United Airlines Reports First-Quarter 2018 Performance - United Hub

United Airlines Reports First-Quarter 2018 Performance

April 17, 2018

CHICAGO, April 17, 2018 /PRNewswire/ -- United Airlines (UAL) today announced its first-quarter 2018 financial results. 

  • UAL reported first-quarter net income of $147 million, diluted earnings per share of $0.52, pre-tax earnings of $184 million and pre-tax margin of 2.0 percent.
  • Excluding special charges and mark-to-market adjustments, UAL reported first-quarter net income of $143 million, diluted earnings per share of $0.50, pre-tax earnings of $179 million and pre-tax margin of 2.0 percent.
  • UAL has repurchased $747 million of its common shares year-to-date through April 16, 2018, representing approximately 4 percent of its shares outstanding as of year-end 2017.
  • Consolidated passenger revenue per available seat mile (PRASM) increased 2.7 percent year-over-year.
  • Consolidated total revenue per available seat mile (TRASM) increased 3.4 percent year-over-year.
  • Consolidated unit cost per available seat mile (CASM) increased 4.3 percent year-over-year.
  • First-quarter consolidated CASM, excluding special charges, third-party business expenses, fuel and profit sharing, increased 0.6 percent year-over-year.
  • UAL now expects full-year 2018 diluted earnings per share, excluding special charges and mark-to-market adjustments, to be $7.00 to $8.501.

"The exceptional operational performance United's employees delivered over the past quarter is impressive.  Even more so when we consider United achieved the best departure performance among our largest competitors despite four nor'easters and other weather disruptions." said Oscar Munoz, chief executive officer of United Airlines. "With our first-quarter financial results and our increased confidence in the outlook for the remainder of the year, we are tightening our adjusted EPS guidance range for the full year to $7.00 to $8.50. We continue to execute our strategy to strengthen and grow our domestic network, drive asset efficiency and productivity, while also continuing our focus on our customers."

For more information on UAL's second-quarter 2018 guidance, please visit ir.united.com for the company's investor update.

First-Quarter Highlights

Operations and Employees

  • Ranked first among our largest competitors in on-time departures and second among the same group in fewest cancelled flights.
  • Introduced and began training our team on United's new customer service decision framework, the core4, which focuses on the principles of being safe, caring, dependable and efficient.
  • Ranked number one among global carriers in Newsweek's 2017 Global 500 Green Rankings, one of the most recognized environmental performance assessments of the world's largest publicly traded companies.
  • Announced new global partnership with the Special Olympics.
  • Flew hundreds of Team USA Olympic and Paralympic Winter Games 2018 athletes – along with coaches and family members – to PyeongChang, South Korea, continuing the 38-year relationship between United and the United States Olympic Committee.

Customer Experience

  • Announced United Premium Plus that will provide more space, comfort and amenities on select international flights starting later this year.
  • Expanded menu selections for our Snack Shop and Bistro on Board and launched a new menu for customers flying from Canada to the U.S.
  • Announced that consumers can now earn and use United MileagePlus award miles at participating BP retail stations.
  • Eliminated charges for customers' second checked bag on all routes from North America to China and Hong Kong.

Network and Fleet

  • Launched two new international routes from Houston to Sydney and Denver to London.
  • Announced new service between six domestic hubs and eight destinations in California, Ohio, North Dakota, South Dakota, Virginia and Wisconsin.
  • As part of our joint venture relationship, Air New Zealand announced new nonstop service between Auckland and Chicago beginning this fall.
  • Announced year-round service between San Francisco and Auckland beginning April 2019.
  • Awarded tentative authority by the U.S. Department of Transportation to begin offering daily nonstop service between Houston and Havana, Cuba.
  • Took delivery of six new aircraft: four Boeing 787-9s and two Boeing 777-300ERs.
  • Announced newest aircraft type, the Boeing 737 MAX 9, to be introduced in domestic flight schedules starting in June.
  • Entered into an agreement to purchase 20 used Airbus A319 aircraft with expected delivery dates scheduled in 2020 and 2021.

Earnings Call

UAL will hold a conference call to discuss first-quarter 2018 financial results on Wednesday, April 18, at 9:30 a.m. Central Time /10:30 a.m. Eastern Time. A live, listen-only webcast of the conference call will be available at ir.united.com. The webcast will be available for replay within 24 hours of the conference call and then archived on the website for three months.

About United

United Airlines and United Express operate approximately 4,600 flights a day to 354 airports across five continents. In 2017, United and United Express operated more than 1.6 million flights carrying more than 148 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, Newark/New York, San Francisco and Washington, D.C. United operates 750 mainline aircraft and the airline's United Express carriers operate 545 regional aircraft. The airline is a founding member of Star Alliance, which provides service to 191 countries via 28 member airlines. For more information, visit united.com, follow @United on Twitter or connect on Facebook. The common stock of United's parent, United Continental Holdings, Inc., is traded on the NYSE under the symbol "UAL".

