United Third Quarter 2016 Earnings - United Hub

United Airlines Reports Third-Quarter 2016 Performance

October 17, 2016

CHICAGO, Oct. 17, 2016 /PRNewswire/ -- United Airlines (UAL) today announced its third-quarter 2016 financial results. 

  • UAL reported third-quarter net income of $965 million, diluted earnings per share of $3.01, pre-tax earnings of $1.5 billion and pre-tax margin of 15.2 percent.
  • Excluding special items, UAL reported third-quarter net income of $997 million, diluted earnings per share of $3.11, pre-tax earnings of $1.6 billion and pre-tax margin of 15.7 percent.
  • Flight attendants ratified a joint contract and the company reached a tentative agreement with technicians and related employees for a joint contract.

"We delivered another very good quarter, demonstrating the progress United continues to make at improving our customer experience, which included our best third quarter on-time performance in company history," said Oscar Munoz, chief executive officer of United Airlines. "As we execute our strategy to build the world's best airline, we will remain intensely focused on engaging our employees, running a great operation and improving our financial performance."

Third-Quarter Revenue

For the third quarter of 2016, total revenue was $9.9 billion, a decrease of 3.8 percent year-over-year. Third-quarter 2016 consolidated passenger revenue per available seat mile (PRASM) decreased 5.8 percent and consolidated yield decreased 5.7 percent compared to the third quarter of 2015. The decline in PRASM continues to be driven by factors including a strong U.S. dollar, lower surcharges, reductions from energy-related corporate travel, and declining yields.

Third-Quarter Costs

Total operating expense including special charges was $8.3 billion in the third quarter, down 1.4 percent year-over-year. Excluding special charges, total operating expense was $8.2 billion, a 1.0 percent improvement year-over-year. Consolidated unit cost (CASM) including special charges, third-party business expenses, fuel and profit sharing decreased 3.3 percent compared to the third quarter of 2015 due mainly to lower oil prices. Consolidated CASM, excluding special charges, third-party business expenses, fuel and profit sharing, increased 3.4 percent year-over-year driven largely by the impact of recently ratified labor agreements.

Liquidity and Capital Allocation

In the third quarter, UAL generated $1.1 billion in operating cash flow and ended the quarter with $6.2 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 $689 million in the third quarter. Including assets acquired through the issuance of debt and airport construction financing and excluding fully reimbursable projects, the company invested $679 million in adjusted capital expenditures during the third quarter. Free cash flow, measured as operating cash flow less adjusted capital expenditures, was $459 million in the third quarter and $2.6 billion year-to-date.  

For the 12 months ended Sept. 30, 2016, the company's return on invested capital was 19.6 percent.

In the quarter, UAL purchased $255 million of its common shares, representing 1.5 percent of shares outstanding. Since the initial repurchase announcement in July 2014, the company has purchased $4.0 billion of its common shares, representing approximately 20 percent of shares outstanding. As of Sept. 30, 2016, the company had $2.0 billion remaining to purchase shares under its existing share repurchase authority.

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

Third-Quarter Highlights

Operations and Employees

  • Flight attendants ratified a joint contract covering 25,000 employees.
  • Reached a tentative agreement with technicians and related employees for a joint contract.
  • Achieved best September, third-quarter and year-to-date on-time performance in company history.
  • Employees earned cash-incentive payments of approximately $30 million for achieving operational performance goals in the quarter, marking ten straight months of bonus payouts.
  • Solidified the company's executive leadership, bringing significant experience and expertise to the team.

Network, Fleet and Customer Experience

  • Raised $920 million in financing through an enhanced equipment trust certificate transaction at a blended interest rate of 2.94 percent.
  • Launched new international routes between San Francisco and Auckland, New Zealand; and between San Francisco and Hangzhou, China.
  • Announced the launch of service to Havana, Cuba from the company's Newark and Houston hubs.
  • Flew approximately 1,500 athletes, coaches and Team USA staff to the 2016 Rio Olympic and Paralympic Games as the company celebrated more than 35 years partnering with Team USA.
  • Took delivery of four new Boeing 737NG aircraft and one used Airbus A319 aircraft.
  • In the third quarter, United's industry-leading mobile app surpassed more than 24 million downloads and 1 million visits per day.

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 737NGs, 787s and 777s, as well as six used Airbus A319 aircraft. 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 and revenue-generating initiative, 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 1, 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 NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015

