United Announces Third-Quarter Profit - United Hub

United Airlines Announces Third-Quarter Profit

October 22, 2015

CHICAGO, Oct. 22, 2015 /PRNewswire/ -- United Airlines (UAL) today reported third-quarter 2015 financial results.

  • UAL reported third-quarter net income of $1.7 billion, or $4.53 per diluted share, excluding special items.
  • Including special items, UAL reported third-quarter net income of $4.8 billion. These results include a nonrecurring $3.2 billion non-cash gain associated with the reversal of the company's income tax valuation allowance.

"I want to thank all of our employees for their hard work, professionalism and contributions to another successful quarter. The United family has had a challenging few weeks, but we have never felt more unified and are committed to making the right investments in our people and providing them the tools they need to deliver excellent service to our customers," said Brett Hart, acting CEO of United. "With Oscar Munoz on medical leave, this leadership team and I are working to push forward the agenda we laid out over the past six weeks by focusing on our employees, improving our processes and investing in our systems to further improve our margins."

Third-Quarter Revenue and Capacity

For the third quarter of 2015, total revenue was $10.3 billion, a decrease of 2.4 percent year-over-year. In the quarter, the company amended its co-branded credit card marketing services agreement, which led to approximately $100 million of incremental revenue. This was more than offset by the declines in passenger revenue.

Third-quarter 2015 consolidated PRASM decreased 5.8 percent and consolidated yield decreased 5.6 percent compared to the third quarter of 2014. The declines in PRASM and yield were driven largely by a strong U.S. dollar, lower surcharges, travel reductions from corporate customers in the energy sector and softening in domestic yields. "Fourth-quarter pre-tax margin is expected to be between 9.5 and 11.5 percent, excluding special items," Hart added.

Passenger revenue for the third quarter of 2015 and period-to-period comparisons of related statistics for UAL's mainline and regional operations are included in the tables in the back of this document.

Third-Quarter Costs

Total operating expense excluding special items was $8.3 billion in the third quarter, down 10.7 percent year-over-year. Including special charges, total operating expense was $8.4 billion, a 10.3 percent decrease year-over-year. The decrease was driven by lower oil prices and good non-fuel cost performance as a result of a strong U.S. dollar, improved operational performance and the company's Project Quality efficiency and quality initiative. Consolidated unit cost (CASM), excluding special charges, third-party business expenses, fuel and profit sharing decreased 1.5 percent compared to the third quarter of 2014. Consolidated CASM including those items decreased 12.1 percent year-over-year.

Liquidity and Capital Allocation

In the third quarter, UAL generated $1.3 billion in operating cash flow, $627 million in free cash flow, and ended the quarter with $6.9 billion in unrestricted liquidity, including $1.35 billion of undrawn commitments under its revolving credit facility. During the third quarter, the company continued to invest in its business through gross capital expenditures of approximately $716 million, excluding fully reimbursable projects. These investments include new aircraft purchases, aircraft refurbishments and investments in the company's hubs at New York/Newark, San Francisco, Houston and Chicago.

The company spent $230 million to complete its initial $1 billion share buyback program in the quarter and spent an additional $32 million toward its new $3 billion authorization, bringing the total returned to shareholders in the quarter to $262 million.

UAL earned a 19.8 percent return on invested capital for the 12 months ended September 30, 2015.

For more information on UAL's fourth-quarter 2015 guidance, please visit ir.united.com for the company's investor update.

About United

United Airlines and United Express operate an average of nearly 5,000 flights a day to 352 airports across six continents. In 2014, United and United Express operated nearly two million flights carrying 138 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, New York/Newark, San Francisco and Washington, D.C. United operates more than 700 mainline aircraft, and this year, the airline anticipates taking delivery of 34 new Boeing aircraft, including the 787-9 and the 737-900ER. United is also welcoming 49 new Embraer E175 aircraft to United Express. The airline is a founding member of Star Alliance, which provides service to 192 countries via 28 member airlines. Approximately 84,000 United employees reside in every U.S. state and in countries around the world. 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.