1 Excludes special charges and mark-to-market impact of equity investments, the nature of which are not determinable at this time. Accordingly, UAL is not providing earnings guidance on a GAAP basis.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
Certain statements included in this release 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 uncertainties relating to our operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as "expects," "will," "plans," "anticipates," "indicates," "believes," "estimates," "forecast," "guidance," "outlook," "goals" and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to us on the date of this release. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law. Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: general economic conditions (including interest rates, foreign currency exchange rates, investment or credit market conditions, crude oil prices, costs of aircraft fuel and energy refining capacity in relevant markets); economic and political instability and other risks of doing business globally, including political developments that may impact our operations in certain countries; demand for travel and the impact that global economic and political conditions have on customer travel patterns; competitive pressures on pricing and on demand; demand for transportation in the markets in which we operate; our capacity decisions and the capacity decisions of our competitors; the effects of any hostilities, act of war or terrorist attack; the effects of any technology failures or cybersecurity breaches; the impact of regulatory, investigative and legal proceedings and legal compliance risks; disruptions to our regional network; the ability of other air carriers with whom we have alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; costs associated with any modification or termination of our aircraft orders; potential reputational or other impact from adverse events in our operations, the operations of our regional carriers or the operations of our code share partners; our ability to attract and retain customers; our ability to execute our operational plans and revenue-generating initiatives, including optimizing our revenue; our ability to control our costs, including realizing benefits from our resource optimization efforts, cost reduction initiatives and fleet replacement programs; the impact of any management changes; our ability to cost-effectively hedge against increases in the price of aircraft fuel if we decide to do so; any potential realized or unrealized gains or losses related to any fuel or currency hedging programs; labor costs; our ability to maintain satisfactory labor relations and the results of any collective bargaining agreement process with our union groups; any disruptions to operations due to any potential actions by our labor groups; an outbreak of a disease that affects travel demand or travel behavior; U.S. or foreign governmental legislation, regulation and other actions (including Open Skies agreements and environmental regulations); industry consolidation or changes in airline alliances; our ability to comply with the terms of our various financing arrangements; the costs and availability of financing; our ability to maintain adequate liquidity; the costs and availability of aviation and other insurance; weather conditions; our ability to utilize our net operating losses to offset future taxable income; the impact of changes in tax laws; the success of our investments in airlines in other parts of the world; and other risks and uncertainties set forth under Part I, Item 1A., "Risk Factors," of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as well as other risks and uncertainties set forth from time to time in the reports we file with the U.S. Securities and Exchange Commission.

-tables attached-

On January 1, 2018, United Continental Holdings, Inc. ("UAL") adopted Accounting Standards Update No. 2014-09 (Topic 606), Revenue from Contracts with Customers, and Accounting Standards Update No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. As such, certain previously reported 2017 figures are adjusted in this report on a basis consistent with the new standards. See the Current Report on Form 8-K filed by UAL with the Securities and Exchange Commission on March 1, 2018 for additional information.

 

UNITED CONTINENTAL HOLDINGS, INC.
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED) (A)
(In millions, except per share data)

(In millions, except per share data) Three Months Ended
March 31, 2018
Three Months Ended
March 31, 2017
%
Increase/
(Decrease)
Operating revenue Passenger $8,149 $7,653 6.5
Operating revenue: Cargo 293 238 23.1
Operating revenue: Other operating revenue 590 535 10.3
Operating revenue: Total operating revenue 9,032 8,426 7.2
Operating expense: Operating expense: Salaries and related costs 2,726 2,636 3.4
Operating expense: Aircraft fuel 1,965 1,560 26.0
Operating expense: Regional capacity purchase 619 536 15.5
Operating expense: Landing fees and other rent 558 544 2.6
Operating expense: Depreciation and amortization 541 518 4.4
Operating expense: Aircraft maintenance materials and outside repairs 440 454 (3.1)
Operating expense: Distribution expenses 342 319 7.2
Operating expense: Aircraft rent 127 179 (29.1)
Operating expense: Special charges (C) 40 51 NM
Operating expense: Other operating expenses 1,398 1,309 6.8
Operating expense: Other Operating Expenses: Total operating expenses 8,756 8,106 8.0
Operating income: Operating income 276 320 (13.8)
Operating margin 3.1% 3.8% (0.7) pts.
Operating margin, excluding special charges (Non-GAAP) 3.5% 4.4% (0.9) pts.
Nonoperating income (expense):
Interest expense
(176) (162) 8.6
Nonoperating income (expense): Interest capitalized 19 23 (17.4)
Nonoperating income (expense): Interest income 17 11 54.5
Nonoperating income (expense): Miscellaneous, net (C) 48 (42) NM
Nonoperating income (expense): Total nonoperating expense (92) (170) (45.9)
Income before income taxes: Income before income taxes 184 150 22.7
Pre-tax margin 2.0% 1.8% 0.2 pts.
Pre-tax margin, excluding special charges and mark-to-market ("MTM") gains on equity investments (Non-GAAP) 2.0% 2.4% (0.4) pts.
Income tax expense (D) 37 51 (27.5)
Net income $147 $99 48.5
Earnings per share, diluted $0.52 $0.32 62.5
Weighted average shares, diluted 284.9 314.6 (9.4)
  1. NM means Not Meaningful

 

UNITED CONTINENTAL HOLDINGS, INC.
STATISTICS
Statistics: Three Months Ended
March 31, 2018
Three Months Ended
March 31, 2017
%
Increase/
(Decrease)
Mainline:
Passengers (thousands)
24,602 23,825 3.3
Mainline:Revenue passenger miles (millions) 44,110 42,183 4.6
Mainline:Available seat miles (millions) 54,798 53,054 3.3
Mainline:Cargo ton miles (millions) 817 748 9.2
Mainline:Passenger revenue per available seat mile (cents) 12.07 11.74 2.8
Mainline:Average yield per revenue passenger mile (cents) 15.00 14.76 1.6
Mainline:Aircraft in fleet at end of period 750 743 0.9
Mainline:Average stage length (miles) 1,813 1,802 0.6
Mainline:Average daily utilization of each aircraft (hours:minutes) 9:57 9:45 2.1
Mainline:Average aircraft fuel price per gallon $2.09 $1.70 22.9
Mainline:Fuel gallons consumed (millions) 771 761 1.3
Regional:
Passengers (thousands)
9,893 9,280 6.6
Regional:Revenue passenger miles (millions) 5,739 5,428 5.7
Regional:Available seat miles (millions) 7,179 6,754 6.3
Regional:Passenger revenue per available seat mile (cents) 21.35 21.11 1.1
Regional:Average yield per revenue passenger mile (cents) 26.71 26.27 1.7
Regional:Aircraft in fleet at end of period 545 478 14.0
Regional:Average stage length (miles) 565 573 (1.4)
Regional:Average aircraft fuel price per gallon $ 2.19 $ 1.80 21.7
Regional:Fuel gallons consumed (millions) 161 149 8.1
Consolidated (Mainline and Regional):
Passengers (thousands)
34,495 33,105 4.2
Consolidated (Mainline and Regional):Revenue passenger miles (millions) 49,849 47,611 4.7
Consolidated (Mainline and Regional):Available seat miles (millions) 61,977 59,808 3.6
Consolidated (Mainline and Regional):Passenger load factor:
Consolidated
80.4% 79.6% 0.8 pts.
Consolidated (Mainline and Regional):Domestic 82.8% 83.3% (0.5) pts.
Consolidated (Mainline and Regional):International 77.5% 75.2% 2.3 pts.
Consolidated (Mainline and Regional):Passenger revenue per available seat mile (cents) 13.15 12.80 2.7
Consolidated (Mainline and Regional):Total revenue per available seat mile (cents) 14.57 14.09 3.4
Consolidated (Mainline and Regional):Average yield per revenue passenger mile (cents) 16.35 16.07 1.7
Consolidated (Mainline and Regional):Aircraft in fleet at end of period 1,295 1,221 6.1
Consolidated (Mainline and Regional):Average stage length (miles) 1,443 1,451 (0.6)
Consolidated (Mainline and Regional):Average full-time equivalent employees (thousands) 85.6 85.2 0.5
Consolidated (Mainline and Regional):Average aircraft fuel price per gallon $ 2.11 $ 1.71 23.4
Consolidated (Mainline and Regional): Fuel gallons consumed (millions) 932 910 2.4
  • Note: See Part II, Item 6, Selected Financial Data, of UAL's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, for definitions of these statistics.

