United 2016 full year and fourth quarter performance - United Hub

United Airlines Reports Full-Year and Fourth-Quarter 2016 Performance

January 17, 2017

  

CHICAGO, Jan. 17, 2017 /PRNewswire/ -- United Airlines (UAL) today announced its fourth-quarter and full-year 2016 financial results. 

  • Achieved best full-year on-time performance while reporting the lowest number of cancellations, delay minutes and mishandled bags in company history.
  • UAL reported full-year net income of $2.3 billion, diluted earnings per share of $6.85, pre-tax earnings of $3.8 billion and pre-tax margin of 10.4 percent. Excluding special items, UAL reported full-year net income of $2.9 billion, diluted earnings per share of $8.65, pre-tax earnings of $4.5 billion and pre-tax margin of 12.2 percent.
  • UAL reported fourth-quarter net income of $397 million, diluted earnings per share of $1.26, pre-tax earnings of $884 million and pre-tax margin of 9.8 percent. Excluding special items, UAL reported fourth-quarter net income of $562 million, diluted earnings per share of $1.78, pre-tax earnings of $857 million and pre-tax margin of 9.5 percent.
  • Technicians and related employees ratified a joint contract in the fourth quarter. UAL has completed new agreements with every domestic unionized work group in 2016.
  • Employees earned $628 million in profit sharing for 2016.

"Our fourth quarter financial and operating performance capped an outstanding year for United Airlines," said Oscar Munoz, chief executive officer of United Airlines. "In 2016, we put into action our plan to become the best airline in the world, and last year's results demonstrate we are on our way to achieving that ambition. We will continue delivering on this commitment by investing in our employees, elevating our customer experience and driving strong and consistent returns for our shareholders." 

Full-Year and Fourth-Quarter Revenue

For the fourth quarter of 2016, total revenue was $9.1 billion, an increase of 0.2 percent year-over-year. Fourth-quarter 2016 consolidated passenger revenue per available seat mile (PRASM) decreased 1.6 percent and consolidated yield decreased 1.2 percent compared to the fourth quarter of 2015. This outperformance versus the company's initial guidance was due to stronger close-in bookings and yields in November and December. For the full-year 2016, consolidated PRASM declined 5.4 percent compared to the prior year driven by factors including a strong U.S. dollar, lower surcharges, reductions from energy-related corporate travel, and declining yields.

"We saw meaningful improvement in the pricing and demand environment in the quarter," said Scott Kirby, president of United Airlines. "Looking forward, we anticipate first-quarter consolidated unit revenues to be approximately flat, marking the fourth straight quarter of sequential quarter-over-quarter improvement."

Full-Year and Fourth-Quarter Costs

Total operating expense was $8.0 billion in the fourth quarter, up 1.2 percent year-over-year. Excluding special charges, total operating expense was $8.1 billion, a 3.2 percent increase year-over-year. Consolidated unit cost (CASM) decreased 0.8 percent compared to the fourth quarter of 2015 due mainly to lower fuel expense. Fourth-quarter consolidated CASM, excluding special charges, third-party business expenses, fuel and profit sharing, increased 4.1 percent year-over-year driven largely by the impact of labor agreements ratified in 2016. For the full year, consolidated CASM decreased 2.9 percent compared to full-year 2015 due to lower fuel expense. Excluding special charges, third-party business expenses, fuel and profit sharing, consolidated CASM increased 2.8 percent compared to the prior year due primarily to new labor agreements.

"I am very pleased with core cost performance achieved in the fourth quarter and full-year 2016 where we kept non-fuel cost growth excluding new labor deals nearly constant," said Andrew Levy, executive vice president and chief financial officer of United Airlines. "I have great confidence we will achieve our cost efficiency targets outlined at our investor day as we look to offset rising fuel and labor costs."

Liquidity and Capital Allocation

In the fourth quarter, UAL generated $658 million in operating cash flow and ended the quarter with $5.8 billion in unrestricted liquidity, including $1.35 billion of undrawn commitments under its revolving credit facility. UAL generated $5.5 billion in operating cash flow for the full year. The company continued to invest in its business through capital expenditures of $880 million in the fourth quarter and a total of $3.2 billion for the full year. Including assets acquired through the issuance of debt and airport construction financing and excluding fully reimbursable projects, the company invested $1.1 billion during the fourth quarter and $3.3 billion for the full year in adjusted capital expenditures. Free cash flow, measured as operating cash flow less adjusted capital expenditures, was $2.2 billion for the full year.

For the 12 months ended Dec. 31, 2016, the company's return on invested capital was 19.3 percent. In the quarter, UAL purchased $156 million of its common shares. For full-year 2016, the company purchased $2.6 billion of its common shares, representing approximately 14 percent of shares outstanding, at an average price of $51.80 per share. As of Dec. 31, 2016, the company had $1.8 billion remaining to purchase shares under its existing share repurchase authority.

For more information on UAL's first-quarter 2017 guidance, please visit ir.united.com for the company's investor update.

Full-Year and Fourth-Quarter Highlights
Operations and Employees

  • In the fourth quarter, United technicians and related employees voted to ratify a new joint collective bargaining agreement. During 2016, the company reached new agreements with every domestic unionized work group.
  • Achieved best full-year on-time performance while reporting the lowest number of cancellations, delay minutes and mishandled bags in company history.
  • In December, United earned its sixth consecutive perfect 100 percent score on the Human Rights Campaign's Corporate Equality Index and a spot on the organization's list of "Best Places to Work for LGBT Equality."
  • Employees earned cash-incentive payments of approximately $30 million for achieving operational performance goals in the quarter, marking a full year of bonus payouts for a total of approximately $120 million.
  • Further enabled employees to provide a better experience to customers by equipping them with the technology and information they need, including more than 50,000 mobile devices in the operation.

Network and Fleet

  • In the fourth quarter, launched service to Havana, Cuba from its Newark and Houston hubs. During 2016, the company also introduced new routes between San Francisco and five international destinations including Tel Aviv; Xi'an, China; Singapore; Auckland, New Zealand; and Hangzhou, China.
  • In the fourth quarter, took delivery of the first Boeing 777-300ER in the company's fleet, named the "New Spirit of United," featuring the all-new United Polaris business class seat.
  • During the quarter, announced a modification to its narrowbody order book by converting its original order for 65 Boeing 737-700 aircraft into four 737-800 aircraft to be delivered in 2017 and 61 737 MAX aircraft with delivery dates to be determined.
  • During the year, took delivery of 22 new Boeing aircraft, including 737NGs, 787s and 777s, as well as six used Airbus A319 aircraft.

Customer Experience

  • Launched a reimagined international travel experience, United Polaris service, in December and opened the first premier United Polaris lounge in Chicago.
  • Opened automated screening lanes to increase efficiency and improve the screening experience for its customers at hubs in Chicago, Los Angeles and Newark during the fourth quarter.
  • During the year, redesigned and upgraded seven United Clubs across the system.
  • In 2016, re-introduced free snacks and began offering illy® premium coffee on board and in United Clubs.
  • For 2016, MileagePlus® loyalty program named best overall frequent flyer program in the world for thirteenth consecutive year by Global Traveler.
  • Flew 1,500 athletes, coaches and Team USA staff to the 2016 Rio Olympic and Paralympic Games over the summer as the company celebrated more than 35 years partnering with Team USA.
  • Expanded capabilities of United's award-winning mobile app, used on more than 28 million devices – enhancing the customer experience with new re-booking options and features to improve management of international travel documents.

About United

United Airlines and United Express operate more than 4,500 flights a day to 339 airports across five continents. In 2016, United and United Express operated more than 1.6 million flights carrying more than 143 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 737 mainline aircraft and the airline's United Express partners operate 483 regional 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 anticipated financial and operating performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to our operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as "expects," "will," "plans," "anticipates," "indicates," "believes," "forecast," "guidance," "outlook" and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to us on the date of this release. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law. Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: our ability to comply with the terms of our various financing arrangements; the costs and availability of financing; our ability to maintain adequate liquidity; our ability to execute our operational plans and revenue-generating initiatives, including optimizing our revenue; our ability to control our costs, including realizing benefits from our resource optimization efforts, revenue-generating initiatives, 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; 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 any collective bargaining agreement process with our union groups; any disruptions to operations due to any potential actions by our labor groups; weather conditions; and other risks and uncertainties set forth under Part I, Item 1A., "Risk Factors," of UAL's Annual Report on Form 10-K 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)
(In millions, except per share data)

(In millions, except per share data) Three Months Ended
December 31, 2016
Three Months Ended
December 31, 2015
%
Increase/
(Decrease)
Year Ended
December 31, 2016
Year Ended
December 31, 2015
%
Increase/
(Decrease)
Operating revenue:
Passenger:
Mainline
$6,295 $6,180 1.9 $25,414 $26,333 (3.5)
Operating revenue: Passenger: Regional 1,466 1,549 (5.4) 6,043 6,452 (6.3)
Operating revenue: Passenger: Total passenger revenue (B) 7,761 7,729 0.4 31,457 32,785 (4.1)
Operating revenue: Cargo 250 231 8.2 876 937 (6.5)
Operating revenue: Other operating revenue 1,041 1,076 (3.3) 4,223 4,142 2.0
Operating revenue: Total operating revenue 9,052 9,036 0.2 36,556 37,864 (3.5)
Operating expense:
Salaries and related costs
2,568 2,424 5.9 10,275 9,713 5.8
Operating expense: Aircraft fuel (C) 1,555 1,618 (3.9) 5,813 7,522 (22.7)
Operating expense: Landing fees and other rent 553 556 (0.5) 2,165 2,203 (1.7)
Operating expense: Regional capacity purchase 552 565 (2.3) 2,197 2,290 (4.1)
Operating expense: Depreciation and amortization 504 476 5.9 1,977 1,819 8.7
Operating expense: Aircraft maintenance materials and outside repairs 448 399 12.3 1,749 1,651 5.9
Operating expense: Distribution expenses 316 316 1,303 1,342 (2.9)
Operating expense: Aircraft rent 159 174 (8.6) 680 754 (9.8)
Operating expense: Special charges (D) (31) 131 NM1 638 326 NM1
Operating expense: Other operating expenses 1,423 1,296 9.8 5,421 5,078 6.8
Operating expense: Other Operating Expenses: Total operating expenses 8,047 7,955 1.2 32,218 32,698 (1.5)
Operating income: Operating income 1,005 1,081 (7.0) 4,338 5,166 (16.0)
Operating margin 11.1% 12.0% (0.9) pts. 11.9% 13.6% (1.7) pts.
Operating margin, excluding special charges (A) (Non-GAAP) 10.8% 13.4% (2.6) pts. 13.6% 14.5% (0.9) pts.
Nonoperating income (expense):
Interest expense
(148) (165) (10.3) (614) (669) (8.2)
Nonoperating income (expense): Interest capitalized 24 11 118.2 72 49 46.9
Nonoperating income (expense): Interest income 11 9 22.2 42 25 68.0
Nonoperating income (expense): Miscellaneous, net (D) (8) (31) (74.2) (19) (352) (94.6)
Nonoperating income (expense): Miscellaneous, net (D): Total nonoperating expense (121) (176) (31.3) (519) (947) (45.2)
Income before income taxes: Income before income taxes 884 905 (2.3) 3,819 4,219 (9.5)
Pre-tax margin 9.8% 10.0% (0.2) pts. 10.4% 11.1% (0.7) pts.
Pre-tax margin, excluding special items (A) (Non-GAAP) 9.5% 10.4% (0.9) pts. 12.2% 11.9% 0.3 pts.
Income tax expense (benefit) (E) 487 82 493.9 1,556 (3,121) NM1
Net income $397 $823 (51.8) $2,263 $7,340 (69.2)
Earnings per share, diluted $1.26 $2.24 (43.8) $6.85 $19.47 (64.8)
Weighted average shares, diluted 316 367 (13.9) 330 377 (12.5)
  1. NM means Not Meaningful

 

