United second quarter 2016 performance - United Hub

United Airlines Reports Second-Quarter 2016 Performance

July 19, 2016

CHICAGO, July 19, 2016 /PRNewswire/ -- United Airlines (UAL) today reported its second-quarter 2016 financial results.

  • Including special items, UAL reported second-quarter net income of $588 million, earnings per share of $1.78 per diluted share and pre-tax earnings of $931 million.
  • Excluding special items, UAL reported second-quarter net income of $863 million, earnings per share of $2.61 per diluted share and pre-tax earnings of $1.4 billion.
  • During the second quarter of 2016, the company repurchased $694 million of its common stock, representing 4.4 percent of shares outstanding.
  • In July, the company's Board of Directors authorized an additional $2 billion share repurchase program.

 

"We made significant progress in the second quarter as a direct result of the passion and dedication that United's aviation professionals around the world have for running a great airline," said Oscar Munoz, president and chief executive officer of United Airlines. "This progress is exemplified by the best six months of operational performance in our history and we will continue down the path of unlocking United's full potential."

Second-Quarter Revenue

For the second quarter of 2016, total revenue was $9.4 billion, a decrease of 5.2 percent year-over-year. Second-quarter 2016 consolidated passenger revenue per available seat mile (PRASM) decreased 6.6 percent and consolidated yield decreased 6.1 percent compared to the second quarter of 2015. The decline in PRASM continues to be driven by factors including a strong U.S. dollar, lower surcharges, travel reductions from customers impacted by declining oil prices, competitive actions and higher-yielding demand not keeping pace with industry capacity.

Second-Quarter Costs

Total operating expense including special charges was $8.3 billion in the second quarter, down 1.6 percent year-over-year. Excluding special charges, total operating expense was $7.9 billion, a 6.1 percent decrease year-over-year. Consolidated unit cost (CASM) including special charges, third-party business expenses, fuel and profit sharing decreased 1.6 percent compared to the second quarter of 2015 due mainly to lower oil prices. Consolidated CASM, excluding special charges, third-party business expenses, fuel and profit sharing, increased 2.5 percent year-over-year driven largely by the impact of recently ratified labor agreements.

Liquidity and Capital Allocation

In the second quarter, UAL generated $2.5 billion in operating cash flow and ended the quarter with $6.0 billion in unrestricted liquidity, including $1.35 billion of undrawn commitments under its revolving credit facility. The company continued to invest in its business through capital expenditures of $838 million in the second quarter. Including assets acquired through the issuance of debt and airport construction financing and excluding fully reimbursable projects, the company invested $767 million in adjusted capital expenditures during the second quarter. Free cash flow, measured as operating cash flow less adjusted capital expenditures, was $1.8 billion in the second quarter.

For the 12 months ended June 30, 2016, the company's return on invested capital was 20.7 percent.

In the quarter, UAL repurchased $694 million worth of its common stock, representing 4.4 percent of shares outstanding. As of June 30, 2016, the company had $255 million remaining to purchase shares under its existing share repurchase programs.

UAL's Board of Directors authorized an additional $2 billion share repurchase program. This amount represents approximately 13 percent of the company's market capitalization as of the closing stock price on July 18, 2016.

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

Second-Quarter Highlights

Operations and Employees

  • Reached a tentative joint agreement with flight attendants.
  • IAM-represented employees ratified agreements.
  • Reported best six-month on-time performance and finished first or second in on-time arrivals among the four largest U.S. network carriers each month.
  • Achieved best quarterly mishandled bag rate, keeping more customers connected with their bags than ever before.
  • Employees earned cash-incentive payments of approximately $30 million for achieving operational performance goals.

Finance, Network and Fleet

  • Outlined initiatives the company is implementing to improve financial performance including commercial enhancements, cost structure improvements and operational improvement expected to drive $3.1 billion in incremental value by 2018.
  • Launched new international routes between San Francisco and Singapore and between San Francisco and Xi'an, China.
  • Took delivery of two Boeing 737-800 aircraft, two Boeing 787-9 aircraft and added 12 Embraer 175 aircraft to its United Express fleet.

Customer Experience

  • Achieved the greatest year-over-year customer satisfaction score improvement in the company's history, up 6.7 points compared to the second quarter of 2015.
  • Completed Wi-Fi installations on 100 percent of domestic and international mainline aircraft, making UAL the first U.S. airline to complete Wi-Fi installations on its international fleet.
  • Unveiled a reimagined international travel experience – United Polaris business class.

About United

United Airlines and United Express operate more than 4,500 flights a day to 339 airports across five 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 720 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. 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" 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, 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 for the fiscal year ended December 31, 2015, 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 SIX MONTHS ENDED June 30, 2016 AND 2015

(In millions, except per share data)

  Three Months Ended
June 30, 2016
Three Months Ended
June 30, 2015
%
Increase/
(Decrease)
Six Months Ended
June 30, 2016
Six Months Ended
June 30, 2015
%
Increase/
(Decrease)
Operating revenue:
Passenger: (A)
Mainline
$6,525 $6,961 (6.3) $12,102 $12,899 (6.2)
Operating revenue: Passenger: (A) Regional 1,578 1,715 (8.0) 2,991 3,197 (6.4)
Operating revenue: Passenger: (A) Total passenger revenue 8,103 8,676 (6.6) 15,093 16,096 (6.2)
Operating revenue: Cargo 208 229 (9.2) 402 471 (14.6)
Operating revenue: Other operating revenue 1,085 1,009 7.5 2,096 1,955 7.2
Operating revenue:Other operating revenue: Total operating revenue 9,396 9,914 (5.2) 17,591 18,522 (5.0)
Operating expense:
Salaries and related costs
2,592 2,454 5.6 5,082 4,755 6.9
Operating expense: Aircraft fuel(B) 1,437 2,106 (31.8) 2,655 3,970 (33.1)
Operating expense: Regional capacity purchase 551 583 (5.5) 1,073 1,153 (6.9)
Operating expense: Landing fees and other rent 541 553 (2.2) 1,066 1,096 (2.7)
Operating expense: Depreciation and amortization 491 445 10.3 970 874 11.0
Operating expense: Aircraft maintenance materials and outside repairs 448 431 3.9 850 828 2.7
Operating expense: Distribution expenses 339 348 (2.6) 642 660 (2.7)
Operating expense: Aircraft rent 175 194 (9.8) 353 395 (10.6)
Operating expense: Special charges (C) 434 55 NM1 624 119 NM1
Operating expense: Other operating expenses 1,328 1,300 2.2 2,567 2,486 3.3
Operating expense: Other Operating Expenses: Total operating expenses 8,336 8,469 (1.6) 15,882 16,336 (2.8)
Operating income 1,060 1,445 (26.6) 1,709 2,186 (21.8)
Nonoperating income (expense):
Interest expense
(157) (167) (6.0) (316) (340) (7.1)
Nonoperating income (expense): Interest capitalized 14 13 7.7 28 25 12.0
Nonoperating income (expense): Interest income 9 6 50.0 17 11 54.5
Nonoperating income (expense): Miscellaneous, net (C) 5 (100) NM1 (13) (174) (92.5)
Nonoperating income (expense): Miscellaneous, net (C): Total nonoperating expense (129) (248) (48.0) (284) (478) (40.6)
Income before income taxes: Income before income taxes 931 1,197 (22.2) 1,425 1,708 (16.6)
Income tax expense: Income tax expense (benefit) (D) 343 4 NM1 524 7 NM1
Net income: Net income $588 $1,193 (50.7) $901 $1,701 (47.0)
Earnings per share: Earnings per share, basic $1.78 $3.14 (43.3) $2.63 $4.46 (41.0)
Earnings per share: Earnings per share, diluted $1.78 $3.14 (43.3) $2.63 $4.45 (40.9)
Weighted average shares: Weighted average shares, basic 331 380 (12.9) 342 381 (10.2)
Weighted average shares: Weighted average shares, diluted 331 380 (12.9) 343 382 (10.2)
  1. NM means Not Meaningful