 

UNITED CONTINENTAL HOLDINGS, INC.
SUMMARY FINANCIAL METRICS (A)

 

Summary Financial Metrics: (In millions, except per share data) Three Months Ended
March 31, 2018
Three Months Ended
March 31, 2017
%
Increase/
(Decrease)
Operating income $276 $320 (13.8)
Operating margin 3.1% 3.8% (0.7) pts.
Operating income, excluding special charges (Non-GAAP) 316 371 (14.8)
Operating margin, excluding special charges (Non-GAAP) 3.5% 4.4% (0.9) pts.
EBITDA, excluding special charges and MTM gains on equity investments (Non-GAAP) $860 $847 1.5
EBITDA margin, excluding special charges and MTM gains on equity investments (Non-GAAP) 9.5% 10.1% (0.6) pts.
Pre-tax income $184 $150 22.7
Pre-tax margin 2.0% 1.8% 0.2 pts.
Pre-tax income, excluding special charges and MTM gains on equity investments (Non-GAAP) 179 201 (10.9)
Pre-tax margin, excluding special charges and MTM gains on equity investments (Non-GAAP) 2.0% 2.4% (0.4) pts.
Net income $147 $99 48.5
Net income, excluding special charges and MTM gains on equity investments (Non-GAAP) 143 132 8.3
Diluted earnings per share $0.52 $0.32 62.5
Diluted earnings per share, excluding special charges and MTM gains on equity investments (Non-GAAP) 0.50 0.42 19.0
Net cash provided by operating activities $1733 $547 216.8
Capital expenditures $979 $691 41.7
Adjusted capital expenditures (Non-GAAP) 1,013 1,354 (25.2)
Free cash flow, net of financings (Non-GAAP) $754 $(144) NM
Free cash flow (Non-GAAP) 720 (807) NM
  1. NM means Not Meaningful

 

UNITED CONTINENTAL HOLDINGS, INC.
ETURN ON INVESTED CAPITAL (ROIC) - Non-GAAP

ROIC is a Non-GAAP financial measure that we believe provides useful supplemental information for management and investors by measuring the effectiveness of our operations' use of invested capital to generate profits.
Return on invested captial: Twelve Months Ended
March 31, 2018
(in millions)
Net Operating Profit After Tax ("NOPAT")
Pre-tax income
$3,074
Special charges and MTM gains on equity investments (C): Severance and benefit costs 93
Special charges and MTM gains on equity investments (C): Impairment of assets 48
Special charges and MTM gains on equity investments (C): (Gains) losses on sale of assets and other special charges 24
Special charges and MTM gains on equity investments (C): MTM gains on equity investments (45)
Pre-tax income excluding special charges and MTM gains on equity investments (Non-GAAP) 3,194
add: Interest expense (net of income tax benefit) (a) 681
add: Interest component of capitalized aircraft rent (net of income tax benefit) (a) 277
add: Net interest on pension (net of income tax benefit) (a) 25
less: Income taxes paid (17)
NOPAT (Non-GAAP) $4,160
Average Invested Capital (five-quarter average)
Total assets
$42,571
Average Invested Capital (five-quarter average)Total assets add: Capitalized aircraft operating leases (b) 4,430
Average Invested Capital (five-quarter average)Total assets less: Non-interest bearing liabilities (c) (16,696)
Average invested capital (Non-GAAP) $30,305
Return on invested capital (Non-GAAP) 13.7%
Notes:
  1. Income tax benefit measured based on the effective cash tax rate. The effective cash tax rate is calculated by dividing cash taxes paid by pre-tax income excluding special charges and MTM gains on equity investments. For the twelve months ended March 31, 2018, the effective cash tax rate was 0.5%.
  2. The purpose of this adjustment is to capitalize the impact of aircraft operating leases. The company uses a multiple of seven times its annual aircraft rent expense to estimate the potential capitalized value and related liability of its aircraft. This is a simplified method used by many rating agencies and financial analysts to assist with the impact of operating leases on financial measures like return on invested capital.
  3. Non-interest bearing liabilities include advance ticket sales, frequent flyer deferred revenue, deferred income taxes and other non-interest bearing liabilities.