UNITED CONTINENTAL HOLDINGS, INC.
STATISTICS
  Three Months Ended
December 31, 2016
Three Months Ended
December 31, 2015
%
Increase/
(Decrease)
Year Ended
December 31, 2016
Year Ended
December 31, 2015
%
Increase/
(Decrease)
Mainline:
Passengers (thousands)
25,590 24,169 5.9 101,007 96,327 4.9
Mainline:Revenue passenger miles (millions) 45,608 44,470 2.6 186,181 183,642 1.4
Mainline:Available seat miles (millions) 55,440 53,814 3.0 224,692 219,989 2.1
Mainline:Cargo ton miles (millions) 790 679 16.3 2,805 2,614 7.3
Mainline:Passenger revenue per available seat mile (cents) 11.35 11.48 (1.1) 11.31 11.97 (5.5)
Mainline:Average yield per revenue passenger mile (cents) 13.80 13.90 (0.7) 13.65 14.34 (4.8)
Mainline:Aircraft in fleet at end of period 737 715 3.1 737 715 3.1
Mainline:Average stage length (miles) 1,804 1,869 (3.5) 1,859 1,922 (3.3)
Mainline:Average daily utilization of each aircraft (hours) 9:54 9:59 (0.8) 10:06 10:24 (2.9)
Regional:
Passengers (thousands)
10,433 10,983 (5.0) 42,170 44,042 (4.3)
Regional:Revenue passenger miles (millions) 5,930 6,248 (5.1) 24,128 24,969 (3.4)
Regional:Available seat miles (millions) 7,078 7,490 (5.5) 28,898 30,014 (3.7)
Regional:Passenger revenue per available seat mile (cents) 20.71 20.68 0.1 20.91 21.50 (2.7)
Regional:Average yield per revenue passenger mile (cents) 24.72 24.79 (0.3) 25.05 25.84 (3.1)
Regional:Aircraft in fleet at end of period 494 521 (5.2) 494 521 (5.2)
Regional:Average stage length (miles) 560 562 (0.4) 564 559 0.9
Consolidated (Mainline and Regional):
Passengers (thousands)
36,023 35,152 2.5 143,177 140,369 2.0
Consolidated (Mainline and Regional):Revenue passenger miles (millions) 51,538 50,718 1.6 210,309 208,611 0.8
Consolidated (Mainline and Regional):Available seat miles (millions) 62,518 61,304 2.0 253,590 250,003 1.4
Consolidated (Mainline and Regional):Passenger load factor:
Consolidated
82.4% 82.7% (0.3) pts. 82.9% 83.4% (0.5) pts.
Consolidated (Mainline and Regional):Domestic 85.2% 85.7% (0.5) pts. 85.4% 85.7% (0.3) pts.
Consolidated (Mainline and Regional):International 78.9% 79.0% (0.1) pts. 80.0% 80.7% (0.7) pts.
Consolidated (Mainline and Regional):Passenger revenue per available seat mile (cents) 12.41 12.61 (1.6) 12.40 13.11 (5.4)
Consolidated (Mainline and Regional):Total revenue per available seat mile (cents) 14.48 14.74 (1.8) 14.42 15.15 (4.8)
Consolidated (Mainline and Regional):Average yield per revenue passenger mile (cents) 15.06 15.24 (1.2) 14.96 15.72 (4.8)
Consolidated (Mainline and Regional):Aircraft in fleet at end of period 1,231 1,236 (0.4) 1,231 1,236 (0.4)
Consolidated (Mainline and Regional):Average stage length (miles) 1,441 1,456 (1.0) 1,473 1,487 (0.9)
Consolidated (Mainline and Regional):Average full-time equivalent employees (thousands) 84.8 82.1 3.3 83.9 82.1 2.2
  • 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.
SUMMARY FINANCIAL METRICS

Note (A) provides a reconciliation of non-GAAP financial metrics to the comparable GAAP financial metrics and provides the reasons UAL management believes these financial metrics are useful.
(In millions, except per share data)

  Three Months Ended
December 31, 2016
Three Months Ended
December 31, 2015
%
Increase/
(Decrease)
Year Ended
December 31, 2016
Year Ended
December 31, 2015
%
Increase/
(Decrease)
Operating income (GAAP) $1,005 $1,081 (7.0) $4,338 $5,166 (16.0)
Operating margin (GAAP) 11.1% 12.0% (0.9) pts. 11.9% 13.6% (1.7) pts.
Operating income, excluding Special charges (Non-GAAP) 974 1,212 (19.6) 4,976 5,492 (9.4)
Operating margin, excluding Special charges (Non-GAAP) 10.8% 13.4% (2.6) pts. 13.6% 14.5% (0.9) pts.
Adjusted EBITDA, excluding special items (Non-GAAP) $1,474 $1,560 (5.5) $6,939 $6,912 0.4
Adjusted EBITDA margin, excluding special items (Non-GAAP) 16.3% 17.3% (1.0) pts. 19.0% 18.3% 0.7 pts.
Adjusted EBITDAR, excluding special items (Non-GAAP) 1,633 1,734 (5.8) 7,619 7,666 (0.6)
Adjusted EBITDAR margin, excluding special items (Non-GAAP) 18.0% 19.2% (1.2) pts. 20.8% 20.2% 0.6 pts.
Pre-tax income (GAAP) $884 $905 (2.3) $3,819 $4,219 (9.5)
Pre-tax margin (GAAP) 9.8% 10.0% (0.2) pts. 10.4% 11.1% (0.7) pts.
Pre-tax income, excluding special items (Non-GAAP) 857 939 (8.7) 4,462 4,498 (0.8)
Pre-tax margin, excluding special items (Non-GAAP) 9.5% 10.4% (0.9) pts. 12.2% 11.9% 0.3 pts.
Net income (GAAP) $397 $823 (51.8) $2,263 $7,340 (69.2)
Net income, excluding special items (Non-GAAP) 562 934 (39.8) 2,857 4,478 (36.2)
Tax adjusted net income, excluding special items (Non-GAAP) 562 602 (6.6) 2,857 2,883 (0.9)
Diluted earnings per share (GAAP) $1.26 $2.24 (43.8) $6.85 $19.47 (64.8)
Diluted earnings per share, excluding special items (Non-GAAP) 1.78 2.54 (29.9) 8.65 11.88 (27.2)
Tax adjusted diluted earnings per share, excluding special items (Non-GAAP) 1.78 1.64 8.5 8.65 7.65 13.1
Net cash provided by operating activities $658 $1,115 (41.0) $5,542 $5,992 (7.5)
Capital expenditures $880 $763 15.3 $3,223 $2,747 17.3
Adjusted capital expenditures 1,078 791 36.3 3,347 3,506 (4.5)
Free cash flow, net of financings (Non-GAAP) $(222) $352 NM $2,319 $3,245 (28.5)
Free cash flow (Non-GAAP) (420) 324 NM 2,195 2,486 (11.7)

 

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
December 31, 2016
Net Operating Profit After Tax (NOPAT)
Pre-tax income excluding special items 2
$4,462
Pre-tax income excluding special items: NOPAT adjustments 3 998
NOPAT $5,460
Effective cash tax rate 4 0.3%
Invested Capital (five-quarter average)
Total assets
$40,435
Total assets: Invested capital adjustments 5 12,182
Average Invested Capital $28,253
Return on Invested Capital 19.3%
  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
December 31, 2016
Pre-tax income $3,819
Pre-tax income: Add: Special items 643
Pre-tax income excluding special items $4,462

 

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

(A) Pursuant to SEC Regulation G, UAL has included the following reconciliations of reported Non-GAAP financial measures to comparable financial measures reported on a GAAP basis.

CASM is a common metric used in the airline industry to measure an airline's cost structure and efficiency. UAL reports CASM excluding special charges, third-party business expenses, fuel and profit sharing. UAL believes that adjusting for special charges is useful to investors because special charges are non-recurring charges not indicative of UAL's ongoing performance. UAL also believes that excluding third-party business expenses, such as maintenance, ground handling and catering services for third parties, 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. 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.
  Three Months Ended
December 31, 2016 in cents
Three Months Ended
December 31, 2015 in cents
%
Increase/
(Decrease)
Year Ended
December 31, 2016 in cents
Year Ended
December 31, 2015 in cents
%
Increase/
(Decrease)
CASM Mainline Operations (cents)
Cost per available seat mile (CASM)
12.43 12.37 0.5 12.22 12.42 (1.6)
CASM Mainline Operations (cents): Cost per available seat mile (CASM):Less: Special charges (D) (0.06) 0.24 NM1 0.29 0.15 NM1
CASM Mainline Operations (cents): Cost per available seat mile (CASM): Less: Third-party business expenses 0.13 0.16 (18.8) 0.11 0.13 (15.4)
CASM Mainline Operations (cents): Cost per available seat mile (CASM): Less: Fuel expense 2.33 2.53 (7.9) 2.16 2.87 (24.7)
CASM Mainline Operations (cents): CASM, excluding special charges, third-party business expenses and fuel 10.03 9.44 6.3 9.66 9.27 4.2
CASM Mainline Operations (cents): CASM, excluding special charges, third-party business expenses and fuel: Less: Profit sharing per available seat mile 0.22 0.28 (21.4) 0.28 0.32 (12.5)
CASM Mainline Operations (cents): CASM, excluding special charges, third-party business expenses, fuel, and profit sharing 9.81 9.16 7.1 9.38 8.95 4.8
CASM Consolidated Operations (cents)
Cost per available seat mile (CASM)
12.87 12.98 (0.8) 12.70 13.08 (2.9)
CASM Consolidated Operations (cents): Cost per available seat mile (CASM):Less: Special charges (D) (0.05) 0.22 NM1 0.25 0.13 NM1
CASM Consolidated Operations (cents): Cost per available seat mile (CASM): Less: Third-party business expenses 0.11 0.14 (21.4) 0.10 0.12 (16.7)
CASM Consolidated Operations (cents): Cost per available seat mile (CASM): Less: Fuel expense 2.49 2.64 (5.7) 2.29 3.01 (23.9)
CASM Consolidated Operations (cents): CASM, excluding special charges, third-party business expenses and fuel 10.32 9.98 3.4 10.06 9.82 2.4
CASM Consolidated Operations (cents): CASM, excluding special charges, third-party business expenses and fuel: Less: Profit sharing per available seat mile 0.19 0.25 (24.0) 0.25 0.28 (10.7)
CASM Consolidated Operations (cents): CASM, excluding special charges, third-party business expenses, fuel, and profit sharing 10.13 9.73 4.1 9.81 9.54 2.8

 

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

UAL evaluates its financial performance utilizing various accounting principles generally accepted in the United States of America (GAAP) and Non-GAAP financial measures, including operating income (loss) excluding special charges, income (loss) before income taxes excluding special items, net income (loss) excluding special items, and net earnings (loss) per share excluding special items, among others. UAL also presented diluted earnings per share excluding special items for the periods presented in 2015 adjusted for the impact of tax expense using the effective tax rate from the respective period in 2016 in order to make the financial measures more comparable. UAL had minimal income tax expense in the second half of 2015 that was offset by the release of its deferred tax asset valuation allowance resulting in a net income tax benefit.
  Three Months Ended
December 31, 2016 (In millions)
Three Months Ended
December 31, 2015 (In millions)
$
Increase/
(Decrease)
%
Increase/
(Decrease)
Year Ended
December 31, 2016 (In millions)
Year Ended
December 31, 2015 (In millions)
$
Increase/
(Decrease)
%
Increase/
(Decrease)
Operating expenses $8,047 $7,955 $92 1.2 $32,218 $32,698 $(480) (1.5)
Operating expenses: Less: Special charges (D) (31) 131 (162) NM1 638 326 312 NM1
Operating expenses, excluding special charges 8,078 7,824 254 3.2 31,580 32,372 (792) (2.4)
Operating expenses, excluding special charges: Less: Third-party business expenses 69 86 (17) (19.8) 257 291 (34) (11.7)
Operating expenses, excluding special charges: Less: Fuel expense 1,555 1,618 (63) (3.9) 5,813 7,522 (1,709) (22.7)
Operating expenses, excluding special charges: Less: Profit sharing, including taxes 122 153 (31) (20.3) 628 698 (70) (10.0)
Operating expenses, excluding fuel, profit sharing, special charges and third-party business expenses $6,332 $5,967 $365 6.1 $24,882 $23,861 $1,021 4.3
Operating income $1,005 $1,081 $(76) (7.0) $4,338 $5,166 $(828) (16.0)
Operating income: Less: Special charges (D) (31) 131 (162) NM1 638 326 312 NM1
Operating income, excluding special charges $974 $1,212 $(238) (19.6) $4,976 $5,492 $(516) (9.4)
Income before income taxes $884 $905 $(21) (2.3) $3,819 $4,219 $(400) (9.5)
Income before income taxes: Less: special items before income taxes (D) (27) 34 (61) NM1 643 279 364 NM1
Income before income taxes and excluding special items $857 $939 $(82) (8.7) $4,462 $4,498 $(36) (0.8)
Net income $397 $823 $(426) (51.8) $2,263 $7,340 $(5,077) (69.2)
Net income: Less: special items, net of tax (D) 165 111 54 NM1 594 (2,862) 3,456 NM1
Net income, excluding special items 562 934 (372) (39.8) 2,857 4,478 (1,621) (36.2)
Net income, excluding special items: Less: Income tax adjustment using 2016 tax rate for 2015 (332) 332 NM1 (1,595) 1,595 NM1
Tax adjusted net income, excluding special items $562 $602 $(40) (6.6) $2,857 $2,883 $(26) (0.9)
Diluted earnings per share $1.26 $2.24 $(0.98) (43.8) $6.85 $19.47 $(12.62) (64.8)
Diluted earnings per share: Less: special items (0.09) 0.09 (0.18) NM1 1.95 0.74 1.21 NM1
Diluted earnings per share: Less: special income tax items 0.61 0.21 0.40 NM1 (0.15) (8.33) 8.18 NM1
Diluted earnings per share, excluding special items $1.78 $2.54 $(0.76) (29.9) $8.65 $11.88 $(3.23) (27.2)
Diluted earnings per share, excluding special items: Less: Income tax adjustment using 2016 tax rate for 2015 (0.90) 0.90 NM1 (4.23) 4.23 NM1
Tax adjusted diluted earnings per share, excluding special items $1.78 $1.64 $0.14 8.5 $8.65 $7.65 $1.00 13.1