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 financial 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," "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 report are based upon information available to us on the date of this report. 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: our ability to comply with the terms of our various financing arrangements; the costs and availability of financing; our ability to maintain adequate liquidity; our ability to execute our operational plans, 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; our ability to utilize our net operating losses; our ability to attract and retain customers; demand for transportation in the markets in which we operate; an outbreak of a disease that affects travel demand or travel behavior; demand for travel and the impact that global economic conditions have on customer travel patterns; excessive taxation and the inability to offset future taxable income; 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); our ability to cost-effectively hedge against increases in the price of aircraft fuel; any potential realized or unrealized gains or losses related to fuel or currency hedging programs; the effects of any hostilities, act of war or terrorist attack; 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; the costs and availability of aviation and other insurance; industry consolidation or changes in airline alliances; competitive pressures on pricing and on demand; our capacity decisions and the capacity decisions of our competitors; U.S. or foreign governmental legislation, regulation and other actions (including open skies agreements and environmental regulations); the impact of regulatory, investigative and legal proceedings and legal compliance risks; the impact of any management changes; labor costs; our ability to maintain satisfactory labor relations and the results of the collective bargaining agreement process with our union groups; any disruptions to operations due to any potential actions by our labor groups; weather conditions; and other risks and uncertainties set forth under Item 1A., Risk Factors, of UAL's Annual Report on Form 10-K, as well as other risks and uncertainties set forth from time to time in the reports we file with the SEC.

-tables attached-

 

 

 


2015 - Special items




Severance and benefits: During the three and nine months ended September 30, 2015, the company recorded $28 million and $103 million, respectively, of severance and benefits primarily related to a voluntary early-out program for its flight attendants. In 2014, more than 2,500 flight attendants 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 the end of 2016.






Integration-related costs: Integration-related costs include compensation costs related primarily to systems integration and training for employees.




(Gains) losses on sale of assets and other special charges: During the three and nine months ended September 30, 2015, the company recorded $33 million and $45 million, respectively, for losses on the sale of one aircraft, the impairment of several engines held for sale and discontinued internal software projects.






Loss on extinguishment of debt: During the nine months ended September 30, 2015, the company recorded $134 million of losses as part of Nonoperating income (expense): Miscellaneous, net due to the write-off of the unamortized non-cash debt discount related to the extinguishment of the 6% Notes due 2026 and 6% Notes due 2028.




Venezuela currency loss: During the third quarter of 2015, the company recorded a $61 million foreign exchange loss related to its cash holdings in Venezuela. The Venezuelan government has maintained currency controls and fixed official exchange rates (i.e. Sistema Complementario de Administracion de Divisas, or SICAD, and Sistema Marginal de Divisas, or SIMADI) for many years. Previously, airlines were permitted to use the more favorable SICAD rate (currently 13.5 Venezuelan bolivars to one U.S. dollar) if repatriating profits and for payments of local goods and services in Venezuela. During 2015, many of the payments for local goods and services have transitioned to utilizing the SIMADI rate (currently 200 Venezuelan bolivars to one U.S. dollar) or have been required to be paid in U.S. dollars. Furthermore, the Venezuelan government has not permitted the exchange and repatriations of local currency since mid-2014. As a result, the Company has decided to change the exchange rate from historical SICAD rates to a combination of SIMADI and SICAD rates based on projections of future cash payments. Including this adjustment, the company's resulting cash balance held in Venezuelan bolivars at September 30, 2015 is approximately $15 million.




MTM losses from fuel derivative contracts settling in future periods and prior period gains (losses) on fuel derivative contracts settled in the current period: The company uses certain combinations of derivative contracts that are economic hedges but do not qualify for hedge accounting under U.S. generally accepted accounting principles. Additionally, the company may enter into contracts at different times and later combine those contracts into structures designated for hedge accounting. As with derivatives that qualify for hedge accounting, the economic hedges and individual contracts are part of the company's program to mitigate the adverse financial impact of potential increases in the price of fuel. The company records changes in the fair value of these various contracts that are not designated for hedge accounting to Nonoperating income (expense):

Miscellaneous, net in the statements of consolidated operations. During the three and nine months ended September 30, 2015, the company recorded $36 million and $28 million, respectively, in MTM losses on fuel derivative contracts that will settle in future periods. For fuel derivative contracts that settled in the three and nine months ended September 30, 2015, the company recorded MTM losses of $69 million and $173 million, respectively, in prior periods. The figures above also include an insignificant amount of ineffectiveness on hedges that are designated for hedge accounting.




