United Airlines Holdings, Inc. · NASDAQ:UAL
United Airlines — United Continental Holdings — Q3 2017 Earnings Presentation
24 slides from United Airlines's earnings presentation, Oct 19, 2017
Slide 1: 3Q 2017 Earnings Call
3Q 2017 Earnings Call October 19, 2017 Exhibit 99.1
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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 subj
Slide 3: Oscar Munoz Opening Remarks
Oscar Munoz Opening Remarks Chief Executive Officer
Slide 4: Challenging environment in the third quarter
Challenging environment in the third quarter Reported pre-tax earnings of approximately $1.0B with a pre-tax margin of 9.9%; $1.0B and 10.4% excluding special charges Repurchased $556M of shares in the quarter at an average price of $67.08 per share Employees delivered record setting operational per
Slide 5: Customer service initiatives gaining traction
Customer service initiatives gaining traction Continue to improve mobile tools for employees, such as the “in the moment” care app Rolled out a new Customer Solutions Desk – open 24/7, 365 days a year Involuntary denied boardings are down 92% year-over-year in the third-quarter 28 days of zero invol
Slide 6: Scott Kirby Revenue and Operations Update
Scott Kirby President Revenue and Operations Update
Slide 7: Expect fourth-quarter unit revenue to be down (1.0%) to (3.0%)
Expect fourth-quarter unit revenue to be down (1.0%) to (3.0%) Domestic Consolidated Latin Pacific Atlantic 1 Based on capacity from 4Q16-3Q17 % ASMs1 3Q17 YOY PRASM H/(L) Notes 55% (4.4%) Headwinds: Storms, Basic Economy roll-out & ULCC pricing 18% (0.4%) In-line 17% (10.4%) Weakness in China/Hong
Slide 8: We have been focused on running a great operation
We have been focused on: Running a great operation Improving the culture for employees and focusing on the customer Rebuilding our network profitably Executing on 2016 Investor Day initiatives 2017 has been an eventful year at United Improving profitability at United remains our top financial object
Slide 9: United is running an outstanding operation despite weather-related challenges
United is running an outstanding operation despite weather-related challenges Mishandled bag ratio2 D:001 1 Consolidated system flights 2 As reported to the Department of Transportation 3 Controllable delays as a percentage of total delays; include everything except delays attributed towards weather
Slide 10: All earnings initiatives are performing largely on plan, except segmentation
All earnings initiatives are performing largely on plan, with the exception of segmentation Early stages on revenue management improvements Network initiatives are ongoing with rebanking starting later this month 2017 costs have been challenged by higher labor rates and higher fuel prices Headwinds
Slide 11: Andrew Levy Financial Update
Andrew Levy Financial Update Executive Vice President and Chief Financial Officer
Slide 12: 3Q17 GAAP earnings per share, diluted of $2.12
3Q17 GAAP earnings per share, diluted of $2.12 $M 3Q17 3Q16 H/(L) Total revenue $9,878 $9,913 (0.4%) Fuel expense $1,809 $1,603 12.9% Non-fuel expense1 $7,089 $6,800 4.3% Pre-tax earnings $980 $1,510 (35.1%) Net income $637 $965 (34.0%) Earnings per share, diluted $2.12 $3.01 (29.6%) Weighted averag
Slide 13: 3Q17 non-GAAP earnings per share, diluted of $2.22
3Q17 non-GAAP earnings per share, diluted of $2.22 $M 3Q17 3Q16 H/(L) Total revenue $9,878 $9,913 (0.4%) Fuel expense $1,809 $1,603 12.9% Non-fuel expense1,2 $7,039 $6,752 4.3% Pre-tax earnings2 $1,030 $1,558 (33.9%) Net income2 $669 $997 (32.9%) Earnings per share, diluted2 $2.22 $3.11 (28.6%) Weig
Slide 14: Total CASM was up 3.0% in the third-quarter
Total CASM was up 3.0% in the third-quarter 1 2.2% - 4.4% 1 4.0% - 4.5% Total CASM Year-over-year H/(L) 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 reasonable certainty. For a
Slide 15: Non-fuel unit cost was up 2.6% in the third-quarter
Non-fuel unit cost was up 2.6% in the third-quarter 2 3.3% - 3.5% 2 2.5% - 3.5% Non-fuel CASM1 Year-over-year H/(L) 1 Non-fuel CASM (operating expense per available seat mile) excludes fuel, profit sharing, third-party business expenses and special charges 2 While the Company anticipates that it wil
Slide 16: Balance sheet and liquidity update
Ended the third quarter with $6.3B in unrestricted liquidity, including $2B untapped revolver Comfortably in excess of our target liquidity range of $5B - $6B Raised $400M of unsecured debt at an interest rate of 4.25% during the quarter Contributed $160M to our pension in the quarter, completing ou
Slide 17: Capital allocation, capex, and fleet update
Capital allocation, capex, and fleet update Share Repurchases Capex & Fleet Repurchased $556M in 3Q at an average of $67.08 per share Modified Airbus A350 order Deferred delivery by four years to 2022 Changed model type to A350-900 Increased order size from 35 to 45 aircraft Repurchased $1.3B YTD, a
Slide 18: Guidance Summary
Guidance Summary 4Q17 FY17 Capacity ~3.5% ~3.5% PRASM (1.0%) – (3.0%) CASM ex1,2 2.5% - 3.5% 3.3% - 3.5% Fuel price3 $1.80 - $1.85 Pre-tax margin1 3.0% - 5.0% Capex4 $0.9B - $1.1B $4.6B - $4.8B 1 Excludes special charges, the nature and amount of which are not determinable at this time 2 Excludes fu
Slide 19: Oscar Munoz Closing Remarks
Oscar Munoz Closing Remarks Chief Executive Officer
Slide 20: Question & Answer Session
Question & Answer Session UNITED
Slide 21: UNITED
UNITED
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 income (loss) before taxes excluding special charges,
Slide 23: Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued)
Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued) UAL also presented non-fuel expense excluding special charges. UAL believes that adjusting for special charges is useful to investors because special charges are non-recurring charges not indicative of UAL’s ongoing perfor
Slide 24: Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued)
Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued) Cost per available seat mile (CASM) is a common metric used in the airline industry to measure an airline’s cost structure and efficiency. UAL reports CASM excluding profit sharing, third-party business expenses, fuel, and
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