United Airlines Holdings, Inc. · NASDAQ:UAL
United Airlines — Q2 2019 Earnings Presentation
24 slides from United Airlines's earnings presentation, Jul 17, 2019
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: Diluted earnings per share grew 62% year-over-year; 31% on an adjusted basis
Diluted earnings per share grew 62% year-over year; 31% on an adjusted basis Reported pre-tax earnings of $1.4B with a pre-tax margin of 11.9%, up 400bps versus 2Q18 Reported adjusted pre-tax earnings1 of $1.4B with an adjusted pre-tax margin1 of 12.4%, up 200bps versus 2Q18 Highest second-quarter p
Slide 4: Raised mid-point of full-year 2019 adjusted EPS guidance
Raised mid-point of full-year 2019 adjusted EPS guidance, with a new range of $10.50 - $12.00 Second consecutive quarter of pre-tax margin expansion and third consecutive quarter of adjusted pre-tax margin expansion Continued to actively manage costs despite less efficient flying and on track to del
Slide 5: Executing on financial targets
Executing on financial targets Highest second-quarter pre-tax income in the airline’s history1 Strong results despite operational challenges driven by the MAX grounding and suspension of India flights Network strategy running on all cylinders Building customer loyalty through investments such as “Co
Slide 6: Employee Update
Employee Update Kate Gebo Executive Vice President, Human Resources and Labor Relations
Slide 7: Investing in our team
Investing in our team Event for our 25,000 flight attendants 34 events, ~800 employees – about 50% complete Sharing the “why” behind the decisions we make ~10% higher employee engagement rate among flight attendants who have attended the event
Slide 8: Commercial Update
Commercial Update Andrew Nocella Executive Vice President and Chief Commercial Officer
Slide 9: Geographic region overview – consolidated 2Q PRASM up 2.5% year-over-year
Geographic region overview – consolidated 2Q PRASM up 2.5% year-over-year Domestic Latin Pacific Atlantic 1 Based on full-year 3Q18-2Q19 capacity. We expect third-quarter 2019 year-over-year consolidated PRASM to be up 0.5% to 2.5% % ASMs1 2Q19 YOY PRASM H/(L) Notes 57% 1.9% Strong close-in bookings
Slide 10: Commercial initiatives expected to drive long-term impact
Commercial initiatives expected to drive long-term impact Premium seating Started roll-out of our specialized Boeing 767-300s with high premium seat counts from EWR and ORD to LHR Customer engagement Meaningful growth in new fliers in 2019 driven by corporate sales team and loyalty promotions Segmen
Slide 11: Financial Update
Financial Update Gerry Laderman Executive Vice President and Chief Financial Officer
Slide 12: Second-quarter 2019 diluted earnings per share up 62% year-over-year
Second-quarter 2019 diluted earnings per share up 62% year-over-year 1 Includes non-fuel operating expense and non-operating expense. $M 2Q19 2Q18 H/(L) Total revenue $11,402 $10,777 5.8% Fuel expense $2,385 $2,390 (0.2%) Non-fuel expense1 $7,663 $7,532 1.7% Pre-tax earnings $1,354 $855 58.4% Net in
Slide 13: Second-quarter 2019 adjusted diluted earnings per share up 1% year-over-year
Second-quarter 2019 adjusted diluted earnings per share up 31% year-over-year $M 2Q19 2Q18 H/(L) Total revenue $11,402 $10,777 5.8% Fuel expense $2,385 $2,390 (0.2%) Adjusted non-fuel expense1,2 $7,601 $7,268 4.6% Adjusted pre-tax earnings2 $1,416 $1,119 26.5% Adjusted net income2 $1,100 $888 23.9%
Slide 14: Total CASM decreased 0.4% in second-quarter 2019
Total CASM decreased 0.4% in second-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 the Company is unable to provide an estimate of these charges with reasonable certainty. FY19E1 2Q19 3
Slide 15: Non-fuel CASM increased 0.6% in second-quarter 2019
Non-fuel CASM increased 0.6% in second-quarter 2019 2Q19 3Q19E2 1.0% - 2.0% 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 company anticip
Slide 16: Capital allocation and fleet update
Capital allocation and fleet update Repurchased $536M worth of shares in the second quarter of 2019 Board approved new $3B share repurchase program; $687M remaining under current repurchase program Now expect full-year 2019 adjusted capital expenditures1 to be ~$4.9B During the quarter, took deliver
Slide 17: Third-quarter 2019 guidance summary
Third-quarter 2019 guidance summary 3Q19 Capacity 2.0% - 3.0% PRASM 0.5% - 2.5% CASMex1 1.0% - 2.0% Fuel price2 $2.12 - $2.22 Adjusted pre-tax margin3 10% - 12% 1 Non-fuel CASM (operating expense per available seat mile) excludes fuel, profit sharing, third-party business expenses and special charge
Slide 18: Full-year 2019 guidance summary
Full-year 2019 guidance summary FY19 January Guidance FY19 April Guidance FY19 Update Capacity 4.0% - 6.0% 4.0% - 5.0% 3.0% - 4.0% CASMex1 Flat to better ~Flat 0.5% - 1.0% Adjusted diluted EPS2 $10.00 - $12.00 $10.00 - $12.00 $10.50 - $12.00 Adjusted capex3 ($B) ~$4.7 ~$4.7 ~$4.9 1 Non-fuel CASM (op
Slide 19: Full-year 2019 guidance summary
Full-year 2019 guidance summary 3.0% - 4.0% rauaesaesers (ISOS SEES] | s0s0s120 ones a "None CASM (operating expense per vale set ml) exces fl, rf sharing, hie party business expenses and spacial charges, We he Company anpatsthat \twirecord spect charges tought the year, hs ime the Company i unabe t
Slide 20: Question & Answer Session
Question & Answer Session
Slide 21: 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 22: 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 June 30, Adjusted Non-Fuel Expense 2019 2018 Operating expenses (GAAP) $9,930 $9,632 Less: Aircraft fuel (2,385) (2,390) Add: Total nonoperating expense 118 290 Non-fuel expense 7,663 7,532
Slide 23: 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 24: Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued)
Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued) cnohdsted CASM excising special charges, dpa busines expense, el nd prot Shorng ost gor aati sat mi (CASH (GAAP) Speci charge (2) “Tc pry ines expenses Ft expone Prot sara, ang pay tases ‘CASH exci sec chares, breathes exp
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