 

UNITED CONTINENTAL HOLDINGS, INC.
NON-GAAP FINANCIAL RECONCILIATION

(A) UAL evaluates its financial performance utilizing various accounting principles generally accepted in the United States of America (GAAP) and Non-GAAP financial measures, including operating income (loss), excluding special charges, operating margin excluding special charges, pre-tax income (loss), excluding special charges and MTM gains and losses on equity investments, pre-tax margin, excluding special charges and MTM gains and losses on equity investments, net income (loss), excluding special charges and MTM gains and losses on equity investments, diluted earnings (loss) per share, excluding special charges and MTM gains and losses on equity investments, and CASM, excluding special charges, third-party business expenses, fuel, and profit sharing, among others. UAL believes that adjusting for special charges is useful to investors because special charges are charges not indicative of UAL's ongoing performance. UAL believes that adjusting for MTM gains and losses on equity investments is useful to investors because those unrealized gains or losses may not ultimately be realized on a cash basis.

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 that adjusting for special charges is useful to investors because special charges are charges not indicative of UAL's ongoing performance. UAL also believes that excluding third-party business expenses, such as maintenance, ground handling and catering services for third parties, and fuel sales, provides more meaningful disclosure because these expenses are not directly related to UAL's core business. UAL also believes that excluding fuel costs from certain measures is useful to investors because it provides an additional measure of management's performance excluding the effects of a significant cost item over which management has limited influence. UAL excludes profit sharing because this exclusion allows investors to better understand and analyze our operating cost performance and provides a more meaningful comparison of our core operating costs to the airline industry. Reconciliations of reported non-GAAP financial measures to the most directly comparable GAAP financial measures are included below.
Non-GAAP Financial Reconciliation: Three Months Ended
March 31, 2018 in cents
Three Months Ended
March 31, 2017 in cents
%
Increase/
(Decrease)
CASM Mainline Operations (cents)
Cost per available seat mile (CASM)
13.58 13.15 3.3
CASM Mainline Operations (cents): Cost per available seat mile (CASM):Special charges (C) 0.07 0.09 NM
CASM Mainline Operations (cents): Cost per available seat mile (CASM): Third-party business expenses 0.06 0.09 (33.3)
CASM Mainline Operations (cents): Cost per available seat mile (CASM): Fuel expense 2.94 2.44 20.5
CASM Mainline Operations (cents): CASM, excluding special charges, third-party business expenses and fuel 10.51 10.53 (0.2)
CASM Mainline Operations (cents): CASM, excluding special charges, third-party business expenses and fuel: Profit sharing per available seat mile 0.03 0.03
CASM Mainline Operations (cents): CASM, excluding special charges, third-party business expenses, fuel, and profit sharing 10.48 10.50 (0.2)
CASM Consolidated Operations (cents)
Cost per available seat mile (CASM)
14.13 13.55 4.3
CASM Consolidated Operations (cents): Cost per available seat mile (CASM):Special charges (C) 0.07 0.08 NM
CASM Consolidated Operations (cents): Cost per available seat mile (CASM): Third-party business expenses 0.05 0.07 (28.6)
CASM Consolidated Operations (cents): Cost per available seat mile (CASM): Fuel expense 3.17 2.60 21.9
CASM Consolidated Operations (cents): CASM, excluding special charges, third-party business expenses and fuel 10.84 10.80 0.4
CASM Consolidated Operations (cents): CASM, excluding special charges, third-party business expenses and fuel: Profit sharing per available seat mile 0.02 0.04 (50.0)
CASM Consolidated Operations (cents): CASM, excluding special charges, third-party business expenses, fuel, and profit sharing 10.82 10.76 0.6
NM means Not Meaningful

 

UNITED CONTINENTAL HOLDINGS, INC.
NON-GAAP FINANCIAL RECONCILIATION (Continued)
 
Non-GAAP Financial Reconciliation continued: Three Months Ended
March 31, 2018 (In millions)
Three Months Ended
March 31, 2017 (In millions)
$
Increase/
(Decrease)
%
Increase/
(Decrease)
Operating expenses $8,756 $8,106 $650 8.0
Operating expenses: Special charges (C) 40 51 (11) NM
Operating expenses, excluding special charges 8,716 8,055 661 8.2
Operating expenses, excluding special charges: Third-party business expenses 31 40 (9) (22.5)
Operating expenses, excluding special charges: Fuel expenses 1,965 1,560 405 26.0
Operating expenses, excluding special charges: Profit sharing, including taxes 17 20 (3) (15.0)
Operating expenses, excluding fuel, profit sharing, special charges and third-party business expenses $6,703 $6,435 $268 4.2
Operating income $276 $320 $(44) (13.8)
Operating income: Special charges (C) 40 51 (11) NM
Operating income, excluding special charges $316 $371 $(55) (14.8)
Pre-tax income $184 $150 $34 22.7
Income before income taxes: Special charges and MTM gains on equity investments before income taxes (C) (5) 51 (56) NM
Pre-tax income excluding special charges and MTM gains on equity investments $179 $201 $(22) (10.9)
Net income $147 $99 $48 48.5
Net income: Special charges and MTM gains on equity investments, net of tax (C) (4) 33 (37) NM
Net income, excluding special charges and MTM gains on equity investments 143 132 11 8.3
Diluted earnings per share $0.52 $0.32 $0.20 62.5
Diluted earnings per share: Special charges and MTM gains on equity investments (0.02) 0.16 (0.18) NM
Diluted earnings per share: Tax effect related to special charges and MTM gains on equity investments (0.06) 0.06 NM
Diluted earnings per share, excluding special charges and MTM gains on equity investments $0.50 $0.42 $0.08 19.0
NM means Not Meaningful

 

UNITED CONTINENTAL HOLDINGS, INC.
NON-GAAP FINANCIAL RECONCILIATION (Continued)

UAL provides financial metrics, including earnings before interest, taxes, depreciation and amortization (EBITDA), that we believe provide useful supplemental information for management and investors by measuring profit and profit as a percentage of total operating revenues. UAL also provides EBITDA excluding special charges that management believes are not indicative of UAL's ongoing performance, and excluding MTM on equity investments, which represents unrealized gains or losses that may not ultimately be realized on a cash basis.
EBITDA, excluding special charges and MTM gains on equity investments (in millions) Three Months Ended
March 31, 2018
Three Months Ended
March 31, 2017
Net income $147 $99
Adjusted For:
Depreciation and amortization
541 518
Adjusted For: Interest expense 176 162
Adjusted For: Interest capitalized (19) (23)
Adjusted For: Interest income (17) (11)
Adjusted For: Income tax expense (D) 37 51
Adjusted For: Special charges before income taxes (C) 40 51
Adjusted For: MTM gains on equity investments (C) (45)
Adjusted EBITDA, excluding special items $860 $847
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 to appropriately reflect the non-reimbursable funds spent on capital expenditures. UAL also believes that adjusting net cash provided by operating activities for capital expenditures and adjusted capital expenditures is useful to allow investors to evaluate the company's ability to generate cash that is available for debt service or general corporate initiatives.

