United Airlines Holdings, Inc. · NASDAQ:UAL
United Airlines — United Continental Holdings — Investor Presentation (October 2018)
18 slides from United Airlines's investor presentation, Oct 2, 2018
Slide 1: 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 2: The U.S. airline industry is now generating consistent profits
The U.S. airline industry is now generating consistent profits U.S. passenger airlines Pre-tax earnings Structural changes in the business have led to financial stability $30B $20B $10B $0B ($10B) ($20B) ($30B) 2007 2006 2005 2019 2012 2011 2010 2009 2008 2001 2000 2015 2014 2013 2018 2017 2016 2004
Slide 3: The U.S. airline industry is now generating consistent profits
The U.S. airline industry is now generating consistent profits sa —— % 00 i o* soo |i | | ites Rasy ae = ee) ‘and negative (3%) (20%) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Margin Ml Profit(Loss) Source: U.S DOT Form 41 Data: 2018 and 2019
Slide 4: Delivering top-tier operational performance continues to be our focus
Delivering top-tier operational performance continues to be our focus D:001 1 Consolidated system flights Source: masFlight 2Q16 2Q18 2Q17 2Q18 D:001 69.8% UA 70.0% WN 46.3% AA 65.2% DL Completion factor1 2Q16 98.3% 98.7% 2Q18 2Q17 98.6% 70.0% 69.7% 68.7%
Slide 5: Improving customer service and experience is a top priority
Improving customer service and experience is a top priority Equipping employees with modern tools Completed rollout of 10,000 mobile devices for airport agents in 1Q18 Continue to train our team on core4, United’s customer service hierarchical decision framework Designed to drive improved customer s
Slide 6: Network strategy
Network strategy Network is our foundation Leverage our strengths “Uniquely United” opportunities Our network has tremendous potential – capitalizing on our strengths and improving our hub quality Other commercial elements require a strong network to succeed Overall strategy returns United to profit
Slide 7: Fleet flexibility in the event of a downturn
Fleet flexibility in the event of a downturn 109 Lease expirations 2020E 2019E 94 Aircraft late in life-cycle with heavy maintenance due Flexibility levers in mainline fleet Estimated resulting capacity reduction (~12%) (~12%) Leased aircraft can be returned to lessor at time of contract expiration
Slide 8: Commercial initiatives running in-line with expectations
Segmentation Loyalty Revenue Management Commercial initiatives running in-line with expectations Gemini running on all flights and all cabins Results exceeded expectations in the first half of the year Rolled out Basic Economy in select Latin markets Launched a Basic Economy-like product across the
Slide 9: Commercial initiatives running in-line with expectations
Commercial initiatives running in-line with expectations * Gemini running on all flights and all cabins Revenue Management * Results exceeded expectations in the first half of the year = Rolled out Basic Economy in select Latin markets Segmentation = Launched a Basic Economy-like product across the
Slide 10: United's balance sheet is well positioned among peers
Adjusted debt1 2Q18 Debt, pension and post-retirement obligations ($B)2 United’s balance sheet is well positioned among peers 1 Adjusted debt and adjusted EBITDA are non-GAAP measures; adjusted EBITDA excludes special charges. For a GAAP to non-GAAP reconciliation, see Appendix A 2 Source: SEC filin
Slide 11: $5B - $6B is the optimal liquidity level
$5B - $6B is the optimal liquidity level Absorb seasonality of the business (~$1.5B peak to trough) Meets debt and capital expenditure commitments Provides sufficient liquidity under extreme stress-test (e.g. Sept. 11th) scenario Strong liquidity position Minimum target balance $5.0B YE17 $5.8 YE16
Slide 12: Capital allocation and fleet update
Capital allocation and fleet update Share Repurchases Repurchased ~$1B worth of shares in the first half of the year, representing ~5% of shares outstanding as of year-end 2017 ~$2.0B in repurchase authority remaining Plan to continue to opportunistically return cash to shareholders through share re
Slide 13: Capital expenditures in 2018 expected to be $3.6B - $3.8B
Capital expenditures in 2018 expected to be $3.6B - $3.8B 24 scheduled aircraft deliveries in 2018 Opportunistic purchases of aircraft off-lease Continue to invest in product, technology and infrastructure Adjusted capital expenditures ($B) $3.6 - $3.8 2017 ~($1.0) 2018E 1 Adjusted capital expenditu
Slide 14: Reaching financial targets will guide our long term network strategy
Reaching financial targets will guide our long term network strategy Primary focus areas: Strengthening and growing our domestic network Driving asset efficiency and productivity Target ~25% CAGR adj. EPS from 2018 through 2020 2020E $11.00 - $13.00 2018E 1Q Update $7.00 - $8.50 2018E Initial $6.50
Slide 15: Reaching financial targets will guide our long term network strategy
Reaching financial targets will guide our long term network strategy = Primary focus areas: - Strengthening and growing our domestic network - Driving asset efficiency and productivity * Target ~25% CAGR adj. EPS from 2018 through 2020 Target adjusted earnings per share, diluted $11.00 - $13.00 $7.2
Slide 16: 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. UAL provides financial metrics, including earnings before inter
Slide 17: Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued)
Appendix A: reconciliation of GAAP to Non-GAAP financial measures (continued) UAL believes that adjusting capital expenditures for assets acquired through the issuance of debt and capital leases, airport construction financing and excluding fully reimbursable projects is useful to investors in order
Slide 18: Reconciliation of GAAP to Non-GAAP financial measures (continued)
reconciliation of GAAP to Non-GAAP financial measures (continued
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