 

UNITED CONTINENTAL HOLDINGS, INC.
NOTES (UNAUDITED)

(A) Select passenger revenue information is as follows (in millions):
  2Q 2016
Passenger
Revenue
(millions)
Passenger
Revenue
vs.
2Q 2015
PRASM
vs.
2Q 2015
Yield
vs.
2Q 2015
Available
Seat Miles
vs.
2Q 2015
Domestic $3,393 (3.7%) (4.6%) (4.7%) 0.9%
Atlantic 1,506 (7.9%) (10.3%) (4.8%) 2.7%
Pacific 1,013 (8.6%) (7.6%) (8.0%) (1.1%)
Latin America 613 (11.8%) (10.5%) (13.5%) (1.5%)
International 3,132 (8.9%) (9.3%) (7.8%) 0.5%
Mainline 6,525 (6.3%) (6.9%) (6.2%) 0.7%
Regional 1,578 (8.0%) (3.4%) (4.2%) (4.8%)
Consolidated $8,103 (6.6%) (6.6%) (6.1%) 0.1%

 

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
June 30, 2016
Three Months Ended
June 30, 2015
%
Increase/
(Decrease)
Six Months Ended
June 30, 2016
Six Months Ended
June 30, 2015
%
Increase/
(Decrease)
Mainline fuel expense excluding hedge impacts $1,166 $1,648 (29.2) $2,051 $3,044 (32.6)
Hedge losses reported in fuel expense 2 (35) (118) NM1 (173) (279) NM1
Total mainline fuel expense 1,201 1,766 (32.0) 2,224 3,323 (33.1)
Regional fuel expense 236 340 (30.6) 431 647 (33.4)
Consolidated fuel expense 1,437 2,106 (31.8) 2,655 3,970 (33.1)
Cash paid on settled hedges that did not qualify for hedge accounting 3 (75) NM1 (5) (114) NM1
Fuel expense including all losses from settled hedgesFuel expense including all losses from settled hedges $1,437 $2,181 (34.1) $2,660 $4,084 (34.9)
Mainline fuel consumption (gallons) 834 833 0.1 1,568 1,570 (0.1)
Mainline average aircraft fuel price per gallon $1.44 $2.12 (32.1) $1.42 $2.12 (33.0)
Mainline average aircraft fuel price per gallon excluding hedge losses recorded in fuel expense $1.40 $1.98 (29.3) $1.31 $1.94 (32.5)
Mainline average aircraft fuel price per gallon including cash paid on settled hedges that did not qualify for hedge accounting $1.44 $2.21 (34.8) $1.42 $2.19 (35.2)
Regional fuel consumption (gallons) 161 171 (5.8) 317 330 (3.9)
Regional average aircraft fuel price per gallon $1.47 $1.99 (26.1) $1.36 $1.96 (30.6)
Consolidated fuel consumption (gallons) 995 1,004 (0.9) 1,885 1,900 (0.8)
Consolidated average aircraft fuel price per gallon $1.44 $2.10 (31.4) $1.41 $2.09 (32.5)
Consolidated average aircraft fuel price per gallon excluding hedge losses recorded in fuel expense $1.41 $1.98 (28.8) $1.32 $1.94 (32.0)
Consolidated average aircraft fuel price per gallon including cash paid on settled hedges that did not qualify for hedge accounting $1.44 $2.17 (33.6) $1.41 $2.15 (34.4)
  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
June 30, 2016 (In millions)
Three Months Ended
June 30, 2015 (In millions)
Six Months Ended
June 30, 2016 (In millions)
Six Months Ended
June 30, 2015 (In millions)
Operating:
Impairment of intangible asset related to Newark Liberty International Airport (Newark) slots
$412 $ — $412 $ —
Operating:
Labor agreement costs
10 110
Operating:Severance and benefit costs 6 25 14 75
Operating:Cleveland airport lease restructuring 74
Operating:(Gains) losses on sale of assets and other special charges 6 30 14 44
Operating: (Gains) losses on sale of assets and other special charges:Special charges 434 55 624 119
Nonoperating and income taxes:
(Gain) Loss on extinguishment of debt and other
(9) 128 (1) 134
Nonoperating and income taxes:Income tax benefit related to special charges (153) (225)
Nonoperating and income taxes:Total operating and nonoperating special charges, net of income taxes 272 183 398 253
Nonoperating and income taxes:Mark-to-market (MTM) losses from fuel derivative contracts settling in future periods (26) (7)
Nonoperating and income taxes:Prior period gains (losses) on fuel derivative contracts settled in the current period 3 (90) (1) (105)
Nonoperating and income taxes:Total special items, net of income taxes $275 $67 $397 $141

 

 
   
 

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 (IAM) ratified seven new contracts with the company which extended the contracts through 2021. The company also reached a tentative agreement with the Int'l Brotherhood of Teamsters (IBT). During the three and Six months ended June 30, 2016, the company recorded $61 million ($39 million net of taxes) and $171 million ($109 million net of taxes), respectively, of special charges primarily for payments to be made in conjunction with the IAM and IBT agreements described above. Also, as part of the recently ratified contract with the Association of Flight Attendants, the company amended two of its flight attendant postretirement medical plans. The amendments triggered curtailment accounting, resulting in the recognition of a one-time $47 million gain ($30 million net of taxes) for accelerated recognition of a prior service credit.

   
 

Severance and benefit costs: During the three and Six months ended June 30, 2016, the company recorded $13 million ($8 million net of taxes) and $27 million ($17 million net of taxes), respectively, of severance and benefit costs related to a voluntary early-out program for the company's flight attendants and other severance agreements. In 2014, more than 2,500 flight attendants elected to voluntarily separate from the company for 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.

   
 

Impairment of intangible asset related to Newark slots: In April 2016, the Federal Aviation Administration (FAA) announced that it will designate Newark as a Level 2 schedule-facilitated airport under the International Air Transport Association Worldwide Slot Guidelines effective October 30, 2016. The designation was associated with an updated demand and capacity analysis of Newark by the FAA. In the second quarter of 2016, the company determined that the FAA's action impaired the entire value of its Newark slots because the slots will no longer be the mechanism that governs take-off and landing rights. Accordingly, the company recorded a $412 million special charge ($264 million net of taxes) to write off the intangible asset. The Newark slots served as part of the collateral for the term loans under the company's Credit Agreement and under the Second Amended and Restated Co-Branded Card Marketing Services Agreement with Chase Bank USA, N.A. (the Chase Agreement). The Credit Agreement and the Chase Agreement have been amended to remove the Newark slots as collateral with no replacement collateral required.

   
 

Cleveland airport lease restructuring: During the Six months ended June 30, 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. 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 recorded a net charge of $74 million ($47 million net of taxes) related to the amended lease.