 

Capital Expenditures (in millions) Three Months Ended
March 31, 2018
Three Months Ended
March 31, 2017
Capital Expenditures: Capital expenditures $979 $691
Capital Expenditures: Capital expendituresProperty and equipment acquired through the issuance of debt and capital leases 74 711
Capital Expenditures: Capital expendituresAirport construction financing 12 21
Capital Expenditures: Capital expendituresFully reimbursable projects (52) (69)
Capital Expenditures:Adjusted capital expenditures – Non-GAAP $1,013 $1,354
Free Cash Flow (in millions) Three Months Ended
March 31, 2018
Three Months Ended
March 31, 2017
Free Cash Flow: Net cash provided by operating activities $1,733 $547
Free Cash Flow: Net cash provided by operating activities: Less capital expenditures 979 691
Free Cash Flow: Free cash flow, net of financings - Non-GAAP $754 $(144)
Free Cash Flow: Net cash provided by operating activities $1733 $547
Free Cash Flow: Net cash provided by operating activities: Less adjusted capital expenditures – Non-GAAP 1,013 1,354
Free Cash Flow: Free cash flow - Non-GAAP $720 $(807)

 

UNITED CONTINENTAL HOLDINGS, INC.
NOTES (UNAUDITED)

(B) Select passenger revenue information is as follows (in millions):
Notes unaudited: 1Q 2018
Passenger
Revenue
(millions)
Passenger
Revenue
vs.
1Q 2017
PRASM
vs.
1Q 2017
Yield
vs.
1Q 2017
Available
Seat Miles
vs.
1Q 2017
Mainline $3,485 6.5% 1.7% 2.2% 4.7%
Regional 1,483 7.5% 0.5% 1.6% 7.0%
Domestic 4968 6.8% 1.6% 2.2% 5.2%
Atlantic 1,252 12.1% 8.8% 1.0% 3.1%
Pacific 1,069 1.5% (1.5%) (1.9%) 3.0%
Latin America 860 3.4% 5.1% 2.9% (1.6%)
International 3,181 6.0% 4.1% 1.0% 1.8%
Consolidaterd $8,149 6.5% 2.7% 1.7% 3.6%
Mainline $6,616 6.2% 2.8% 1.6% 3.3%
Regional 1,533 7.5% 1.1% 1.7% 6.3%
Consolidated $8,149

 

UNITED CONTINENTAL HOLDINGS, INC.
NOTES (UNAUDITED)

(C) Special charges and MTM gains on equity investments include the following:
(In millions) Three Months Ended
March 31, 2018 (In millions)
Three Months Ended
March 31, 2017 (In millions)
Operating:
Operating: Severance and benefit costs
$14 $37
Operating: Impairment of assets 23
Operating: (Gains) losses on sale of assets and other special charges 3 14
Operating: (Gains) losses on sale of assets and other special charges Total special charges 40 51
Operating: Nonoperating MTM gains on equity investments (45)
Operating: Nonoperating MTM gains on equity investmentsTotal special charges and MTM gains on equity investments (5) 51
Operating: Income tax benefit related to special charges (9) (18)
Operating: Income tax expense related to MTM gains an on equity investments 10
Operating: Total special charges and MTM gains on equity investments, net of income taxes $(4) $(33)

 

Severance and benefit costs:During the three months ended March 31, 2018 and 2017, the company recorded $8 million ($7 million net of taxes) and $21 million ($14 million net of taxes), respectively, of severance and benefit costs primarily related to a voluntary early-out program for its technicians and related employees represented by the International Brotherhood of Teamsters. In the first quarter of 2017, approximately 1,000 technicians and related employees elected to voluntarily separate from the company and will receive a severance payment, with a maximum value of $100,000 per participant, based on years of service, with retirement dates through early 2019. Also during the three months ended March 31, 2018 and 2017, the company recorded $6 million ($4 million net of taxes) and $16 million ($10 million net of taxes), respectively, of severance related to its management reorganization initiative.

Impairment of assets:During the three months ended March 31, 2018, the company recorded a $23 million ($17 million net of taxes) fair value adjustment for aircraft purchased off lease and impairments related to certain fleet types and certain international slots no longer in use.

MTM gains on equity investments: During the three months ended March 31, 2018, the company recorded a gain of $45 million ($35 million net of taxes) for the change in market value of its investment in Azul, S.A. For equity investments subject to MTM accounting, the company records gains and losses to Nonoperating income (expense): Miscellaneous, net in its statements of consolidated operations.

(D) Effective tax rate

The company's effective tax rate for the three months ended March 31, 2018 and 2017 was 20.3% and 33.6%, respectively. The effective tax rates represented a blend of federal, state and foreign taxes and included the impact of certain nondeductible items. The effective tax rate for the three months ended March 31, 2018 also reflects the reduced federal corporate income tax rate as a result of the enactment of the Tax Cuts and Jobs Act ("Tax Act") in December 2017 and the impact of a change in the mix of domestic and foreign earnings. We continue to analyze the different aspects of the Tax Act which could potentially affect the provisional estimates that were recorded at December 31, 2017.

