United strong first quarter 2016 performance - United Hub

United Airlines Announces Strong First-Quarter 2016 Performance

Mainline on-time arrival improvement of 14 points year-over-year; best quarterly on-time performance since the merger
April 20, 2016

CHICAGO, April 20, 2016 /PRNewswire/ -- United Airlines (UAL) today reported its first-quarter 2016 financial results.

  • Excluding special items, UAL reported first-quarter net income of $435 million, earnings per share of $1.23 per diluted share and pre-tax earnings of $688 million.
  • Including special items, UAL reported first-quarter net income of $313 million, earnings per share of $0.88 per diluted share and pre-tax earnings of $494 million.
  • During the first quarter of 2016, the company repurchased $1.5 billion worth of its common stock, representing approximately 8 percent of shares outstanding.

 

"I am extremely proud of United's nearly 86,000 aviation professionals for their contributions to these strong results – including the improvements in our reliability, customer satisfaction and financial performance," said Oscar Munoz, president and chief executive officer of United Airlines. "As we accelerate United's path forward, we will continue to focus on running a great airline today while innovating for tomorrow."

First-Quarter Revenue

For the first quarter of 2016, total revenue was $8.2 billion, a decrease of 4.8 percent year-over-year. First-quarter 2016 consolidated passenger revenue per available seat mile (PRASM) decreased 7.4 percent and consolidated yield decreased 6.1 percent compared to the first quarter of 2015. The decline in PRASM continues to be driven by economic factors including a strong U.S. dollar and lower oil prices. In addition, the company experienced a larger-than-anticipated decrease in close-in business travel during the weeks surrounding the Easter holiday and spring break.

The company continues to focus on providing customers options to personalize their travel experience and, this quarter, launched its new bundled products offering, which is exceeding expectations.

First-Quarter Costs

Total operating expense excluding special charges was $7.4 billion in the first quarter, down 5.7 percent year-over-year. Including special charges, total operating expense was $7.5 billion, a 4.1 percent decrease year-over-year. The decrease was largely driven by lower oil prices. Consolidated unit cost (CASM), excluding special charges, third-party business expenses, fuel and profit sharing, increased 1.3 percent compared to the first quarter of 2015. Consolidated CASM including those items decreased 5.7 percent year-over-year.

Liquidity and Capital Allocation

In the first quarter, UAL generated $1.2 billion in operating cash flow, $376 million in free cash flow and ended the quarter with $5.3 billion in unrestricted liquidity, including $1.35 billion of undrawn commitments under its revolving credit facility. During the first quarter, the company continued to invest in its business through gross capital expenditures of approximately $820 million, excluding fully reimbursable projects, and repurchased $1.5 billion worth of its common stock, representing approximately 8 percent of shares outstanding.

UAL earned a 20.8 percent return on invested capital for the 12 months ended March 31, 2016.

For more information on UAL's second-quarter 2016 guidance, please visit ir.united.com for the company's investor update.

Recent Accomplishments
Operations and Employees

  • Reported best quarterly on-time performance since the merger with a mainline arrival rate of 71.9 percent.
  • Achieved best quarterly mishandled bag rate since the merger.
  • Employees earned cash-incentive payments of approximately $30 million for achieving operational performance goals.
  • Reached ratified agreements with more than half of represented employees – pilots, dispatchers and IAM-represented employees. The company remains focused on getting contracts like these for flight attendants and technicians.

Network and Fleet

  • Announced new international routes including service between San Francisco and Hangzhou, China and San Francisco and Singapore, both with the Boeing 787-9 Dreamliner and subject to government approval.
  • Launched the first-ever nonstop service between San Francisco and Tel Aviv.
  • Announced a joint venture revenue-sharing agreement with Air New Zealand.
  • Signed a multi-year agreement to strengthen partnership and established a joint strategic initiative with Air China.
  • Ordered 65 customer-pleasing, two-cabin Boeing 737-700 aircraft, reducing reliance on 50-seat aircraft.

Customer Experience

  • Achieved highest customer satisfaction score in the combined company's history.
  • United's industry-leading mobile app topped 21 million downloads and was used by 50 percent of MileagePlus members when traveling.
  • First U.S. airline to use commercial-scale volumes of biofuel for regularly scheduled flights.

About United

United Airlines and United Express operate an average of 5,000 flights a day to 336 airports across six continents. In 2015, United and United Express operated more than 1.5 million flights carrying more than 140 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 715 mainline aircraft, and this year, the airline anticipates taking delivery of 21 new Boeing aircraft, including 737 NGs, 787s and 777s. The airline is a founding member of Star Alliance, which provides service to 192 countries via 28 member airlines. Approximately 86,000 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 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," "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: 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 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; 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); economic and political instability and other risks of doing business globally; 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; disruptions to our regional network; 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 Part I, 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 U.S. Securities and Exchange Commission.

