CHICAGO, July 17, 2018 /PRNewswire/ -- United
Airlines (UAL) today announced its second-quarter 2018 financial
results.
- UAL reported second-quarter net income of $684 million, diluted earnings per share of
$2.48, pre-tax earnings of
$857 million and pre-tax margin of
8.0 percent.
- Excluding special charges and mark-to-market adjustments, UAL
reported second-quarter net income of $889
million, diluted earnings per share of $3.23, pre-tax earnings of $1.1 billion and pre-tax margin of 10.4
percent.
- Ranked first among largest competitors in on-time departures in
the quarter.
- UAL repurchased $407 million of
its common shares in the second quarter.
- Consolidated passenger revenue per available seat mile (PRASM)
increased 3.0 percent year-over-year.
- Consolidated total revenue per available seat mile (TRASM)
increased 2.8 percent year-over-year.
- Consolidated unit cost per available seat mile (CASM) increased
7.1 percent year-over-year.
- Consolidated CASM, excluding special charges, third-party
business expenses, fuel and profit sharing, decreased 0.4 percent
year-over-year.
- UAL now expects full-year 2018 diluted earnings per share,
excluding special charges and mark-to-market adjustments, to be
$7.25 to $8.751.
"We delivered great financial results and strong operational
performance in the second quarter despite the significant headwind
of higher fuel prices," said Oscar
Munoz, chief executive officer of United Airlines. "These
results are the strongest evidence yet that our strategic growth
plan is working, and we are well positioned to carry our momentum
into the second half of the year."
For more information on UAL's third-quarter 2018 guidance,
please visit ir.united.com for the company's investor update.
Second-Quarter Highlights
Operations and Employees
- Completed the best second-quarter on-time departure
performance in United's history.
- 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.
- Announced a total of $8 million
in grants to benefit organizations in each of its domestic hub
communities.
- Became the first carrier to achieve certification through the
new Audubon International Green Hospitality Program for the
airline's United Club location in Terminal 7 of Los Angeles International Airport.
Customer Experience
- Expanded personal device entertainment option to all aircraft
with DIRECTV live streaming for purchase, providing at least one
free entertainment option on all Wi-Fi equipped aircraft (which is
any aircraft with more than 70 seats).
- Opened three new United Polaris lounges located in San Francisco International Airport, Newark
Liberty International Airport and Houston's George Bush Intercontinental
Airport.
- Announced a new relationship with The Private Suite, offering
the airline's customers access to a newly built, private terminal
at Los Angeles International
Airport.
- Introduced the new United Explorer Card which offers additional
benefits, travel credits and discounts.
Network and Fleet
- Launched service from Newark/New
York to two new international destinations: Reykjavik, Iceland, and Porto, Portugal.
- Announced the return of seasonal service to 25 destinations,
including, among others: Athens,
Greece; Glasgow, Scotland;
Madrid and Barcelona, Spain; Rome and Venice,
Italy; and Hamburg,
Germany.
- 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.
- Took delivery of one Boeing 777-300ER aircraft and six Boeing
737 MAX 9 aircraft.
- Became North American launch customer of the Boeing 737 MAX 9
aircraft, which took its first flight on June 7 from Houston's George Bush Intercontinental Airport
to Orlando International Airport
in Florida.
Earnings Call
UAL will hold a conference call to discuss second-quarter 2018
financial results and its financial and operational outlook for the
third quarter and full year of 2018 on Wednesday, July 18, 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 4,600
flights a day to 357 airports across five continents. In 2017,
United and United Express operated more than 1.6 million flights
carrying more than 148 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 757 mainline
aircraft and the airline's United Express carriers operate 551
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 NYSE under the symbol "UAL".
1 Excludes special charges, the nature of which are
not determinable at this time, and mark-to-market impact of equity
investments. Accordingly, UAL is not providing earnings guidance on
a GAAP basis.