SOURCE United Airlines

For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com

United Airlines to Lead Industry Switch to Sustainable Aviation Fuel with Global Corporations, Customers

New United Eco-Skies Alliance Program includes global corporate leaders who, with United, will pay towards more sustainable aviation fuel, all companies invited to participate
April 13, 2021

CHICAGO, April 13, 2021 /PRNewswire/ -- United Airlines continues to lead the industry towards a more sustainable future with the launch of the first-of-its-kind Eco-Skies Alliance SM  program. Working with the airline, more than a dozen leading global corporations will collectively contribute towards the purchase of approximately 3.4 million gallons of sustainable aviation fuel (SAF) this year. With its nearly 80% emissions reductions on a lifecycle basis compared to conventional jet fuel, this is enough SAF to eliminate approximately 31,000 metric tons of greenhouse gas emissions, or enough to fly passengers over 220 million miles.

As inaugural participants, the following companies are taking a lead within their respective industries, reducing their aviation-related impact on the environment at the source, and creating demand for more SAF production.

  • Autodesk
  • Boston Consulting Group
  • CEVA Logistics
  • Deloitte
  • DHL Global Forwarding
  • DSV Panalpina
  • HP Inc.
  • Nike
  • Palantir
  • Siemens
  • Takeda Pharmaceuticals

"While we've partnered with companies for years to help them offset their flight emissions, we applaud those participating in the Eco-Skies Alliance for recognizing the need to go beyond carbon offsets and support SAF-powered flying, which will lead to more affordable supply and ultimately, lower emissions," said United CEO Scott Kirby. "This is just the beginning. Our goal is to add more companies to the Eco-Skies Alliance program, purchase more SAF and work across industries to find other innovative paths towards decarbonization."

United has made the airline industry's single largest investment in SAF and has purchased more SAF than any other airline in the world. World Energy, a long-term partner of United, will supply the SAF to Los Angeles International Airport (LAX), which makes it conveniently accessible to United's operations.

Customers traveling with United can now purchase SAF

In addition to the Eco-Skies Alliance program, United is giving customers the ability to contribute funds for additional SAF purchase or for use on initiatives United believes will help decarbonize aviation – the first of any U.S. airline to do so. Understanding there is a growing interest among customers for real, lasting solutions, this new capability will be available starting immediately via portal on united.com/ecoskiesalliance.

Advocating for sustainable travel, together with United

Strong federal and state policy leadership will be essential to reducing the climate impacts of air travel, so starting immediately United will help individuals connect with elected representatives to advocate for policies that would make air travel more sustainable for the long term. United will be the first airline in the world to connect customers directly with policy makers to voice the support that is needed to advance and accelerate permanent, scalable solutions that hold the potential to decarbonize the air transportation industry – and not just offset emissions.

 "We know there is a growing demand from a wide range of our customers including corporations, cargo shippers and individuals who share the same concern we do – that climate change is the most pressing issue of our generation," Kirby said.

United's 100% Green Commitment

At United, we believe the airline industry needs to be bolder when it comes to making decisions that confront the climate crisis. That's why we've committed to become 100% green and reduce our greenhouse gas emissions 100% by 2050 by taking the harder, better path of reducing emissions from flying, rather than relying on traditional carbon offsets.

Here are some of the ways we're making sustainability the new standard in flight:

United's Award-Winning Eco-Skies Program

United's award-winning Eco-Skies® program represents the company's commitment to the environment and the actions taken every day to create a more sustainable future. The Carbon Disclosure Project (CDP) named United as the only airline globally to its 2020 Climate 'A List' for the airline's actions to cut emissions, mitigate climate risks and develop the low-carbon economy, marking the seventh consecutive year that United had the highest CDP score among U.S. airlines.

In 2017, Air Transport World magazine named United its Eco-Airline of the Year for the second time since the airline launched the Eco-Skies program. Additionally, United ranked No. 1 among global carriers inNewsweek's2017 Global 500 Green Rankings, one of the most recognized environmental performance assessments of the world's largest publicly traded companies. For more information on United's commitment to environmental sustainability, visit united.com/sustainability.

About United

United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of UAL is traded on the Nasdaq under the symbol "UAL."

 

SOURCE United Airlines

For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com

United Sets New Diversity Goal: 50% of Students at New Pilot Training Academy To Be Women and People of Color

United Airlines is only major U.S. airline to own flight school: United Aviate Academy
April 06, 2021

CHICAGO, April 6, 2021 /PRNewswire/ -- United Airlines, the only major U.S. airline to own a flight school, will begin accepting applications today as it embarks on an ambitious plan to train 5,000 new pilots by 2030, at least half of them women and people of color. Backed by scholarship commitments from United Airlines and JPMorgan Chase, United Aviate Academy will create opportunities for thousands of students, including women and people of color to pursue a career as a commercial airline pilot, one of the most lucrative careers in the industry.

United Returns to JFK With Coast-to-Coast Flights and the Most Premium Seats From the NYC Area

Flights feature a reconfigured Boeing 767-300ER airplane with 46 business class seats and 22 United Premium Plus® seats
March 29, 2021

NEW YORK, March 29, 2021 /PRNewswire/ -- United is back at John F. Kennedy Airport (JFK), now operating direct service to the airline's West Coast hubs – Los Angeles International Airport (LAX) and San Francisco International Airport (SFO) from New York City. The airline will use its Boeing 767-300ER aircraft which features 46 business class all-aisle-access seating, and 22 United Premium Plus® seats. The airline operates the most premium seats between the New York City area and Los Angeles and San Francisco combined.

United is currently flying one round-trip flight, five days a week to each West Coast airport, with plans to double the number of flights as demand grows. The carrier is back at JFK following a five-year hiatus and now offers service from all three major airports in the New York City area.

"United's return to JFK reflects not only our strong commitment to the New York City area, but also to increasing service to and from the places our customers want to fly," said Ankit Gupta, Vice President of Domestic Network Planning and Scheduling. "With the addition of JFK, United now offers unmatched service, greater convenience, more choice and a best-in-class product for travelers throughout the New York City region as they return to the skies."