2014 - Special items




Severance and benefits: During the nine months ended September 30, 2014, the company recorded $58 million of severance and benefits primarily related to reductions of management and front-line employees, including from Hopkins International Airport (Cleveland), as part of its cost savings initiatives. The company reduced its average daily departures from Cleveland by over 60 percent during the second quarter of 2014. The company is currently evaluating its options regarding its long-term contractual commitments at Cleveland. The capacity reductions at Cleveland may result in further special charges, which could be significant, related to our contractual commitments.




Integration-related costs: Integration-related costs included compensation costs related to systems integration, training, severance and relocation for employees.




Costs associated with permanently grounding Embraer ERJ 135 aircraft: During the nine months ended September 30, 2014, the company recorded $66 million for the permanent grounding of 21 of the company's Embraer ERJ 135 regional aircraft under lease through 2018, which included an accrual for remaining lease payments and an amount for maintenance return conditions. The company decided to permanently ground these 21 Embraer ERJ 135 aircraft as a result of new Embraer E175 regional jet deliveries, the impact of pilot shortages at regional carriers and fuel prices.




(Gains)/losses on sale of assets and other special charges: During the nine months ended September 30, 2014, the company recorded $33 million for charges related primarily to the impairment of its flight equipment held for disposal associated with its Boeing 737-300 and 737-500 fleets and incurred losses on sales of aircraft and other assets and other special losses totaling $28 million.




Venezuela currency loss: During the nine months ended September 30, 2014, the company recorded $21 million of losses due to exchange rate changes in Venezuela applicable to funds held in local currency.




MTM losses from fuel derivative contracts settling in future periods and prior period gains on fuel derivative contracts settled in the current period: The company utilizes certain derivative instruments that are economic hedges but do not qualify for hedge accounting under U.S. generally accepted accounting principles. The company records changes in the fair value of these economic hedges to Nonoperating income (expense): Miscellaneous, net in the statements of consolidated operations. During the three and nine months ended September 30, 2014, the company recorded $95 million and $57 million, respectively, in MTM losses on economic hedges that will settle in future periods. For economic hedges that settled in the three and nine months ended September 30, 2014, the company recorded MTM gains of $16 million and $63 million, respectively, in prior periods. The figures above also include an insignificant amount of ineffectiveness on hedges that are designated for hedge accounting.




(C)

The company's income tax benefit was $3.2 billion for both the third quarter of 2015 and nine months ended September 30, 2015. This compares to an income tax benefit of $4 million in the third quarter of 2014 and a $1 million tax provision for the nine months ended September 30, 2014. A discrete tax benefit of $3.1 billion for the reduction to the U.S. net federal deferred tax asset valuation allowance and an approximately $100 million tax benefit related to a reduction to the net state deferred tax asset valuation allowance was included in the income tax benefit for the third quarter of 2015 and nine months ended September 30, 2015.







 

 

 

 

 

 

 

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SOURCE United Airlines

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

United Airlines Plans to Resume Service on More Than 25 International Routes in September

July 31, 2020

CHICAGO, July 31, 2020 /PRNewswire/ -- United Airlines today announced it plans to resume service on nearly 30 international routes in September, including flights to Asia, India, Australia, Israel and Latin America and to continue to add ways to visit popular vacation destinations in the Caribbean, Hawaii and Mexico. The airline intends to fly 37% of its overall schedule in September as compared to the same period last year and is a 4% increase in capacity compared to what is planned for August 2020. United is also extending its waiver of change fees and award redeposit fees for reservations through August 31.

Passengers Can Now Text Cleaning and Safety Questions Directly to United Airlines

July 30, 2020

CHICAGO, July 30, 2020 /PRNewswire/ -- United Airlines today launched a new chat function – the United Automated Assistant – to give customers a contactless option to receive immediate access to information about cleaning and safety procedures put in place due to COVID-19. Customers can text "Clean" to FLYUA (35982) and get answers to questions about masks, boarding procedures, touchless check-in options and more, without having to call, search online or wait in a line for an answer. The United Automated Assistant is one of many recent innovations that have been developed to modernize the airline's service and create a more seamless experience for our customers. This launch follows another recently announced digital product that allows United customers on standby and upgrade lists to receive text notifications once they have been cleared and assigned a seat, saving them time and further limiting person-to-person interactions.


United Airlines Names Sasha Johnson Vice President Corporate Safety

July 24, 2020

CHICAGO, July 24, 2020 /PRNewswire/ -- United Airlines today announced that Sasha Johnson will become the company's Vice President of Corporate Safety following Michael Quiello's retirement from United, effective October 1. Johnson, who currently serves as United's managing director of International Regulatory and Policy, will report to United's Chief Operations Officer Jon Roitman.

In her new role, Johnson will manage all aspects of worldwide aviation safety, ground safety, quality assurance, medical, workers compensation, managed care, business continuity, family assistance and emergency operations for United.

"Sasha is a highly respected and well-established leader with a proven track record of navigating some of the most challenging safety and regulatory issues in our industry," said Scott Kirby, United's chief executive officer. "Her unparalleled capacity for collaboration, teamwork and creative solutions will be a tremendous asset to our corporate safety team during one of the most challenging periods our industry has ever faced. We wish Mike well and appreciate his efforts over the past decade to not only lead United's safety programs but also take on a mentorship role for young people interested in aviation."

During Quiello's 11 years with United, the Corporate Safety team accomplished some tremendous milestones, including the highly complex process that resulted in United's single operating certificate after the merger with Continental Airlines. Quiello championed the company's active participation in the OSHA Voluntary Protection Program, and under his leadership, the United team's data visualization program won the National Safety Council's highest award.

Before joining United in 2015, Johnson worked for more than a decade at the Federal Aviation Administration and with the Department of Transportation in various roles including chief of staff at the FAA; assistant to the secretary and director of public affairs, and press secretary at the DOT. In these roles, she developed a comprehensive understanding of the issues critical to aviation safety, honed by her work in crisis management with the FAA administrator and the DOT secretary. 

Prior to that, Johnson spent more than a decade in broadcast journalism at CNN, including covering campaigns and elections as a senior producer.

Johnson holds a Bachelor of Science degree from the S.I. Newhouse School of Public Communications at Syracuse University.

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 Extends Mask Requirements to Airports

July 22, 2020

CHICAGO, July 22, 2020 /PRNewswire/ -- United Airlines today announced that customers will be required to wear a face covering in the more than 360 airports where the airline operates around the world. This includes United customer service counters and kiosks, United Club locations, United's gates and baggage claim areas. If customers refuse to comply, they may be refused travel and banned from flying United at least while the mask requirement is in place. This will be effective for all customers traveling on and after July 24 regardless of when their ticket was purchased. United also will strengthen its mask exemption policy by only excluding children under the age of two. If a passenger believes that there are extraordinary circumstances that warrant an exception, they should contact United or speak to a representative at the airport.

United Airlines Took Industry-Leading Steps to Manage Historic Impact of COVID-19 in Q2

July 21, 2020

CHICAGO, July 21, 2020 /PRNewswire/ -- United Airlines (UAL) today announced second quarter 2020 financial results, the most difficult financial quarter in its 94-year history, with a net loss of $1.6 billion, and an adjusted net loss¹ of $2.6 billion. Total operating revenues were down 87.1% year-over-year, on an 87.8 percent decrease in capacity year-over-year. The company's total liquidity as of the close of business on Monday, July 20, 2020 was approximately $15.2 billion. United now expects liquidity at the end of the third quarter to be over $18 billion.

United Airlines to Maximize Ventilation System During Boarding and Deplaning

July 20, 2020

CHICAGO, July 20, 2020 /PRNewswire/ -- United Airlines today announced that the carrier will now maximize air flow volume for all mainline aircraft high-efficiency particulate air (HEPA) filtration systems during the entire boarding and deplaning process, helping further reduce the spread of COVID-19. In combination with the HEPA filters, the air conditioning and pressurization system onboard United's mainline aircraft recirculates the air every 2-3 minutes and removes 99.97% of particles – including viruses and bacteria during both ground and air operations – making the air onboard a plane significantly cleaner than what people typically experience in restaurants, grocery stores, schools or even some hospitals. United pilots and ground staff are working to implement this new procedure for mainline aircraft beginning July 27.

United Airlines Named a Top Company for Disability Inclusion for Fifth Consecutive Year

July 15, 2020

CHICAGO, July 15, 2020 /PRNewswire/ -- United Airlines was recognized for the fifth consecutive year as a top-scoring company and best place to work for disability inclusion with a perfect score of 100 on the 2020 Disability Equality Index (DEI). The 2020 DEI measured United's inclusion criteria including: culture & leadership; enterprise-wide access; employment practices; community engagement and supplier diversity.

United Airlines to Hold Webcast of Second-Quarter 2020 Financial Results

July 07, 2020

CHICAGO, July 7, 2020 /PRNewswire/ -- United Airlines will hold a conference call to discuss second-quarter 2020 financial results on Wednesday, July 22, 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 second-quarter earnings release and third-quarter investor update after market close on Tuesday, July 21.

United Airlines Further Expands International Schedule: Adds New Service Between Chicago and Tel Aviv

July 07, 2020

Chicago, July 6, 2020 – United Airlines today announced it is further expanding its international schedule in September with new nonstop service three days a week between Chicago O'Hare and Tel Aviv's Ben Gurion International Airport. United also announced it is reinstating service between Chicago and Hong Kong as well as between Los Angeles and Sydney.

United Announces Completion of MileagePlus Senior Secured Notes Offering

July 02, 2020

CHICAGO, July 2, 2020 /PRNewswire/ -- Today, United Airlines, Inc. ("United") announced the completion of the private offering by Mileage Plus Holdings, LLC, a direct wholly-owned subsidiary of United that operates the MileagePlus program ("MPH"), and Mileage Plus Intellectual Property Assets, Ltd., an indirect wholly-owned subsidiary of MPH ("MIPA" and, together with MPH, the "MileagePlus Subsidiaries") of an aggregate of $3.8 billion in principal amount of 6.50% senior secured notes due 2027 (the "Notes"). Concurrently with the issuance of the Notes, the MileagePlus Subsidiaries entered into a credit agreement providing for a term loan facility ("Term Loan Facility") in an aggregate amount of $3.0 billion. Borrowings under the Term Loan Facility will bear interest at a variable rate equal to LIBOR (but not less than 1.0% per annum) plus 5.25% per annum. The MileagePlus Subsidiaries intend to loan the net proceeds from the offering of the Notes and borrowings under the Term Loan Facility to United, after depositing a portion of such proceeds in reserve accounts for the Notes and the Term Loan Facility.

United Airlines Adds Nearly 25,000 Flights in August

July 01, 2020

CHICAGO, July 1, 2020 /PRNewswire/ -- United Airlines today announced it is tripling the size of its August schedule compared to its June 2020 schedule, adding nearly 25,000 domestic and international flights compared to July 2020, and plans to fly 40% of its overall schedule in August, as compared to August 2019. While travel demand remains a fraction of what it was at the end of 2019, customers are slowly returning to flying with a preference for leisure destinations, trips to reunite with friends and family, and getaways to places that encourage social distancing. According to TSA, more than 600,000 passengers passed through airport security checkpoints on Monday, June 29, the first time since March 19 that those numbers exceeded 25% of pre-COVID levels.