-tables attached-

 

UNITED CONTINENTAL HOLDINGS, INC.
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015

(In millions, except per share data)

  Three Months Ended
March 31, 2016
Three Months Ended
March 31, 2015
%
Increase/
(Decrease)
Operating revenue:
Passenger: (A)
Mainline
$5,577 $5,938 (6.1)
Operating revenue: Passenger: (A) Regional 1,413 1,482 (4.7)
Operating revenue: Passenger: (A) Total passenger revenue 6,990 7,420 (5.8)
Operating revenue: Cargo 194 242 (19.8)
Operating revenue: Other operating revenue 1,011 946 6.9
Operating revenue:Other operating revenue: Total operating revenue 8,195 8,608 (4.8)
Operating expense:
Salaries and related costs
2,490 2,301 8.2
Operating expense: Aircraft fuel(B) 1,218 1,864 (34.7)
Operating expense: Landing fees and other rent 525 543 (3.3)
Operating expense: Regional capacity purchase 522 570 (8.4)
Operating expense: Depreciation and amortization 479 429 11.7
Operating expense: Aircraft maintenance materials and outside repairs 402 397 1.3
Operating expense: Distribution expenses 303 312 (2.9)
Operating expense: Aircraft rent 178 201 (11.4)
Operating expense: Special charges (C) 190 64 NM1
Operating expense: Other operating expenses 1,239 1,186 4.5
Operating expense: Other operating expenses: Total operating expenses 7,546 7,867 (4.1)
Operating income 649 741 (12.4)
Nonoperating income (expense):
Interest expense
(159) (173) (8.1)
Nonoperating income (expense): Interest capitalized 14 12 16.7
Nonoperating income (expense): Interest income 8 5 60.0
Nonoperating income (expense): Miscellaneous, net (C) (18) (74) (75.7)
Nonoperating income (expense): Miscellaneous, net (C): Total nonoperating expense (155) (230) (32.6)
Income before income taxes 494 511 (3.3)
Income tax expense (benefit) (D) 181 3 NM1
Net income $313 $508 (38.4)
Earnings per share, basic $0.88 $1.33 (33.8)
Earnings per share, diluted $0.88 $1.32 (33.3)
Weighted average shares, basic 354 382 (7.3)
Weighted average shares, diluted 355 384 (7.6)
  1. NM means Not Meaningful

 

UNITED CONTINENTAL HOLDINGS, INC.
NOTES (UNAUDITED)

(A) Select passenger revenue information is as follows (in millions):
  1Q 2016
Passenger
Revenue
(millions)
Passenger
Revenue
vs.
1Q 2015
PRASM
vs.
1Q 2015
Yield
vs.
1Q 2015
Available
Seat Miles
vs.
1Q 2015
Domestic $2,868 (2.8%) (5.5%) (4.3%) 2.8%
Atlantic 1,040 (11.9%) (8.9%) (4.1%) (3.3%)
Pacific 952 (10.1%) (9.4%) (7.8%) (0.8%)
Latin America 717 (4.0%) (14.5%) (15.1%) 12.3%
International 2,709 (9.3%) (10.5%) (8.7%) 1.4%
Mainline 5,577 (6.1%) (8.0%) (6.5%) 2.1%
Regional 1,413 (4.7%) (4.1%) (3.7%) (0.5%)
Consolidated $6,990 (5.8%) (7.4%) (6.1%) 1.8%

 

UNITED CONTINENTAL HOLDINGS, INC.
NOTES (UNAUDITED)

(B) UAL's results of operations include fuel expense for both mainline and regional operations. (In millions, except per gallon)
  Three Months Ended
March 31, 2016
Three Months Ended
March 31, 2015
%
Increase/
(Decrease)
Mainline fuel expense excluding hedge impacts $885 $1,396 (36.6)
Hedge losses reported in fuel expense 2 (138) (161) NM1
Total mainline fuel expense 1,023 1,557 (34.3)
Regional fuel expense 195 307 (36.5)
Consolidated fuel expense 1,218 1,864 (34.7)
Cash paid on settled hedges that did not qualify for hedge accounting 3 (5) (39) NM1
Fuel expense including all losses from settled hedges $1,223 $1,903 (35.7)
Mainline fuel consumption (gallons) 734 737 (0.4)
Mainline average aircraft fuel price per gallon excluding hedge losses recorded in fuel expense $1.21 $1.89 (36.0)
Mainline average aircraft fuel price per gallon $1.39 $2.11 (34.1)
Mainline average aircraft fuel price per gallon including cash paid on settled hedges that did not qualify for hedge accounting $1.40 $2.17 (35.5)
Regional fuel consumption (gallons) 156 159 (1.9)
Regional average aircraft fuel price per gallon $1.25 $1.93 (35.2)
Consolidated fuel consumption (gallons) 890 896 (0.7)
Consolidated average aircraft fuel price per gallon excluding hedge losses recorded in fuel expense $1.21 $1.90 (36.3)
Consolidated average aircraft fuel price per gallon $1.37 $2.08 (34.1)
Consolidated average aircraft fuel price per gallon including cash paid on settled hedges that did not qualify for hedge accounting $1.37 $2.12 (35.4)
  1. Includes losses from settled hedges that were designated for hedge accounting. UAL allocates 100 percent of hedge accounting gains (losses) to mainline fuel expense.
  2. Includes ineffectiveness losses on settled hedges and losses on settled hedges that were not designated for hedge accounting. Ineffectiveness gains (losses) and gains (losses) on hedges that do not qualify for hedge accounting are recorded in Nonoperating income (expense): Miscellaneous, net.
UNITED CONTINENTAL HOLDINGS, INC.
NOTES (UNAUDITED)