 

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

UAL provides financial metrics, including 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 items that are non-recurring and that management believes are not indicative of UAL's ongoing performance.
EBITDA and EBITDAR (in millions) Three Months Ended
December 31, 2016
Three Months Ended
December 31, 2015
Year Ended
December 31, 2016
Year Ended
December 31, 2015
Net income $397 $823 $2,263 $7,340
Adjusted For:
Depreciation and amortization
504 476 1,977 1,819
Adjusted For: Interest expense 148 165 614 669
Adjusted For: Interest capitalized (24) (11) (72) (49)
Adjusted For: Interest income (11) (9) (42) (25)
Adjusted For: Income tax expense (benefit) (E) 487 82 1,556 (3,121)
Adjusted For: Special items before income taxes (D) (27) 34 643 279
Adjusted EBITDA, excluding special items 1,474 1,560 6,939 6,912
Adjusted EBITDA, excluding special items: Aircraft rent 159 174 680 754
Adjusted EBITDAR, excluding special items $1,633 $1,734 $7,619 $7,666
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
December 31, 2016
Three Months Ended
December 31, 2015
Year Ended
December 31, 2016
Year Ended
December 31, 2015
Capital Expenditures: Capital expenditures – GAAP $880 $763 $3,223 $2,747
Capital Expenditures: Capital expenditures – GAAP:Property and equipment acquired through the issuance of debt 271 69 386 866
Capital Expenditures: Capital expenditures – GAAP:Airport construction financing 23 12 91 17
Capital Expenditures: Capital expenditures – GAAP:Fully reimbursable projects (96) (53) (353) (124)
Capital Expenditures:Adjusted capital expenditures – Non-GAAP $1,078 $791 $3,347 $3,506
Free Cash Flow (in millions) Three Months Ended
December 31, 2016
Three Months Ended
December 31, 2015
Year Ended
December 31, 2016
Year Ended
December 31, 2015
Free Cash Flow: Net cash provided by operating activities $658 $1,115 $5,542 $5,992
Free Cash Flow: Net cash provided by operating activities: Less capital expenditures – Non-GAAP 880 763 3,223 2,747
Free Cash Flow: Free cash flow, net of financings - Non-GAAP $(222) $352 $2,319 $3,245
Free Cash Flow: Net cash provided by operating activities $658 $1,115 $5,542 $5,992
Free Cash Flow: Net cash provided by operating activities: Less adjusted capital expenditures – Non-GAAP 1,078 791 3,347 3,506
Free Cash Flow: Free cash flow - Non-GAAP $(420) $324 $2,195 $2,486

 

UNITED CONTINENTAL HOLDINGS, INC.
NOTES (UNAUDITED)

(B) Select passenger revenue information is as follows (in millions):
  4Q 2016
Passenger
Revenue
(millions)
Passenger
Revenue
vs.
4Q 2015
PRASM
vs.
4Q 2015
Yield
vs.
4Q 2015
Available
Seat Miles
vs.
4Q 2015
Domestic $3,378 4.0% (0.3%) 0.6% 4.3%
Atlantic 1,246 (5.2%) (2.8%) (0.2%) (2.4%)
Pacific 1,030 1.8% (6.0%) (6.2%) 8.1%
Latin America 641 6.0% 7.7% 4.2% (1.6%)
International 2,917 (0.5%) (2.2%) (2.0%) 1.8%
Mainline 6,295 1.9% (1.1%) (0.7%) 3.0%
Regional 1,466 (5.4%) 0.1% (0.3%) (5.5%)
Consolidated $7,761 0.4% (1.6%) (1.2%) 2.0%

 

UNITED CONTINENTAL HOLDINGS, INC.
NOTES (UNAUDITED)

(C) UAL's results of operations include fuel expense for both mainline and regional operations. (In millions, except per gallon)
  Three Months Ended
December 31, 2016
Three Months Ended
December 31, 2015
%
Increase/
(Decrease)
Year Ended
December 31, 2016
Year Ended
December 31, 2015
%
Increase/
(Decrease)
Mainline fuel expense excluding hedge impacts $1,270 $1,184 7.3 $4,640 $5,711 (18.8)
Hedge losses reported in fuel expense 6 (20) (175) NM1 (217) (604) NM1
Total mainline fuel expense 1,290 1,359 (5.1) 4,857 6,315 (23.1)
Regional fuel expense 265 259 2.3 956 1,207 (20.8)
Consolidated fuel expense 1,555 1,618 (3.9) 5,813 7,522 (22.7)
Cash paid on settled hedges that did not qualify for hedge accounting 7 (115) NM1 (5) (329) NM1
Fuel expense including all losses from settled hedges $1,555 $1,733 (10.3) $5,818 $7,851 (25.9)
Mainline fuel consumption (gallons) 804 784 2.6 3,261 3,216 1.4
Mainline average aircraft fuel price per gallon $1.60 $1.73 (7.5) $1.49 $1.96 (24.0)
Mainline average aircraft fuel price per gallon excluding hedge losses recorded in fuel expense $1.58 $1.51 4.6 $1.42 $1.78 (20.2)
Mainline average aircraft fuel price per gallon including cash paid on settled hedges that did not qualify for hedge accounting $1.60 $1.88 (14.9) $1.49 $2.07 (28.0)
Regional fuel consumption (gallons) 158 167 (5.4) 643 670 (4.0)
Regional average aircraft fuel price per gallon $1.68 $1.55 8.4 $1.49 $1.80 (17.2)
Consolidated fuel consumption (gallons) 962 951 1.2 3,904 3,886 0.5
Consolidated average aircraft fuel price per gallon $1.62 $1.70 (4.7) $1.49 $1.94 (23.2)
Consolidated average aircraft fuel price per gallon excluding hedge losses recorded in fuel expense $1.60 $1.52 5.3 $1.43 $1.78 (19.7)
Consolidated average aircraft fuel price per gallon including cash paid on settled hedges that did not qualify for hedge accounting $1.62 $1.82 (11.0) $1.49 $2.02 (26.2)
  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)

(D) Special items include the following:
(In millions) Three Months Ended
December 31, 2016 (In millions)
Three Months Ended
December 31, 2015 (In millions)
Year Ended
December 31, 2016 (In millions)
Year Ended
December 31, 2015 (In millions)
Operating:
Labor agreement costs and related items
$(60) $18 $64 $18
Operating: Severance and benefit costs 10 4 37 107
Operating: Impairment of assets 48 412 79
Operating: Cleveland airport lease restructuring 74
Operating: (Gains) losses on sale of assets and other special charges 19 61 51 122
Operating: (Gains) losses on sale of assets and other special charges: Special charges (31) 131 638 326
Nonoperating and income taxes:
Losses (gain) on extinguishment of debt and other
7 (1) 202
Nonoperating and income taxes: Income tax expense (benefit) related to special charges 12 (11) (229) (11)
Nonoperating and income taxes: Income tax expense (benefit) related to special charges: Total operating and nonoperating special charges, net of income taxes (19) 127 408 517
Nonoperating and income taxes: Income tax adjustments (E) 180 88 180 (3,130)
Nonoperating and income taxes: Mark-to-market (MTM) losses from fuel derivative contracts settling in future periods 1 (8)
Nonoperating and income taxes:Prior period gains (losses) on fuel derivative contracts settled in the current period 4 (105) 6 (241)
Nonoperating and income taxes: Prior period gains (losses) on fuel derivative contracts settled in the current period:Total special items, net of income taxes $165 $111 $594 $(2,862)

 

Special items

 

Labor agreement costs and related items: The fleet service, passenger service, storekeeper and other employees represented by the International Association of Machinists and Aerospace Workers (IAM) ratified seven new contracts with the company which extended the contracts through 2021. The technicians and related employees represented by the International Brotherhood of Teamsters (IBT) ratified a six-year joint collective bargaining agreement which extended the contract through 2022. During 2016, the company recorded $171 million ($110 million net of taxes) of special charges primarily for payments in conjunction with the IAM and IBT agreements described above. As part of the ratified contract with the IBT, the company amended some of its technicians and related employees' postretirement medical plans. The amendments triggered curtailment accounting, resulting in the recognition of a one-time $60 million gain ($38 million net of taxes) for accelerated recognition of a prior service credit in one of the plans. Also, as part of the 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 months and year ended December 31, 2016, the company recorded $10 million ($6 million net of taxes) and $37 million ($24 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 2015, the company recorded $107 million of severance and benefit costs primarily related to a voluntary early-out program for its flight attendants. In 2014, more than 2,500 flight attendants elected to voluntarily separate from the company 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 assets: In April 2016, the Federal Aviation Administration (FAA) announced that it will designate Newark Liberty International Airport (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 2016, the company determined that the FAA's action impaired the entire value of its Newark slots because the slots are no longer 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. During its annual assessment in the fourth quarter of 2015, the company recorded $33 million ($22 million net of related income tax benefit) related to impairment of its indefinite-lived intangible assets (certain domestic slots and international Pacific routes), $8 million for the write-off of unexercised aircraft purchase options and $7 million for inventory held for sale. For the full-year 2015, the company also recorded other impairments, including $10 million for discontinued internal software projects and $10 million for the impairment of several engines held for sale.

 

Cleveland airport lease restructuring: During 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 months and year ended December 31, 2016, the company recorded gains and losses on sale of assets and other special charges of $19 million ($12 million net of taxes) and $51 million ($33 million net of taxes), respectively. During 2015, the company recorded $122 million, which includes $60 million of integration-related costs primarily related to systems integration and training for employees, $32 million related to charges for legal matters, $16 million for the cease use of an aircraft under lease and $14 million for losses on the sale of aircraft and other miscellaneous gains and losses.

 

Losses (gain) on extinguishment of debt and other: During the year ended December 31, 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. During 2015, the company recorded $202 million of losses as part of Nonoperating income (expense): Miscellaneous, net due primarily to the write-off of $134 million related to the unamortized non-cash debt discount from the extinguishment of the 6% Notes due 2026 and 6% Notes due 2028, and $61 million of foreign exchange losses on its holdings of Venezuela currency.

 

MTM (gains)/losses from fuel derivative contracts settling in future periods and prior period gains/(losses) on fuel derivative contracts settled in the current period: The company uses certain combinations of derivative contracts that are economic hedges but do not qualify for hedge accounting under U.S. generally accepted accounting principles. Additionally, the company may enter into contracts at different times and later combine those contracts into structures designated for hedge accounting. As with derivatives that qualify for hedge accounting, the economic hedges and individual contracts are part of the company's program to mitigate the adverse financial impact of potential increases in the price of fuel. The company records changes in the fair value of these various contracts that are not designated for hedge accounting to Nonoperating income (expense): Miscellaneous, net in the statements of consolidated operations. During the three months and year ended December 31, 2016, the company did not record any MTM gains or losses on fuel derivative contracts that will settle in future periods. For fuel derivative contracts that settled in the three months and year ended December 31, 2016, the company recorded MTM gains of $4 million and $6 million, respectively, in prior periods. During the three months and year ended December 31, 2015, the company recorded $1 million in MTM losses and $8 million in MTM gains, respectively, on fuel derivative contracts that will settle in future periods. For fuel derivative contracts that settled in the three months and year ended December 31, 2015, the company recorded MTM losses of $105 million and $241 million, respectively, in prior periods.

 

(E)     The company's effective tax rate for the three months and year ended December 31, 2016 was 55% and 41%, respectively. The rate for both periods was impacted by a special tax expense of $180 million. The company recorded approximately $180 million of deferred income tax expense adjustments in AOCI, which related to losses on fuel hedges designated for hedge accounting. Accounting rules required the adjustments to remain in AOCI as long as the company had fuel derivatives designated for cash flow hedge accounting. In 2016, we settled all of our fuel hedges and have not entered into any new fuel derivative contracts for hedge accounting. Accordingly, the company reclassified the $180 million to income tax expense in 2016. The effective tax rate for 2016 also represented a blend of federal, state and foreign taxes and the impact of certain nondeductible items.

 

The company's effective tax rate for the three months and year ended December 31, 2015 was impacted by the valuation allowance release. 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.