   
 

(Gains) losses on sale of assets and other special charges: During the three and Six months ended June 30, 2016, the company recorded gains and losses on sale of assets and other special charges of $18 million ($12 million net of taxes) and $32 million ($20 million net of taxes), respectively.

   
 

Nonoperating losses on extinguishment of debt and other: During the Six months ended June 30, 2016, the company recorded $8 million ($5 million net of taxes) of losses due to exchange rate changes in Venezuela applicable to funds held in local currency and recorded a $9 million ($6 million net of taxes) gain on the sale of an affiliate.

   
 

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 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 Six months ended June 30, 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 and Six months ended June 30, 2016, the company recorded MTM gains of $3 million and $2 million, respectively, in prior periods.

   
 

2015 - Special items

   
 

Severance and benefit costs: During the three and Six months ended June 30, 2015, the company recorded $28 million and $103 million, respectively, 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 for 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 and Six months ended June 30, 2015, the company recorded $48 million and $92 million, respectively, for integration costs, impairment of assets and other special gains and losses.

   
 

Nonoperating loss on extinguishment of debt and other: During the third quarter of 2015, the company recorded $61 million of losses due to exchange rate changes in Venezuela applicable to funds held in local currency. During the Six months ended June 30, 2015, the company recorded a charge of $134 million 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. Both of the charges were recorded as part of Nonoperating income (expense): Miscellaneous, net.

   
 

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 and Six months ended June 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 Six months ended June 30, 2015, the company recorded MTM losses of $69 million and $173 million, respectively, in prior periods.

   

(D)  

The company's effective tax rate for the three and Six months ended June 30, 2016 was 36% which represented a blend of federal, state and foreign taxes and the impact of certain nondeductible items. During 2015, after considering all positive and negative evidence, the company concluded that its deferred income taxes would more likely than not be realized. The company released substantially all of its valuation allowance in the third quarter of 2015, which resulted in a $3.2 billion benefit in its provision for income taxes.

 

UNITED CONTINENTAL HOLDINGS, INC.
STATISTICS
  Three Months Ended
June 30, 2016
Three Months Ended
June 30, 2015
%
Increase/
(Decrease)
Six Months Ended
June 30, 2016
Six Months Ended
June 30, 2015
%
Increase/
(Decrease)
Mainline:
Passengers (thousands)
25,639 24,858 3.1 47,916 46,236 3.6
Mainline:Revenue passenger miles (millions) 47,842 47,859 88,698 88,519 0.2
Mainline:Available seat miles (millions) 57,452 57,048 0.7 108,617 107,173 1.3
Mainline:Cargo ton miles (millions) 679 633 7.3 1,301 1,295 0.5
Mainline:Passenger load factor:
Mainline
83.3% 83.9% (0.6) pts. 81.7% 82.6% (0.9) pts.
Mainline:Domestic 86.8% 86.6% 0.2 pts. 85.2% 85.6% (0.4) pts.
Mainline:International 79.9% 81.3% (1.4) pts. 78.3% 79.8% (1.5) pts.
Mainline:Passenger revenue per available seat mile (cents) 11.36 12.20 (6.9) 11.14 12.04 (7.5)
Mainline:Average yield per revenue passenger mile (cents) 13.64 14.54 (6.2) 13.64 14.57 (6.4)
Mainline:Aircraft in fleet at end of period 720 708 1.7 720 708 1.7
Mainline:Average stage length (miles) 1,890 1,939 (2.5) 1,875 1,928 (2.7)
Mainline:Average daily utilization of each aircraft (hours) 10:38 10:54 (2.4) 10:07 10:25 (2.9)
Regional:
Passengers (thousands)
10,777 11,373 (5.2) 20,587 21,517 (4.3)
Regional:Revenue passenger miles (millions) 6,175 6,430 (4.0) 11,901 12,214 (2.6)
Regional:Available seat miles (millions) 7,273 7,637 (4.8) 14,381 14,781 (2.7)
Regional:Passenger load factor 84.9% 84.2% 0.7 pts. 82.8% 82.6% 0.2 pts.
Regional:Passenger revenue per available seat mile (cents) 21.70 22.46 (3.4) 20.80 21.63 (3.8)
Regional:Average yield per revenue passenger mile (cents) 25.55 26.67 (4.2) 25.13 26.17 (4.0)
Regional:Aircraft in fleet at end of period 494 522 (5.4) 494 522 (5.4)
Regional:Average stage length (miles) 565 558 1.3 570 560 1.8
Consolidated (Mainline and Regional):
Passengers (thousands)
36,416 36,231 0.5 68,503 67,753 1.1
Consolidated (Mainline and Regional)Revenue passenger miles (millions) 54,017 54,289 (0.5) 100,599 100,733 (0.1)
Consolidated (Mainline and Regional)Available seat miles (millions) 64,725 64,685 0.1 122,998 121,954 0.9
Consolidated (Mainline and Regional)Passenger load factor 83.5% 83.9% (0.4) pts. 81.8% 82.6% (0.8) pts.
Consolidated (Mainline and Regional)Passenger revenue per available seat mile (cents) 12.52 13.41 (6.6) 12.27 13.20 (7.0)
Consolidated (Mainline and Regional)Total revenue per available seat mile (cents) 14.52 15.33 (5.3) 14.30 15.19 (5.9)
Consolidated (Mainline and Regional)Average yield per revenue passenger mile (cents) 15.00 15.98 (6.1) 15.00 15.98 (6.1)
Consolidated (Mainline and Regional)Aircraft in fleet at end of period 1,214 1,230 (1.3) 1,214 1,230 (1.3)
Consolidated (Mainline and Regional)Average stage length (miles) 1,496 1,500 (0.3) 1,479 1,488 (0.6)
Consolidated (Mainline and Regional)Average full-time equivalent employees (thousands) 83.2 82.3 1.1 82.8 82.0 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, as adjusted, among others. CASM is a common metric used in the airline industry to measure an airline's cost structure and efficiency. UAL reports CASM excluding profit sharing, third-party business expenses, fuel and special charges. 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 charges 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 assets acquired through the issuance of debt, 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.

 