(C) Special items include the following:
  Three Months Ended
March 31, 2016 (In millions)
Three Months Ended
March 31, 2015 (In millions)
Operating:
Labor agreement costs
$100 $ —
Operating:Cleveland airport lease restructuring 74
Operating:Severance and benefit costs 8 50
Operating:(Gains) losses on sale of assets and other special charges 8 14
Operating: (Gains) losses on sale of assets and other special charges:Special charges 190 64
Nonoperating and income taxes:
Losses on extinguishment of debt and other
8 6
Nonoperating and income taxes:Income tax benefit related to special charges (72)
Nonoperating and income taxes: Income tax benefit related to special charges:Total operating and nonoperating special charges, net of income taxes 126 70
Nonoperating and income taxes:Mark-to-market (MTM) losses from fuel derivative contracts settling in future periods 36
Nonoperating and income taxes:Prior period gains (losses) on fuel derivative contracts settled in the current period (4) (32)
Nonoperating and income taxes: Prior period gains (losses) on fuel derivative contracts settled in the current period:Total special items, net of income taxes $122 $74

 

 
   
 

2016 - Special items

   
 

Labor agreement costs: The fleet service, passenger service, storekeeper and other employees represented by the Int'l Association of Machinists and Aerospace Workers ratified seven new contracts with the company which extended the contracts through 2021. The company recorded a $100 million ($64 million net of taxes) special charge for bonus payments to be made in conjunction with the ratification of these contracts.

   
 

Cleveland airport lease restructuring: During the three months ended March 31, 2016, the City of Cleveland agreed to amend the lease, which runs through 2029, associated with certain excess airport terminal space (principally Terminal D) and related facilities at Hopkins International Airport ("Cleveland"). The company recorded an accrual for remaining payments under the lease for facilities that the company no longer uses and will continue to incur costs under the lease without economic benefit to the company. This liability was measured and recorded at its fair value when the company ceased its right to use such facilities leased to it pursuant to the lease. The company reduced its flight operations at Cleveland in 2014 and had been evaluating its options for the excess space. The company recorded a net charge of $74 million ($47 million net of taxes) related to the amended lease.

   
 

Severance and benefit costs: During the three months ended March 31, 2016, the company recorded $8 million ($5 million net of taxes) of severance and benefit costs 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.

   
 

Loss on extinguishment of debt and other: During the three months ended March 31, 2016, the company recorded $8 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 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 months ended March 31, 2016, the company did not record any MTM gains or losses on fuel derivative contracts that will settle in future periods. For fuel derivative contracts that settled in the three months ended March 31, 2016, the company recorded MTM losses of $4 million in prior periods.

   
 

2015 - Special items

   
 

Severance and benefit costs: During the three months ended March 31, 2015, the company recorded $50 million of severance and benefit costs 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.

   
 

(Gains) losses on sale of assets and other special charges: During the three months ended March 31, 2015, the company recorded $18 million of integration-related charges, $5 million of other charges, and approximately $9 million of gains on the sale of assets.

   
 

Loss on extinguishment of debt and other: During the three months ended March 31, 2015, the company recorded $6 million of losses as part of Nonoperating income (expense): Miscellaneous, net due to the write-off of the debt discount related to the redemption of the 6% Notes due 2026 and 6% Notes due 2028.

   
 

MTM losses from fuel derivative contracts settling in future periods and prior period 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 months ended March 31, 2015, the company recorded $36 million in MTM losses on fuel derivative contracts that will settle in future periods. For fuel derivative contracts that settled in the three months ended March 31, 2015, the company recorded MTM losses of $32 million in prior periods.

   

(D)  

The company's effective tax rate for the three months ended March 31, 2016 was 36.6%, which represented a blend of federal, state and foreign taxes and the impact of certain nondeductible items. The effective rate for the three months ended March 31, 2015 was 0.5% due primarily to the existing income tax valuation allowance against deferred income tax assets, primarily net operating losses. During 2015, after considering all positive and negative evidence, the company concluded that its deferred income taxes would be more likely than not to be realized. The company released substantially all of its valuation allowance in 2015.