 

 

 

SOURCE United Airlines

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

United Airlines to Present at Barclays Industrial Select Conference 2019

February 18, 2019

CHICAGO, Feb. 18, 2019 /PRNewswire/ -- United Airlines will present at Barclays Industrial Select Conference on Wednesday, February 20. United Airlines' Vice President of Pricing and Revenue Management Dave Bartels and Vice President of Finance and CFO of Commercial Jonathan Ireland will present at the conference beginning at 1:15 p.m. ET / 12:15 p.m. CT.

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

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 Airlines and United Express operate approximately 4,800 flights a day to 353 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 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 770 mainline aircraft and the airline's United Express carriers operate 559 regional aircraft. United is a founding member of Star Alliance, which provides service to 193 countries via 28 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 Continental 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 Adds More Than 1,600 New Premium Seats to International, Domestic and Regional Aircraft; More Comfort for More Customers in the Skies

February 06, 2019

CHICAGO, Feb. 6, 2019 /PRNewswire/ -- United Airlines today announced the next step in its commitment to making more customers more comfortable by adding more than 1,600 United Polaris® business class and United First seats to nearly 250 international and domestic aircraft. Additionally, United will revolutionize the regional flying experience by introducing the two-cabin, 50-seat Bombardier CRJ 550 aircraft to its fleet, offering customers on key regional routes more legroom, storage and amenities than any other 50-seat regional aircraft operating today.

Click here to view an infographic on United's newly reconfigured aircraft

"In an era where many airlines are adding seats to their aircraft to crowd more passengers onto the plane, we're re-configuring more than 100 of our aircraft and doing exactly the opposite – for the benefit of our customers," said Andrew Nocella, United's executive vice president and chief commercial officer. "From adding more premium seats on aircraft that serve some of our most traveled routes, introducing a revolutionary, best-in-class 50-seat experience or simply offering free DIRECTV on more than 200 aircraft, we are committed to making United the airline that our customers choose to fly."

More United Polaris business seats on Boeing 767-300ER aircraft

In the next several weeks, United will introduce to its fleet the first of 21 reconfigured Boeing 767-300ER aircraft featuring 16 additional United Polaris business seats in the premium cabin – a more than 50 percent increase in all-aisle-access seating – bringing the total premium cabin seat count to 46. The newly reconfigured aircraft will also feature 22 United® Premium Plus seats (becoming the first 767-300ER to offer this seat type); 47 Economy Plus® seats and 52 Economy seats. United will first operate the reconfigured 767 – which will feature the highest proportion of premium seats on any widebody operated by any U.S. carrier – between Newark/New York and London, offering 50 percent more premium seats in the largest premium route in the world. The airline expects to introduce all the reconfigured aircraft to its fleet by the end of next year.

More United First seats on Airbus A319 and A320 aircraft

United is also adding more United First® seats to its fleet of Airbus aircraft, offering customers greater opportunities to upgrade and enjoy a premium flying experience. Beginning this fall, the carrier will add four United First seats on its fleet of Airbus A319s, increasing the total count from eight to 12. The reconfigured aircraft will also feature 36 Economy Plus and 78 Economy seats.

Beginning early next year, United will add four United First seats on its fleet of nearly 100 Airbus A320 aircraft, increasing the total count from 12 to 16. The reconfigured aircraft will also feature 39 Economy Plus seats and 95 Economy seats. United expects to complete the reconfiguration of the Airbus A320 and A319s by the middle of next year.

Introducing the first-of-its-kind Bombardier CRJ 550

By the end of this year, United will revolutionize the regional flying experience with the planned introduction of 50 spacious, 50-seat Bombardier CRJ 550 aircraft to its regional fleet, subject to government certification. In addition to becoming the only 50-seat aircraft in the world to offer true first-class seating, the innovative new aircraft will provide customers with a truly exceptional flying experience, including a state-of-the-art interior featuring LED lighting, a self-serve beverage and snack station for customers seated in the premium cabin, Wi-Fi and more overall legroom per seat than any other 50-seat aircraft flown by any U.S. carrier. Additionally, the CRJ 550 will feature four storage closets, providing customers ample room to store their carryon bags and making the CRJ 550 the only regional jet in the skies where customers will not need to routinely gate check their bags.

The two-cabin CRJ 550 will feature 10 United First seats; 20 Economy Plus seats and 20 Economy seats. The CRJ 550 aircraft will eventually replace existing single-cabin 50-seat aircraft and will bring a higher percentage of two-cabin departures to smaller cities across the carrier's network. Additionally, the innovative aircraft will enable United to offer premium seats on more connecting flights from smaller cities to the airline's overall global network, further strengthening its competitive position and emphasizing its role as an industry innovator.

United expects that its regional partner GoJet will begin operating the CRJ 550 in the second half of this year – subject to agreement on final terms and conditions – on select routes from Chicago, O'Hare followed by Newark/New York, offering customers connecting through the hub the opportunity to enjoy a premium cabin experience at every step of their journey.

Every customer. Every flight. Every day.

In 2019, United is focusing more than ever on 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 released a re-imagined version of the most downloaded app in the airline industry and made DIRECTV free for every passenger on 211 aircraft, offering more than 100 channels on seat back monitors on more than 30,000 seats. The multimillion-dollar investment in improving inflight entertainment options will benefit the more than 29 million people expected to fly United's DIRECTV-enabled planes this year.

About United

United Airlines and United Express operate approximately 4,800 flights a day to 353 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, Newark/New York, San Francisco and Washington, D.C. United operates 770 mainline aircraft and the airline's United Express carriers operate 559 regional aircraft. The airline is a founding member of Star Alliance, which provides service to 193 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 Nasdaq under the symbol "UAL".

SOURCE United Airlines

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

United Airlines Announces Four New Domestic United Club Locations for 2019

February 04, 2019

CHICAGO, Feb. 4, 2019 /PRNewswire/ -- United Airlines today welcomed the newest addition to its network of more than 50 United Club locations around the world with the opening of a brand-new 5,000 square foot United Club at Fort Lauderdale-Hollywood International Airport. Located near Gate C1, this new United Club is the first of four new United Club locations set to open in 2019.

"United Clubs are the perfect spot for our customers to relax and recharge and we are excited to open the first of four new United Clubs this year," said United's Chief Customer Officer Toby Enqvist. "Our multimillion-dollar investment in the United Clubs is one of many ways we are working to improve every aspect of our customers' experience."

In addition to the Fort Lauderdale renovation, the airline is expanding its United Club network by introducing new locations in popular destinations. This summer, United plans to open a new United Club in New Orleans in conjunction with the opening of the new terminal at Louis Armstrong New Orleans International Airport. United will also open a brand-new United Club location in New York's La Guardia Airport to coincide with the relocation of its operations to the airport's Terminal B. Additionally, United will introduce its first-ever United Club location in Raleigh-Durham International Airport.

Designed with today's customers in mind, each United Club location is created to serve the distinct needs of customers traveling to and from that destination and feature complimentary high-speed Wi-Fi, wellness rooms and specially curated local food and beverage offerings. United Club members enjoy access to more than 50 United Club locations and participating Star Alliance partner lounges around the world.

About United

United Airlines and United Express operate approximately 4,800 flights a day to 353 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, Newark/New York, San Francisco and Washington, D.C. United operates 770 mainline aircraft and the airline's United Express carriers operate 559 regional aircraft. The airline is a founding member of Star Alliance, which provides service to 193 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 Nasdaq under the symbol "UAL".

SOURCE United Airlines

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

United Airlines Offers Customers Free Live TV

January 30, 2019

CHICAGO, Jan. 30, 2019 /PRNewswire/ -- Just in time for the Big Game, United Airlines today announced that effective immediately more than 100 channels of live television will now be free on 211 Boeing 737 United aircraft equipped with seat back TV, making viewing easy gate-to-gate. In addition to offering free live DIRECTV at more than 30,000 seats, United customers also have access to hundreds of movies and TV shows available on personal devices through the airline's collection on the United app – offering customers thousands of hours of programming in total.

"This year, we will be introducing a series of innovations and improvements designed to help build a great experience for all our customers," said United's Chief Customer Officer Toby Enqvist. "Offering free entertainment, whether it's on seat back TV or on personal devices, is one example of how we are placing our customers at the heart of what we do and helping them to relax and enjoy their flights."

"We're pleased that United is offering customers complimentary access to live TV on more than 200 of its aircraft so customers can feel like they're sitting in their own living rooms enjoying DIRECTV," said Roman Pacewicz, chief product officer, AT&T; Business. "Whether they want to tune into their favorite primetime show or their favorite sports team, United customers won't miss a moment with free DIRECTV programming."

Personal Device Entertainment

Over the last year, United has also expanded its personal device entertainment product to aircraft that previously only offered DIRECTV, providing an option for customers to use their phones, tablets or laptops to access a library of more than 280 complimentary movies and TV shows.

Accessibility

Additionally, United has made improvements in its entertainment options for customers with hearing and mobility issues through its Accessible Entertainment menu category available on seat back on-demand systems. Accessible Entertainment offers customers entertainment options by grouping titles that are either audio descriptive or closed captioned under one menu. United currently offers more than 20 audio descriptive movies and TV shows and more than 50 with English closed captioning. Select DIRECTV channels also include closed captioning, subject to programming availability.

About United

United Airlines and United Express operate approximately 4,800 flights a day to 353 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, Newark/New York, San Francisco and Washington, D.C. United operates 770 mainline aircraft and the airline's United Express carriers operate 559 regional aircraft. The airline is a founding member of Star Alliance, which provides service to 193 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 Nasdaq under the symbol "UAL".

SOURCE United Airlines

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

United Airlines Donates $1 Million to Feeding America's Shutdown Response Fund

January 25, 2019

CHICAGO, Jan. 25, 2019 /PRNewswire/ -- United Airlines announced today that in response to Feeding America's increased need for support as a result of the government shutdown, the airline is donating $1 million to the organization's Shutdown Response Fund. This donation will directly support the food banks that are providing food for families of federal workers, who need assistance following their loss of income.

"On behalf of the United family, I would like to thank the countless federal employees who have made a large sacrifice to ensure our safety despite not being paid, and we hope this contribution provides them much-needed support. Even with today's announcement, there is continued need among federal employees, in addition to the important programs that Feeding America administers," said Oscar Munoz, chief executive officer of United Airlines. "We continue to urge our leaders to work in a bipartisan way over the coming weeks to ensure the long-term certainty on which our industry and the overall economy depends."

"Feeding America is thankful to our long-time partner, United Airlines, for stepping up, yet again, to help families in need. Even after the government is re-opened, many hardworking families will likely suffer the lingering impact of this crisis," said Claire Babineaux-Fontenot, chief executive officer of Feeding America. "This donation will support Feeding America member food banks as they provide immediate and longer-term assistance to people impacted by the furlough as they get back on their feet in the coming months."

Today's announcement builds on United's ongoing efforts to support the federal workers who work side-by-side with the United team every day to get customers where they need to go safely and on time. This includes working with Feeding America member food banks to set up and provide food distribution centers at United's seven hub airports and New York's LaGuardia Airport, and distributing care packages to federal employees twice a week throughout February. United will continue to work with Feeding America and other charitable partners to assess expanding support if and where it is needed.

About United

United Airlines and United Express operate approximately 4,800 flights a day to 353 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, Newark/New York, San Francisco and Washington, D.C. United operates 770 mainline aircraft and the airline's United Express carriers operate 559 regional aircraft. The airline is a founding member of Star Alliance, which provides service to 193 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 Nasdaq under the symbol "UAL".

About Feeding America

Feeding America® is the largest hunger-relief organization in the United States. Through a network of 200 food banks and 60,000 food pantries and meal programs, we provide meals to more than 46 million people each year. Feeding America also supports programs that prevent food waste and improve food security among the people we serve; educates the public about the problem of hunger; and advocates for legislation that protects people from going hungry. Individuals, charities, businesses and government all have a role in ending hunger. Donate. Volunteer. Advocate. Educate. Together we can solve hunger. Visit www.feedingamerica.org, find us on Facebook or follow us on Twitter.

SOURCE United Airlines

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

The No. 1 Airline App Just Got Better - United Airlines Introduces Upgraded App

January 24, 2019

CHICAGO, Jan. 24, 2019 /PRNewswire/ -- Today, United Airlines is introducing a reimagined mobile app to customers around the world. Already the top downloaded airline app for Apple and Android phones, the refreshed app now features a more dynamic experience that updates customers at each step of their travel journey, making it the perfect travel companion. The app includes features customers know and love from the previous version, while adding enhancements that make managing travel easier from booking to landing.

United app updated after boarding process has begun

"Every day we are using technology to improve our customers' experience and making more information available to our customers at the swipe of a finger," said Linda Jojo, executive vice president of technology and chief digital officer at United Airlines. "With this updated app, we set out to bring improvements that are meaningful to all our customers, whether they travel every week or only once a year."

