United Airlines Holdings, Inc. · NASDAQ:UAL
United Airlines — Continental Airlines — Dahlman Rose Global Transportation Conference 2012
23 slides from United Airlines's conference presentation, Sep 5, 2012
Slide 1: Dahlman Rose Global Transportation Conference
Dahlman Rose Global Transportation Conference United Continental Holdings, Inc. September 5, 2012 Exhibit 99.1
Slide 2: John Rainey, Executive Vice President and Chief Financial Officer
John Rainey Executive Vice President and Chief Financial Officer
Slide 3: United is transforming
United is transforming 4 We are building a new airline Broad, business-centric network Capacity discipline and business flexibility Investing in our people, customers, products and technology Creating economic value over the business cycl e Strengthening the balance sheet
Slide 4: Creating Long-Term Shareholder Value
Earnings Stability Earnings Expansion Improve Capital Structure Managing the business to create long-term shareholder value Creating Long-Term Shareholder Value
Slide 5: Creating Long-Term Shareholder Value
Earnings Stability Earnings Expansion Improve Capital Structure Creating Long-Term Shareholder Value
Slide 6: The world's best network
The world’s best network Serving the most destinations of any global carrier Hubs in the four largest U.S. cities 50 of Fortune 100 companies headquartered in hubs Rankings for US carriers by ASMs as of 2011 Source: Earnings releases and SEC filings Best Network for Business Customers
Slide 7: Maintaining capacity discipline is core to our long-term success
Note: Rolling consolidated capacity for prior twelve months; industry includes AMR, DAL, LUV and LCC; capacity proforma for merged carriers Source: Earnings releases and SEC filings (10%) (5%) 0% 5% 4Q09 4Q08 4Q07 4Q06 4Q10 Industry ex-UAL 2Q12 4Q11 Maintaining capacity discipline is core to our lon
Slide 8: Further reducing capacity in response to economic outlook
(2.0%) (3.0%) (1.0%) (2.0%) (0.5%) 0.5% Source: SEC filings and investor updates Further reducing capacity in response to economic outlook Reduced FY 2012 consolidated capacity twice since start of the year Expect FY 2012 consolidated capacity of (0.75%) to (1.75%) year-over-year September – Decembe
Slide 9: ROIC goal of 10% over the business cycle
ROIC goal of 10% over the business cycle Return on Invested Capital Note: Results prior to 4Q 2010 pro forma; ROIC calculation available in Appendix A and on our website: http//:ir.united.com Source: SEC filings 1. Source: Kiodex – Platts US Gulf Coast Jet 10.3% 11.3% 7% 8% 9% 10% 11% 12% 13% 14% TM
Slide 10: United's ROIC calculation
ROIC = Net Operating Profit After Tax (NOPAT) Average Invested Capital United’s ROIC calculation NOPAT Adjusted pre-tax income + Interest expense + Interest component of + Net interest on pension Adjusted for cash taxes Invested Capital Total assets + Capitalized A/C rent (at 7.0x) - Non-interest be
Slide 11: ROIC goal of 10% over the business cycle
ROIC goal of 10% over the business cycle $1.0 - $1.2B of synergies Capacity discipline Strengthen our balance sheet Grow high margin components of our business Product and technology investments
Slide 12: Airline multiple lags other industries due to high leverage and earnings volatility
(10%) (5%) 0% 5% 10% S&P 500 Airline Industry Pre-Tax Margin YoY Change (%) Airline multiple lags other industries due to high leverage and earnings volatility Forward P/E Ratio Note: Airline industry P/E ratio includes UAL, ALK, DAL, JBLU, LCC and LUV; Other industry P/E ratios include only S&P 500
Slide 13: Creating Long-Term Shareholder Value
Earnings Stability Earnings Expansion Improve Capital Structure Creating Long-Term Shareholder Value
Slide 14: Investing in our fleet
Boeing 737 MAX 9 Investing in our fleet Highly efficient Great fit for network Unrivaled customer experience
Slide 15: Investing in our product and technology
New United Club in ORD T-2 Boeing Sky Interior Global Satellite Wi-Fi Investing in our product and technology Enhanced Agent Interface
Slide 16: Growing high margin components of our business
Growing high margin components of our business 90 million members worldwide 100+ partnerships to earn Unmatched redemption opportunities Up to 5 more inches of space in coach Ancillary Revenue Economy Plus Value-add products & services Dynamic pricing Improved CRM targeting
Slide 17: Creating Long-Term Shareholder Value
Earnings Stability Earnings Expansion Improve Capital Structure Creating Long-Term Shareholder Value
Slide 18: Committed to strengthening the balance sheet
12.0 13.5 15.9 Net Debt ($B) Net Debt incl. Pension ($B) 2012 interest expense expected to decline more than 20% vs. 2010 Committed to strengthening the balance sheet ($3.9) $12.0 $13.5 $15.9 ($3.2) $16.2 $17.3 $19.4 Net Debt Pension 4.2 3.8 3.5 Note: Results prior to 4Q 2010 pro forma 1. Year end b
Slide 19: $4B of non-aircraft debt coming due in next four years
0.8 0.9 0.9 0.9 0.6 $4B of non-aircraft debt coming due in next four years Scheduled Debt & Capital Lease Payments ($B) 0.6 1.1 1.3 1.2 0.4 $1.0 $2.1 $2.2 $1.9 $1.5 Aircraft Non-Aircraft
Slide 20: Increasing unencumbered asset base
Increasing unencumbered asset base $11.3 $7.7 $5.1 $3.0 Unencumbered Asset Balance ($B) Note: Cumulative total of assets generally accepted as collateral in financing transactions and not then encumbered; Asset values derived from historical appraisals and company estimates; 2012 amount includes cur
Slide 21: Creating shareholder value
Improve cost of capital Manage liquidity levels Reduce amount of leverage Increase pool of unencumbered assets Improve credit rating Capacity discipline Stable earnings Invest in product, technology Grow high margin businesses Generate ROIC in excess of 10% over the business cycle Creating sharehold
Slide 22: Appendix A: ROIC calculation
Appendix A: ROIC calculation NOPAT ($M) TME 2Q12 Adjusted Pre-Tax Income $1,146 + Interest Expense + Interest Component of Capitalized Aircraft Rent + Net Interest on Pension Adjusted for Cash Taxes (6) NOPAT $2,666 Invested Capital ($M) TME 2Q12 Total Assets $38,726 + Capitalized Aircraft Rent (@ 7
Slide 23: Appendix B: Non-GAAP Financial Reconciliation
Appendix B: Non-GAAP Financial Reconciliation Pre-tax Earnings ($M) TME 2Q12 Earnings / (Loss) Before Income Taxes $407 Add: Special Items Adjusted Earnings / (Loss) Before Income Taxes $1,146 Note: Non-GAAP financial measures are presented because they provide management and investors with the abil
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