UNITED CONTINENTAL HOLDINGS, INC.
NON-GAAP FINANCIAL RECONCILIATION (Continued)
  Three Months Ended
June 30, 2016 (In millions)
Three Months Ended
June 30, 2015 (In millions)
$
Increase/
(Decrease)
%
Increase/
(Decrease)
Six Months Ended
June 30, 2016 (In millions)
Six Months Ended
June 30, 2015 (In millions)
$
Increase/
(Decrease)
%
Increase/
(Decrease)
Operating expenses $8,336 $8,469 $(133) (1.6) $15,882 $16,336 $(454) (2.8)
Operating expenses:Less: Special charges (C) 434 55 379 NM1 624 119 505 NM1
Operating expenses, excluding special charges 7,902 8,414 (512) (6.1) 15,258 16,217 (959) (5.9)
Operating expenses, excluding special charges:Less: Third-party business expenses 60 69 (9) (13.0) 127 135 (8) (5.9)
Operating expenses, excluding special charges:Less: Fuel expense 1,437 2,106 (669) (31.8) 2,655 3,970 (1,315) (33.1)
Operating expenses, excluding special charges:Less: Profit sharing, including taxes 209 198 11 5.6 302 268 34 12.7
Operating expensesOperating expenses, excluding fuel, profit sharing, special charges and third-party business expenses $6,196 $6,041 $155 2.6 $12,174 $11,844 $330 2.8
Operating incomeIncome before income taxes $931 $1,197 $(266) (22.2) $1,425 $1,708 $(283) (16.6)
Operating incomeLess: special items before income taxes (C) 428 67 361 NM1 622 141 481 NM1
Operating incomeIncome before income taxes and excluding special items $1,359 $1,264 $95 7.5 $2,047 $1,849 $198 10.7
Operating incomeNet income $588 $1,193 $(605) (50.7) $901 $1,701 $(800) (47.0)
Operating incomeLess: special items, net of tax (C) 275 67 208 NM1 397 141 256 NM1
Operating incomeNet income, excluding special items $863 $1,260 $(397) (31.5) $1,298 $1,842 $(544) (29.5)
Diluted earnings per shareDiluted earnings per share $1.78 $3.14 $(1.36) (43.3) $2.63 $4.45 $(1.82) (40.9)
Diluted earnings per shareAdd back: special items 1.29 0.17 1.12 NM1 1.82 0.37 1.45 NM1
Diluted earnings per shareTax effect related to special items (0.46) (0.46) NM1 (0.66) (0.66) NM1
Diluted earnings per shareDiluted earnings per share, excluding special items $2.61 $3.31 $(0.70) (21.1) $3.79 $4.82 $(1.03) (21.4)

 

UNITED CONTINENTAL HOLDINGS, INC.
NON-GAAP FINANCIAL RECONCILIATION (Continued)
  Three Months Ended
June 30, 2016 in cents
Three Months Ended
June 30, 2015 in cents
%
Increase/
(Decrease)
Six Months Ended
June 30, 2016 in cents
Six Months Ended
June 30, 2015 in cents
%
Increase/
(Decrease)
CASM Mainline Operations (cents)
Cost per available seat mile (CASM)
12.39 12.42 (0.2) 12.43 12.69 (2.0)
CASM Mainline Operations (cents): Cost per available seat mile (CASM)Less: Special charges (C) 0.76 0.10 NM1 0.58 0.12 NM1
CASM Mainline Operations (cents): Cost per available seat mile (CASM)CASM, excluding special charges 11.63 12.32 (5.6) 11.85 12.57 (5.7)
CASM Mainline Operations (cents): CASM, excluding special chargesLess: Third-party business expenses 0.10 0.12 (16.7) 0.11 0.12 (8.3)
CASM Mainline Operations (cents): CASM Mainline OperationsCASM, excluding special charges and third-party business expenses 11.53 12.20 (5.5) 11.74 12.45 (5.7)
CASM Mainline Operations (cents): CASM, excluding special charges and third-party business expensesLess: Fuel expense 2.09 3.10 (32.6) 2.05 3.10 (33.9)
CASM Mainline Operations (cents): CASM Mainline OperationsCASM, excluding special charges, third-party business expenses and fuel 9.44 9.10 3.7 9.69 9.35 3.6
CASM Mainline Operations (cents): CASM, excluding special charges, third-party business expenses and fuelLess: Profit sharing per available seat mile 0.36 0.34 5.9 0.28 0.25 12.0
CASM Mainline Operations (cents): CASM Mainline OperationsCASM, excluding special charges, third-party business expenses, fuel, and profit sharing 9.08 8.76 3.7 9.41 9.10 3.4
CASM Consolidated Operations (cents)
Cost per available seat mile (CASM)
12.88 13.09 (1.6) 12.91 13.40 (3.7)
CASM Consolidated Operations (cents): Cost per available seat mile (CASM)Less: Special charges (C) 0.67 0.08 NM1 0.50 0.10 NM1
CASM Consolidated Operations (cents): CASM, excluding special charges 12.21 13.01 (6.1) 12.41 13.30 (6.7)
CASM Consolidated Operations (cents): CASM, excluding special chargesLess: Third-party business expenses 0.09 0.11 (18.2) 0.11 0.11
CASM Consolidated Operations (cents): CASM, excluding special charges and third-party business expenses 12.12 12.90 (6.0) 12.30 13.19 (6.7)
CASM Consolidated Operations (cents): CASM, excluding special charges and third-party business expensesLess: Fuel expense 2.22 3.25 (31.7) 2.16 3.26 (33.7)
CASM Consolidated Operations (cents): CASM, excluding special charges, third-party business expenses and fuel 9.90 9.65 2.6 10.14 9.93 2.1
CASM Consolidated Operations (cents): CASM, excluding special charges, third-party business expenses and fuelLess: Profit sharing per available seat mile 0.33 0.31 6.5 0.24 0.22 9.1
CASM Consolidated Operations (cents): CASM, excluding special charges, third-party business expenses, fuel, and profit sharing 9.57 9.34 2.5 9.90 9.71 2.0

 

UNITED CONTINENTAL HOLDINGS, INC.
CAPITAL EXPENDITURES AND FREE CASH FLOW
Capital Expenditures (in millions) Three Months Ended
June 30, 2016
Six Months Ended
June 30, 2016
Capital Expenditures:Capital expenditures – GAAP $838 $1,654
Capital Expenditures: Capital expenditures – GAAP:Property and equipment acquired through the issuance of debt 59
Capital Expenditures: Capital expenditures – GAAP:Airport construction financing 26 35
Capital Expenditures: Capital expenditures – GAAP:Fully reimbursable projects (97) (158)
Capital Expenditures:Adjusted capital expenditures – Non-GAAP $767 $1,590
Free Cash Flow (in millions) Three Months Ended
June 30, 2016
Six Months Ended
June 30, 2016
Free Cash Flow (in millions):Net cash provided by operating activities $2,547 $3,746
Free Cash Flow (in millions): Net cash provided by operating activities:Less adjusted capital expenditures – Non-GAAP 767 1,590
Free Cash Flow (in millions):Free cash flow - Non-GAAP $1,780 $2,156

 

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
June 30, 2016
Return On Invested CapitalNet Operating Profit After Tax (NOPAT)
Pre-tax income excluding special items 4
$4,696
Return On Invested CapitalNOPAT adjustments 5 1,056
Return On Invested CapitalNOPAT $5,752
Return On Invested CapitalEffective cash tax rate 6 0.3%
Return On Invested CapitalInvested Capital (five-quarter average)
Total assets
$40,394
Return On Invested CapitalInvested capital adjustments 7 12,581
Return On Invested CapitalAverage Invested Capital $27,813
Return On Invested CapitalReturn on Invested Capital 20.7%
  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
June 30, 2016
Pre-tax income $3,936
Return On Invested CapitalAdd: Special items 760
Return On Invested CapitalPre-tax income excluding special items $4,696

 

Photo - http://photos.prnewswire.com/prnh/20161016/429327-INFO

Logo - http://photos.prnewswire.com/prnh/20130404/MM89155LOGO

 

SOURCE United Airlines

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

United Airlines Earns 100% Score on Human Rights Campaign Foundation's Annual Scorecard on LGBTQ+ Workplace Equality

January 27, 2020

CHICAGO, Jan. 27, 2020 /PRNewswire/ -- United Airlines today announced it has received a perfect score of 100% on the 2020 Corporate Equality Index (CEI), a premier benchmarking survey and report on corporate policies and practices related to LGBTQ+ workplace equality, administered by the Human Rights Campaign (HRC) Foundation. This is the ninth consecutive year the airline receives a 100% score.