Customers' favorite features, such as bag tracking, will continue to be available in the updated app, and new highlights include:

  • A navigation bar that gives customers quick access to some of the most popular tools such as flight status, and some new handy features like My Trips.
  • A My Trips tab in the navigation bar that allows customers to easily access information about their upcoming trip and stores boarding passes when customers are checked in for their flights.
  • An inbox that stores important push notifications United sends customers about their flight, such as if a flight status changes, gate changes and alerts about when boarding for a flight has begun.
  • Dynamic boarding times will be updated throughout the app in the event that departure times change to give customers the latest information even when they are not at the gate. This builds on the airline's recent addition of boarding notifications, which were added when United rolled out its Better Boarding process.

One of the biggest updates to the app comes during the travel period, when the home screen updates to give customers the most helpful information for each step of their travel journey. The home screen will begin to update starting 48 hours before a flight, and will continue updating throughout various phases all the way through arrival at the final destination with the most useful information. For instance, customers connecting will find a screen that allows them to easily access airport maps so they can easily navigate to the next gate. Bringing the most useful information to the forefront will make the entire journey less stressful and more intuitive.

The app also includes an updated design with more engaging content. When a customer does not have an upcoming trip, the app will open to a beautiful destination image to provide travel inspiration. Content on the home screen is also more personalized to each user; for example, customers who recently passed loyalty milestones will be recognized on the home screen, and the app will also celebrate customers on their birthday.

United's in-house digital team spent over a year designing and creating this updated app, including eight months during which customers and more than 18,000 employees provided feedback to create the final version that rolls out worldwide today. United issued seven releases during the beta test, making numerous changes based on user feedback. There were more than 13,000 check-ins during the beta test period. The airline will continue soliciting feedback on the app and expects to roll out additional features later this year to further improve and ease travel for our customers.

As a technology leader, United was the first carrier to offer mobile boarding passes and became the first to introduce boarding passes and flight information in its app for partner airlines. Customers can access boarding passes and flight information for flights on United's Star Alliance partner airlines when flights are booked with connecting travel on United on the same itinerary. The airline also made it easier for customers to search for fare classes available in the app with Expert Mode, a popular feature from united.com.

Last year, United updated its digital platforms including the united.com homepage and entire mobile website to make them more dynamic and personalized.

For more information about updates to the app, visit the United Hub.

About United

United Airlines and United Express operate approximately 4,800 flights a day to 353 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, Newark/New York, San Francisco and Washington, D.C. United operates 770 mainline aircraft and the airline's United Express carriers operate 559 regional aircraft. The airline is a founding member of Star Alliance, which provides service to 193 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 Nasdaq under the symbol "UAL".

SOURCE United Airlines

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

United Airlines Names Bryan Quigley Senior Vice President - Flight Operations

January 18, 2019

CHICAGO, Jan. 18, 2019 /PRNewswire/ -- United Airlines (UAL) today announced Bryan Quigley has been named senior vice president of flight operations. Quigley will be responsible for overseeing United's 12,500 pilots and will serve as the airline's FAA certificate director of operations. Quigley will replace Howard Attarian who is retiring after more than a decade of leadership at United.

Quigley, who joined United in 1995, has held several leadership positions throughout United. He most recently was the vice president of the company's San Francisco hub. Quigley also served as chief pilot and led the team in charge of the integration of policies and procedures following the merger of United and Continental.

"Bryan is an exceptional leader both in and out of the flight deck. He has developed a deep understanding of the entire airline after leading our San Francisco hub and I believe he will do great work as the leader of our pilots," said Executive Vice President and Chief Operations Officer Greg Hart.

In addition to his time at United, Quigley spent 26 years in the United States Navy, serving as a U.S. naval aviator.

Attarian retires after more than 40 years in aviation. In addition to his time at United, he spent more than 23 years as a pilot for Northwest Airlines and held several leadership positions with the Air Line Pilots Association. Attarian also served in the United States Air Force and was a demonstration pilot with the U.S. Air Force Thunderbirds.

"Over the past five years, Howard has worked tirelessly to develop the best group of aviators in the industry. We will forever be grateful and wish him the best as he enters the next chapter of his life," said Hart.

Quigley holds a bachelor of science degree in Business Administration from Appalachian State University and has completed the Executive Scholar Program from the Kellogg School of Business at Northwestern University.

Matt Miller, current vice president of international will replace Quigley as vice president of the San Francisco hub.

About United

United Airlines and United Express operate approximately 4,800 flights a day to 353 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, Newark/New York, San Francisco and Washington, D.C. United operates 770 mainline aircraft and the airline's United Express carriers operate 559 regional aircraft. The airline is a founding member of Star Alliance, which provides service to 193 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 Nasdaq under the symbol "UAL".

SOURCE United Airlines

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

United Airlines Reports Full-Year and Fourth-Quarter 2018 Performance

January 15, 2019

CHICAGO, Jan. 15, 2019 /PRNewswire/ -- In a departure from industry trends, United (UAL) announced today that its fourth-quarter unit revenue came in at the high end of its guidance range and also exceeded its full-year adjusted diluted earnings per share target laid out last January. UAL reported full-year net income of $2.1 billion, diluted earnings per share of $7.70 (a 9.1 percent increase year-over-year), pre-tax earnings of $2.7 billion and pre-tax margin of 6.4 percent. UAL reported adjusted full-year net income of $2.5 billion, adjusted pre-tax earnings of $3.2 billion and adjusted pre-tax margin of 7.7 percent.1 UAL increased its full-year 2018 adjusted diluted earnings per share outlook three times during the year despite a $2.4 billion year-over-year headwind from fuel. Full-year adjusted diluted earnings per share increased 33.5 percent year-over-year to $9.13, above the high end of the company's most recent guidance range.1

"United's financial performance is a testament to the successful implementation of the first year of our strategic plan and to the record-setting operational performance powered by the more than 90,000 airline professionals who work at United," said Oscar Munoz, chief executive officer of United Airlines. "United delivered proof, not just promises in 2018 - even in the face of significant headwinds from higher than expected fuel costs. It's why I couldn't be more proud of our winning culture and customer-focused team and continue to be enthusiastic about United's bright future."

For 2019, UAL expects adjusted diluted earnings per share to again grow year-over-year to between $10.00 to $12.00.2

  • UAL reported fourth-quarter net income of $462 million, diluted earnings per share of $1.70, pre-tax earnings of $556 million and pre-tax margin of 5.3 percent.
  • UAL reported fourth-quarter adjusted net income of $657 million, adjusted diluted earnings per share of $2.41 and adjusted pre-tax earnings of $814 million.
  • UAL reported fourth-quarter adjusted pre-tax margin of 7.8 percent,1 expanding margin on an adjusted basis of 0.9 points versus the fourth-quarter of 2017.
  • UAL recovered 98% percent of the year-over-year increase in fuel prices in 2018.
  • Consolidated fourth-quarter passenger revenue per available seat mile (PRASM) increased 5 percent year-over-year, at the high end of the company's fourth-quarter 2018 guidance range.
  • Consolidated fourth-quarter unit cost per available seat mile (CASM) increased 7.0 percent year-over-year.
  • Consolidated fourth-quarter CASM, excluding special charges, third-party business expenses, fuel and profit sharing, decreased 0.7 percent year-over-year.
  • Employees earned $334 million in profit sharing for 2018.

For more information on UAL's first-quarter and full-year 2019 guidance, please visit ir.united.com for the company's investor update.

2018 Highlights

Record-Setting Operational Performance3

  • Set new UAL records by flying the most revenue passengers ever, operating the most mainline departures and achieving the fewest cancellations ever in a year, resulting in more UAL customers departing on-time in 2018 than ever before.
  • For the year, achieved the best completion rate in company history with more than 1.7 million flights.
  • In 2018, achieved the best ever company STAR performance (first departures of the day), with nearly 250,000 flights leaving on time.
  • In the fourth quarter, the company achieved top-tier performance in on-time departures among its largest competitors. For the December holiday season, UAL had its best-ever on-time departure performance while flying the most revenue customers it had ever flown during the holiday period.

Customer Experience

  • Opened three new United Polaris lounges located in San Francisco International Airport, Newark Liberty International Airport and Houston's George Bush Intercontinental Airport.
  • Announced UAL's newest premium seating, United® Premium Plus, which will provide more space, comfort and amenities on select international flights starting later this year.
  • Introduced a new boarding process designed to reduce customers' stress by reducing time spent waiting in line and providing them with improved boarding information.
  • Expanded personal device entertainment option to all aircraft, providing at least one free entertainment option on all Wi-Fi equipped aircraft.
  • MileagePlus loyalty program voted Best Overall Frequent-Flyer Program in the world for the 15th consecutive year by readers of Global Traveler, and voted Favorite Frequent-Flyer Program in the Trazee Awards.

Employees

  • Employees earned incentive payments totaling approximately $14 million for achieving operational performance goals in the quarter, marking a full year of earned incentive payments totaling $55 million.
  • Introduced and trained over 90,000 team members on UAL's new customer service decision framework, the core4, which focuses on the principles of safe, caring, dependable and efficient.
  • Deployed 6,000 iPads to maintenance employees, improving reliability and efficiency.
  • Unveiled a state-of-the-art flight training center in Denver, Colorado - the largest in the world and home to the company's more than 30 full flight simulators representing all of UAL's fleet types.
  • Successfully completed the full implementation of the flight attendant joint collective bargaining agreement, allowing the company to operate more efficiently and reliably.
  • Achieved the top score of 100 percent on the 2018 Disability Equality Index (DEI), a prominent benchmarking metric that rates U.S. companies on their disability inclusion policies and practices, also earning UAL a place on DEI's 2018 "Best Places to Work" list.
  • Received "Best-of-the-Best" Award from the National LGBT Chamber of Commerce and National Business Inclusion Consortium for commitment to diversity and inclusion across all communities.

Network

  • Introduced 93 new routes, adding more flights in 2018 than any other U.S. airline.
  • Announced new international service including Washington-Dulles to Tel Aviv, Israel; San Francisco to Amsterdam, Netherlands; Newark/New York to Naples, Italy; as well as Newark/New York to Prague, Czech Republic and Denver to Frankfurt, Germany, all subject to government approval.
  • Launched several exciting new international routes including Houston to Sydney, San Francisco to Tahiti and Denver to London.
  • Announced schedule expansion at East Coast hubs in Newark/New York and Washington-Dulles to offer more nonstop flights to destinations popular with New York-area customers while reallocating largely connecting passenger flights to Washington-Dulles.
  • Announced a joint business agreement with Compañía Panameña de Aviación S.A. (Copa), Aerovías del Continente Americano S.A. (Avianca) and many of Avianca's affiliates, pending government approval.

Fleet

  • Took delivery of 21 new Boeing aircraft, including four 777-300ER, four 787-9, three 787-10 and ten 737 MAX 9 aircraft.
  • In December 2018, ordered an additional four Boeing 777-300ER aircraft and 24 737 MAX aircraft.

Community and Environment

  • Pledged to reduce the company's greenhouse gas emissions by 50 percent by 2050, the only U.S. airline to commit to emissions reductions, further strengthening UAL's ambition to be the world's most environmentally conscious airline.
  • Announced a total of $8 million in grants to benefit organizations in each of UAL's domestic hub communities.
  • Announced new global partnership with the Special Olympics and flew hundreds of Team USA Olympic and Paralympic Winter Games 2018 athletes, coaches and family members to PyeongChang, South Korea, continuing the 38-year relationship between UAL and the United States Olympic Committee.
  • Ranked No. 1 among global carriers in Newsweek's 2017 Global 500 Green Rankings, one of the most recognized environmental performance assessments of the world's largest publicly traded companies.
  • Launched a Crowdrise fundraising campaign to support those affected by Hurricane Florence, Typhoon Mangkhut, flooding in Western Japan, wildfires in California and other disasters.

Earnings Call

UAL will hold a conference call to discuss its fourth-quarter and full-year 2018 financial results and its financial and operational outlook for the first quarter and full year of 2019 on Wednesday, January 16, at 9:30 a.m. Central time /10:30 a.m. Eastern time. A live, listen-only webcast of the conference call will be available at ir.united.com. The webcast will be available for replay within 24 hours of the conference call and then archived on the website for three months.

About United

United Airlines and United Express operate approximately 4,800 flights a day to 353 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, Newark/New York, San Francisco and Washington, D.C. United operates 770 mainline aircraft and the airline's United Express carriers operate 559 regional aircraft. The airline is a founding member of Star Alliance, which provides service to 193 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 Nasdaq under the symbol "UAL".