(In millions, except per share data) Three Months Ended
September 30, 2016
Three Months Ended
September 30, 2015
%
Increase/
(Decrease)
Nine Months Ended
September 30, 2016
Nine Months Ended
September 30, 2015
%
Increase/
(Decrease)
Operating revenue:
Passenger: (A)
Mainline
$7,017 $7,254 (3.3) $19,119 $20,153 (5.1)
Operating revenue: Passenger: (A) Regional 1,586 1,706 (7.0) 4,577 4,903 (6.6)
Operating revenue: Passenger: (A) Total passenger revenue 8,603 8,960 (4.0) 23,696 25,056 (5.4)
Operating revenue: Cargo 224 235 (4.7) 626 706 (11.3)
Operating revenue: Other operating revenue 1,086 1,111 (2.3) 3,182 3,066 3.8
Operating revenue:Other operating revenue: Total operating revenue 9,913 10,306 (3.8) 27,504 28,828 (4.6)
Operating expense:
Salaries and related costs
2,625 2,534 3.6 7,707 7,289 5.7
Operating expense: Aircraft fuel(B) 1,603 1,934 (17.1) 4,258 5,904 (27.9)
Operating expense: Regional capacity purchase 572 572 1,645 1,725 (4.6)
Operating expense: Landing fees and other rent 546 551 (0.9) 1,612 1,647 (2.1)
Operating expense: Depreciation and amortization 503 469 7.2 1,473 1,343 9.7
Operating expense: Aircraft maintenance materials and outside repairs 451 424 6.4 1,301 1,252 3.9
Operating expense: Distribution expenses 345 366 (5.7) 987 1,026 (3.8)
Operating expense: Aircraft rent 168 185 (9.2) 521 580 (10.2)
Operating expense: Special charges (C) 45 76 NM1 669 195 NM1
Operating expense: Other operating expenses 1,431 1,296 10.4 3,998 3,782 5.7
Operating expense: Total operating expenses 8,289 8,407 (1.4) 24,171 24,743 (2.3)
Operating income: Operating income 1,624 1,899 (14.5) 3,333 4,085 (18.4)
Nonoperating income (expense):
Interest expense
(150) (164) (8.5) (466) (504) (7.5)
Nonoperating income (expense): Interest capitalized 20 13 53.8 48 38 26.3
Nonoperating income (expense): Interest income 14 5 180.0 31 16 93.8
Nonoperating income (expense): Miscellaneous, net (C) 2 (147) NM1 (11) (321) (96.6)
Nonoperating income (expense): Total nonoperating expense (114) (293) (61.1) (398) (771) (48.4)
Income before income taxes: Income before income taxes 1,510 1,606 (6.0) 2,935 3,314 (11.4)
Income tax expense: Income tax expense (benefit) (D) 545 (3210) NM1 1,069 (3,203) NM1
Net income: Net income $965 $4,816 (80) $1,866 $6,517 (71.4)
Earnings per share: Earnings per share, diluted $3.01 $12.82 (76.5) $5.57 $17.15 (67.5)
Weighted average shares: Weighted average shares, diluted 321 376 (14.6) 335 380 (11.8)
Pre-tax margin: Pre-tax margin 15.2% 15.6% (0.4) pts. 10.7% 11.5% (0.8) pts.
Pre-tax margin: Pre-tax margin, excluding special items (C) 15.7% 16.6% (0.9) pts. 13.1% 12.3% 0.8pts.
  1. NM means Not Meaningful

 

UNITED CONTINENTAL HOLDINGS, INC.
NOTES (UNAUDITED)

(A) Select passenger revenue information is as follows (in millions):
  3Q 2016
Passenger
Revenue
(millions)
Passenger
Revenue
vs.
3Q 2015
PRASM
vs.
3Q 2015
Yield
vs.
3Q 2015
Available
Seat Miles
vs.
3Q 2015
Domestic $3,582 (0.9%) (4.9%) (3.9%) 4.2%
Atlantic 1,619 (9.7%) (10.7%) (7.6%) 1.2%
Pacific 1,168 (2.6%) (4.1%) (7.5%) 1.6%
Latin America 648 0.3% (1.3%) (4.4%) 1.6%
International 3,435 (5.6%) (6.9%) (7.2%) 1.4%
Mainline 7,017 (3.3%) (5.9%) (5.5%) 2.8%
Regional 1,586 (7.0%) (3.2%) (3.9%) (3.9%)
Consolidated $8,603 (4.0%) (5.8%) (5.7%) 2.0%

 