 

UNITED CONTINENTAL HOLDINGS, INC.
STATISTICS
  Three Months Ended
March 31, 2016
Three Months Ended
March 31, 2015
%
Increase/
(Decrease)
Mainline:
Passengers (thousands)
22,277 21,378 4.2
Mainline:Revenue passenger miles (millions) 40,856 40,660 0.5
Mainline:Available seat miles (millions) 51,165 50,125 2.1
Mainline:Cargo ton miles (millions) 622 662 (6.0)
Mainline:Passenger load factor:
Mainline
79.9% 81.1% (1.2) pts.
Mainline:Domestic 83.4% 84.4% (1.0) pts.
Mainline:International 76.5% 78.1% (1.6) pts.
Mainline:Passenger revenue per available seat mile (cents) 10.90 11.85 (8.0)
Mainline:Average yield per revenue passenger mile (cents) 13.65 14.60 (6.5)
Mainline:Aircraft in fleet at end of period 719 700 2.7
Mainline:Average stage length (miles) 1,859 1,917 (3.0)
Mainline:Average daily utilization of each aircraft (hours) 9:36 9:55 (3.2)
Regional:
Passengers (thousands)
9,810 10,144 (3.3)
Regional:Revenue passenger miles (millions) 5,726 5,784 (1.0)
Regional:Available seat miles (millions) 7,108 7,144 (0.5)
Regional:Passenger load factor 80.6% 81.0% (0.4) pts.
Regional:Passenger revenue per available seat mile (cents) 19.88 20.74 (4.1)
Regional:Average yield per revenue passenger mile (cents) 24.68 25.62 (3.7)
Regional:Aircraft in fleet at end of period 503 532 (5.5)
Regional:Average stage length (miles) 575 561 2.5
Consolidated (Mainline and Regional):
Passengers (thousands)
32,087 31,522 1.8
Consolidated (Mainline and Regional)Revenue passenger miles (millions) 46,582 46,444 0.3
Consolidated (Mainline and Regional)Available seat miles (millions) 58,273 57,269 1.8
Consolidated (Mainline and Regional)Passenger load factor 79.9% 81.1% (1.2) pts.
Consolidated (Mainline and Regional)Passenger revenue per available seat mile (cents) 12.00 12.96 (7.4)
Consolidated (Mainline and Regional)Total revenue per available seat mile (cents) 14.06 15.03 (6.5)
Consolidated (Mainline and Regional)Average yield per revenue passenger mile (cents) 15.01 15.98 (6.1)
Consolidated (Mainline and Regional)Aircraft in fleet at end of period 1,222 1,232 (0.8)
Consolidated (Mainline and Regional)Average stage length (miles) 1,461 1,473 (0.8)
Consolidated (Mainline and Regional)Average full-time equivalent employees (thousands) 82.5 81.7 1.0
Note:See Part II, Item 6 Selected Financial Data of the company's annual report on Form 10-K for the year ended December 31, 2015 for the definition of these statistics.

 

UNITED CONTINENTAL HOLDINGS, INC.
NON-GAAP FINANCIAL RECONCILIATION

UAL evaluates its financial performance utilizing various accounting principles generally accepted in the United States of America (GAAP) and Non-GAAP financial measures, including income (loss) before income taxes excluding special items, net income (loss) excluding special items, net earnings (loss) per share excluding special items, and CASM, among others. CASM is a common metric used in the airline industry to measure an airline's cost structure and efficiency. Pursuant to SEC Regulation G, UAL has included the following reconciliation of reported Non-GAAP financial measures to comparable financial measures reported on a GAAP basis. UAL believes that adjusting for special items is useful to investors because special charges are non-recurring charges not indicative of UAL's ongoing performance. In addition, the company believes that adjusting for MTM gains and losses from fuel derivative contracts settling in future periods and prior period gains and losses on fuel derivative contracts settled in the current period is useful because the adjustments allow investors to better understand the cash impact of settled fuel derivative contracts in a given period. UAL also believes that excluding third-party business expenses, such as maintenance, ground handling and catering services for third parties, fuel sales and non-air mileage redemptions, 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 recurring cost performance and provides a more meaningful comparison of our core operating costs to the airline industry. UAL also believes that adjusting capital expenditures for fully reimbursable projects is useful to investors in order to appropriately reflect the non-reimbursable funds spent on capital expenditures.

 

UNITED CONTINENTAL HOLDINGS, INC.
NON-GAAP FINANCIAL RECONCILIATION (Continued)
  Three Months Ended
March 31, 2016 (In millions)
Three Months Ended
March 31, 2015 (In millions)
$
Increase/
(Decrease)
%
Increase/
(Decrease)
Operating expenses $7,546 $7,867 $(321) (4.1)
Operating expenses:Less: Special charges (C) 190 64 126 NM1
Operating expenses, excluding special charges 7,356 7,803 (447) (5.7)
Operating expenses, excluding special charges:Less: Third-party business expenses 67 66 1 1.5
Operating expenses, excluding special charges:Less: Fuel expense 1,218 1,864 (646) (34.7)
Operating expenses, excluding special charges:Less: Profit sharing, including taxes 93 70 23 32.9
Operating expenses, excluding fuel, profit sharing, special charges and third-party business expenses $5,978 $5,803 $175 3.0
Income before income taxes $494 $511 $(17) (3.3)
Income before income taxes:Less: special items before income taxes (C) 194 74 120 NM1
Income before income taxes and excluding special items $688 $585 $103 17.6
Net income $313 $508 $(195) (38.4)
Net income:Less: special items, net of tax (C) 122 74 48 NM1
Net income, excluding special items $435 $582 $(147) (25.3)
Diluted earnings per share $0.88 $1.32 $(0.44) (33.3)
Diluted earnings per share:Add back: special items 0.35 0.20 0.15 NM1
Diluted earnings per share, excluding special items $1.23 $1.52 $(0.29) (19.1)

 

UNITED CONTINENTAL HOLDINGS, INC.
NON-GAAP FINANCIAL RECONCILIATION (Continued)
  Three Months Ended
March 31, 2016 in cents
Three Months Ended
March 31, 2015 in cents
%
Increase/
(Decrease)
CASM Mainline Operations (cents)
Cost per available seat mile (CASM)
12.47 12.99 (4.0)
Cost per available seat mile (CASM):Less: Special charges (C) 0.37 0.13 NM1
CASM Mainline Operations (cents): CASM, excluding special charges 12.10 12.86 (5.9)
CASM Mainline Operations (cents): CASM, excluding special charges:Less: Third-party business expenses 0.13 0.13
CASM Mainline Operations (cents): CASM, excluding special charges and third-party business expenses 11.97 12.73 (6.0)
CASM Mainline Operations (cents): CASM, excluding special charges and third-party business expenses:Less: Fuel expense 2.00 3.10 (35.5)
CASM Mainline Operations (cents): CASM, excluding special charges, third-party business expenses and fuel 9.97 9.63 3.5
CASM Mainline Operations (cents): CASM, excluding special charges, third-party business expenses and fuel:Less: Profit sharing per available seat mile 0.18 0.14 28.6
CASM Mainline Operations (cents): CASM, excluding special charges, third-party business expenses, fuel, and profit sharing 9.79 9.49 3.2
CASM Consolidated Operations (cents)
Cost per available seat mile (CASM)
12.95 13.74 (5.7)
CASM Consolidated Operations (cents): Cost per available seat mile (CASM):Less: Special charges (C) 0.33 0.11 NM1
CASM Consolidated Operations (cents): CASM, excluding special charges 12.62 13.63 (7.4)
CASM Consolidated Operations (cents): CASM, excluding special charges:Less: Third-party business expenses 0.11 0.12 (8.3)
CASM Consolidated Operations (cents): CASM, excluding special charges and third-party business expenses 12.51 13.51 (7.4)
CASM Consolidated Operations (cents): CASM, excluding special charges and third-party business expenses:Less: Fuel expense 2.09 3.25 (35.7)
CASM Consolidated Operations (cents): CASM, excluding special charges, third-party business expenses and fuel 10.42 10.26 1.6
CASM Consolidated Operations (cents): CASM, excluding special charges, third-party business expenses and fuel:Less: Profit sharing per available seat mile 0.16 0.13 23.1
CASM Consolidated Operations (cents): CASM, excluding special charges, third-party business expenses, fuel, and profit sharing 10.26 10.13 1.3

 

UNITED CONTINENTAL HOLDINGS, INC.
CAPITAL EXPENDITURES AND FREE CASH FLOW
Capital Expenditures (in millions) Three Months Ended
March 31, 2016 (in millions)
Capital Expenditures (in millions):Capital expenditures – GAAP $816
Capital Expenditures (in millions): Capital expenditures – GAAP:Property and equipment acquired through the issuance of debt 59
Capital Expenditures (in millions): Capital expenditures – GAAP:Airport construction financing 9
Capital Expenditures (in millions): Capital expenditures – GAAP:Fully reimbursable projects (61)
Capital Expenditures (in millions):Adjusted capital expenditures – Non-GAAP $823
Free Cash Flow (in millions) Three Months Ended
March 31, 2016
Free Cash Flow (in millions):Net cash provided by operating activities $1,199
Free Cash Flow (in millions): Net cash provided by operating activities:Less adjusted capital expenditures – Non-GAAP 823
Free Cash Flow (in millions):Free cash flow - Non-GAAP $376

 

UNITED CONTINENTAL HOLDINGS, INC.
RETURN ON INVESTED CAPITAL (ROIC)