1Adjusted pre-tax earnings and adjusted pre-tax margin exclude special charges, the mark-to-market ("MTM") impact of financial instruments and imputed interest on certain capitalized leases. Adjusted net income and adjusted diluted earnings per share exclude special charges, the MTM impact of financial instruments, imputed interest on certain capitalized leases and certain tax adjustments. 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 the MTM impact of financial instruments, the nature of which are not determinable at this time, and imputed interest on certain capitalized leases. Accordingly, UAL is not providing earnings guidance on a GAAP basis.

3 Company history defined as post-2010 merger; company records measured from 2010 merger.

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

-tables attached-

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

UNITED CONTINENTAL HOLDINGS, INC.

STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)




Three Months Ended

December 31,


%



Full Year Ended

December 31,


%


(In millions, except per share data)


2018


2017


Increase/
Decrease)



2018


2017


Increase/
Decrease)

Operating revenue:















Passenger


$

9,556



$

8,587



11.3




$

37,706



$

34,460



9.4



Cargo


334



324



3.1




1,237



1,114



11.0



Other operating revenue


601



540



11.3




2,360



2,210



6.8



Total operating revenue


10,491



9,451



11.0




41,303



37,784



9.3


















Operating expense:















Salaries and related costs


2,924



2,678



9.2




11,458



10,941



4.7



Aircraft fuel


2,380



1,875



26.9




9,307



6,913



34.6



Regional capacity purchase


638



580



10.0




2,601



2,232



16.5



Landing fees and other rent


602



570



5.6




2,359



2,240



5.3



Depreciation and amortization


578



539



7.2




2,240



2,149



4.2



Aircraft maintenance materials and outside repairs


434



479



(9.4)




1,767



1,856



(4.8)



Distribution expenses


396



354



11.9




1,558



1,435



8.6



Aircraft rent


78



145



(46.2)




433



621



(30.3)



Special charges (B)


301



31



NM




487



176



NM



Other operating expenses


1,508



1,424



5.9




5,801



5,550



4.5



Total operating expense


9,839



8,675



13.4




38,011



34,113



11.4


















Operating income


652



776



(16.0)




3,292



3,671



(10.3)


















Operating margin


6.2

%


8.2

%


(2.0)


pts.


8.0

%


9.7

%


(1.7)


pts.

Adjusted operating margin (Non-GAAP) (A)


9.1

%


8.5

%


0.6


pts.


9.1

%


10.2

%


(1.1)


pts.
















Nonoperating income (expense):















Interest expense


(189)



(173)



9.2




(729)



(671)



8.6



Interest capitalized


19



20



(5.0)




70



84



(16.7)



Interest income


31



16



93.8




101



57



77.2



Miscellaneous, net (B)


43



(19)



NM




(76)



(101)



(24.8)



Total nonoperating expense


(96)



(156)



(38.5)




(634)



(631)



0.5


















Income before income taxes


556



620



(10.3)




2,658



3,040



(12.6)


















Pre-tax margin


5.3

%


6.6

%


(1.3)


pts.


6.4

%


8.0

%


(1.6)


pts.

Adjusted pre-tax margin (Non-GAAP) (A)


7.8

%


6.9

%


0.9


pts.


7.7

%


8.5

%


(0.8)


pts.
















Income tax expense (D)


94



41



129.3




529



896



(41.0)



Net income


$

462



$

579



(20.2)




$

2,129



$

2,144



(0.7)


















Diluted earnings per share


$

1.70



$

1.98



(14.1)




$

7.70



$

7.06



9.1



Diluted weighted average shares


272.7



291.8



(6.5)




276.7



303.6



(8.9)




NM Not meaningful

UNITED CONTINENTAL HOLDINGS, INC.

SELECT PASSENGER REVENUE INFORMATION AND STATISTICS


Select passenger revenue information is as follows:




4Q 2018

Passenger

Revenue

(millions)


Passenger

Revenue

vs.

4Q 2017


PRASM

vs.

4Q 2017


Yield

vs.

4Q 2017


Available

Seat Miles

vs.

4Q 2017

Domestic


6,088



12.8%


6.0%


6.7%


6.4%












Atlantic


1,535



9.6%


1.6%


(5.0%)


8.0%

Pacific


1,139



8.8%


4.5%


3.2%


4.0%

Latin America


794



7.2%


3.8%


1.1%


3.1%

International


3,468



8.8%


3.2%


(0.5%)


5.4%












Consolidated


$

9,556



11.3%


5.0%


3.8%


6.0%

Select statistics are as follows:




Three Months Ended

December 31,


%

Increase/

(Decrease)



Full Year Ended

December 31,


%

Increase/

(Decrease)




2018


2017





2018


2017




Passengers (thousands)


39,891



37,413



6.6




158,330



148,067



6.9



Revenue passenger miles (millions)


56,968



53,149



7.2




230,155



216,261



6.4



Available seat miles (millions)


68,902



65,028



6.0




275,262



262,386



4.9



Passenger load factor:















Consolidated


82.7

%


81.7

%


1.0


pt.


83.6

%


82.4

%


1.2


pts.

Domestic


84.6

%


85.2

%


(0.6)


pts.


85.4

%


85.2

%


0.2


pts.

International


80.1

%


77.2

%


2.9


pts.


81.3

%


78.9

%


2.4


pts.

Passenger revenue per available seat mile (cents)


13.87



13.21



5.0




13.70



13.13



4.3



Total revenue per available seat mile (cents)


15.23



14.53



4.8




15.00



14.40



4.2



Average yield per revenue passenger mile (cents)


16.77



16.16



3.8




16.38



15.93



2.8



Aircraft in fleet at end of period


1,329



1,262



5.3




1,329



1,262



5.3



Average stage length (miles)


1,426



1,431



(0.3)




1,446



1,460



(1.0)



Average full-time equivalent employees (thousands)


87.3



85.6



2.0




86.6



86.0



0.7



Average aircraft fuel price per gallon


$

2.30



$

1.91



20.4




$

2.25



$

1.74



29.3



Fuel gallons consumed (millions)


1,036



980



5.7




4,137



3,978



4.0




Note: See Part II, Item 6, Selected Financial Data, of UAL's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, for definitions of these statistics.

UNITED CONTINENTAL HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


(In millions)

December 31, 2018


December 31, 2017

ASSETS




Current assets:




Cash and cash equivalents

$

1,694



$

1,482


Short-term investments

2,256



2,316


Receivables, net

1,346



1,340


Aircraft fuel, spare parts and supplies, net

985



924


Prepaid expenses and other

913



1,071


Total current assets

7,194



7,133






Total operating property and equipment, net

28,329



26,208






Other assets:




Goodwill

4,523



4,523


Intangibles, net

3,159



3,539


Restricted cash

105



91


Loans to others, net

496



46


Investments in affiliates and other, net

966



806


Total other assets

9,249



9,005


Total assets

$

44,772



$

42,346






LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Advance ticket sales

$

4,381



$

3,940


Accounts payable

2,363



2,196


Frequent flyer deferred revenue

2,286



2,192


Accrued salaries and benefits

2,184



2,166


Current maturities of long-term debt and capital leases

1,379



1,693


Other

600



576


Total current liabilities

13,193



12,763






Other liabilities and deferred credits:




Long-term debt and capital leases

13,349



12,699


Frequent flyer deferred revenue

2,719



2,591


Postretirement benefit liability

1,295



1,602


Pension liability

1,576



1,921


Deferred income taxes

814



204


Other

1,831



1,832


Total other liabilities and deferred credits

21,584



20,849






Commitments and contingencies








Stockholders' equity

9,995



8,734


Total liabilities and stockholders' equity

$

44,772



$

42,346


UNITED CONTINENTAL HOLDINGS, INC.

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)


(In millions)

Full Year Ended
December 31,


2018


2017

Cash Flows from Operating Activities:




Net cash provided by operating activities

$

6,181



$

3,413






Cash Flows from Investing Activities:




Capital expenditures

(4,177)



(3,998)


Purchases of short-term and other investments

(2,552)



(3,241)


Proceeds from sale of short-term and other investments

2,616



3,177


Loans made to others

(456)




Investment in affiliates

(139)




Other, net

145



132


Net cash used in investing activities

(4,563)



(3,930)






Cash Flows from Financing Activities:




Proceeds from issuance of long-term debt and airport construction financing

1,740



2,765


Repurchases of common stock

(1,235)



(1,844)


Payments of long-term debt

(1,727)



(901)


Principal payments under capital leases

(134)



(124)


Other, net

(54)



(91)


Net cash used in financing activities

(1,410)



(195)


Net increase (decrease) in cash, cash equivalents and restricted cash

208



(712)


Cash, cash equivalents and restricted cash at beginning of the year

1,591



2,303


Cash, cash equivalents and restricted cash at end of the year (a)

$

1,799



$

1,591






Investing and Financing Activities Not Affecting Cash:




Property and equipment acquired through the issuance of debt and capital leases

$

174



$

935


Debt associated with termination of a maintenance service agreement

163




Equity interest in Republic Airways Holdings, Inc. received in consideration for bankruptcy claims



92


Airport construction financing

12



42


Operating lease conversions to capital lease

52





(a) The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the consolidated balance sheet:


Reconciliation of cash, cash equivalents and restricted cash:




Current assets:




Cash and cash equivalents

$

1,694



$

1,482


Restricted cash included in Prepaid expenses and other



18


Other assets:




Restricted cash

105



91


Total cash, cash equivalents and restricted cash

$

1,799



$

1,591


UNITED CONTINENTAL HOLDINGS, INC.

RETURN ON INVESTED CAPITAL (ROIC) - Non-GAAP


ROIC is a non-GAAP financial measure that UAL believes provides useful supplemental information for management and investors by measuring the effectiveness of the company's operations' use of invested capital to generate profits.


(in millions)

Twelve Months Ended

December 31, 2018

Net Operating Profit After Tax ("NOPAT")


Pre-tax income

$

2,658


Special charges and MTM losses on financial instruments (B):


Impairment of assets

377


Termination of a maintenance service agreement

64


Severance and benefit costs

41


MTM losses on financial instruments

5


(Gains) losses on sale of assets and other special charges

5


Pre-tax income excluding special charges and MTM losses on financial instruments (Non-GAAP)

3,150


add: Interest expense (net of income tax benefit) (a)

725


add: Interest component of capitalized aircraft rent (net of income tax benefit) (a)

211


add: Net interest on pension (net of income tax benefit) (a)

(16)


less: Income taxes paid

(19)


NOPAT (Non-GAAP)

$

4,051






Average Invested Capital (five-quarter average)


Total assets

$

44,133


add: Capitalized aircraft operating leases (b)

3,723


less: Non-interest bearing liabilities (c)

(17,224)


Average invested capital (Non-GAAP)

$

30,632




ROIC (Non-GAAP)

13.2

%





(a)

Income tax benefit measured based on the effective cash tax rate. The effective cash tax rate is calculated by dividing cash taxes paid by pre-tax income excluding special charges. For the twelve months ended December 31, 2018, the effective cash tax rate was 0.6%.

(b)

The purpose of this adjustment is to capitalize the impact of aircraft operating leases. The company uses a multiple of seven times its annual aircraft rent expense to estimate the potential capitalized value and related liability of its aircraft. This is a simplified method used by many rating agencies and financial analysts to assess the impact of operating leases on financial measures like return on invested capital.

(c)

Non-interest bearing liabilities include advance ticket sales, frequent flyer deferred revenue, deferred income taxes and other non-interest bearing liabilities.

UNITED CONTINENTAL HOLDINGS, INC.

NON-GAAP FINANCIAL RECONCILIATION


(A) UAL evaluates its financial performance utilizing various accounting principles generally accepted in the United States of America (GAAP) and Non-GAAP financial measures, including adjusted operating income (loss), adjusted operating margin, adjusted pre-tax income (loss), adjusted pre-tax margin, adjusted net income (loss), adjusted diluted earnings (loss) per share and CASM, excluding special charges, third-party business expenses, fuel, and profit sharing, among others. UAL believes that adjusting for special charges is useful to investors because special charges are not indicative of UAL's ongoing performance. UAL believes that adjusting for MTM gains and losses on financial instruments is useful to investors because those unrealized gains or losses may not ultimately be realized on a cash basis. UAL believes that adjusting for interest expense related to capital leases of Embraer ERJ 145 aircraft is useful to investors because of the accelerated recognition of interest expense.


CASM is a common metric used in the airline industry to measure an airline's cost structure and efficiency. UAL reports CASM excluding special charges, third-party business expenses, fuel and profit sharing. UAL believes that adjusting for special charges is useful to investors because special charges are not indicative of UAL's ongoing performance. UAL also believes that excluding third-party business expenses, such as maintenance, ground handling and catering services for third parties and fuel sales, provides more meaningful disclosure because these expenses are not directly related to UAL's core business. UAL also believes that excluding fuel costs from certain measures is useful to investors because it provides an additional measure of management's performance excluding the effects of a significant cost item over which management has limited influence. UAL excludes profit sharing because this exclusion allows investors to better understand and analyze our operating cost performance and provides a more meaningful comparison of our core operating costs to the airline industry.