"United is proud to receive this recognition as it speaks to our commitment to not only promoting an LGBTQ+-friendly workplace but LGBTQ+-friendly skies," said Kate Gebo, United's Executive Vice President of Human Resources and Labor Relations. "We will continue working with organizations like the Human Rights Campaign to help champion LGBTQ+ inclusion because United believes in breaking down barriers to create a more welcoming world for all who explore it."

"The impact of the Human Rights Campaign's Corporate Equality Index over its 18-year history is profound. In this time, the corporate community has worked with us to adopt LGBTQ+-inclusive policies, practices and benefits, establishing the Corporate Equality Index as a primary driving force for LGBTQ+ workplace inclusion in America and across the globe," said HRC President Alphonso David. "These companies know that protecting their LGBTQ+ employees and customers from discrimination is not just the right thing to do -- it is also the best business decision."

United's commitment to LGBTQ+ equality includes being the first U.S. airline to fully recognize domestic partnerships in 1999 to becoming the first U.S. airline to offer non-binary gender options throughout all of its booking channels in 2019. Additionally, during its Pride Month celebration in 2019, United became the first public company to be inducted into Pride Live's Stonewall Ambassador program

United has partnered with the Human Rights Campaign on training initiatives including educating employees about preferred pronouns and the persistence of gender norms and other steps to make United an inclusive space for both customers and employees. The airline's latest efforts include developing comprehensive training modules and exercises to continue employee education on how to be a better ally in both the workplace and to customers. Over the past year, United has also opened more LGBTQ+ Business Resource Groups across the country, reaching more employees.

Alongside partner organizations, customers and employees, United will continue working to build the world's most inclusive airline. For more information on United's commitment to diversity and inclusion, visit https://hub.united.com/diversity-inclusion-fact-sheet/.

Every customer. Every flight. Every day.

United continues to strengthen its commitment to its customers, looking at every aspect of its business to ensure that the carrier keeps customers' best interests at the heart of its service. In addition to today's announcement, United recently:

  • Announced that MileagePlus award miles will never expire
  • Committed $40 million toward a new investment initiative focused on accelerating the development of sustainable aviation fuels and other decarbonization technologies
  • Established Miles on a Mission, a first-of-its-kind crowdsourcing platform which gives customers a simple way to donate miles to non-profit organizations and charities in need of air travel
  • Launched ConnectionSaver, a digital tool dedicated to improving the experience for customers with connecting flights
  • Instituted PlusPoints, new upgrade benefits for MileagePlus Premier members
  • Gave Economy customers a choice of complimentary snacks on domestic flights
  • Made DIRECTV free for every customer on more than 200 aircraft

About United

United's shared purpose is "Connecting People. Uniting the World." We are more focused than ever on our commitment to customers through a series of innovations and improvements designed to help build a great experience: Every customer. Every flight. Every day. Together, United and United Express operate approximately 4,900 flights a day to 362 airports across six continents. In 2019, United and United Express operated more than 1.7 million flights carrying more than 162 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 791 mainline aircraft and the airline's United Express partners operate 581 regional aircraft. United is a founding member of Star Alliance, which provides service to 195 countries via 26 member airlines. 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 is Onboard as the Official Airline of the 92nd Street Y’s Acclaimed Talks Series

January 24, 2020

NEW YORK, January 24, 2020 – United is teaming up with famed New York community and cultural center, the 92nd Street Y (92Y), to serve as the official airline of the nonprofit's renowned Recanati-Kaplan Talks Series for 2020. For decades, 92Y has been home to New York City's largest and most successful talks series, featuring prominent artists, entertainers, musicians, scientists, comedians, political figures, fashion designers, dancers, economists and many others.

Pop TV's Schitt's Creek: A Screening and Conversation with Eugene Levy, Catherine O'Hara, Daniel Levy and Annie Murphy, Moderated by Vanity Fair's Richard Lawson at the 92Y.

Jamie McCarthy/Getty Images

🙂

"United's shared purpose drives us to unite the world by connecting people to what matters most, which is why we are thrilled to be aligned with an organization such as the 92nd Street Y which embodies our brand's commitment," said Jill Kaplan, President, New York / New Jersey for United Airlines. "We are extremely proud to join this iconic institution in treating New Yorkers to another season of compelling commentary and captivating stories that will lift hearts, illuminate minds and bring our community together."

"We are delighted to collaborate with United Airlines for our 2020 season of Recanati-Kaplan Talks," said Susan Engel, executive director of 92Y Talks. "Their generosity helps us to continue to present unforgettable events with some of the most interesting and culturally significant speakers of our times."

Talks for the 2020 season include Larry David, the cast of Schitt's Creek, John Mulaney, Jeffrey Toobin, Paul Krugman, Samantha Bee, Queer Eye's Antoni Porowski, Diane Keaton, Issa Rae, Edie Falco, Seth Rogen, the cast of Outlander, Kevin Kline, Pod Save America's Dan Pfeiffer, Roy Wood Jr., Ronny Chieng, Noah Centineo, Ezra Klein, Malcolm Gladwell, Fareed Zakaria, Ramit Sethi, Glennon Doyle, Nicholas Kristof, Sheryl WuDunn and many more.

Every customer. Every flight. Every day.

United continues to strengthen its commitment to its customers, looking at every aspect of its business to ensure that the carrier keeps customers' best interests at the heart of its service. In addition to today's announcement, United recently:

  • Announced that MileagePlus award miles will never expire
  • Committed $40 million toward a new investment initiative focused on accelerating the development of sustainable aviation fuels and other decarbonization technologies
  • Established Miles on a Mission, a first-of-its-kind crowdsourcing platform which gives customers a simple way to donate miles to non-profit organizations and charities in need of air travel
  • Launched ConnectionSaver, a digital tool dedicated to improving the experience for customers with connecting flights
  • Instituted PlusPoints, new upgrade benefits for MileagePlus Premier members
  • Gave Economy customers a choice of complimentary snacks on domestic flights
  • Made DIRECTV free for every customer on more than 200 aircraft

About United

United's shared purpose is "Connecting People. Uniting the World." We are more focused than ever on our commitment to customers through a series of innovations and improvements designed to help build a great experience: Every customer. Every flight. Every day. Together, United and United Express operate approximately 5,000 flights a day to 362 airports across five continents. In 2019, United and United Express operated more than 1.7 million flights carrying more than 162 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 791 mainline aircraft and the airline's United Express partners operate 579 regional aircraft. United is a founding member of Star Alliance, which provides service to 195 countries via 26 member airlines. 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 92Y

92nd Street Y is a world-class, nonprofit cultural and community center that fosters the mental, physical and spiritual health of people throughout their lives, offering: wide-ranging conversations with the world's best minds; an outstanding range of programming in the performing, visual and literary arts; fitness and sports programs; and activities for children and families. 92Y is reimagining what it means to be a community center in the digital age with initiatives like the award-winning #GivingTuesday, launched by 92Y in 2012 and now recognized across the US and in a growing number of regions worldwide as a day to celebrate and promote giving. These kinds of initiatives are transforming the way people share ideas and translate them into action both locally and around the world. More than 300,000 people visit 92Y annually; millions more participate in 92Y's digital and online initiatives. A proudly Jewish organization since its founding in 1874, 92Y embraces its heritage and welcomes people of all backgrounds and perspectives. For more information, visit www.92Y.org.