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 or the operations of 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) (A)
|
|
|
|
Three Months Ended June 30,
|
|
% Increase/
|
|
|
Six Months Ended
June 30,
|
|
% Increase/
|
|
(In millions, except
per share data)
|
|
2018
|
|
2017
|
|
(Decrease)
|
|
|
2018
|
|
2017
|
|
(Decrease)
|
|
Operating
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
|
|
$
|
9,880
|
|
|
$
|
9,151
|
|
|
8.0
|
|
|
|
$
|
18,030
|
|
|
$
|
16,804
|
|
|
7.3
|
|
|
Cargo
|
|
314
|
|
|
273
|
|
|
15.0
|
|
|
|
607
|
|
|
511
|
|
|
18.8
|
|
|
Other operating
revenue
|
|
583
|
|
|
584
|
|
|
(0.2)
|
|
|
|
1,172
|
|
|
1,119
|
|
|
4.7
|
|
|
Total operating
revenue
|
|
10,777
|
|
|
10,008
|
|
|
7.7
|
|
|
|
19,809
|
|
|
18,434
|
|
|
7.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and related
costs
|
|
2,878
|
|
|
2,842
|
|
|
1.3
|
|
|
|
5,604
|
|
|
5,478
|
|
|
2.3
|
|
|
Aircraft
fuel
|
|
2,390
|
|
|
1,669
|
|
|
43.2
|
|
|
|
4,355
|
|
|
3,229
|
|
|
34.9
|
|
|
Regional capacity
purchase
|
|
681
|
|
|
549
|
|
|
24.0
|
|
|
|
1,300
|
|
|
1,085
|
|
|
19.8
|
|
|
Landing fees and
other rent
|
|
603
|
|
|
541
|
|
|
11.5
|
|
|
|
1,161
|
|
|
1,085
|
|
|
7.0
|
|
|
Depreciation and
amortization
|
|
557
|
|
|
536
|
|
|
3.9
|
|
|
|
1,098
|
|
|
1,054
|
|
|
4.2
|
|
|
Aircraft maintenance
materials and outside repairs
|
|
438
|
|
|
472
|
|
|
(7.2)
|
|
|
|
878
|
|
|
926
|
|
|
(5.2)
|
|
|
Distribution
expenses
|
|
393
|
|
|
385
|
|
|
2.1
|
|
|
|
735
|
|
|
704
|
|
|
4.4
|
|
|
Aircraft
rent
|
|
119
|
|
|
152
|
|
|
(21.7)
|
|
|
|
246
|
|
|
331
|
|
|
(25.7)
|
|
|
Special charges
(C)
|
|
129
|
|
|
44
|
|
|
NM
|
|
|
|
169
|
|
|
95
|
|
|
NM
|
|
|
Other operating
expenses
|
|
1,428
|
|
|
1,381
|
|
|
3.4
|
|
|
|
2,826
|
|
|
2,690
|
|
|
5.1
|
|
|
Total operating
expense
|
|
9,616
|
|
|
8,571
|
|
|
12.2
|
|
|
|
18,372
|
|
|
16,677
|
|
|
10.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
1,161
|
|
|
1,437
|
|
|
(19.2)
|
|
|
|
1,437
|
|
|
1,757
|
|
|
(18.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
10.8
|
%
|
|
14.4
|
%
|
|
(3.6)
|
|
pts.
|
|
7.3
|
%
|
|
9.5
|
%
|
|
(2.2)
|
|
pts.
|
Operating margin,
excluding special charges (Non-GAAP)
|
|
12.0
|
%
|
|
14.8
|
%
|
|
(2.8)
|
|
pts.
|
|
8.1
|
%
|
|
10.0
|
%
|
|
(1.9)
|
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(177)
|
|
|
(167)
|
|
|
6.0
|
|
|
|
(353)
|
|
|
(329)
|
|
|
7.3
|
|
|
Interest
capitalized
|
|
14
|
|
|
21
|
|
|
(33.3)
|
|
|
|
33
|
|
|
44
|
|
|
(25.0)
|
|
|
Interest
income
|
|
25
|
|
|
13
|
|
|
92.3
|
|
|
|
42
|
|
|
24
|
|
|
75.0
|
|
|
Miscellaneous, net
(C)
|
|
(166)
|
|
|
(27)
|
|
|
NM
|
|
|
|
(118)
|
|
|
(69)
|
|
|
71.0
|
|
|
Total nonoperating
expense
|
|
(304)
|
|
|
(160)
|
|
|
90.0
|
|
|
|
(396)
|
|
|
(330)
|
|
|
20.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
857
|
|
|
1,277
|
|
|
(32.9)
|
|
|
|
1,041
|
|
|
1,427
|
|
|
(27.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
margin
|
|
8.0
|
%
|
|
12.8
|
%
|
|
(4.8)
|
|
pts.
|
|
5.3
|
%
|
|
7.7
|
%
|
|
(2.4)
|
|
pts.
|
Pre-tax margin,
excluding special charges and mark-to-market ("MTM") losses on
equity investments (Non-GAAP)
|
|
10.4
|
%
|
|
13.2
|
%
|
|
(2.8)
|
|
pts.
|
|
6.6
|
%
|
|
8.3
|
%
|
|
(1.7)
|
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(D)
|
|
173
|
|
|
456
|
|
|
(62.1)
|
|
|
|
210
|
|
|
507
|
|
|
(58.6)
|
|
|
Net income
|
|
$
|
684
|
|
|
$
|
821
|
|
|
(16.7)
|
|
|
|
$
|
831
|
|
|
$
|
920
|
|
|
(9.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share,
diluted
|
|
$
|
2.48
|
|
|
$
|
2.67
|
|
|
(7.1)
|
|
|
|
$
|
2.96
|
|
|
$
|
2.96
|
|
|
—
|
|
|
Weighted average
shares, diluted
|
|
275.6
|
|
|
307.7
|
|
|
(10.4)
|
|
|
|
280.2
|
|
|
311.1
|
|
|
(9.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM Not
meaningful
|
|
|
|
|
|
|
|
|
|
|
UNITED CONTINENTAL
HOLDINGS, INC.