Reconciliations of reported non-GAAP financial measures to the most directly comparable GAAP financial measures are included below.




Three Months Ended

December 31,


%
Increase/


Full Year Ended

December 31,


%
Increase/



2018


2017


(Decrease)


2018


2017


(Decrease)

CASM (cents)













Cost per available seat mile (CASM) (GAAP)


14.28



13.34



7.0



13.81



13.00



6.2


Special charges (B)


0.44



0.04



NM



0.18



0.07



NM


Third-party business expenses


0.04



0.06



(33.3)



0.04



0.05



(20.0)


Fuel expense


3.46



2.88



20.1



3.38



2.64



28.0


Profit sharing, including taxes


0.12



0.07



71.4



0.12



0.13



(7.7)


CASM, excluding special charges, third-party business expenses, fuel, and profit sharing (Non-GAAP)


10.22



10.29



(0.7)



10.09



10.11



(0.2)



NM Not Meaningful

UNITED CONTINENTAL HOLDINGS, INC.

NON-GAAP FINANCIAL RECONCILIATION (Continued)




Three Months Ended

December 31,


$

Increase/


%

Increase/


Full Year Ended

December 31,


$

Increase/


%

Increase/

(in millions)


2018


2017


(Decrease)


(Decrease)


2018


2017


(Decrease)


(Decrease)

Operating expenses (GAAP)


$

9,839



$

8,675



$

1,164



13.4



$

38,011



$

34,113



$

3,898



11.4


Special charges (B)


301



31



270



NM



487



176



311



NM


Operating expenses, excluding special charges


9,538



8,644



894



10.3



37,524



33,937



3,587



10.6


Adjusted to exclude:

















Third-party business expenses


32



31



1



3.2



121



145



(24)



(16.6)


Fuel expense


2,380



1,875



505



26.9



9,307



6,913



2,394



34.6


Profit sharing, including taxes


82



45



37



82.2



334



349



(15)



(4.3)


Adjusted operating expenses (Non-GAAP)


$

7,044



$

6,693



$

351



5.2



$

27,762



$

26,530



$

1,232



4.6



















Operating income (GAAP)


$

652



$

776



$

(124)



(16.0)



$

3,292



$

3,671



$

(379)



(10.3)


Adjusted to exclude:

















Special charges (B)


301



31



270



NM



487



176



311



NM


Adjusted operating income (Non-GAAP)


$

953



$

807



$

146



18.1



$

3,779



$

3,847



$

(68)



(1.8)



















Pre-tax income (GAAP)


$

556



$

620



$

(64)



(10.3)



$

2,658



$

3,040



$

(382)



(12.6)


Adjusted to exclude:

















Special charges (B)


301



31



270



NM



487



176



311



NM


MTM (gains) losses on financial instruments (B)


(56)





(56)



NM



5





5



NM


Interest expense on ERJ 145 capital leases (C)


13





13



NM



26





26



NM


Adjusted pre-tax income (Non-GAAP)


$

814



$

651



$

163



25.0



$

3,176



$

3,216



$

(40)



(1.2)



















Net income (GAAP)


$

462



$

579



$

(117)



(20.2)



$

2,129



$

2,144



$

(15.0)



(0.7)


Adjusted to exclude:

















Special charges (B)


301



31



270



NM



487



176



311



NM


MTM (gains) losses on financial instruments (B)


(56)





(56)



NM



5





5



NM


Interest expense on ERJ 145 capital leases (C)


13





13



NM



26





26



NM


Income tax benefit related to adjustments above


(58)



(11)



(47)



NM



(116)



(63)



(53)



NM


Special income tax adjustments (D)


(5)



(179)



174



NM



(5)



(179)



174



NM


Adjusted net income (Non-GAAP)


$

657



$

420



$

237



56.4



$

2,526



$

2,078



$

448



21.6



















Diluted earnings per share (GAAP)


$

1.70



$

1.98



$

(0.28)



(14.1)



$

7.70



$

7.06



$

0.64



9.1


Adjusted to exclude:

















Special charges (B)


1.10



0.11



0.99



NM



1.76



0.58



1.18



NM


MTM (gains) losses on financial instruments (B)


(0.21)





(0.21)



NM



0.02





0.02



NM


Interest expense on ERJ 145 capital leases (C)


0.05





0.05



NM



0.09





0.09



NM


Income tax benefit related to adjustments


(0.21)



(0.04)



(0.17)



NM



(0.42)



(0.21)



(0.21)



NM


Special income tax adjustments (D)


(0.02)



(0.61)



0.59



NM



(0.02)



(0.59)



0.57



NM


Adjusted diluted earnings per share (Non-GAAP)


$

2.41



$

1.44



$

0.97



67.4



$

9.13



$

6.84



$

2.29



33.5



NM Not Meaningful

UNITED CONTINENTAL HOLDINGS, INC.

NON-GAAP FINANCIAL RECONCILIATION (Continued)


UAL believes that adjusting capital expenditures for assets acquired through the issuance of debt and capital leases, airport construction financing and excluding fully reimbursable projects is useful to investors in order to appropriately reflect the non-reimbursable funds spent on capital expenditures. UAL also believes that adjusting net cash provided by operating activities for capital expenditures and adjusted capital expenditures is useful to allow investors to evaluate the company's ability to generate cash that is available for debt service or general corporate initiatives.




Three Months Ended

December 31,


Full Year Ended

December 31,

Capital Expenditures (in millions)


2018


2017


2018


2017

Capital expenditures (GAAP)


$

1,585



$

1,098



$

4,177



$

3,998


Property and equipment acquired through the issuance of debt and capital leases


35



17



174



935


Airport construction financing




1



12



42


Fully reimbursable projects


(36)



(70)



(176)



(246)


Adjusted capital expenditures (Non-GAAP)


$

1,584



$

1,046



$

4,187



$

4,729











Free Cash Flow (in millions)









Net cash provided by operating activities (GAAP)


$

1,101



$

728



$

6,181



$

3,413


Less capital expenditures


1,585



1,098



4,177



3,998


Free cash flow, net of financings (Non-GAAP)


$

(484)



$

(370)



$

2,004



$

(585)











Net cash provided by operating activities (GAAP)


$

1,101



$

728



$

6,181



$

3,413


Less adjusted capital expenditures (Non-GAAP)


1,584



1,046



4,187



4,729


Free cash flow (Non-GAAP)


$

(483)



$

(318)



$

1,994



$

(1,316)


UNITED CONTINENTAL HOLDINGS, INC.

NOTES (UNAUDITED)


(B) Special charges and MTM gains and losses on financial instruments include the following:




Three Months Ended

December 31,


Full Year Ended

December 31,

(In millions)


2018


2017


2018


2017

Operating:









Impairment of assets


$

232



$

10



$

377



$

25


Termination of an engine maintenance service agreement


64





64




Severance and benefit costs


7



15



41



116


(Gains) losses on sale of assets and other special charges


(2)



6



5



35


Total special charges


301



31



487



176


Nonoperating MTM (gains) losses on financial instruments


(56)





5




Total special charges and MTM (gains) losses on financial instruments


245



31



492



176


Income tax benefit related to special charges


(68)



(11)



(109)



(63)


Income tax expense (benefit) related to MTM gains and losses on financial instruments


13





(1)




Income tax adjustments (D)


(5)



(179)



(5)



(179)


Total special charges and MTM (gains) losses on financial instruments, net of income taxes


$

185



$

(159)



$

377



$

(66)



Impairment of assets:


Routes: The company conducted its annual impairment review of intangible assets in the fourth quarter of 2018, which consisted of a comparison of the book value of specific assets to the fair value of those assets calculated using the discounted cash flow method. Due to increased costs without sufficient corresponding increases in revenue in the Hong Kong market, the company determined that the value of its Hong Kong routes had been impaired. Accordingly, in the fourth quarter of 2018, the company recorded a special non-cash impairment charge of $206 million ($160 million net of taxes) associated with its Hong Kong routes. The collateral pledged under the company's term loan, including the Hong Kong routes, continues to be sufficient to satisfy the loan covenants.


In May 2018, the Brazil–United States open skies agreement was ratified, which provides air carriers with unrestricted access between the United States and Brazil. The company determined that the approval of the open skies agreement impaired the entire value of its Brazil route authorities because the agreement removes all limitations or reciprocity requirements for flights between the United States and Brazil. Accordingly, in the second quarter of 2018, the company recorded a $105 million special charge ($82 million net of taxes) to write off the entire value of the intangible asset associated with its Brazil routes. This asset was not part of any collateral pledged against any of the company's borrowings. The company continues to maintain its slot assets related to Brazil since airport access is still regulated by slot allocations that are limited by airport facility constraints.


Other: For the three and twelve months ended December 31, 2018, the company also recorded $26 million ($20 million net of taxes) and $66 million ($51 million net of taxes), respectively, of fair value adjustments related to aircraft purchased off lease, write-off of unexercised aircraft purchase options and other impairments related to certain fleet types and international slots no longer in use.


In the fourth quarter of 2017, the company recorded a $10 million ($6 million net of taxes) impairment charge related to obsolete spare parts inventory. During 2017, the company recorded a $15 million ($10 million net of taxes) intangible asset impairment charge related to a maintenance service agreement.


Termination of a maintenance service agreement: In the fourth quarter of 2018, the company recorded a one-time termination charge of $64 million ($50 million net of tax) related to one of its engine maintenance service agreements.


Severance and benefit costs: During the three and twelve months ended December 31, 2018, the company recorded severance and benefit costs related to a voluntary early-out program for its technicians and related employees represented by the International Brotherhood of Teamsters of $3 million ($2 million net of taxes) and $22 million ($17 million net of taxes), respectively. In the first quarter of 2017, approximately 1,000 technicians and related employees elected to voluntarily separate from the company and will receive a severance payment, with a maximum value of $100,000 per participant, based on years of service, with retirement dates through 2018. Also during the three and twelve months ended December 31, 2018, the company recorded other management severance of $4 million ($3 million net of taxes) and $19 million ($15 million net of taxes), respectively.


During the three and twelve months ended December 31, 2017, the company recorded $10 million ($6 million net of taxes) and $83 million ($53 million net of taxes), respectively, of severance and benefit costs related to the voluntary early-out program for its technicians and related employees, and $5 million ($3 million net of taxes) and $33 million ($21 million net of taxes), respectively, of management severance.


MTM gains and losses on financial instruments: During the three and twelve months ended December 31, 2018, the company recorded gains of $89 million ($69 million net of taxes) and $28 million ($22 million net of taxes), respectively, for the change in market value of certain of its equity investments. During the fourth quarter of 2018, the company recorded losses of $33 million ($26 million net of taxes) for the change in fair value of certain derivative assets related to equity of Avianca Holdings S.A. For equity investments and derivative assets subject to MTM accounting, the company records gains and losses as part of Nonoperating income (expense): Miscellaneous, net in its statements of consolidated operations.



(C) Interest expense related to capital leases of Embraer ERJ 145 aircraft


During the third quarter of 2018, United entered into an agreement with the lessor of 54 Embraer ERJ 145 aircraft to purchase those aircraft in 2019. The provisions of the new lease agreement resulted in a change in accounting classification of these new leases from operating leases to capital leases up until the purchase date. The company recognized $13 million ($10 million net of tax) and $26 million ($20 million net of tax) of additional interest expense in the three and twelve months ended December 31, 2018, respectively, as a result of this change.


(D) Effective tax rate


The company's effective tax rate for the three and twelve months ended December 31, 2018 was 16.9% and 19.9%, respectively, and the effective tax rate for the three and twelve months ended December 31, 2017 was 6.6% and 29.5%, respectively. The effective tax rate represents a blend of federal, state and foreign taxes and included the impact of certain nondeductible items. The effective tax rate for the three and twelve months ended December 31, 2018 also reflects the reduced federal corporate income tax rate as a result of the enactment of the Tax Cuts and Jobs Act (the "Tax Act") in December 2017 and the impact of a change in the company's mix of domestic and foreign earnings. The rates for the 2018 and 2017 periods were impacted by one-time benefits of $5 million and $179 million, respectively, due to the passage of the Tax Act.

SOURCE United Airlines

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

LA's Newest Star: The United Polaris Lounge Opens at Los Angeles International Airport

January 10, 2019

LOS ANGELES, Jan. 10, 2019 /PRNewswire/ -- Beginning January 12, United customers traveling in United Polaris® business class, the airline's international premium cabin travel experience, will now be able to relax and dine before their travels in the new United Polaris lounge at Los Angeles International Airport.

The award-winning Polaris lounge experience builds on the airline's concept to be uniquely United while embracing the energy and distinct culture of Southern California and the exciting destinations United serves from here. This Polaris lounge features Southern California-style throughout, including works by local, Los Angeles-based artists, Rema Ghuloum, Chris Trueman and Ruth Pastine, and a food and beverage program inspired by the City of Angels. It is conveniently located in Terminal 7 between Gates 73 and 75A and faces west to capture the city's vibrant sunset skies.

The United Polaris lounge is the most recent investment United has made at LAX, where the airline recently completed a $573 million renovation of Terminal 7. Customers also can now take advantage of the recently completed cut-through, a new road that provides a shortcut to avoid the LAX "horseshoe" road around the terminals to help ease their travels. In addition to the Polaris lounge, United recently opened a new United Club in Terminal 7, and offers customers who want a more upscale experience access to The Private Terminal. These latest improvements and amenities help give United customers the best possible airport experience at LAX.

The airline is also committed to the greater Los Angeles community, having announced last year a $1 million grant to Southern California-based First Place for Youth.

"Los Angeles is one of United's most important gateways, particularly to Asia and Australia, and this lounge provides our customers with a best-in-class experience before they board their flights, especially for those customers with late-night departures and early-morning arrivals," said Janet Lamkin, United's California President. "We continue to expand our presence in Los Angeles, connecting customers from all over California and the U.S. to our global network. The addition of the United Polaris lounge is yet another way we provide customers with the best possible travel experience at LAX."

United Polaris Lounge at LAX Facts & Highlights

  • More than 12,000 square feet
  • 140 seats, with a variety of seating areas for productivity, privacy and dining
  • 272 power outlets and 120 USB ports
  • Luxurious shower suites, featuring rainfall showerheads and Soho House & Co's Cowshed Spa products
  • Private daybeds outfitted with Saks Fifth Avenue bedding
  • Customers are invited to enjoy a full restaurant-quality experience in The Dining Room before their flights. With a menu that blends international comfort foods developed by Los Angeles native Chef Tritia Gestuvo, highlights include: almond-crusted fish and chips, chilaquiles, Korean bulgogi arancini, fresh crafted sandwiches on La Brea Bakery® bread, flavorful street tacos and house-made cinnamon churros.
  • In a nod to the innovative cocktail culture of Los Angeles, the lounge features signature cocktails inspired by the City of Stars, including the Let's Rumble, made from Cruso Spiced Rum, fresh lemon, prickly pear puree and house-made simple syrup and the On Sunset, a playful take on the tequila sunrise, made from Casa Noble Tequila, Del Maguey Single Village Mezcal and agave nectar.

The United Polaris lounge at Los Angeles International Airport is the fifth Polaris lounge to open. Other United Polaris lounge locations include: Chicago O'Hare International Airport, George Bush Intercontinental in Houston, Newark Liberty International Airport and San Francisco International Airport.

The focus behind the United Polaris experience has always been to provide long-haul travelers with what they've asked for: the best sleep in the sky. On average, United continues to add one aircraft with the new United Polaris business class seat every 10 days from now through 2020. On Monday, the airline's newest aircraft, the Boeing 787-10 Dreamliner, officially entered service, featuring the Polaris business class seat as well as the airline's new United Premium Plus seat. United in the first North American carrier to operate the 787-10 and the only airline in the world to operate all three models of the Dreamliner.

For more photos of the United Polaris lounge at Los Angeles International Airport, visit the United Newsroom.

About United

United Airlines and United Express operate approximately 4,800 flights a day to 353 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, Newark/New York, San Francisco and Washington, D.C. United operates 770 mainline aircraft and the airline's United Express carriers operate 559 regional aircraft. The airline is a founding member of Star Alliance, which provides service to 193 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 Nasdaq under the symbol "UAL".

SOURCE United Airlines

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

United Airlines Unveils New United MileagePlus X App

January 10, 2019

CHICAGO, Jan. 10, 2019 /PRNewswire/ -- Today, United Airlines is introducing the relaunch of the United MileagePlus X app, which offers United MileagePlus® members a unique opportunity to earn award miles for everyday purchases. The app has been refreshed to integrate additional programs to make it even easier for members to accumulate miles. Additionally, the app features the launch of United Visa Rewards with offers from merchants like Sam's Club®, Wayfair®, and StubHubTM, offering UnitedSM Chase Visa Cardmembers even more ways to earn miles.

App enhancements

  • MileagePlus DiningSM: The existing MileagePlus Dining program has been integrated into the MileagePlus X app. With seamless enrollment and showcasing nearby restaurants, members' ability to choose where to dine and earn miles is now in the palm of their hand.
  • MileagePlus Shopping: The longstanding shopping program is now available through the MileagePlus X app, and offers members the ability to shop and earn miles on the go at more than 900 retailers.
  • United Visa Rewards: This new program is powered by Visa Commerce Network, which allows enrolled individuals to receive valuable offers within MileagePlus X thanks to the power of the Visa payments network. United Visa Rewards is available exclusively to United Chase Visa Cardmembers in the U.S. who are now able to enroll their eligible card into the program via the app. From there, they can view active enhanced mileage earning offers from participating merchants. Once program participants make a qualifying purchase with a participating merchant, they will receive a near real-time reward notification within the app. As a special launch offer, from now until March 31, 2019, United Chase Visa Cardmembers can earn 1,000 bonus award miles by simply enrolling their eligible credit card for the first time into the program.1

"We are excited to launch the new MileagePlus X app, which allows MileagePlus members to earn and redeem award miles in real time for their everyday purchases at hundreds of merchants across the U.S, matching the increased benefits our UnitedSM Explorer Cardmembers received with the new credit card last summer," said Luc Bondar, president of MileagePlus Holdings and vice president of loyalty at United Airlines. "As mobile payments become more commonplace, it was a natural tie for United to update the features, enable members to make purchases and earn and use miles on the go."

"Visa and United have been working together for over 20 years," said Terry Angelos, SVP, loyalty & offers, Visa. "As digitally-savvy individuals continue to help shape the future of digital commerce, Visa continues to work with United and Chase to bring new ways to reward consumers for their loyalty. At the same time, participating merchants will benefit from Visa Commerce Network's ability to deliver custom solutions that will help increase their customer base and loyalty, ultimately helping them continue to grow their business."

Through the MileagePlus X app, members can purchase eGift Cards from hundreds of restaurants and retailers. One of the savviest ways to take advantage of this feature is to buy an eGift Card in the amount of the purchase price while at checkout at a participating merchant. In addition, primary United Chase Cardmembers earn a 25% bonus on miles earned from MileagePlus on eGift Card purchases made through the app. Customers can find eGift Cards from a variety of categories such as shopping, dining, transportation, lodging, music, and more.

About MileagePlus®

MileagePlus® is United's industry-leading loyalty program. With a wide network of partners through which members may earn and redeem miles. MileagePlus members earn award miles by flying United, United Express, Star Alliance airlines or other airline partners, and by purchasing products or services from partners around the globe. Members enjoy a host of options for using those award miles, including award travel, hotel stays, car rentals and merchandise. For the 15th consecutive year, Global Traveler voted United's MileagePlus® loyalty program the best overall frequent-flyer program in the world.

About United

United Airlines and United Express operate approximately 4,800 flights a day to 353 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, Newark/New York, San Francisco and Washington, D.C. United operates 770 mainline aircraft and the airline's United Express carriers operate 559 regional aircraft. The airline is a founding member of Star Alliance, which provides service to 193 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 Nasdaq under the symbol "UAL".

1 Available to first time enrollees only

 

SOURCE United Airlines

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

United Reports December 2018 Operational Performance

January 09, 2019

CHICAGO, Jan. 9, 2019 /PRNewswire/ -- United Airlines (UAL) today reported December 2018 operational results.

UAL's December 2018 consolidated traffic (revenue passenger miles) increased 6.9 percent and consolidated capacity (available seat miles) increased 6.4 percent versus December 2017. UAL's December 2018 consolidated load factor increased 0.4 points compared to December 2017.

December Highlights

  • Announced UAL's largest ever international network expansion from San Francisco International Airport by offering nonstop year-round service to Toronto and Melbourne, Australia, seasonal service to New Delhi and a second daily flight between San Francisco and Seoul, South Korea - all subject to government approvals. In addition to the new routes, UAL will begin new year-round nonstop service between San Francisco and each of Auckland, New Zealand, Tahiti, French Polynesia and Amsterdam.
  • Announced the addition of 11 new routes from UAL's hubs in Chicago, Houston, Los Angeles and Washington, D.C. The company's new summer service, beginning in June 2019, will connect customers to popular summer vacation destinations in California, Colorado, Florida, Oregon, Michigan and Nova Scotia.
  • Mileage Plus loyalty program was voted Best Overall Frequent-Flyer Program in the world for the 15th consecutive year by readers of Global Traveler and was awarded the 2018 Frequent Traveler Titan Award for the Americas.

About United

United Airlines and United Express operate approximately 4,800 flights a day to 353 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, Newark/New York, San Francisco and Washington, D.C. United operates 770 mainline aircraft and the airline's United Express carriers operate 559 regional aircraft. The airline is a founding member of Star Alliance, which provides service to 193 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 Nasdaq under the symbol "UAL".


Preliminary Operational Results










December


Year-to-Date


2018

2017

Change


2018

2017

Change









REVENUE PASSENGER MILES (000)









Domestic

11,058,944

10,479,105

5.5%


132,954,893

124,267,502

7.0%

Mainline

8,982,444

8,578,667

4.7%


108,634,884

102,312,669

6.2%

Regional

2,076,500

1,900,438

9.3%


24,320,009

21,954,833

10.8%

International

8,270,205

7,596,002

8.9%


97,199,892

91,992,999

5.7%

Atlantic

2,986,741

2,645,206

12.9%


40,610,724

36,220,795

12.1%

Pacific

3,108,677

2,880,088

7.9%


34,414,147

33,890,639

1.5%

Latin

2,174,787

2,070,708

5.0%


22,175,021

21,881,565

1.3%

Mainline

2,085,568

1,987,076

5.0%


21,255,941

21,019,723

1.1%

Regional

89,219

83,632

6.7%


919,080

861,842

6.6%

Consolidated

19,329,149

18,075,107

6.9%


230,154,785

216,260,501

6.4%


AVAILABLE SEAT MILES (000)

Domestic

13,295,896

12,476,108

6.6%


155,637,292

145,848,600

6.7%

Mainline

10,757,911

10,173,407

5.7%


126,385,402

119,208,926

6.0%

Regional

2,537,985

2,302,701

10.2%


29,251,890

26,639,674

9.8%

International

10,076,215

9,486,777

6.2%


119,624,405

116,537,327

2.6%

Atlantic

3,671,224

3,343,547

9.8%


49,721,287

47,297,821

5.1%

Pacific

3,835,983

3,660,168

4.8%


43,406,455

42,831,318

1.3%

Latin

2,569,008

2,483,062

3.5%


26,496,663

26,408,188

0.3%

Mainline

2,457,018

2,376,570

3.4%


25,279,532

25,238,343

0.2%

Regional

111,990

106,492

5.2%


1,217,131

1,169,845

4.0%

Consolidated

23,372,111

21,962,885

6.4%


275,261,697

262,385,927

4.9%




PASSENGER LOAD FACTOR



Domestic

83.2%

84.0%

(0.8) pts


85.4%

85.2%

0.2 pts

Mainline

83.5%

84.3%

(0.8) pts


86.0%

85.8%

0.2 pts

Regional

81.8%

82.5%

(0.7) pts


83.1%

82.4%

0.7 pts

International

82.1%

80.1%

2.0 pts


81.3%

78.9%

2.4 pts

Atlantic

81.4%

79.1%

2.3 pts


81.7%

76.6%

5.1 pts

Pacific

81.0%

78.7%

2.3 pts


79.3%

79.1%

0.2 pts

Latin

84.7%

83.4%

1.3 pts


83.7%

82.9%

0.8 pts

Mainline

84.9%

83.6%

1.3 pts


84.1%

83.3%

0.8 pts

Regional

79.7%

78.5%

1.2 pts


75.5%

73.7%

1.8 pts

Consolidated

82.7%

82.3%

0.4 pts


83.6%

82.4%

1.2 pts


ONBOARD PASSENGERS (000)

Mainline

9,448

9,006

4.9%


113,885

108,017

5.4%

Regional

3,744

3,436

9.0%


44,445

40,050

11.0%

Consolidated

13,192

12,442

6.0%


158,330

148,067

6.9%


CARGO REVENUE TON MILES (000)

Total

302,575

301,330

0.4%


3,424,625

3,315,902

3.3%


OPERATIONAL PERFORMANCE

Mainline Departure Performance 1

67.5%

69.1%

(1.6) pts





Mainline Completion Factor

99.8%

99.8%

0.0 pts






1Based on mainline scheduled flights departing by or before scheduled departure time

Note: See Part II, Item 6, Selected Financial Data, of the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017 for the definitions of these statistics

Safe Harbor Statement

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

 

SOURCE United Airlines

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