United Adds 29 New Flights to Miami for the Big Game

January 23, 2020

CHICAGO, Jan. 23, 2020 /PRNewswire/ -- United Airlines is offering football fans across the United States more options to get to Miami for the Big Game. United is offering fans more than 5,600 seats through 29 additional nonstop flights to Miami from its seven U.S. hubs including Los Angeles and seven special point-to-point flights between Kansas City and Miami. Tickets are now available for purchase on united.com.

"This year we're offering football fans from every corner of the country more opportunities than ever to get to Miami for the Big Game including extra flights between San Francisco and Miami and new service between Kansas City and Miami," said Ankit Gupta, United's vice president of Domestic Network Planning. "In addition to our expanded network to Miami for the game, travelers can easily get to Miami via United's 25 daily flights to Fort Lauderdale's Hollywood International Airport from Chicago, Denver, Houston, New York/Newark, San Francisco, Washington Dulles and Cleveland."

United's Big Game Service to Miami


Day

From

To

Frequency

Friday

San Francisco

Miami

3 Flights

Friday

Kansas City

Miami

2 Flights

Friday

Chicago

Miami

5 Flights

Friday

Denver

Miami

1 Flight

Friday

Houston

Miami

5 Flights

Friday

Los Angeles

Miami

1 Flight

Friday

New York/Newark

Miami

8 Flights

Friday

Washington Dulles

Miami

2 Flights





Saturday

San Francisco

Miami

3 Flights

Saturday

Kansas City

Miami

2 Flights

Saturday

Chicago

Miami

5 Flights

Saturday

Denver

Miami

1 Flight

Saturday

Houston

Miami

6 Flights

Saturday

New York/Newark

Miami

6 Flights

Saturday

Washington Dulles

Miami

2 Flights





Monday

Miami

San Francisco

5 Flights

Monday

Miami

Kansas City

3 Flights

Monday

Miami

Chicago

4 Flights

Monday

Miami

Denver

1 Flight

Monday

Miami

Houston

5 Flights

Monday

Miami

Los Angeles

2 Flights

Monday

Miami

New York/Newark

9 Flights

Monday

Miami

Washington Dulles

3 Flights

Every customer. Every flight. Every day.

United continues to strengthen its commitment to its customers, looking at every aspect of its business to ensure that the carrier keeps customers' best interests at the heart of its service. In addition to today's announcement, United recently:

  • Announced that MileagePlus award miles will never expire
  • Committed $40 million toward a new investment initiative focused on accelerating the development of sustainable aviation fuels and other decarbonization technologies
  • Established Miles on a Mission, a first-of-its-kind crowdsourcing platform which gives customers a simple way to donate miles to non-profit organizations and charities in need of air travel
  • Launched ConnectionSaver, a digital tool dedicated to improving the experience for customers with connecting flights
  • Instituted PlusPoints, new upgrade benefits for MileagePlus Premier members
  • Gave Economy customers a choice of complimentary snacks on domestic flights
  • Made DIRECTV free for every customer on more than 200 aircraft

About United

United's shared purpose is "Connecting People. Uniting the World." We are more focused than ever on our commitment to customers through a series of innovations and improvements designed to help build a great experience: Every customer. Every flight. Every day. Together, United and United Express operate approximately 4,900 flights a day to 362 airports across six continents. In 2019, United and United Express operated more than 1.7 million flights carrying more than 162 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 791 mainline aircraft and the airline's United Express partners operate 581 regional aircraft. United is a founding member of Star Alliance, which provides service to 195 countries via 26 member airlines. 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, 872-825-8640, media.relations@united.com

United Airlines Reaches 2020 Adjusted Earnings Per Share Target One Year Ahead Of Schedule

January 21, 2020

CHICAGO, Jan. 21, 2020 /PRNewswire/ -- United Airlines (UAL) today announced it reached its 2020 goal -- first announced in January 2018 -- to achieve adjusted diluted earnings per share (EPS) target2 of $11 to $13 a full year ahead of schedule. The company also achieved full year pre-tax margin growth of 2.6 points, which is expected to outpace its largest competitors for 2019.

  • Reported fourth quarter net income of $641 million, diluted EPS of $2.53, up 50% versus the fourth quarter of 2018, pre-tax earnings of $844 million and pre-tax margin of 7.8 percent, expanding pre-tax margin 2.5 points versus the fourth quarter of 2018.
  • Reported fourth quarter adjusted net income of $676 million, adjusted diluted EPS of $2.67, up 11% versus the fourth quarter of 2018, adjusted pre-tax earnings of $889 million and adjusted pre-tax margin of 8.2 percent, expanding adjusted pre-tax margin 0.5 points versus the fourth quarter of 2018.1
  • Reported full year net income of $3.0 billion, diluted EPS of $11.58, up 51% versus full year 2018, pre-tax earnings of $3.9 billion and pre-tax margin of 9.0 percent, expanding pre-tax margin 2.6 points versus full year 2018.
  • Reported full year adjusted net income of $3.1 billion, adjusted diluted EPS of $12.05, up 32% versus full year 2018, adjusted pre-tax earnings of $4.1 billion and adjusted pre-tax margin of 9.4 percent, expanding adjusted pre-tax margin 1.7 points versus full year 2018.1
  • Consolidated fourth quarter passenger revenue per available seat mile (PRASM) increased 0.8 percent year-over-year.
  • Consolidated fourth quarter unit cost per available seat mile (CASM) decreased 1.3 percent year-over-year and consolidated full year unit cost per available seat mile (CASM) decreased 1.2 percent year-over-year.
  • Consolidated fourth quarter CASM, excluding special charges, third party business expenses, fuel and profit sharing, increased 2.7 percent year-over-year. Consolidated full year CASM, excluding special charges, third-party business expenses, fuel and profit sharing, increased 1.0 percent year-over-year.
  • Repurchased $216 million of its common shares in the fourth quarter of 2019, at an average purchase price of $88.95 per share, bringing share repurchases for full year 2019 to $1.6 billion.

"2019 was a great year for our United team -- highlighted by achieving our $11 to $13 adjusted EPS target a full year ahead of schedule," said Oscar Munoz, CEO of United Airlines. "With a four-quarter streak of expanding profit margins, when all the results are in we expect our full year 2019 pre-tax margin growth to be the highest amongst our largest competitors. When I look at United's fundamental strength, I could not be prouder of what we've accomplished in such a short time. This is the New United we set out to build more than four years ago. As we embark on a new year and decade, I believe the outlook for United's future has never been brighter."

1 Excludes special charges, unrealized gains and losses on investments and imputed interest on certain finance leases. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the tables accompanying this release.
2 Excludes special charges and unrealized gains and losses on investments, the nature of which are not determined at this time. Accordingly, UAL does not provide earnings guidance on a GAAP basis.

For more information on UAL's first quarter and full year 2020 guidance, please visit ir.united.com for the company's investor update.

