United Airlines Holdings, Inc. · NASDAQ:UAL
United Airlines — United Continental Holdings — Raymond James Global Airline and Transportation Conference 2014
20 slides from United Airlines's conference presentation, Nov 6, 2014
Slide 1: Raymond James Global Airline and Transportation Conference
Raymond James Global Airline and Transportation Conference United Continental Holdings, Inc. November 6, 2014 Exhibit 99.1
Slide 2: Jim Compton, Vice Chairman and Chief Revenue Officer
Jim Compton Vice Chairman and Chief Revenue Officer
Slide 3: Improving long-term shareholder value
Balance cash flow allocation Increase earnings 2x – 4x Generate ROIC greater than 10% Expand revenue Grow CASM less than inflation Improving long-term shareholder value
Slide 4: Taking action to expand revenue
Efficient capacity growth Improve core passenger revenue Grow ancillary revenue Taking action to expand revenue
Slide 5: Drivers of capacity growth in 2014
Drivers of capacity growth in 2014 Capacity discipline and efficient growth are central to our strategy United’s capacity vs. U.S. GDP growth (year-over-year) Installing slimline economy seats – 15% lighter Install on ~350 aircraft by YE 2014 Up-gauging regional fleet 32 76-seat Embraer 175s, replac
Slide 6: Drivers of capacity growth in 2015
Drivers of capacity growth in 2015 Pacific 3% to 5% YOY Expect to grow capacity 1.5% to 2.5% in 2015; below US GDP growth estimates 3% to 4% International Latin 4% to 6% YOY Transatlantic 1% to 3% YOY Domestic 0.5% - 1.5% United’s 2015 capacity Three initiatives contribute to consolidated capacity g
Slide 7: Reducing dependence on smaller regional aircraft
~50% 69% ~60% 56% ~20% Reducing dependence on smaller regional aircraft ~30% YE 2012 31% Regional Fleet Mix YE 2015 ~40% YE 2012 44% United Fleet Mix Total aircraft 1,253 1,188 Total aircraft YE 2015
Slide 8: Taking steps to improve our reliability
Reducing variability Leveraging technology Simplifying operations Taking steps to improve our reliability More efficiently re-route passengers during irregular operations Use multi-variable decision tool to inform cancellation decisions Reduce number of regional carriers and fleet types in hubs Redu
Slide 9: Improving the value of the network
Re-banking and seasonal shaping Consolidating frequencies Optimizing network structure Improving the value of the network Re-banking at DEN (in progress), IAH (in progress) and ORD (1Q15) Better align service to seasonal demand trends ~25% difference in capacity between high-demand and low-demand pe
Slide 10: Ancillary revenue growth
New products Powerful and nimble technology platforms Dynamic pricing capabilities Expand availability $3.5+ 2017E 2014E Ancillary revenue ($B) 1: 2010 results are pro-forma Expect to continue steadily growing ancillary revenue, providing better choice and experience to our customers +7% CAGR $3.0 $
Slide 11: Improving long-term shareholder value
Balance cash flow allocation Increase earnings 2x – 4x Generate ROIC greater than 10% Expand revenue Grow CASM less than inflation Improving long-term shareholder value
Slide 12: Sarah Murphy, Vice President Financial Planning & Analysis
Sarah Murphy Vice President Financial Planning & Analysis
Slide 13: Improving long-term shareholder value
Balance cash flow allocation Increase earnings 2x – 4x Generate ROIC greater than 10% Grow CASM less than inflation Expand revenue Improving long-term shareholder value
Slide 14: CASM ex-fuel expected to grow less than inflation
Expect 2014 CASM ex-fuel to grow less than inflation, with similar performance through 2017 YoY CASM ex-fuel Sources: SEC filings; 2014E capacity from October 23 Investor Update CASM ex-fuel numbers also exclude profit sharing, third party business expense and special charges 1.0% 3Q 6.4% 2Q (0.2%)
Slide 15: Progress toward $2 billion in annual cost savings by 2017
Maintenance ~$100M Fuel consumption ~$1B Productivity ~$500M Distribution ~$100M Sourcing ~$150M Making good progress in achieving $2 billion in annual cost savings by 2017 Expect to achieve more than $300M in non-fuel savings and nearly $200M in fuel savings in 2014
Slide 16: Productivity and fuel initiatives drive significant savings
Fuel Initiatives YoY Productivity Improvement 1 Productivity and fuel initiatives drive significant savings Adding fuel efficient aircraft 2014 - 2015: 85 Embraer 175s 10%+ more fuel efficient 52 Boeing 737-900ERs 15%+ more fuel efficient 17 Boeing 787s 15 -20% more fuel efficient Process improvemen
Slide 17: Revenue and cost initiatives driving improved earnings
Revenue and cost initiatives driving improved earnings Return on invested capital Pre-tax margin (Trailing twelve months) Pre-tax margin excludes special items; FY2013 and FY2014 exclude impact of non-cash fuel hedge FY2012 8.0% 12.3% 10.0% FY2013 TME3Q14 FY2012 1.6% 4.5% 2.7% FY2013 TME3Q14
Slide 18: Improving balance sheet
Improving balance sheet Total debt outstanding ($B) 1: Includes annualized aircraft rent capitalized at 7x 2: 2009 and 2010 data is pro forma Unfunded pension liability ($B) $1.5 $2.4 3Q 2014 $1.8 $1.5 $23.8 $20.1 Target 3Q 2014 $18.4 ~$15B
Slide 19: Cash flow priorities
Liquidity balance Capital investment Debt reduction Pension funding Shareholder compensation Shareholder Cash flow priorities Maintain unrestricted liquidity balance of $5B - $6B, including revolver Average capital expenditure of $2.8B - $3.0B from 2014 - Achieve ~$15B gross debt target and improve
Slide 20: Improving long-term shareholder value
Balance cash flow allocation Increase earnings 2x – 4x Generate ROIC greater than 10% Expand revenue Grow CASM less than inflation Improving long-term shareholder value
United Continental Holdings — Raymond James Global Airline and Transportation Conference 2014 on 6ix