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
September 30, 2016
Three Months Ended
September 30, 2015
%
Increase/
(Decrease)
Nine Months Ended
September 30, 2016
Nine Months Ended
September 30, 2015
%
Increase/
(Decrease)
Mainline fuel expense excluding hedge impacts Mainline fuel expense excluding hedge impacts $1,319 $1,483 (11.1) $3,370 $4,527 (25.6)
Hedge losses reported in fuel expense 2 (24) (150) NM1 (197) (429) NM1
Total mainline fuel expenseTotal mainline fuel expense 1,343 1,633 (17.8) 3,567 4,918 (28.0)
Regional fuel expense Regional fuel expense 260 301 (13.6) 691 948 (27.1)
Consolidated fuel expenseConsolidated fuel expense 1,603 1,934 (17.1) 4,258 25,904 (27.9)
Cash paid on settled hedges that did not qualify for hedge accounting 3 (100) NM1 (5) (214) NM1
Fuel expense including all losses from settled hedgesFuel expense including all losses from settled hedges $1,603 $2,034 (21.2) $4,263 $6,118 (30.3)
Mainline fuel consumption (gallons)Mainline fuel consumption (gallons) 889 862 3.1 2,457 2,432 1.0
Mainline average aircraft fuel price per gallonMainline average aircraft fuel price per gallon $1.51 $1.89 (20.1) $1.45 $2.04 (28.9)
Mainline average aircraft fuel price per gallon excluding hedge losses recorded in fuel expenseMainline average aircraft fuel price per gallon excluding hedge losses recorded in fuel expense $1.48 $1.72 (14.0) $1.37 $1.86 (26.3)
Mainline average aircraft fuel price per gallon including cash paid on settled hedges that did not qualify for hedge accountingMainline average aircraft fuel price per gallon including cash paid on settled hedges that did not qualify for hedge accounting $1.51 $2.01 (24.9) $1.45 $2.13 (31.9)
Regional fuel consumption (gallons)Regional fuel consumption (gallons) 168 173 (2.9) 485 503 (3.6)
Regional average aircraft fuel price per gallonRegional average aircraft fuel price per gallon $1.55 $1.74 (10.9) $1.42 $1.88 (24.5)
Consolidated fuel consumption (gallons)Consolidated fuel consumption (gallons) 1,057 1,035 2.1 2,942 2,935 0.2
Consolidated average aircraft fuel price per gallonConsolidated average aircraft fuel price per gallon $1.52 $1.87 (18.7) $2.01 $2.01 (27.9)
Consolidated average aircraft fuel price per gallon excluding hedge losses recorded in fuel expenseConsolidated average aircraft fuel price per gallon excluding hedge losses recorded in fuel expense $1.49 $1.72 (13.4) $1.38 $1.87 (26.2)
Consolidated average aircraft fuel price per gallon including cash paid on settled hedges that did not qualify for hedge accountingConsolidated average aircraft fuel price per gallon including cash paid on settled hedges that did not qualify for hedge accounting $1.52 $1.97 (22.8) $1.45 $2.08 (30.3)
UNITED CONTINENTAL HOLDINGS, INC.
NOTES (UNAUDITED)

(C) Special items include the following:
(In millions) Three Months Ended
September 30, 2016
Three Months Ended
September 30, 2015
Nine Months Ended
September 30, 2016
Nine Months Ended
September 30, 2015
Operating:
Labor agreement costs
($14) $ — $124 $ —
Operating:Severance and benefit costs 13 28 27 103
Operating:Impairment of intangible asset related to Newark Liberty International Airport (Newark) slots 412
Operating:Cleveland airport lease restructuring 74
Operating:(Gains) losses on sale of assets and other special charges 18 48 32 92
Operating:Special charges 45 76 669 195
Nonoperating and income taxes:
Losses on extinguishment of debt and other
61 (1) 195
Nonoperating and income taxes:Income tax benefit related to special charges (16) (241)
Nonoperating and income taxes:Total operating and nonoperating special charges, net of income taxes 29 137 427 390
Nonoperating and income taxes:Income tax valuation allowance release (D) (3,218) (3,218)
Nonoperating and income taxes:Mark-to-market (MTM) losses from fuel derivative contracts settling in future periods 36 28
Nonoperating and income taxes:Prior period gains (losses) on fuel derivative contracts settled in the current period 3 (69) 2 (173)
Nonoperating and income taxes:Total special items, net of income taxes $32 $(3,114) $429 $(2,973)

 

 
   
 

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 nine months ended September 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 nine months ended September 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 nine months ended September 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 nine months ended September 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 nine months ended September 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 nine months ended September 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 nine months ended September 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 nine months ended September 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 nine months ended September 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 nine months ended September 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 nine months ended September 30, 2015, the company recorded $36 million and $28 million, respectively, in MTM losses on fuel derivative contracts that will settle in future periods. For fuel derivative contracts that settled in the three and nine months ended September 30, 2015, the company recorded MTM losses of $69 million and $173 million, respectively, in prior periods.

   

(D)  

The company's effective tax rate for the three and nine months ended September 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
September 30, 2016
Three Months Ended
September 30, 2015
%
Increase/
(Decrease)
Nine Months Ended
September 30, 2016
Nine Months Ended
September 30, 2015
%
Increase/
(Decrease)
Mainline:
Passengers (thousands)
27,501 25,922 6.1 75,417 72,158 4.5
Mainline:Revenue passenger miles (millions) 51,875 50,653 2.4 140,573 139,172 1.0
Mainline:Available seat miles (millions) 60,635 59,002 2.8 169,252 166,175 1.9
Mainline:Cargo ton miles (millions) 714 640 11.6 2,015 1,935 4.1
Mainline:Passenger load factor:
Mainline
85.6% 85.8% (0.2) pts. 83.1% 83.8% (0.7) pts.
Mainline:Domestic 86.8% 87.7% (0.9) pts. 85.8% 86.3% (0.5) pts.
Mainline:International 84.3% 84.1% 0.2 pts. 80.4% 81.3% (0.9) pts.
Mainline:Passenger revenue per available seat mile (cents) 11.57 12.29 (5.9) 11.30 12.13 (6.8)
Mainline:Average yield per revenue passenger mile (cents) 13.53 14.32 (5.5) 13.60 14.48 (6.1)
Mainline:Aircraft in fleet at end of period 724 717 1.0 724 717 1.0
Mainline:Average stage length (miles) 1,882 1,960 (4.0) 1,878 1,939 (3.1)
Mainline:Average daily utilization of each aircraft (hours) 10:59 10:47 1.9 10:25 10:32 (1.1)
Regional:
Passengers (thousands)
11,150 11,542 (3.4) 31,737 33,059 (4.0)
Regional:Revenue passenger miles (millions) 6,297 6,507 (3.2) 18,198 18,721 (2.8)
Regional:Available seat miles (millions) 7,439 7,743 (3.9) 21,820 22,524 (3.1)
Regional:Passenger load factor 84.6% 84.0% 0.6 pts. 83.4% 83.1% 0.3 pts.
Regional:Passenger revenue per available seat mile (cents) 21.32 22.03 (3.2) 20.98 21.77 (3.6)
Regional:Average yield per revenue passenger mile (cents) 25.19 26.22 (3.9) 25.15 26.19 (4.0)
Regional:Aircraft in fleet at end of period 490 527 (7.0) 490 527 (7.0)
Regional:Average stage length (miles) 556 555 0.2 565 558 1.3
Consolidated (Mainline and Regional):
Passengers (thousands)
38,651 37,464 3.2 107,154 105,217 1.8
Consolidated (Mainline and Regional)Revenue passenger miles (millions) 58,172 57,160 1.8 158,771 157,893 0.6
Consolidated (Mainline and Regional)Available seat miles (millions) 68,074 66,745 2.0 191,072 188,699 1.3
Consolidated (Mainline and Regional)Passenger load factor 85.5% 85.6% (0.1) pts. 83.1% 83.7% (0.6) pts.
Consolidated (Mainline and Regional)Passenger revenue per available seat mile (cents) 12.64 13.42 (5.8) 12.40 13.28 (6.6)
Consolidated (Mainline and Regional)Total revenue per available seat mile (cents) 14.56 15.44 (5.7) 14.39 15.28 (5.8)
Consolidated (Mainline and Regional)Average yield per revenue passenger mile (cents) 14.79 15.68 (5.7) 14.92 15.87 (6.0)
Consolidated (Mainline and Regional)Aircraft in fleet at end of period 1,214 1,244 (2.4) 1,214 1,244 (2.4)
Consolidated (Mainline and Regional)Average stage length (miles) 1,493 1,515 (1.5) 1,484 1,497 (0.9)
Consolidated (Mainline and Regional)Average full-time equivalent employees (thousands) 85.1 82.4 3.3 83.6 82.1 1.8
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 operating income (loss) excluding special items, 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 presented diluted earnings per share excluding special items for the third quarter of 2015 adjusted for the impact of tax expense using the effective tax rate from the third quarter of 2016 in order to make the financial measures more comparable. UAL had minimal income tax expense in the third quarter of 2015 that was offset by the release of its deferred tax asset valuation allowance in that period resulting in a net income tax benefit.

 

UNITED CONTINENTAL HOLDINGS, INC.
NON-GAAP FINANCIAL RECONCILIATION (Continued)
(In millions) Three Months Ended
September 30, 2016
Three Months Ended
September 30, 2015
$
Increase/
(Decrease)
%
Increase/
(Decrease)
Nine Months Ended
September 30, 2016
Nine Months Ended
September 30, 2015
$
Increase/
(Decrease)
%
Increase/
(Decrease)
Operating expenses $8,289 $8,407 $(118) (1.4) $24,171 $24,743 $(572) (2.3)
Operating expensesLess: Special charges (C) 45 76 (31) NM1 669 195 474 NM1
Operating expenses, excluding special chargesOperating expenses, excluding special charges 8,244 8,331 (87) (1.0) 23,502 24,548 (1,046) (4.3)
Operating expenses, excluding special chargesLess: Third-party business expenses 61 70 (9) (12.9) 188 205 (17) (8.3)
Operating expenses, excluding special chargesLess: Fuel expense 1,603 1,934 (331) (17.1) 4,258 5,904 (1,646) (27.9)
Operating expensesLess: Profit sharing, including taxes 204 277 (73) (26.4) 506 545 (39) (7.2)
Operating expensesOperating expenses, excluding fuel, profit sharing, special charges and third-party business expenses $6,376 $6,050 $326 5.4 $18,550 $17,894 $656 3.7
Operating income $1,624 $1,899 $(275) (14.5) $3,333 $4,085 $(752) (18.4)
Operating incomeLess: Special charges (C) 45 76 (31) NM1 669 195 474 NM1
Operating incomeOperating income, excluding special charges $1,669 $1,975 $(306) (15.5) $4,002 $4,280 $(278) (6.5)
Operating incomeIncome before income taxes $1,510 $1,606 $(96) (6.0) $2,935 $3,314 $(379) (11.4)
Operating incomeLess: special items before income taxes (C) 48 104 (56) NM1 670 245 425 NM1
Operating incomeIncome before income taxes and excluding special items $1,558 $1,710 $(152) (8.9) $3,605 $3,559 $46 1.3
Operating incomeNet income $965 $4,816 $(3,851) (80.0) $1,866 $6,517 $(4,651) (71.4)
Operating incomeLess: special items, net of tax (C) 32 (3,114) 3,146 NM1 429 (2,973) 3,402 NM1
Operating incomeNet income, excluding special items $997 $1,702 $(705) (41.4) $2,295 $3,544 $(1,249) (35.2)
Operating incomeLess: Income tax adjustment using 3Q 2016 tax rate for 3Q 2015 (608) 608 NM1        
Operating incomeTax adjusted net income, excluding special items $997 $1,094 $(97) (8.9)        
Diluted earnings per shareDiluted earnings per share $3.01 $12.82 $(9.81) (76.5) $5.57 $17.15 $(11.58) (67.5)
Diluted earnings per shareAdd back: special items 0.15 (8.29) 8.44 NM1 2.00 (7.83) 9.83 NM1
Diluted earnings per shareTax effect related to special items (0.05) (0.05) NM1 (0.72) (0.72) NM1
Diluted earnings per shareDiluted earnings per share, excluding special items $3.11 $4.53 $(1.42) (31.3) $6.85 $9.32 $(2.47) (26.5)
Diluted earnings per shareLess: Income tax adjustment using 3Q 2016 tax rate for 3Q 2015 (1.62) 1.62 NM1        
Diluted earnings per shareTax adjusted diluted earnings per share, excluding special items $3.11 $2.91 $0.20 6.9        

 

UNITED CONTINENTAL HOLDINGS, INC.
NON-GAAP FINANCIAL RECONCILIATION (Continued)
  Three Months Ended
September 30, 2016
Three Months Ended
September 30, 2015
%
Increase/
(Decrease)
Nine Months Ended
September 30, 2016
Nine Months Ended
September 30, 2015
%
Increase/
(Decrease)
CASM Mainline Operations (cents)
Cost per available seat mile (CASM)
11.65 11.97 (2.7) 12.15 12.43 (2.3)
Cost per available seat mile (CASM)Less: Special charges (C) 0.08 0.13 NM1 0.40 0.12 NM1
CASM Mainline OperationsCASM, excluding special charges 11.57 11.84 (2.3) 11.75 12.31 (4.5)
CASM, excluding special chargesLess: Third-party business expenses 0.10 0.12 (16.7) 0.11 0.12 (8.3)
CASM Mainline OperationsCASM, excluding special charges and third-party business expenses 11.47 11.72 (2.1) 11.64 12.19 (4.5)
CASM, excluding special charges and third-party business expensesLess: Fuel expense 2.21 2.77 (20.2) 2.11 2.98 (29.2)
CASM Mainline OperationsCASM, excluding special charges, third-party business expenses and fuel 9.26 8.95 3.5 9.53 9.21 3.5
CASM, excluding special charges, third-party business expenses and fuelLess: Profit sharing per available seat mile 0.34 0.47 (27.7) 0.30 0.33 (9.1)
CASM Mainline OperationsCASM, excluding special charges, third-party business expenses, fuel, and profit sharing 8.92 8.48 5.2 9.23 8.88 3.9
CASM Consolidated Operations (cents)
Cost per available seat mile (CASM)
12.18 12.60 (3.3) 12.65 13.11 (3.5)
Cost per available seat mile (CASM)Less: Special charges (C) 0.07 0.12 NM1 0.35 0.10 NM1
CASM Mainline OperationsCASM, excluding special charges 12.11 12.48 (3.0) 12.30 13.01 (5.5)
CASM, excluding special chargesLess: Third-party business expenses 0.09 0.10 (10.0) 0.10 0.11 (9.1)
CASM Mainline OperationsCASM, excluding special charges and third-party business expenses 12.02 12.38 (2.9) 12.20 12.90 (5.4)
CASM, excluding special charges and third-party business expensesLess: Fuel expense 2.35 2.90 (19.0) 2.23 3.13 (28.8)
CASM Mainline OperationsCASM, excluding special charges, third-party business expenses and fuel 9.67 9.48 2.0 9.97 9.77 2.0
CASM, excluding special charges, third-party business expenses and fuelLess: Profit sharing per available seat mile 0.30 0.42 (28.6) 0.26 0.29 (10.3)
CASM Mainline OperationsCASM, excluding special charges, third-party business expenses, fuel, and profit sharing 9.37 9.06 3.4 9.71 9.48 2.4

 

UNITED CONTINENTAL HOLDINGS, INC.
FINANCIAL METRICS

UAL provides financial metrics, including operating margin, pre-tax margin, earnings before interest, taxes, depreciation and amortization (EBITDA) as well as earnings before interest, taxes, depreciation and amortization, and aircraft rent (EBITDAR), that we believe provides useful supplemental information for management and investors by measuring profit and profit as a percentage of total operating revenues. These financial metrics are adjusted for special charges/items that are non-recurring and that management believes are not indicative of UAL's ongoing performance.
  Three Months Ended
September 30, 2016
Three Months Ended
September 30, 2015
%
Increase/
(Decrease)
Nine Months Ended
September 30, 2016
Nine Months Ended
September 30, 2015
%
Increase/
(Decrease)
Financial MetricsOperating margin 16.4% 18.4% (2.0) pts. 12.1% 14.2% (2.1) pts.
Financial MetricsOperating margin, excluding Special charges (C) 16.8% 19.2% (2.4) pts. 14.6% 14.8% (0.2) pts.
Financial MetricsNet income $965 $4,816 (80.0) $1,866 $6,517 (71.4)
Financial MetricsAdjusted for:
Depreciation and amortization
503 469 7.2 1,473 1,343 9.7
Financial MetricsInterest expense 150 164 (8.5) 466 504 (7.5)
Financial MetricsInterest capitalized (20) (13) 53.8 (48) (38) 26.3
Financial MetricsInterest income (14) (5) 180.0 (31) (16) 93.8
Financial MetricsIncome tax expense (benefit) (D) 545 (3,210) NM1 1,069 (3,203) NM1
Financial MetricsSpecial items before income taxes (C) 48 104 NM1 670 245 NM1
Financial MetricsAdjusted EBITDA, excluding special items $2,177 $2,325 (6.4) $5,465 $5,352 2.1
Financial MetricsAircraft rent 168 185 (9.2) 521 580 (10.2)
Financial MetricsAdjusted EBITDAR, excluding special items $2,345 $2,510 (6.6) $5,986 $5,932 0.9

 

UNITED CONTINENTAL HOLDINGS, INC.
CAPITAL EXPENDITURES AND FREE CASH FLOW

UAL 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.
Capital Expenditures (in millions) Three Months Ended
September 30, 2016
Nine Months Ended
September 30, 2016
Capital ExpendituresCapital expenditures – GAAP $689 $2,343
Capital ExpendituresProperty and equipment acquired through the issuance of debt 56 115
Capital ExpendituresAirport construction financing 33 68
Capital ExpendituresFully reimbursable projects (99) (257)
Capital ExpendituresAdjusted capital expenditures – Non-GAAP $679 $2,269
Free Cash Flow (in millions) Three Months Ended
September 30, 2016
Nine Months Ended
September 30, 2016
Free Cash FlowNet cash provided by operating activities $1,138 $4,884
Free Cash FlowLess adjusted capital expenditures – Non-GAAP 679 2,269
Free Cash FlowFree cash flow - Non-GAAP $459 $2,615

 

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.
(in millions) Twelve Months Ended
September 30, 2016
Return On Invested CapitalNet Operating Profit After Tax (NOPAT)
Pre-tax income excluding special items 4
$3,840
Return On Invested CapitalNOPAT adjustments 5 703
Return On Invested CapitalNOPAT $4,543
Return On Invested CapitalEffective cash tax rate 6 0.2%
Return On Invested CapitalInvested Capital (five-quarter average)
Total assets
$40,746
Return On Invested CapitalInvested capital adjustments 7 12,314
Return On Invested CapitalAverage Invested Capital $28,432
Return On Invested CapitalReturn on Invested Capital 19.6%
  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
September 30, 2016
Pre-tax income excluding special items $4,543
Return On Invested CapitalAdd: Special items 1,037
Return On Invested CapitalPre-tax income excluding special items $5,580

 

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SOURCE United Airlines

For further information: United Airlines Worldwide Media Relations, 872.825.8640, media.relations@united.com

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

July 07, 2020

CHICAGO, July 7, 2020 /PRNewswire/ -- United Airlines will hold a conference call to discuss second-quarter 2020 financial results on Wednesday, July 22, at 9:30 a.m. CT/10:30 a.m. ET. A live, listen-only webcast of the conference call will be available at ir.united.com. The company will issue its second-quarter earnings release and third-quarter investor update after market close on Tuesday, July 21.

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

July 07, 2020

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

United Announces Completion of MileagePlus Senior Secured Notes Offering

July 02, 2020

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

United Airlines Adds Nearly 25,000 Flights in August

July 01, 2020

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

United Airlines Resuming Service Between San Francisco and Shanghai

June 26, 2020

CHICAGO, June 26, 2020 /PRNewswire/ -- United Airlines announced today it will resume service to China with twice-weekly flights between San Francisco and Shanghai's Pudong International Airport via Seoul's Incheon International Airport beginning July 8, 2020. United will operate service with Boeing 777-300ER aircraft from San Francisco to Shanghai on Wednesdays and Saturdays. Customers traveling from Shanghai will return to San Francisco on Thursdays and Sundays.

United Announces Upsized Pricing of MileagePlus Senior Secured Notes Offering

June 25, 2020

CHICAGO, June 25, 2020 /PRNewswire/ -- Today, United Airlines, Inc. ("United") announced the pricing and upsize of the previously announced private offering by Mileage Plus Holdings, LLC, a direct wholly-owned subsidiary of United that operates the MileagePlus program ("MPH"), and Mileage Plus Intellectual Property Assets, Ltd., an indirect wholly-owned subsidiary of MPH ("MIPA" and, together with MPH, the "MileagePlus Subsidiaries"). An aggregate of $3.8 billion in principal amount of 6.50% senior secured notes due 2027 (the "Notes") is expected to be issued on July 2, 2020, subject to customary closing conditions. Concurrently with the issuance of the Notes, United expects the MileagePlus Subsidiaries to enter into a credit agreement providing for a term loan facility ("Term Loan Facility") for an aggregate of $3.0 billion, also subject to customary closing conditions. The Notes and the Term Loan Facility, in a total aggregate amount of $6.8 billion, replace the previously announced committed term loan facility.

United Announces Proposed Senior Secured Notes Offering by MileagePlus Subsidiaries

June 23, 2020

CHICAGO, June 23, 2020 /PRNewswire/ -- Today, United Airlines, Inc. ("United") announced that Mileage Plus Holdings, LLC, a direct wholly-owned subsidiary of United that operates the MileagePlus program ("MPH"), and Mileage Plus Intellectual Property Assets, Ltd., an indirect wholly-owned subsidiary of MPH ("MIPA" and, together with MPH, the "MileagePlus Subsidiaries") intend to commence a private offering to eligible purchasers of $3.0 billion in aggregate principal amount of senior secured notes due 2027 (the "Notes"), subject to market and other conditions. The Notes will be guaranteed by each subsidiary of MPH (collectively, the "MPH Subsidiary Guarantors"), United, United's parent company, United Airlines Holdings, Inc. ("UAL", and, together with United, the "Company"), and certain subsidiaries of UAL.

United Airlines Strengthens Onboard Mask Policy to Further Protect Passengers and Employees Against COVID-19 Spread

June 15, 2020

CHICAGO, June 15, 2020 /PRNewswire/ -- United Airlines announced today that, along with other Airlines for America (A4A) members, it will strengthen mandatory mask policies to further mitigate against the spread of COVID-19 and help continue to keep passengers and crew safe. While the overwhelming majority of passengers are complying with United's mandatory policy, starting on June 18, any passenger that does not comply when onboard a United flight will be placed on an internal travel restriction list. Customers on this list will lose their travel privileges on United for a duration of time to be determined pending a comprehensive incident review.

United Expects To Have Approximately $17 Billion In Available Liquidity By September 2020

June 15, 2020

CHICAGO, June 15, 2020 /PRNewswire/ -- United Airlines (NASDAQ: UAL) today announced that it expects to have total available liquidity of approximately $17 billion at the end of the third quarter of 2020.[1] This dollar amount reflects committed financing of $5 billion to be secured by the airline's loyalty program, MileagePlus, that allows the airline to continue to operate, evolve, and grow the program, as well as $4.5 billion expected to be available to United through the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") Loan Program. The company believes it has sufficient slots, gates and routes collateral available to meet the collateral coverage that may be required for the full $4.5 billion available to the company under the Loan Program. This $9.5 billion of additional liquidity will provide even more flexibility as the airline navigates the most disruptive financial crisis in the history of aviation.

Given the impact COVID-19 has had on travel demand, United has spent the past several months aggressively and proactively cutting costs. The airline has already reduced planned capital expenditures and operating and vendor expenditures, suspended raises and implemented an unpaid time off program for management and administrative employees, put a freeze on hiring, introduced voluntary leave and separation programs, reduced pay for all executives and cut its CEO and President's base salaries by 100%, among other cost-saving measures. United expects an average cash burn of approximately $40 million per day in the second quarter of 2020 and to reduce its average cash burn to approximately $30 million per day in the third quarter of 2020.[2]

Goldman Sachs Lending Partners LLC, Barclays Bank PLC and Morgan Stanley Senior Funding, Inc. have committed to provide, and have agreed to arrange the syndication of, the MileagePlus financing through a term loan facility, which is expected to close, subject to standard conditions precedent, by the end of July 2020. Goldman Sachs Lending Partners LLC will act as the sole structuring agent and lead left arranger for the transaction.

MileagePlus has more than 100 million members, over 100 program partners, and is an essential asset for United. The program has historically generated material and stable revenues and free cash flows, drives customer retention, and increases customer lifetime value. United continues to invest in making MileagePlus the top loyalty program for its members. Last year the airline announced that MileagePlus miles never expire and announced a partnership with CLEAR to offer free and discounted memberships to MileagePlus members. United also introduced PlusPoints, a new industry-leading upgrade benefit for Premier members.

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".