2019 Highlights

Operations and Employees

  • Flew most revenue passengers in company history.
  • Set new company record for most mainline departures with nearly 800,000 departures.
  • Number one in on-time departures at all hubs with direct competitors -- Chicago, Denver and Los Angeles.
  • Hosted Backstage 2019, which brought all 25,000 flight attendants to Chicago for an event which was designed to underscore the important role flight attendants play in delivering great service.
  • Profit sharing for 2019 was on average 45 percent higher per participating employee year-over-year.
  • Launched Aviate, a new pilot recruiting and development program and career website to establish a more structured career path to becoming a United pilot.
  • Hired nearly 9,000 aviation professionals in well paying careers with great benefits in 2019.

Customer Experience

  • Introduced ConnectionSaver, a new tool dedicated to improving the experience for customers connecting from one United flight to the next, saving nearly 100,000 connections to be made in 2019.
  • Became the first U.S. airline to offer non-binary gender options throughout all booking channels in addition to providing the option to select the title "Mx." during booking.
  • Announced MileagePlus award miles never expire, giving members a lifetime to use miles on flights, experiences, hotels and more.
  • Announced free live DIRECTV on 211 Boeing 737 United aircraft equipped with seat back TV, providing more than 100 channels of live television.
  • Introduced a re-imagined mobile app to customers featuring a more dynamic experience that updates customers at each step of their travel journey.
  • Customers are now provided three inflight snack options on domestic flights regardless of departure time, including the Stroopwafel.
  • MileagePlus members between the ages of 18 to 22 received a discount on domestic flights when booked through the United mobile app through the end of 2019.
  • Opened the fifth of its award-winning United Polaris Lounges at Los Angeles International Airport.
  • Opened three new United Clubs at Fort Lauderdale-Hollywood International Airport, LaGuardia Airport and Raleigh-Durham International Airport.
  • Announced the addition of more than 1,600 United Polaris® business class and United First seats to nearly 250 international and domestic aircraft.
  • Began flight operations at LaGuardia Airport's new Terminal B Eastern Concourse.
  • Customers can now pre-pay for bags as soon as their ticket is issued. Previously customers had to wait until check-in to pay for their bags.
  • Announced partnership with CLEAR which includes a free or discounted CLEAR membership for U.S.-based MileagePlus members.

Network

  • Announced a total of nine new international routes and two new expanded routes beginning in 2020, including four new daily nonstop flights to Tokyo Haneda Airport.
  • Strengthened the domestic route network with 69 new routes including launching 54 new routes and announcing 15 routes beginning in 2020.
  • Launched 11 new international routes in 2019, including direct flights from Newark Liberty International Airport to Cape Town, South Africa; Prague, Czech Republic; and Naples, Italy.

Fleet

  • Took delivery of 49 aircraft in 2019, including eight Boeing 787-10 aircraft, becoming the first carrier in the world to operate all three Dreamliner models.
  • Signed agreements to purchase 50 Airbus A321 XLR, 20 used Boeing 737-700 aircraft and 20 Embraer E175 aircraft operated by our regional partners.
  • Introduced a brand new and revolutionary regional flying experience with the addition of the two-cabin, 50-seat Bombardier CRJ 550 aircraft.
  • Unveiled next paint design, which brings a refreshed look to its fleet, serving as a visual representation of the airline's ongoing brand evolution.
  • Launched Boeing 767-300ER ultra-premium United Polaris business class configuration on all flights between New York/Newark and Chicago to London-Heathrow.

Community and Environment

  • Launched Miles on a Mission, a first-of-its-kind crowdsourcing platform which gives customers a simple way to donate miles to non-profit organizations and charities in need of air travel.
  • Pledged on Giving Tuesday to match up to 10 million MileagePlus miles to featured Miles on a Mission partners.
  • Committed $40 million toward a new investment initiative focused on accelerating the development of sustainable aviation fuels and other decarbonization technologies.
  • Made history with the departure of the "Flight for the Planet," the most eco-friendly commercial flight of its kind in the history of aviation.
  • Renewed contract with Boston-based World Energy to purchase up to 10 million gallons of cost-competitive, commercial-scale, sustainable aviation biofuel.
  • Launched Her Art Here, a contest where two women artists were chosen to have their work painted on California- and New York/New Jersey-themed Boeing 757s to uplift underrepresented women artists.
  • Celebrated Women in Aviation International's annual Girls in Aviation Day by hosting more than 500 girls in 14 locations around the world.
  • Became the first public company to be inducted into Pride Live's Stonewall Ambassador program in recognition of the airline's commitment to LGBTQ+ equality.
  • Reached a milestone of 1 million meals packed for charity partner Rise Against Hunger.
  • Donated $1 million to Feeding America's Shutdown Response Fund to directly support the food banks providing food for families of federal workers.

Earnings Call

UAL will hold a conference call to discuss its fourth quarter and full year 2019 financial results as well as its financial and operational outlook for first quarter and full year 2020 on Wednesday, January 22, 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's shared purpose is "Connecting People. Uniting the World." We are more focused than ever on our commitment to customers through a series of innovations and improvements designed to help build a great experience: Every customer. Every flight. Every day. Together, United and United Express operate approximately 4,900 flights a day to 362 airports across six continents. In 2019, United and United Express operated more than 1.7 million flights carrying more than 162 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 791 mainline aircraft and the airline's United Express partners operate 581 regional aircraft. United is a founding member of Star Alliance, which provides service to 195 countries via 26 member airlines. 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".

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," "targets" 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 execute our strategic operating plan, including our growth, revenue-generating and cost-control initiatives; 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); risks of doing business globally, including instability and 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; our capacity decisions and the capacity decisions of our competitors; competitive pressures on pricing and on demand; changes in aircraft fuel prices; disruptions in our supply of aircraft fuel; our ability to cost-effectively hedge against increases in the price of aircraft fuel, if we decide to do so; the effects of any technology failures or cybersecurity breaches; disruptions to services provided by third-party service providers; potential reputational or other impact from adverse events involving our aircraft or operations, the aircraft or operations of our regional carriers or our code share partners or the aircraft or operations of another airline; our ability to attract and retain customers; the effects of any terrorist attacks, international hostilities or other security events, or the fear of such events; the mandatory grounding of aircraft in our fleet; disruptions to our regional network; the impact of regulatory, investigative and legal proceedings and legal compliance risks; the success of our investments in other airlines, including in other parts of the world; industry consolidation or changes in airline alliances; 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; disruptions in the availability of aircraft, parts or support from our suppliers; 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; labor costs; an outbreak of a disease that affects travel demand or travel behavior; the impact of any management changes; extended interruptions or disruptions in service at major airports where we operate; U.S. or foreign governmental legislation, regulation and other actions (including Open Skies agreements, environmental regulations and the United Kingdom's withdrawal from the European Union); the seasonality of the airline industry; weather conditions; the costs and availability of aviation and other insurance; the costs and availability of financing; our ability to maintain adequate liquidity; our ability to comply with the terms of our various financing arrangements; our ability to realize the full value of our intangible assets and long-lived assets; 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, 2018, our Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, 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, 2019, United Airlines Holdings, Inc. ("UAL") adopted Accounting Standards Update No. 2016-02, Leases ("Topic 842"). As such, certain previously reported 2018 figures are adjusted in this report on a basis consistent with Topic 842.