|
STATISTICS
|
|
|
|
Three Months Ended June 30,
|
|
%
Increase/
|
|
|
Six Months Ended
June 30,
|
|
%
Increase/
|
|
|
|
2018
|
|
2017
|
|
(Decrease)
|
|
|
2018
|
|
2017
|
|
(Decrease)
|
|
Mainline:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passengers
(thousands)
|
|
29,589
|
|
|
28,084
|
|
|
5.4
|
|
|
|
54,191
|
|
|
51,909
|
|
|
4.4
|
|
|
Revenue passenger
miles (millions)
|
|
53,485
|
|
|
50,554
|
|
|
5.8
|
|
|
|
97,595
|
|
|
92,737
|
|
|
5.2
|
|
|
Available seat miles
(millions)
|
|
63,061
|
|
|
60,473
|
|
|
4.3
|
|
|
|
117,859
|
|
|
113,527
|
|
|
3.8
|
|
|
Cargo ton miles
(millions)
|
|
855
|
|
|
828
|
|
|
3.3
|
|
|
|
1,672
|
|
|
1,576
|
|
|
6.1
|
|
|
Passenger revenue per
available seat mile (cents)
|
|
12.76
|
|
|
12.39
|
|
|
3.0
|
|
|
|
12.44
|
|
|
12.08
|
|
|
3.0
|
|
|
Average yield per
revenue passenger mile (cents)
|
|
15.04
|
|
|
14.82
|
|
|
1.5
|
|
|
|
15.02
|
|
|
14.79
|
|
|
1.6
|
|
|
Aircraft in fleet at
end of period
|
|
757
|
|
|
748
|
|
|
1.2
|
|
|
|
757
|
|
|
748
|
|
|
1.2
|
|
|
Average stage length
(miles)
|
|
1,823
|
|
|
1,821
|
|
|
0.1
|
|
|
|
1,818
|
|
|
1,812
|
|
|
0.3
|
|
|
Average daily
utilization of each aircraft (hours: minutes)
|
|
11:07
|
|
|
10:46
|
|
|
3.3
|
|
|
|
10:32
|
|
|
10:16
|
|
|
2.6
|
|
|
Average aircraft fuel
price per gallon
|
|
$
|
2.24
|
|
|
$
|
1.62
|
|
|
38.3
|
|
|
|
$
|
2.17
|
|
|
$
|
1.66
|
|
|
30.7
|
|
|
Fuel gallons consumed
(millions)
|
|
885
|
|
|
867
|
|
|
2.1
|
|
|
|
1,656
|
|
|
1,628
|
|
|
1.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passengers
(thousands)
|
|
11,469
|
|
|
10,163
|
|
|
12.9
|
|
|
|
21,362
|
|
|
19,443
|
|
|
9.9
|
|
|
Revenue passenger
miles (millions)
|
|
6,460
|
|
|
5,802
|
|
|
11.3
|
|
|
|
12,199
|
|
|
11,230
|
|
|
8.6
|
|
|
Available seat miles
(millions)
|
|
7,641
|
|
|
6,994
|
|
|
9.3
|
|
|
|
14,820
|
|
|
13,748
|
|
|
7.8
|
|
|
Passenger revenue per
available seat mile (cents)
|
|
24.02
|
|
|
23.72
|
|
|
1.3
|
|
|
|
22.73
|
|
|
22.44
|
|
|
1.3
|
|
|
Average yield per
revenue passenger mile (cents)
|
|
28.41
|
|
|
28.59
|
|
|
(0.6)
|
|
|
|
27.62
|
|
|
27.47
|
|
|
0.5
|
|
|
Aircraft in fleet at
end of period
|
|
551
|
|
|
475
|
|
|
16.0
|
|
|
|
551
|
|
|
475
|
|
|
16.0
|
|
|
Average stage length
(miles)
|
|
552
|
|
|
558
|
|
|
(1.1)
|
|
|
|
558
|
|
|
565
|
|
|
(1.2)
|
|
|
Average aircraft fuel
price per gallon
|
|
$
|
2.38
|
|
|
$
|
1.71
|
|
|
39.2
|
|
|
|
$
|
2.29
|
|
|
$
|
1.75
|
|
|
30.9
|
|
|
Fuel gallons consumed
(millions)
|
|
173
|
|
|
156
|
|
|
10.9
|
|
|
|
334
|
|
|
305
|
|
|
9.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
(Mainline and Regional):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passengers
(thousands)
|
|
41,058
|
|
|
38,247
|
|
|
7.3
|
|
|
|
75,553
|
|
|
71,352
|
|
|
5.9
|
|
|
Revenue passenger
miles (millions)
|
|
59,945
|
|
|
56,356
|
|
|
6.4
|
|
|
|
109,794
|
|
|
103,967
|
|
|
5.6
|
|
|
Available seat miles
(millions)
|
|
70,702
|
|
|
67,467
|
|
|
4.8
|
|
|
|
132,679
|
|
|
127,275
|
|
|
4.2
|
|
|
Passenger load
factor:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
84.8
|
%
|
|
83.5
|
%
|
|
1.3
|
|
pts.
|
|
82.8
|
%
|
|
81.7
|
%
|
|
1.1
|
|
pts.
|
Domestic
|
|
87.1
|
%
|
|
86.8
|
%
|
|
0.3
|
|
pts.
|
|
85.1
|
%
|
|
85.2
|
%
|
|
(0.1)
|
|
pts.
|
International
|
|
81.7
|
%
|
|
79.5
|
%
|
|
2.2
|
|
pts.
|
|
79.7
|
%
|
|
77.5
|
%
|
|
2.2
|
|
pts.
|
Passenger revenue per
available seat mile (cents)
|
|
13.97
|
|
|
13.56
|
|
|
3.0
|
|
|
|
13.59
|
|
|
13.20
|
|
|
3.0
|
|
|
Total revenue per
available seat mile (cents)
|
|
15.24
|
|
|
14.83
|
|
|
2.8
|
|
|
|
14.93
|
|
|
14.48
|
|
|
3.1
|
|
|
Average yield per
revenue passenger mile (cents)
|
|
16.48
|
|
|
16.24
|
|
|
1.5
|
|
|
|
16.42
|
|
|
16.16
|
|
|
1.6
|
|
|
Aircraft in fleet at
end of period
|
|
1,308
|
|
|
1,223
|
|
|
7.0
|
|
|
|
1,308
|
|
|
1,223
|
|
|
7.0
|
|
|
Average stage length
(miles)
|
|
1,460
|
|
|
1,475
|
|
|
(1.0)
|
|
|
|
1,452
|
|
|
1,464
|
|
|
(0.8)
|
|
|
Average full-time
equivalent employees (thousands)
|
|
86.7
|
|
|
86.0
|
|
|
0.8
|
|
|
|
86.2
|
|
|
85.6
|
|
|
0.7
|
|
|
Average aircraft fuel
price per gallon
|
|
$
|
2.26
|
|
|
$
|
1.63
|
|
|
38.7
|
|
|
|
$
|
2.19
|
|
|
$
|
1.67
|
|
|
31.1
|
|
|
Fuel gallons consumed
(millions)
|
|
1,058
|
|
|
1,023
|
|
|
3.4
|
|
|
|
1,990
|
|
|
1,933
|
|
|
2.9
|
|
|
|
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.
|
SUMMARY FINANCIAL
METRICS (A)
|
|
|
|
Three Months Ended June 30,
|
|
%
Increase/
|
|
|
Six Months Ended
June 30,
|
|
%
Increase/
|
|
|
|
2018
|
|
2017
|
|
(Decrease)
|
|
|
2018
|
|
2017
|
|
(Decrease)
|
|
(In millions, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$
|
1,161
|
|
|
$
|
1,437
|
|
|
(19.2)
|
|
|
|
$
|
1,437
|
|
|
$
|
1,757
|
|
|
(18.2)
|
|
|
Operating
margin
|
|
10.8
|
%
|
|
14.4
|
%
|
|
(3.6)
|
|
pts.
|
|
7.3
|
%
|
|
9.5
|
%
|
|
(2.2)
|
|
pts.
|
Operating income,
excluding special charges (Non-GAAP)
|
|
1,290
|
|
|
1,481
|
|
|
(12.9)
|
|
|
|
1,606
|
|
|
1,852
|
|
|
(13.3)
|
|
|
Operating margin,
excluding special charges (Non-GAAP)
|
|
12.0
|
%
|
|
14.8
|
%
|
|
(2.8)
|
|
pts.
|
|
8.1
|
%
|
|
10.0
|
%
|
|
(1.9)
|
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, excluding
special charges and MTM losses on equity investments
(Non-GAAP)
|
|
$
|
1,816
|
|
|
$
|
1,990
|
|
|
(8.7)
|
|
|
|
$
|
2,676
|
|
|
$
|
2,837
|
|
|
(5.7)
|
|
|
EBITDA margin,
excluding special charges and MTM losses on equity investments
(Non-GAAP)
|
|
16.9
|
%
|
|
19.9
|
%
|
|
(3.0)
|
|
pts.
|
|
13.5
|
%
|
|
15.4
|
%
|
|
(1.9)
|
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
income
|
|
$
|
857
|
|
|
$
|
1,277
|
|
|
(32.9)
|
|
|
|
$
|
1,041
|
|
|
$
|
1,427
|
|
|
(27.0)
|
|
|
Pre-tax
margin
|
|
8.0
|
%
|
|
12.8
|
%
|
|
(4.8)
|
|
pts.
|
|
5.3
|
%
|
|
7.7
|
%
|
|
(2.4)
|
|
pts.
|
Pre-tax income,
excluding special charges and MTM losses on equity investments
(Non-GAAP)
|
|
1,121
|
|
|
1,321
|
|
|
(15.1)
|
|
|
|
1,300
|
|
|
1,522
|
|
|
(14.6)
|
|
|
Pre-tax margin,
excluding special charges and MTM losses on equity investments
(Non-GAAP)
|
|
10.4
|
%
|
|
13.2
|
%
|
|
(2.8)
|
|
pts.
|
|
6.6
|
%
|
|
8.3
|
%
|
|
(1.7)
|
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
684
|
|
|
$
|
821
|
|
|
(16.7)
|
|
|
|
$
|
831
|
|
|
$
|
920
|
|
|
(9.7)
|
|
|
Net income, excluding
special charges and MTM losses on equity investments
(Non-GAAP)
|
|
889
|
|
|
849
|
|
|
4.7
|
|
|
|
1,032
|
|
|
981
|
|
|
5.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
$
|
2.48
|
|
|
$
|
2.67
|
|
|
(7.1)
|
|
|
|
$
|
2.96
|
|
|
$
|
2.96
|
|
|
—
|
|
|
Diluted earnings per
share, excluding special charges and MTM losses on equity
investments (Non-GAAP)
|
|
3.23
|
|
|
2.76
|
|
|
17.0
|
|
|
|
3.68
|
|
|
3.15
|
|
|
16.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
2,442
|
|
|
$
|
1,561
|
|
|
56.4
|
|
|
|
$
|
4,175
|
|
|
$
|
2,108
|
|
|
98.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
|
755
|
|
|
$
|
1,089
|
|
|
(30.7)
|
|
|
|
$
|
1,734
|
|
|
$
|
1,780
|
|
|
(2.6)
|
|
|
Adjusted capital
expenditures (Non-GAAP)
|
|
783
|
|
|
1,247
|
|
|
(37.2)
|
|
|
|
1,796
|
|
|
2,601
|
|
|
(30.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow, net
of financings (Non-GAAP)
|
|
$
|
1,687
|
|
|
$
|
472
|
|
|
257.4
|
|
|
$
|
2,441
|
|
|
$
|
328
|
|
|
NM
|
|
|
Free cash flow
(Non-GAAP)
|
|
1,659
|
|
|
314
|
|
|
428.3
|
|
|
2,379
|
|
|
(493)
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM Not
meaningful
|
|
|
|
|
|
|
|
|
|
|
UNITED CONTINENTAL
HOLDINGS, INC.
|
RETURN ON INVESTED
CAPITAL (ROIC) - Non-GAAP
|
|
ROIC is a non-GAAP
financial measure that we believe provides useful supplemental
information for management and investors by measuring the
effectiveness of our operations' use of invested capital to
generate profits.
|
|
|
(in
millions)
|
Twelve Months Ended June 30, 2018
|
Net Operating
Profit After Tax ("NOPAT")
|
|
Pre-tax
income
|
$
|
2,654
|
|
Special charges and
MTM losses on equity investments (C):
|
|
Impairment of
assets
|
159
|
|
MTM losses on
equity investments
|
90
|
|
Severance and
benefit costs
|
63
|
|
(Gains) losses
on sale of assets and other special charges
|
28
|
|
Pre-tax income
excluding special charges and MTM losses on equity investments
(Non-GAAP)
|
2,994
|
|
add: Interest expense
(net of income tax benefit) (a)
|
689
|
|
add: Interest
component of capitalized aircraft rent (net of income tax benefit)
(a)
|
260
|
|
add: Net interest on
pension (net of income tax benefit) (a)
|
10
|
|
less: Income taxes
paid
|
(24)
|
|
NOPAT
(Non-GAAP)
|
$
|
3,929
|
|
|
|
|
|
Average Invested
Capital (five-quarter average)
|
|
Total
assets
|
$
|
43,205
|
|
add: Capitalized
aircraft operating leases (b)
|
4,227
|
|
less: Non-interest
bearing liabilities (c)
|
(16,957)
|
|
Average invested
capital (Non-GAAP)
|
$
|
30,475
|
|
|
|
Return on invested
capital (Non-GAAP)
|
12.9
|
%
|
|
|
|
|
(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 June
30, 2018, the effective cash tax rate was 0.8%.
|
(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 assist with
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 operating income
(loss), excluding special charges, operating margin excluding
special charges, pre-tax income (loss), excluding special charges
and MTM gains and losses on equity investments, pre-tax margin,
excluding special charges and MTM gains and losses on equity
investments, net income (loss), excluding special charges and MTM
gains and losses on equity investments, diluted earnings (loss) per
share, excluding special charges and MTM gains and losses on equity
investments, 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 equity investments is useful to investors because those
unrealized gains or losses may not ultimately be realized on a cash
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 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 recurring 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 June 30,
|
|
%
Increase/
|
|
Six Months Ended
June 30,
|
|
%
Increase/
|
|
|
2018
|
|
2017
|
|
(Decrease)
|
|
2018
|
|
2017
|
|
(Decrease)
|
CASM Mainline
Operations (cents)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost per available
seat mile (CASM)
|
|
13.08
|
|
|
12.27
|
|
|
6.6
|
|
|
13.31
|
|
|
12.68
|
|
|
5.0
|
|
Special charges
(C)
|
|
0.20
|
|
|
0.07
|
|
|
NM
|
|
|
0.14
|
|
|
0.09
|
|
|
NM
|
|
Third-party business
expenses
|
|
0.05
|
|
|
0.07
|
|
|
(28.6)
|
|
|
0.05
|
|
|
0.06
|
|
|
(16.7)
|
|
Fuel
expense
|
|
3.14
|
|
|
2.32
|
|
|
35.3
|
|
|
3.05
|
|
|
2.38
|
|
|
28.2
|
|
CASM, excluding
special charges, third-party business expenses and fuel
|
|
9.69
|
|
|
9.81
|
|
|
(1.2)
|
|
|
10.07
|
|
|
10.15
|
|
|
(0.8)
|
|
Profit sharing per
available seat mile
|
|
0.17
|
|
|
0.25
|
|
|
(32.0)
|
|
|
0.10
|
|
|
0.15
|
|
|
(33.3)
|
|
CASM, excluding
special charges, third-party business expenses, fuel, and profit
sharing
|
|
9.52
|
|
|
9.56
|
|
|
(0.4)
|
|
|
9.97
|
|
|
10.00
|
|
|
(0.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASM Consolidated
Operations (cents)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost per available
seat mile (CASM)
|
|
13.60
|
|
|
12.70
|
|
|
7.1
|
|
|
13.85
|
|
|
13.10
|
|
|
5.7
|
|
Special charges
(C)
|
|
0.18
|
|
|
0.07
|
|
|
NM
|
|
|
0.13
|
|
|
0.07
|
|
|
NM
|
|
Third-party business
expenses
|
|
0.04
|
|
|
0.05
|
|
|
(20.0)
|
|
|
0.05
|
|
|
0.06
|
|
|
(16.7)
|
|
Fuel
expense
|
|
3.38
|
|
|
2.47
|
|
|
36.8
|
|
|
3.28
|
|
|
2.54
|
|
|
29.1
|
|
CASM, excluding
special charges, third-party business expenses and fuel
|
|
10.00
|
|
|
10.11
|
|
|
(1.1)
|
|
|
10.39
|
|
|
10.43
|
|
|
(0.4)
|
|
Profit sharing per
available seat mile
|
|
0.16
|
|
|
0.23
|
|
|
(30.4)
|
|
|
0.09
|
|
|
0.14
|
|
|
(35.7)
|
|
CASM, excluding
special charges, third-party business expenses, fuel, and profit
sharing
|
|
9.84
|
|
|
9.88
|
|
|
(0.4)
|
|
|
10.30
|
|
|
10.29
|
|
|
0.1
|
|
UNITED CONTINENTAL
HOLDINGS, INC.
|
NON-GAAP FINANCIAL
RECONCILIATION (Continued)
|
|
|
|
Three Months Ended June 30,
|
|
$ Increase/
|
|
%
Increase/
|
|
Six Months Ended
June 30,
|
|
$ Increase/
|
|
%
Increase/
|
(in
millions)
|
|
2018
|
|
2017
|
|
(Decrease)
|
|
(Decrease)
|
|
2018
|
|
2017
|
|
(Decrease)
|
|
(Decrease)
|
Operating
expenses
|
|
$
|
9,616
|
|
|
$
|
8,571
|
|
|
$
|
1,045
|
|
|
12.2
|
|
|
$
|
18,372
|
|
|
$
|
16,677
|
|
|
$
|
1,695
|
|
|
10.2
|
|
Special charges
(C)
|
|
129
|
|
|
44
|
|
|
85
|
|
|
NM
|
|
|
169
|
|
|
95
|
|
|
74
|
|
|
NM
|
|
Operating expenses,
excluding special charges
|
|
9,487
|
|
|
8,527
|
|
|
960
|
|
|
11.3
|
|
|
18,203
|
|
|
16,582
|
|
|
1,621
|
|
|
9.8
|
|
Third-party business
expenses
|
|
29
|
|
|
41
|
|
|
(12)
|
|
|
(29.3)
|
|
|
60
|
|
|
81
|
|
|
(21)
|
|
|
(25.9)
|
|
Fuel
expense
|
|
2,390
|
|
|
1,669
|
|
|
721
|
|
|
43.2
|
|
|
4,355
|
|
|
3,229
|
|
|
1,126
|
|
|
34.9
|
|
Profit sharing,
including taxes
|
|
108
|
|
|
154
|
|
|
(46)
|
|
|
(29.9)
|
|
|
125
|
|
|
174
|
|
|
(49)
|
|
|
(28.2)
|
|
Operating expenses,
excluding fuel, profit sharing, special charges and third-party
business expenses
|
|
$
|
6,960
|
|
|
$
|
6,663
|
|
|
$
|
297
|
|
|
4.5
|
|
|
$
|
13,663
|
|
|
$
|
13,098
|
|
|
$
|
565
|
|
|
4.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$
|
1,161
|
|
|
$
|
1,437
|
|
|
$
|
(276)
|
|
|
(19.2)
|
|
|
$
|
1,437
|
|
|
$
|
1,757
|
|
|
$
|
(320)
|
|
|
(18.2)
|
|
Special charges
(C)
|
|
129
|
|
|
44
|
|
|
85
|
|
|
NM
|
|
|
169
|
|
|
95
|
|
|
74
|
|
|
NM
|
|
Operating income,
excluding special charges
|
|
$
|
1,290
|
|
|
$
|
1,481
|
|
|
$
|
(191)
|
|
|
(12.9)
|
|
|
$
|
1,606
|
|
|
$
|
1,852
|
|
|
$
|
(246)
|
|
|
(13.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
income
|
|
$
|
857
|
|
|
$
|
1,277
|
|
|
$
|
(420)
|
|
|
(32.9)
|
|
|
$
|
1,041
|
|
|
$
|
1,427
|
|
|
$
|
(386)
|
|
|
(27.0)
|
|
Special charges and
MTM losses on equity investments before income taxes (C)
|
|
264
|
|
|
44
|
|
|
220
|
|
|
NM
|
|
|
259
|
|
|
95
|
|
|
164
|
|
|
NM
|
|
Pre-tax income
excluding special charges and MTM losses on equity
investments
|
|
$
|
1,121
|
|
|
$
|
1,321
|
|
|
$
|
(200)
|
|
|
(15.1)
|
|
|
$
|
1,300
|
|
|
$
|
1,522
|
|
|
$
|
(222)
|
|
|
(14.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
684
|
|
|
$
|
821
|
|
|
$
|
(137)
|
|
|
(16.7)
|
|
|
$
|
831
|
|
|
$
|
920
|
|
|
$
|
(89)
|
|
|
(9.7)
|
|
Special charges and
MTM losses on equity investments, net of tax (C)
|
|
205
|
|
|
28
|
|
|
177
|
|
|
NM
|
|
|
201
|
|
|
61
|
|
|
140
|
|
|
NM
|
|
Net income, excluding
special charges and MTM losses on equity investments
|
|
$
|
889
|
|
|
$
|
849
|
|
|
$
|
40
|
|
|
4.7
|
|
|
$
|
1,032
|
|
|
$
|
981
|
|
|
$
|
51
|
|
|
5.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share
|
|
$
|
2.48
|
|
|
$
|
2.67
|
|
|
$
|
(0.19)
|
|
|
(7.1)
|
|
|
$
|
2.96
|
|
|
$
|
2.96
|
|
|
$
|
—
|
|
|
—
|
|
Special charges and
MTM losses on equity investments
|
|
0.96
|
|
|
0.14
|
|
|
0.82
|
|
|
NM
|
|
|
0.92
|
|
|
0.31
|
|
|
0.61
|
|
|
NM
|
|
Tax effect related to
special charges and MTM losses on equity investments
|
|
(0.21)
|
|
|
(0.05)
|
|
|
(0.16)
|
|
|
NM
|
|
|
(0.20)
|
|
|
(0.12)
|
|
|
(0.08)
|
|
|
NM
|
|
Diluted earnings per
share, excluding special charges and MTM losses on equity
investments
|
|
$
|
3.23
|
|
|
$
|
2.76
|
|
|
$
|
0.47
|
|
|
17.0
|
|
|
$
|
3.68
|
|
|
$
|
3.15
|
|
|
$
|
0.53
|
|
|
16.8
|
|
UNITED CONTINENTAL
HOLDINGS, INC.
|
NON-GAAP FINANCIAL
RECONCILIATION (Continued)
|
|
UAL provides
financial metrics, including earnings before interest, taxes,
depreciation and amortization (EBITDA), excluding special charges
and MTM gains and losses on equity investments that we believe
provide useful supplemental information for management and
investors by measuring profit and profit as a percentage of total
operating revenues. 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 equity investments is useful to investors
because those unrealized gains or losses may not ultimately be
realized on a cash basis.
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended
June 30,
|
|
EBITDA, excluding
special charges and MTM losses on equity investments (in
millions)
|
|
2018
|
|
2017
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
684
|
|
|
$
|
821
|
|
|
|
|
$
|
831
|
|
|
$
|
920
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
557
|
|
|
536
|
|
|
|
|
1,098
|
|
|
1,054
|
|
|
Interest
expense
|
|
177
|
|
|
167
|
|
|
|
|
353
|
|
|
329
|
|
|
Interest
capitalized
|
|
(14)
|
|
|
(21)
|
|
|
|
|
(33)
|
|
|
(44)
|
|
|
Interest
income
|
|
(25)
|
|
|
(13)
|
|
|
|
|
(42)
|
|
|
(24)
|
|
|
Income tax expense
(D)
|
|
173
|
|
|
456
|
|
|
|
|
210
|
|
|
507
|
|
|
Special charges before
income taxes (C)
|
|
129
|
|
|
44
|
|
|
|
|
169
|
|
|
95
|
|
|
MTM losses on equity
investments (C)
|
|
135
|
|
|
—
|
|
|
|
|
90
|
|
|
—
|
|
|
EBITDA, excluding
special charges and MTM losses on equity investments
(Non-GAAP)
|
|
$
|
1,816
|
|
|
$
|
1,990
|
|
|
|
|
$
|
2,676
|
|
|
$
|
2,837
|
|
|
|
|
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 June 30,
|
|
Six Months Ended
June 30,
|
Capital
Expenditures (in millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Capital
expenditures
|
|
$
|
755
|
|
|
$
|
1,089
|
|
|
$
|
1,734
|
|
|
$
|
1,780
|
|
Property and
equipment acquired through the issuance of debt and capital
leases
|
|
65
|
|
|
196
|
|
|
139
|
|
|
907
|
|
Airport construction
financing
|
|
—
|
|
|
11
|
|
|
12
|
|
|
32
|
|
Fully reimbursable
projects
|
|
(37)
|
|
|
(49)
|
|
|
(89)
|
|
|
(118)
|
|
Adjusted capital
expenditures (Non-GAAP)
|
|
$
|
783
|
|
|
$
|
1,247
|
|
|
$
|
1,796
|
|
|
$
|
2,601
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
(in millions)
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
2,442
|
|
|
$
|
1,561
|
|
|
$
|
4,175
|
|
|
$
|
2,108
|
|
Less capital
expenditures
|
|
755
|
|
|
1,089
|
|
|
1,734
|
|
|
1,780
|
|
Free cash flow, net
of financings (Non-GAAP)
|
|
$
|
1,687
|
|
|
$
|
472
|
|
|
$
|
2,441
|
|
|
$
|
328
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
2,442
|
|
|
$
|
1,561
|
|
|
$
|
4,175
|
|
|
$
|
2,108
|
|
Less adjusted capital
expenditures (Non-GAAP)
|
|
783
|
|
|
1,247
|
|
|
1,796
|
|
|
2,601
|
|
Free cash flow
(Non-GAAP)
|
|
$
|
1,659
|
|
|
$
|
314
|
|
|
$
|
2,379
|
|
|
$
|
(493)
|
|
UNITED CONTINENTAL
HOLDINGS, INC.
|
NOTES
(UNAUDITED)
|
|
(B) Select passenger revenue
information is as follows (in millions):
|
|
|
|
2Q
2018 Passenger Revenue (millions)
|
|
Passenger Revenue vs. 2Q
2017
|
|
PRASM vs. 2Q 2017
|
|
Yield vs. 2Q 2017
|
|
Available Seat Miles vs. 2Q 2017
|
|
|
|
|
|
|
|
|
|
|
|
Mainline
|
|
$
|
4,395
|
|
8.7%
|
|
1.7%
|
|
1.6%
|
|
6.9%
|
Regional
|
|
1,786
|
|
10.6%
|
|
0.9%
|
|
(1.0%)
|
|
9.6%
|
Domestic
|
|
6,181
|
|
9.2%
|
|
1.7%
|
|
1.3%
|
|
7.4%
|
|
|
|
|
|
|
|
|
|
|
|
Atlantic
|
|
1,824
|
|
12.9%
|
|
7.9%
|
|
0.9%
|
|
4.7%
|
Pacific
|
|
1,103
|
|
3.7%
|
|
3.4%
|
|
4.3%
|
|
0.2%
|
Latin
America
|
|
772
|
|
(5.2%)
|
|
(2.9%)
|
|
(4.2%)
|
|
(2.3%)
|
International
|
|
3,699
|
|
5.9%
|
|
4.3%
|
|
1.4%
|
|
1.6%
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
$
|
9,880
|
|
8.0%
|
|
3.0%
|
|
1.5%
|
|
4.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mainline
|
|
$
|
8,045
|
|
7.4%
|
|
3.0%
|
|
1.5%
|
|
4.3%
|
Regional
|
|
1,835
|
|
10.6%
|
|
1.3%
|
|
(0.6%)
|
|
9.3%
|
Consolidated
|
|
$
|
9,880
|
|
|
|
|
|
|
|
|
UNITED CONTINENTAL
HOLDINGS, INC.
|
NOTES
(UNAUDITED)
|
|
(C) Special charges and MTM
losses on equity investments include the following:
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended
June 30,
|
(In
millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Operating:
|
|
|
|
|
|
|
|
|
Impairment of
assets
|
|
$
|
111
|
|
|
$
|
—
|
|
|
$
|
134
|
|
|
$
|
—
|
|
Severance and benefit
costs
|
|
11
|
|
|
41
|
|
|
25
|
|
|
78
|
|
(Gains) losses on
sale of assets and other special charges
|
|
7
|
|
|
3
|
|
|
10
|
|
|
17
|
|
Total special
charges
|
|
129
|
|
|
44
|
|
|
169
|
|
|
95
|
|
Nonoperating MTM
losses on equity investments
|
|
135
|
|
|
—
|
|
|
90
|
|
|
—
|
|
Total special charges
and MTM losses on equity investments
|
|
264
|
|
|
44
|
|
|
259
|
|
|
95
|
|
Income tax benefit
related to special charges
|
|
(29)
|
|
|
(16)
|
|
|
(38)
|
|
|
(34)
|
|
Income tax benefit
related to MTM losses on equity investments
|
|
(30)
|
|
|
—
|
|
|
(20)
|
|
|
—
|
|
Total special charges
and MTM losses on equity investments, net of income
taxes
|
|
$
|
205
|
|
|
$
|
28
|
|
|
$
|
201
|
|
|
$
|
61
|
|
|
Impairment of assets:
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, 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 is 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
restricted by slot allocations that are limited by airport facility
constraints. For the three and six months ended June 30, 2018, the
company also recorded $6 million ($5 million net of taxes) and $29
million ($22 million net of taxes), respectively, of fair value
adjustments related to aircraft purchased off lease and other
impairments related to certain fleet types and international slots
no longer in use.
|
|
Severance and benefit
costs: During the three and six months ended June 30,
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 $6 million ($4 million net of taxes) and $14 million ($11
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 six months ended June 30, 2018, the company
recorded other management severance of $5 million ($4 million net
of taxes) and $11 million ($8 million net of taxes),
respectively.
|
|
During the three and
six months ended June 30, 2017, the company recorded $36
million ($23 million net of taxes) and $57 million ($37 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 $21 million
($13 million net of taxes), respectively, of management
severance.
|
|
(Gains) losses on
sale of assets and other special charges: During the three and six
months ended June 30, 2018, the Company recorded $7 million
($5 million net of taxes) and $10 million ($8 million net of
taxes), respectively, of other special charges related primarily to
contract termination of regional aircraft operations in
Guam.
|
|
MTM losses on equity
investments: During the three and six months ended June 30,
2018, the company recorded losses of $135 million ($105 million net
of taxes) and $90 million ($70 million net of taxes), respectively,
for the change in market value of its investment in Azul, S.A. For
equity investments subject to MTM accounting, the company records
gains and losses to Nonoperating income (expense): Miscellaneous,
net in its statements of consolidated operations.
|
|
(D)
Effective tax rate
|
|
The company's
effective tax rate for the three and six months ended June 30,
2018 was 20.2%, and the effective tax rate for the three and six
months ended June 30, 2017 was 35.7% and 35.5%, 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 six months ended
June 30, 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. We continue to
analyze the different aspects of the Tax Act which could
potentially affect the provisional estimates that were recorded at
December 31, 2017.
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/united-airlines-reports-second-quarter-2018-performance-300682459.html
SOURCE United Airlines