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.
  Twelve Months Ended
March 31, 2016 (in millions)
Return On Invested CapitalNet Operating Profit After Tax (NOPAT)
Pre-tax income excluding special items4
$4,601
Return On Invested CapitalNOPAT adjustments 5 1,078
Return On Invested CapitalNOPAT $5,679
Return On Invested CapitalEffective cash tax rate 6 0.3%
Return On Invested CapitalInvested Capital (five-quarter average)
Total assets
$39,966
Return On Invested CapitalInvested capital adjustments 7 12,617
Return On Invested CapitalAverage Invested Capital $27,349
Return On Invested CapitalReturn on Invested Capital 20.8%
  1. Non-GAAP Financial Reconciliation
  2. NOPAT adjustments include: adding back (net of tax shield) interest expense, the interest component of capitalized aircraft rent and net interest on pension.
  3. Effective cash tax rate is calculated by dividing cash taxes paid by adjusted pre-tax income.
  4. Invested capital adjustments include: adding back capital aircraft rent (at 7.0X) and deferred income taxes, less advance ticket sales, frequent flyer deferred revenue, tax valuation allowance and other non-interest bearing liabilities.
Notes: Twelve Months Ended
March 31, 2016
Pre-tax income $4,202
Return On Invested CapitalAdd: Special items 399
Return On Invested CapitalPre-tax income excluding special items $4,601

 

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SOURCE United Airlines

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

United Introduces Customer COVID-19 Testing from Houston to Latin American and Caribbean Destinations

United and Advanced Diagnostic Laboratory team up to offer self-collected, mail-in COVID-19 tests to help ensure travelers meet country entry requirements
November 23, 2020

CHICAGO, Nov. 23, 2020 /PRNewswire/ -- United announced today it is expanding its customer COVID-19 testing efforts to include flights out of Houston to select destinations in Latin America and the Caribbean. Starting for flights departing on December 7, customers originating from George Bush Intercontinental Airport (IAH) will have the option to take a self-collected, mail-in test that meets local entry requirements for the following destinations, allowing them to reunite with family or start their vacation immediately:

  • Aruba (AUA)
  • Belize City, Belize (BZE)
  • Guatemala City, Guatemala (GUA)
  • Lima, Peru (LIM)
  • Nassau, Bahamas (NAS)
  • Panama City, Panama (PTY)
  • Roatan, Honduras (RTB)
  • San Pedro Sula, Honduras (SAP)
  • San Salvador, El Salvador (SAL)
  • Tegucigalpa, Honduras (TGU)

    United Introduces Customer COVID-19 Testing from Houston to Latin American and Caribbean Destinations

    United and Advanced Diagnostic Laboratory team up to offer self-collected, mail-in COVID-19 tests to help ensure travelers meet country entry requirements
    November 23, 2020

    CHICAGO, Nov. 23, 2020 /PRNewswire/ -- United announced today it is expanding its customer COVID-19 testing efforts to include flights out of Houston to select destinations in Latin America and the Caribbean. Starting for flights departing on December 7, customers originating from George Bush Intercontinental Airport (IAH) will have the option to take a self-collected, mail-in test that meets local entry requirements for the following destinations, allowing them to reunite with family or start their vacation immediately:

    • Aruba (AUA)
    • Belize City, Belize (BZE)
    • Guatemala City, Guatemala (GUA)
    • Lima, Peru (LIM)
    • Nassau, Bahamas (NAS)
    • Panama City, Panama (PTY)
    • Roatan, Honduras (RTB)
    • San Pedro Sula, Honduras (SAP)
    • San Salvador, El Salvador (SAL)
    • Tegucigalpa, Honduras (TGU)

    "Widespread testing is key to unlocking international borders and safely reopening global travel. This is particularly important for our customers in Houston, who rely on United to keep them connected with their family and friends in Latin America and the Caribbean," said Toby Enqvist, chief customer officer for United. "We'll continue to lead the way on testing – United was the first to announce a customer COVID-19 testing program and the first to offer free tests on flights across the Atlantic – and we'll look at new, innovative ways to make the travel experience even safer."

    The self-collected, mail-in COVID-19 test is $119. The test will be administered by Advanced Diagnostic Laboratory (ADL) and processed at their COVID-19 testing laboratory in San Antonio, Texas. United will reach out to customers 14 days ahead of their flights to provide instructions on ordering a test and the testing process. United encourages customers to research the local requirements for further questions specific to their destination. Customers are advised to take the tests 72 hours before departure and should expect to receive results via email within 24-48 hours of mailing in their test.

    "As the energy capital of the world and most diverse city in the United States, Houston plays an influential role in linking global economies," said Sylvester Turner, City of Houston mayor. "As we fight against a second wave of the coronavirus, the private and public sectors, with guidance from public health experts, must work collaboratively and judiciously to reopen the global economy. Although a vaccine would be the ultimate solution, United's expansion of its customer testing program is a step in the right direction. I commend United for their leadership and forward-thinking."