"We're happy to welcome United Airlines back to Kennedy Airport," said Charles Everett, General Manager of John F. Kennedy International Airport. "We remain committed to providing the highest level of safety, accessibility and ease of travel for all of the passengers who use the Port Authority's airport facilities, and United's decision is a great step in that direction."

United's premium cabin features flat-bed seats on all flights similar to the current Newark-Los Angeles and Newark-San Francisco offerings, providing a consistent and comprehensive NYC-West Coast product. This includes the signature cooling gel pillow along with the Saks Fifth Avenue day blanket and pillow. The routes offer seasonal menus crafted by renowned chefs and distinctive amenities. This includes both travelers in United Business and United Premium Plus sections who enjoy a complimentary hot entrée, mixed nuts, salad and dessert, as well as complimentary alcoholic beverages. The Economy Plus® and Economy sections feature the United all-in-one snack bag as well as the airline's buy on board program, which returns on April 12. Eligible customers will have access to the United ClubSM location at either LAX or SFO.

United's operations at JFK's Terminal 7 will provide seamless access for customers. The lobby area offers self-service kiosks, along with eight podiums which are conveniently located steps away from the TSA check point. Just a short walk from security screening, travelers will find the United-operated gates. Customers will also benefit from easy connections to more than a dozen Star Alliance partners at JFK, including access to 15 destinations in 14 countries as of March 2021.

For images and video footage please click here. Tickets are now available for purchase on United.com.

Committed to Ensuring a Safe Journey

United is committed to putting health and safety at the forefront of every customer's journey, with the goal of delivering an industry-leading standard of cleanliness through its United CleanPlusSM program. United has teamed up with Clorox and Cleveland Clinic to redefine cleaning and health safety procedures from check-in to landing and has implemented more than a dozen new policies, protocols and innovations designed with the safety of customers and employees in mind. For more details on all the ways United is helping keep customers safe during their journey, please visit united.com/cleanplus.

About United

United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".

 

SOURCE United Airlines

For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com

United to Hold Webcast of First-Quarter 2021 Financial Results

March 26, 2021

CHICAGO, March 26, 2021 /PRNewswire/ -- United Airlines will hold a conference call to discuss first-quarter 2021 financial results on Tuesday, April 20 at 9:30 a.m. CT/10:30 a.m. ET. A live, listen-only webcast of the conference call will be available at ir.united.com. The company will issue its first-quarter financial results after market close on Monday, April 19.

United Airlines Adds New Direct Flights to Coastal Vacation Destinations Starting Memorial Day Weekend

Airline adds 26 new routes between Midwest cities and popular summer getaway destinations in the South and New England
March 25, 2021

CHICAGO, March 25, 2021 /PRNewswire/ -- As more travelers begin to plan long-awaited getaways with family and friends, United Airlines is kicking off summer vacation season with a robust May schedule that includes the addition of 26 new nonstop routes between Midwest cities such as Cleveland, Cincinnati and Milwaukee and popular vacation destinations such as Hilton Head, S.C.; Pensacola, Fla.; and Portland, Maine. The airline also plans to resume more than 20 domestic routes and will start new service between Orange County, Calif., and Honolulu.

Internationally, in May United will fly more than 100% of its pre-pandemic schedule to Latin America compared to what it operated in 2019, including more flights to Mexico, the Caribbean, Central America and South America. The airline also plans to resume flights between Chicago and Tokyo Haneda, resume passenger flights between New York/Newark and Milan and Rome, and restart service between Chicago and Amsterdam. In total, United plans to operate 52% of its overall schedule compared to May 2019, whereas in May 2020 United operated 14% of its overall schedule compared to May 2019.

"In the past few weeks, we have seen the strongest flight bookings since the start of the pandemic," said Ankit Gupta, vice president of United's domestic network planning and scheduling. "As we rebuild our schedule to meet that demand, adding in seasonal point-to-point flying is just one of the ways we are finding opportunities to add new and exciting service. And as we have done throughout the entire pandemic, we will continue being nimble and strategic with our network to add the right service to the destinations our customers want to visit."

Domestic May Schedule

Starting May 27, United will begin point-to-point service to Charleston, S.C.; Hilton Head, S.C.; Myrtle Beach, S.C.; Pensacola, Fla. and Portland, Maine from seven cities including Cleveland, Cincinnati and Columbus, Ohio; St. Louis, Mo.; Pittsburgh, Pa.; Milwaukee, Wis. and Indianapolis, Ind. United plans to operate these point-to-point routes through Labor Day weekend. Most customers on these flights will experience United's new Bombardier CRJ-550 – the world's first 50-seater aircraft with two cabins. The spacious CRJ-550 is equipped with 10 first class seats, 20 Economy Plus seats, 20 standard economy seats, Wi-Fi, more legroom and enough overhead bin space for every customer to bring a roller bag on board.

For video and photos of the CRJ-550 click here.

United also continues to be a leading airline to Hawaii, offering more than 200 weekly flights, including new service between Orange County and Honolulu. In May, United will begin offering United Premium Plus® service on select Hawaii routes, which includes a bigger, more comfortable seat and a complimentary meal. United Premium Plus will be available for customers traveling to Honolulu and Maui from Chicago and Denver and will be expanded in June to flights between Chicago and Kona, Houston and Honolulu, and New York/Newark and Maui. United allows customers with valid negative COVID-19 tests to pre-clear before departing to Hawaii so they can save time and skip document screening lines upon arrival in the islands.

In addition to the new point-to-point service, United will resume 20 domestic flights to popular destinations and introduce three new domestic routes. This new nonstop service includes flights between Houston and Kalispell, Mont.; Washington, D.C. and Bozeman, Mont.; and between Chicago and Nantucket, Mass. Overall, United plans to operate 58% of its domestic schedule compared to May 2019.

International May Schedule

United will fly 46% of its international schedule compared to its May 2019 schedule. As customers continue to travel to warm beach destinations, United will operate more flights to Mexico, the Caribbean, Central America and South America than the carrier flew in 2019, providing more options to travel to Central America than any other U.S. carrier. Across the Pacific, United will resume flights between Chicago and Tokyo's Haneda airport and increase service from Los Angeles to Sydney and Tokyo Narita. Across the Atlantic, United will resume service between Newark and Milan and Rome as well as between Chicago and Amsterdam, Munich and Tel Aviv.

New Summer Point-to-Point Frequencies


Service from Cleveland to:

Destination

Frequency

Charleston, S.C.

3x weekly

Hilton Head, S.C.

3x weekly

Myrtle Beach, S.C.

3x weekly

Pensacola, Fla.

3x weekly

Portland, Maine

3x weekly


Service from Cincinnati to:

Charleston, S.C.

3x weekly

Hilton Head, S.C.

3x weekly

Pensacola, Fla.

3x weekly

Portland, Maine

3x weekly


Service from Columbus to:

Charleston, S.C.

3x weekly

Hilton Head, S.C.

4x weekly

Portland, Maine

4x weekly


Service from Indianapolis to:

Charleston, S.C.

4x weekly

Hilton Head, S.C.

3x weekly

Portland, Maine

4x weekly


Service from Milwaukee to:

Charleston, S.C.

2x weekly

Myrtle Beach, S.C.

2x weekly

Pensacola, Fla.

2x weekly

Portland, Maine

2x weekly

Savannah, Ga.

2x weekly


Service from St. Louis to:

Hilton Head, S.C.

3x weekly

Myrtle Beach, S.C.

3x weekly


Service from Pittsburgh to:

Charleston, S.C.

3x weekly

Hilton Head, S.C.

3x weekly

Pensacola, Fla.

3x weekly

Portland, Maine

3x weekly

Committed to Ensuring a Safe Journey

United is committed to putting health and safety at the forefront of every customer's journey, with the goal of delivering an industry-leading standard of cleanliness through its United CleanPlus program. United has teamed up with Clorox and Cleveland Clinic to redefine cleaning and health safety procedures from check-in to landing and has implemented more than a dozen new policies, protocols and innovations designed with the safety of customers and employees in mind.

About United

United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of UAL is traded on the Nasdaq under the symbol "UAL".

SOURCE United Airlines

For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com

United Airlines to Present at the 2021 J.P. Morgan Industrials Conference

March 09, 2021

CHICAGO, March 9, 2021 /PRNewswire/ -- United Airlines will present at the J.P. Morgan Industrials Conference on Monday, March 15. United Airlines' Chief Executive Officer Scott Kirby will present at the conference beginning at 8:40 a.m. CT / 9:40 a.m. ET.

The live webcast will be available on the investor relations section of United's website at ir.united.com. The company will archive the audio webcast on the website within 24 hours of the presentation, and the webcast will be available for a limited time.

From Airline to Landline: United Offers Seamless Travel from Denver International Airport to Breckenridge and Fort Collins

New luxury bus collaboration allows customers to fly into DEN, have their bags and ski equipment automatically transferred and be driven to Breckenridge and Fort Collins
February 26, 2021

DENVER, Feb. 26, 2021 /PRNewswire/ -- United announced today that it is making it easier for customers to travel to Breckenridge and Fort Collins, Colorado with convenient year-round ground transportation service connecting through its Denver hub. This is the first time Breckenridge has ever been served by an airline and will be Fort Collins' first global network carrier service in 25 years.

United Airlines Names Laysha Ward to Board of Directors

February 24, 2021

CHICAGO, Feb. 24, 2021 /PRNewswire/ -- United Airlines Holdings, Inc. (UAL) announced today that Laysha Ward is joining its Board of Directors. Ward, currently Executive Vice President and Chief External Engagement Officer of Target Corporation, brings an impressive resume with more than three decades of corporate leadership experience to the UAL Board.

United Announces Plans to Begin New Daily Nonstop Service Between Boston Logan and London Heathrow

United will be the only U.S. carrier to offer nonstop service between the nation's top seven business markets and London Heathrow
February 19, 2021

CHICAGO, Feb. 19, 2021 /PRNewswire/ -- United Airlines today announced plans to expand its global route network with new, nonstop service between Boston Logan International Airport and London Heathrow. This new service builds upon United's growing presence in London and provides customers on the East Coast with another convenient option to get to London. United plans to operate its premium Boeing 767-300ER aircraft on the route, with 46 United Polaris Business Class and 22 United Premium Plus seats. The aircraft features the highest proportion of premium seats on any widebody aircraft operated by a U.S. carrier between London and the United States.

Aloha, Summer! United to Offer the Only Nonstop Flights Between Orange County, California and Honolulu

New Orange County service begins May 6 and new, first-ever nonstop service between Chicago and Kona and between New York/Newark and Maui starts June 3

Customers departing Orange County and United's hub airports can save time by showing proof of negative tests to skip document screening process in Hawaii

February 12, 2021

February 12, 2021 – United Airlines today announced new convenient options for Hawaiian getaways this summer, offering the only nonstop flights between Orange County, California and Honolulu. The new route joins United's previously announced service between Chicago and Kona and New York/Newark and Maui. With the additional new flights, United will offer nonstop service on more than 20 routes between the mainland and Hawaii. United's Orange County – Honolulu service will be available for purchase on united.com beginning Saturday, February 13.

United to Work with Archer Aviation to Accelerate Production of Advanced, Short-Haul Electric Aircraft

Arrangement adds to United's commitment to invest in emerging technologies that combat climate change
February 10, 2021

CHICAGO, Feb. 10, 2021 /PRNewswire/ -- United Airlines today announced that it has completed an agreement to work with air mobility company Archer as part of the airline's broader effort to invest in emerging technologies that decarbonize air travel. Rather than relying on traditional combustion engines, Archer's electric vertical takeoff and landing (eVTOL) aircraft are designed to use electric motors and have the potential for future use as an 'air taxi' in urban markets.