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:  Certain statements in this release are forward-looking and thus reflect the Company's 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 the Company's 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," "remains," "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 the Company on the date of this release. The Company undertakes 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.

The Company's actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: the duration and spread of the ongoing global COVID-19 pandemic and the outbreak of any other disease or similar public health threat and the impact on the business, results of operations and financial condition of the Company; the risk that the MileagePlus financing is not completed; the lenders' ability to accelerate the MileagePlus indebtedness, foreclose upon the collateral securing the MileagePlus indebtedness or exercise other remedies if the Company is not able to comply with the covenants in the MileagePlus financing agreement; the final terms of borrowing pursuant to the Loan Program under the CARES Act, if any, and the effects of the grant and promissory note through the Payroll Support Program under the CARES Act; the costs and availability of financing; the Company's significant amount of financial leverage from fixed obligations and ability to seek additional liquidity and maintain adequate liquidity; the Company's ability to comply with the terms of its various financing arrangements; the material disruption of the Company's strategic operating plan as a result of the COVID-19 pandemic and the Company's ability to execute its strategic operating plans in the long term; 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 its operations in certain countries; demand for travel and the impact that global economic and political conditions have on customer travel patterns; the Company's capacity decisions and the capacity decisions of its competitors; competitive pressures on pricing and on demand; changes in aircraft fuel prices; disruptions in the Company's supply of aircraft fuel; the Company's ability to cost-effectively hedge against increases in the price of aircraft fuel, if it decides to do so; the effects of any technology failures, cybersecurity or significant data breaches; disruptions to services provided by third-party service providers; potential reputational or other impact from adverse events involving the Company's aircraft or operations, the aircraft or operations of its regional carriers or its code share partners or the aircraft or operations of another airline; the Company's 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 the Company's fleet; disruptions to the Company's regional network as a result of the COVID-19 pandemic or otherwise; the impact of regulatory, investigative and legal proceedings and legal compliance risks; the success of the Company's investments in other airlines, including in other parts of the world, which involve significant challenges and risks, particularly given the impact of the COVID-19 pandemic; industry consolidation or changes in airline alliances; the ability of other air carriers with whom the Company has alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; costs associated with any modification or termination of the Company's aircraft orders; disruptions in the availability of aircraft, parts or support from its suppliers; the Company's ability to maintain satisfactory labor relations and the results of any collective bargaining agreement process with its union groups; any disruptions to operations due to any potential actions by the Company's labor groups; labor costs; the impact of any management changes; extended interruptions or disruptions in service at major airports where the Company operates; 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 Company's ability to realize the full value of its intangible assets and long-lived assets; any impact to the Company's reputation or brand image and other risks and uncertainties set forth under Part I, Item 1A., "Risk Factors," of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as updated by the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and the Company's Current Report on Form 8-K filed June 15, 2020, as well as other risks and uncertainties set forth from time to time in the reports it files with the SEC.

1 Includes liquidity available under the company's $2 billion revolving credit facility, $5 billion of committed financing to be secured by the company's loyalty program, MileagePlus, as well as $4.5 billion expected to be available to the company through the CARES Act Loan Program.

2 "Cash burn" is defined as net cash from operations, less investing and financing activities. Proceeds from the issuance of new debt (excluding expected aircraft financing), government grants associated with the Payroll Support Program of the CARES Act and any new issuances of UAL common stock are not included in this figure.


 

SOURCE United Airlines

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

United Airlines Passengers First to Experience a New LaGuardia Airport

June 12, 2020

NEW YORK, June 12, 2020 /PRNewswire/ -- United customers traveling through New York-LaGuardia (LGA) this weekend will be the first of any legacy airline to enjoy the airport's new Terminal B experience, featuring brand-new, best-in-class Arrivals and Departures Hall. Whether their journey starts or ends at LGA, United passengers will see amenities including first-rate retail and dining choices as well as innovative lobby and baggage claim areas. The new building is part of the $4 billion, 1.3-million-square-foot Terminal B redevelopment project operated by LaGuardia Gateway Partners (LGP). Images and video can be downloaded here.

United Airlines Asks All Passengers to Take Health Self-Assessment as Part of Check-In Process

June 11, 2020

United Airlines is the first major U.S. airline to ask all passengers to complete a health self-assessment during their check-in process. Based on recommendations from the Cleveland Clinic, the "Ready-to-Fly" checklist asks customers to confirm they have not experienced COVID-19-related symptoms in the 14 days prior to flying. The assessment is part of United CleanPlus, the company's commitment to putting health and safety at the forefront of the entire customer experience.

"As people are returning to their daily activities during the COVID-19 pandemic, their health and safety – as well as the health and safety of others - should continue to be top-of-mind," said Dr. James Merlino, Chief Clinical Transformation Officer at Cleveland Clinic, a nonprofit academic medical center and a United CleanPlus advisor. "Our health experts are pleased to play a role in helping people travel more safely and we worked closely with United to develop a health self-assessment for its customers to better ensure precautions are taken before beginning their journey."

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