    ADL's self-collection kit includes a plastic tube, a nasal swab and instructions on how to properly collect a specimen. ADL's telehealth system will be available to support customers traveling to countries that require a health care professional to supervise the COVID-19 test. United has worked closely with officials in each country to ensure that any customer – both visitors and nationals returning home – who tests negative will be able to enter the country.

    "Accurate and reliable testing is not only critical to reducing the spread of COVID-19, but essential in helping get this virus under control," said Stan Crawford, chief operations officer for ADL. "We are invested in United's commitment to ensuring customers not only meet their destination's entry requirements but that, when they do travel, they do so in a way that is safer."

    Click here for b-roll and visual assets of ADL's self-collection kit and testing 

    In addition to adding another key element to its layered approach to safety, United has also seen a positive impact on travel demand and significant increases in customer load factors and revenue when testing options are available. For example, after United announced its COVID-19 test for customers traveling from San Francisco to Hawaii and allowing them to avoid a 14-day quarantine, the airline saw a nearly 95% increase in passengers compared to the prior two-week period. Last week, United launched the world's first free transatlantic COVID-19 testing pilot between Newark Liberty International Airport and London Heathrow Airport. Through this pilot program, all crew members and customers over the age of two on select flights will be required to take a rapid COVID-19 test and provide a negative result in order to take the flight, ensuring that everyone on board over the age of two has tested negative before departure.

    A safer travel experience: United CleanPlusSM

    Since the start of the pandemic, United has been a leader in enacting new policies and innovations designed to keep employees and passengers safer when traveling. It was the first U.S. airline to mandate masks for flight attendants, quickly following with all customers and employees. United was also among the first U.S. carriers to announce it wouldn't permit customers who refused to comply with the airline's mandatory mask policy to fly with them while the face mask policy is in place. United was also the first U.S. airline to roll out touchless check-in for customers with bags, and the first to require passengers take an online health assessment before traveling. United is applying Zoono Microbe Shield, an EPA-registered antimicrobial coating that forms a long-lasting bond with surfaces and inhibits the growth of microbes, to its entire mainline and express fleet before the end of the year. 

    The latest research, including a recent study conducted by the U.S. Department of Defense, shows COVID-19 exposure risk on board United aircraft is almost zero due to the airline's advanced air filtration systems, mandated mask policy and diligent cleaning protocols.

    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".

    About Advanced Diagnostic Laboratory

    Advanced Diagnostic Laboratory (ADL) is a leader in scientific testing standards for the COVID-19 virus, both in the U.S. and internationally. Located in San Antonio, Texas, ADL has over 80 years of combined experience in clinical diagnostic testing procedures and works globally with local communities to provide safe and healthy lifestyles. For more information, call ADL at 1.800.834.3522 or visit our website at ADLHealth.com.

     

    SOURCE United Airlines

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

    First United Airlines Flight Offering Free Transatlantic COVID-19 Testing Takes Off

    First of its kind, testing program guarantees customers over two years old and crew test negative before departure
    November 16, 2020

    NEWARK, N.J., Nov. 16, 2020 /PRNewswire/ -- Today, United customers traveling on flight 14 from Newark Liberty International Airport (EWR) to London Heathrow (LHR) were the first to experience the airline's free transatlantic COVID-19 testing pilot program. The airline provided rapid tests to every passenger over 2 years old and all crew members on board, free of charge, guaranteeing everyone* on the flight tested negative prior to departure.

    United Airlines to Present at the 2020 Bernstein Operational Decisions Conference

    November 13, 2020

    CHICAGO, Nov. 13, 2020 /PRNewswire/ -- United Airlines' Mike Leskinen, Vice President of Corporate Development and Investor Relations will present at the Bernstein Operational Decisions Conference on Tuesday, November 17th. The presentation will begin at 12:30 p.m. CT / 1:30 p.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 video webcast on the website within 24 hours of the presentation, and the webcast will be available for a limited time.

    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 Airlines Makes it Easier to Earn MileagePlus Premier Status for 2022

    Airline reduces qualifying thresholds and offers first-ever promotions to accelerate earning status
    November 12, 2020

    CHICAGO, Nov. 12, 2020 /PRNewswire/ -- United Airlines today announced changes to its MileagePlus® Premier® program that will make it easier to earn status in 2021 for the 2022 program year. United is reducing Premier Qualifying Points (PQP) and Premier Qualifying Flights (PQF) thresholds next year and introducing first-of-its-kind promotions that help members earn status more quickly. Early next year, United will deposit 25% of the PQP-only requirements in Premier members' accounts based on their 2021 Premier status level. United will also give members bonus PQP for their first three trips flown in 2021 through Mar. 31, helping their flights go further toward reaching status.