UNITED AIRLINES HOLDINGS, INC,

STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)




Three Months Ended
December 31,


%
Increase/
(Decrease)



Year Ended
December 31,


%
Increase/
(Decrease)


(In millions, except per share data)


2019


2018




2019


2018



Operating revenue:















Passenger


$

9,933



$

9,556



3.9




$

39,625



$

37,706



5.1



Cargo


316



334



(5.4)




1,179



1,237



(4.7)



Other operating revenue


639



601



6.3




2,455



2,360



4.0



Total operating revenue


10,888



10,491



3.8




43,259



41,303



4.7


















Operating expense:















Salaries and related costs


3,078



2,924



5.3




12,071



11,458



5.3



Aircraft fuel


2,249



2,380



(5.5)




8,953



9,307



(3.8)



Regional capacity purchase


725



650



11.5




2,849



2,649



7.6



Landing fees and other rent


650



627



3.7




2,543



2,449



3.8



Depreciation and amortization


606



558



8.6




2,288



2,165



5.7



Aircraft maintenance materials and outside repairs


475



434



9.4




1,794



1,767



1.5



Distribution expenses


417



396



5.3




1,651



1,558



6.0



Aircraft rent


67



78



(14.1)




288



433



(33.5)



Special charges (B)


130



301



NM




246



487



NM



Other operating expenses


1,630



1,508



8.1




6,275



5,801



8.2



Total operating expense


10,027



9,856



1.7




38,958



38,074



2.3


















Operating income


861



635



35.6




4,301



3,229



33.2


















Operating margin


7.9

%


6.1

%


1.8

pts.



9.9

%


7.8

%


2.1

pts.

















Nonoperating income (expense):















Interest expense


(161)



(173)



(6.9)




(731)



(670)



9.1



Interest capitalized


20



19



5.3




85



65



30.8



Interest income


30



31



(3.2)




133



101



31.7



Unrealized gains (losses) on investments, net (B)


81



56



44.6




153



(5)



NM


Miscellaneous, net


13



(15)



NM




(27)



(72)



(62.5)



Total nonoperating expense


(17)



(82)



(79.3)




(387)



(581)



(33.4)


















Income before income taxes


844



553



52.6




3,914



2,648



47.8


















Pre-tax margin


7.8

%


5.3

%


2.5

pts.



9.0

%


6.4

%


2.6

pts.

















Income tax expense (D)


203



92



120.7




905



526



72.1



Net income


$

641



$

461



39.0




$

3,009



$

2,122



41.8


















Diluted earnings per share


$

2.53



$

1.69



49.7




$

11.58



$

7.67



51.0



Diluted weighted average shares


253.4



272.7



(7.1)




259.9



276.7



(6.1)


















NM Not meaningful
















 

UNITED AIRLINES HOLDINGS, INC.

PASSENGER REVENUE INFORMATION AND STATISTICS


Passenger revenue information is as follows (in millions, except for percentage changes):



4Q 2019

Passenger

Revenue


4Q 2018

Passenger

Revenue (a)


Reporting Adjustments (b)


4Q 2018

Passenger

Revenue (b)


Passenger

Revenue

vs.

4Q 2018 (b)


PRASM vs. 4Q 2018 (b)


Yield vs. 4Q 2018 (b)


Available

Seat Miles

vs.

4Q 2018


4Q 2019 Available Seat Miles


4Q 2019 Revenue Passenger Miles

Domestic

$

6,338



$

6,088



$

52



$

6,140



3.2%


0.6%


1.5%


2.6%


40,612


34,051





















Atlantic

1,616



1,535



(30)



1,505



7.4%


(0.2%)


(1.3%)


7.6%


12,649


10,373

Pacific

1,088



1,139



(31)



1,108



(1.8)%


(1.2)%


(1.9)%


(0.7%)


11,098


8,653

Latin America

891



794



9



803



11.0%


6.3%


5.8%


4.4%


6,679


5,556

International

3,595



3,468



(52)



3,416



5.2%


1.5%


0.5%


3.8%


30,426


24,582





















Consolidated

$

9,933



$

9,556



$



$

9,556



3.9%


0.8%


1.0%


3.1%


71,038


58,633






















(a) As previously reported.

(b) During the third quarter of 2019, United implemented a new revenue accounting software system which allowed it to more precisely determine the geographic regions associated with certain ancillary passenger revenue items. Prior to July 2019, those ancillary revenue items were determined using an allocation method that was based on revenue from passenger travel. While the total passenger revenue is not impacted, the geographic totals for each period are not comparable year-over-year due to the change. The fourth quarter 2018 passenger revenue presented in the table above reallocates these ancillary items using the 2019 allocation.

 

Select operating statistics are as follows:




Three Months Ended
December 31,


%

Increase/

(Decrease)



Year Ended
December 31,


%

Increase/

(Decrease)




2019


2018




2019


2018



Passengers (thousands)


40,306



39,891



1.0




162,443



158,330



2.6



Revenue passenger miles (millions)


58,633



56,968



2.9




239,360



230,155



4.0



Available seat miles (millions)


71,038



68,902



3.1




284,999



275,262



3.5



Passenger load factor:















    Consolidated


82.5

%


82.7

%


(0.2)

pts.



84.0

%


83.6

%


0.4

pts.


    Domestic


83.8

%


84.6

%


(0.8)

pts.



85.2

%


85.4

%


(0.2)

pts.


    International


80.8

%


80.1

%


0.7

pts.



82.4

%


81.3

%


1.1

pts.


Passenger revenue per available seat mile (cents)


13.98



13.87



0.8




13.90



13.70



1.5



Total revenue per available seat mile (cents)


15.33



15.23



0.7




15.18



15.00



1.2



Average yield per revenue passenger mile (cents)


16.94



16.77



1.0




16.55



16.38



1.0



Cargo ton miles


889



902



(1.4)




3,329



3,425



(2.8)



Aircraft in fleet at end of period


1,372



1,329



3.2




1,372



1,329



3.2



Average stage length (miles)


1,446



1,426



1.4




1,460



1,446



1.0



Average full-time equivalent employees


90,264



87,315



3.4




90,116



86,641



4.0



Average aircraft fuel price per gallon


$

2.10



$

2.30



(8.7)




$

2.09



$

2.25



(7.1)



Fuel gallons consumed (millions)


1,071



1,036



3.4




4,292



4,137



3.7





























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, 2018, for definitions of these statistics.       


 

UNITED AIRLINES HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


 (In millions)

December 31, 2019


December 31, 2018

ASSETS




Current assets:




Cash and cash equivalents

$

2,762



$

1,694


Short-term investments

2,182



2,256


Receivables, less allowance for doubtful accounts

1,364



1,426


Aircraft fuel, spare parts and supplies, less obsolescence allowance

1,072



985


Prepaid expenses and other

814



733


Total current assets

8,194



7,094






Total operating property and equipment, net

30,170



27,399


Operating lease right-of-use assets

4,758



5,262






Other assets:




Goodwill

4,523



4,523


Intangibles, less accumulated amortization

3,009



3,159


Restricted cash

106



105


Notes receivable, net

671



516


Investments in affiliates and other, net

1,180



966


Total other assets

9,489



9,269


Total assets

$

52,611



$

49,024






LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Advance ticket sales

$

4,819



$

4,381


Accounts payable

2,703



2,363


Frequent flyer deferred revenue

2,440



2,286


Accrued salaries and benefits

2,271



2,184


Current maturities of long-term debt

1,407



1,230


Current maturities of finance leases

46



123


Current maturities of operating leases

686



719


Other

566



553


Total current liabilities

14,938



13,839






Other long-term liabilities and deferred credits: