16: Significant Mainline Unit Cost Savings in 2009 Driven By Lower Fuel Costs
*Includes the impact of non-operating cash hedge losses for United **Reflects increased cash outflow in 2008 due to collateral posting and reduced cash outflow in 2009 due to collateral return. Sources: Company press releases and Earnings Calls. Numbers represent mid-point of guidance provided. Excl
Slide 17: United Is Focusing on Five Core Performance Imperatives
United Is Focusing on Five Core Performance Imperatives Core Performance Imperatives DOT service basics Clean, workable product Industry-leading revenues Competitive costs 1 Courteous, caring, respectful 2 3 4 5 Always With A SAFETY MINDSET
Slide 18: With A Compensation Structure Aligned to Deliver Results
With A Compensation Structure Aligned to Deliver Results New front-line employee cash incentive program announced Eligible employees will receive a monthly cash payout if we achieve a first or second-place DOT A:14 ranking amongst the largest network carriers Management incentive programs directly a
Slide 19: Achieving Top-Tier Operational Performance
Achieving Top-Tier Operational Performance 13.7613989637321 10.5613989637318 7.76139896373144 2.16139896373081 1.66139896373075 78.5% LCC 75.3% DAL 72.5% CAL 66.9% UA 66.4% AMR 6.19699431356693 5.39699431356684 4.89699431356677 3.19699431356659 0.696994313566287 80.6% LCC 79.8% UA 79.3% AMR 77.6% DA
Slide 20: Product Quality Improvements Are Beginning to Deliver Results for Customers
And Product Quality Improvements Are Beginning to Deliver Results for Our Customers Ensuring the workability of onboard equipment Increasing frequency of in-flight entertainment equipment maintenance Upgrading entertainment equipment Focused on improving cabin cleanliness Doubling the frequency of h
Slide 21: United Closed 2008 With A Solid Liquidity Position
United Closed 2008 With A Solid Liquidity Position $2 billion in unrestricted cash $400 million of additional liquidity raised in fourth quarter $2 billion in unencumbered assets Fuel hedge collateral fully covers entire hedge portfolio losses at current prices $1B Unrestricted Cash $2B Unencumbered
Slide 22: Fuel Hedge Losses Will Impact Earnings in 2009, But Cash Has Already Been Posted
Fuel Hedge Losses Will Impact Earnings in 2009, But Cash Has Already Been Posted 25 Unhedged Mainline Fuel price* $1.58 $1.50 $1.61 $1.62 Collateral and fuel prices are based on March 6, 2009 closing forward crude oil prices *Fuel price per gallon including taxes and transportation costs **Net cash
Slide 23: United Has Modest Fixed Obligations Moving Into 2009
United Has Modest Fixed Obligations Moving Into 2009 No material defined benefit pension plans Virtually all domestic employees on defined contribution plans No capital requirements for new aircraft in 2009 - no new aircraft financing required No major debt maturities in 2009 - debt and capital leas
Slide 24: Successfully Continuing To Enhance Liquidity In The First Quarter Of 2009
Successfully Continuing To Enhance Liquidity In The First Quarter Of 2009 Aircraft Financing $95 million Over $300 million expected in 1Q through transactions completed and under way Cargo Facility Relocation Agreement ~$160 million Equity Issuances $62 million (completed) $27 million (future)
Slide 25: United Retains Flexibility to Adapt to Uncertain Economic Environment
United Retains Flexibility to Adapt to Uncertain Economic Environment Capacity Flexibility Unencumbered operational aircraft Labor contract flexibility Current fuel hedge portfolio provides protection against volatility Collateral already posted covers fuel hedge losses at current prices Portfolio p
Slide 26: United Is Well Positioned For Success
United Is Well Positioned For Success Aggressive actions taken in response to the challenging environment Led the industry in capacity reductions, revenue initiatives and cost control Raising new capital despite the tough credit markets Maintaining flexibility to adapt to the uncertain economic envi
Slide 27: Q&A
Q&A D
Slide 28: Non-GAAP Reconciliations
Non-GAAP a Reconciliations
Slide 29: Pre-Tax Loss Reconciliation
Pre-Tax Loss Reconciliation Loss
Slide 30: Consolidated Passenger Revenue Per Available Seat Mile Fourth Quarter 2008
Consolidated Passenger Revenue Per Available Seat Mile Fourth Quarter 2008
Slide 31: Mainline Revenue Per Available Seat Mile Twelve Months Ended
Mainline Revenue Per Available Seat Mile Twelve Months Ended
Slide 32: Mainline Cost Per Available Seat Mile Twelve Months Ended
Mainline Cost Per Available Seat Mile Twelve Months Ended
Slide 33: Pre-Tax Margin Twelve Months Ended
Pre-Tax Margin Twelve Months Ended *2007 Includes special items of $44 million and a one time gain of $41 million from ARINC sale and a $22 million gain from early debt retirement.
Slide 34: Mainline Cost Per Available Seat Mile Fourth Quarter 2008
Mainline Cost Per Available Seat Mile Fourth Quarter 2008
Slide 35: Mainline Cost Per Available Seat Mile 2009 Guidance
Mainline Cost Per Available Seat Mile 2009 Guidance Based on the closing forward curve on January 16
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