    United Airlines Now Using New Clorox® Electrostatic Sprayers to Disinfect Airport Terminals

    Clorox® Total 360® System sprays solution that is EPA-approved to kill SARS-CoV-2, the virus that causes COVID-19;
    November 11, 2020

    CHICAGO, Nov. 11, 2020 /PRNewswire/ -- As part of the United CleanPlus commitment to enhancing safety for travelers both onboard and at the airport, United Airlines is now using the Clorox® Total 360® System to disinfect terminals at 35 of the airline's busiest airports. This electrostatic spraying system is similar to the electrostatic spraying technology used onboard aircraft and will be used to spray surfaces in ticketing lobbies, terminals, gate rooms, employee spaces and United Club locations. The disinfecting solution is EPA-approved to kill SARS-CoV-2, the virus that causes COVID-19. Through its United CleanPlus program, United has been working closely with Clorox and the Cleveland Clinic since early May to consult on all its cleaning and disinfection protocols. The airline currently uses Clorox Disinfection Wipes on all mainline aircraft and in United Club locations.

    We are Back! United Announces Return to New York's JFK Airport

    Airline to offer new transcontinental service from JFK to the west coast starting February 1
    November 10, 2020

    CHICAGO, Nov. 10, 2020 /PRNewswire/ -- United Airlines announced today that it will be returning service to New York City's John F. Kennedy Airport (JFK) on February 1, 2021 with nonstop service to the west coast. The airline's entry back into JFK after five years reflects not only its strong commitment to the New York City area, but a continuation of aggressively and strategically managing the impact of COVID-19 by increasing service to and from the places where customers want to fly. The new United service will operate out of Terminal 7.

    Responding to Thanksgiving Travel Demand, United Adds Over 1,400 Domestic Flights to Schedule

    United seeing more customers booking Thanksgiving travel closer to departure this year
    November 09, 2020

    CHICAGO, Nov. 9, 2020 /PRNewswire/ -- United Airlines expects the week of November 23 will be its busiest since March as customers travel to visit friends and family for the Thanksgiving holiday. This year, United is anticipating approximately 50% of United customers flying for Thanksgiving are booking travel less than 30 days prior to departure compared to last year when around 40% of Thanksgiving travelers booked less than 30 days before departure. To help customers reconnect with loved ones this holiday season, United is adding more than 1,400 domestic flights during the week of Thanksgiving and is monitoring bookings in real-time to swap in larger aircraft when needed to accommodate last-minute demand.

    United Airlines Launches World's First Free Transatlantic COVID-19 Testing Pilot

    Free testing guarantees all customers over 2 years old and crew on board have tested negative before departure
    October 29, 2020

    NEWARK, N.J., Oct. 29, 2020 /PRNewswire/ -- United Airlines today announced the world's first free transatlantic COVID-19 testing pilot program for customers. From November 16 through December 11, the airline will offer rapid tests to every passenger over 2 years old and crew members on board select flights from Newark Liberty International Airport (EWR) to London Heathrow (LHR), free of charge. Anyone who does not wish to be tested will be placed on another flight, guaranteeing everyone on board other than children under two will have tested negative before departure.

    United Airlines Redesigns Mobile App to be More Accessible for People with Visual Disabilities

    United increased color contrast, added more space between graphics and reorganized page flows to result in better integration with screen reader technologies;
    October 28, 2020

    CHICAGO, Oct. 28, 2020 /PRNewswire/ -- United Airlines today launches a redesigned version of its mobile app, with new enhancements intended to make travel easier for people with visual disabilities. Throughout its award-winning app, the carrier has increased color contrast, added more space between graphics and reordered how information is displayed and announced to better integrate with the screen reader technologies like VoiceOver and TalkBack that are built into most handheld devices and read aloud on-screen messages and notifications. By restructuring the way the information is organized on the app, screen readers are better able to convert text to audio in the proper, logical sequence, allowing customers to better understand and navigate the app. According to the National Aging and Disability Transportation Center, more than 25 million Americans have self-reported travel-limiting disability. The improved accessibility of the app is just one of the ways United is continuing its commitment to accessibility and inclusion of customers with disabilities.

    United Airlines Announces Eight New Routes and Increases Flights to 19 Destinations in the Caribbean, Central America and Mexico for Winter Sun-Seekers

    Starting Oct. 17, United will begin selling tickets for new flights from Denver, Los Angeles, San Francisco, Washington D.C. and Cleveland
    October 16, 2020

    CHICAGO, Oct. 16, 2020 /PRNewswire/ -- United Airlines today announced a significant expansion of its winter international schedule, introducing eight new routes and adding flights to 19 destinations in Mexico, the Caribbean and Latin America. Starting in December, United will begin new nonstop service between Los Angeles and San Jose, Costa Rica and San Pedro Sula, Honduras; between Denver and Belize City, Belize and San Jose, Costa Rica; between Washington D.C. and Santo Domingo, Dominican Republic, and returning service between Cleveland and Cancun, Mexico. In January, United will begin new nonstop service between Liberia, Costa Rica and both Los Angeles and San Francisco. The new flights are subject to government approval.

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