First-quarter diluted loss per share of
$0.38; first-quarter adjusted diluted
loss per share1 of $0.15 - ahead of expectations
Updates fleet plan - allowing for a more
consistent delivery schedule of approximately 100 narrowbody
aircraft yearly 2025 through 2027
Achieved second-best first quarter on-time
departure performance2 in the company's
history
CHICAGO, April 16,
2024 /PRNewswire/ -- United Airlines (UAL) today
reported first-quarter 2024 financial results. The company had a
pre-tax loss of $164 million, a
$92 million improvement over the same
quarter last year; adjusted pre-tax loss1 of
$79 million, a $187 million improvement on an adjusted basis
over the same quarter last year. These earnings reflect the
approximately $200 million impact
from the Boeing 737 MAX 9 grounding, without which the company
would have reported a quarterly profit. In the quarter, the company
generated $2.8 billion operating cash
flow and free cash flow1 of $1.5
billion. The company continues to expect full-year 2024
adjusted diluted earnings per share3 of
$9 to $11.
United delivered strong financial and operational performance in
the quarter. The demand environment remained strong with a
double-digit percentage increase in business demand quarter over
quarter, as compared to pre-pandemic. Additionally, the company was
able to take advantage of a number of opportunities to adjust
domestic capacity which drove meaningful improvements in first
quarter profitability. Atlantic and Domestic markets both saw large
passenger revenue per available seat mile (PRASM) increases year
over year, with 11% and 6% growth respectively.
"I want to thank the United team for working so hard this
quarter to deliver strong operational metrics for our customers and
sharpen our focus on safety, while producing excellent financial
results for our shareholders," said United Airlines CEO
Scott Kirby. "We've adjusted our
fleet plan to better reflect the reality of what the manufacturers
are able to deliver. And, we'll use those planes to capitalize on
an opportunity that only United has: profitably grow our
mid-continent hubs and expand our highly profitable international
network from our best in the industry coastal hubs."
Fleet Update
United has made several adjustments to its long-term fleet
strategy based on future needs of the airline and manufacturers
production and delivery timelines that are expected to smooth out
and moderate the company's aircraft delivery schedule in the coming
years including:
- Converted a portion of Boeing MAX 10 aircraft orders to Boeing
MAX 9 from 2025 through 2027; maintained the right to convert more
Boeing MAX 10 into MAX 8 or MAX 9 as needed.
- Have agreed to letters of intent with two lessors to lease 35
new Airbus A321neos with CFM engines expected in 2026 and
2027.
- Due to manufacturing and certification delays from prior years,
by the end of 2023, the airline's contractual aircraft commitments
for 2024 had increased to 183 narrowbody aircraft. At the beginning
of 2024, these delays were anticipated to continue and the company
expected 101 narrowbody deliveries. Following the 737 MAX 9
grounding and the FAA's announced significant production capacity
constraints on Boeing, the company now anticipates 61 narrowbody
aircraft and 5 widebody aircraft to be delivered in 2024.
In the short run, the company expects a small number of aircraft
previously scheduled to enter into service in the second quarter to
be pushed into the third quarter, which is expected to have minimal
impact on the company's capacity plans.
First-Quarter Financial Results
- Capacity up 9.1% compared to first-quarter 2023.
- Total operating revenue of $12.5
billion, up 9.7% compared to first-quarter 2023.
- TRASM up 0.6% compared to first-quarter 2023.
- CASM down 0.6%, and CASM-ex1 up 4.7%, compared to
first-quarter 2023.
- Pre-tax loss of $164 million,
with a pre-tax margin of (1.3)%; adjusted pre-tax loss1
of $79 million, with an adjusted
pre-tax margin1 of (0.6)%.
- Net loss of $124 million;
adjusted net loss1 of $50
million.
- Diluted loss per share of $0.38;
adjusted diluted loss per share1 of $0.15.
- Average fuel price per gallon of $2.88.
- Ending available liquidity of $16.9
billion.
- Total debt and finance lease obligations of $27.2 billion at quarter end.
- Trailing twelve months adjusted net debt1 to
adjusted EBITDAR1 of 2.7x.
Key Highlights
- Reached milestone of 200 new and retrofit aircraft featuring
United's signature interior featuring bigger bins, seatback screens
at every seat and Bluetooth connectivity.
- United and the International Brotherhood of Teamsters announced
a tentative agreement for a four-year contract extension, covering
the airline's 9,700 aircraft technicians.
- Opened an expanded Flight Training Center – a new,
150,000-square-foot building in Denver with 12 additional full-motion flight
simulators to train the next generation of world class pilots.
- Announced MileagePlus® pooling, making United the first airline
to allow customers to share and redeem miles in one linked account,
providing additional value to loyalty members, their friends and
loved ones.
- Announced the addition of Rosalind
Brewer and Michelle Freyre to
United's Board of Directors.
- Named among Fortune's Most Admired Companies list, recognized
as having a strong reputation within and across industries.
Customer Experience
- Announced the addition of larger overhead bins to 50 regional
aircraft for an 80% increase of space for carry-on bags, becoming
the first U.S. airline to offer the enhancement.
- Partnered with the Transportation Security Authority (TSA) to
launch TSA PreCheck Touchless ID at O'Hare International Airport
and Los Angeles International
Airport, providing an expedited security experience to
customers.
- In collaboration with the United Spinal Association and
Numotion, launched a new filter in the booking path to enable
customers traveling with a personal wheelchair to filter aircraft
that can accommodate their device, and for eligible customers, the
ability to request a refund of the fare difference in cases where
the accommodating trip would be more expensive.
- Began utilizing generative AI on united.com to expedite
customer search and in the airline's industry-leading flight status
notification system, further enabling real-time flight status
updates to customers.
- Customer satisfaction for the quarter with onboard WiFi and
inflight entertainment systems (IFE) achieved its highest rating
since 2022 for on-time flights, with WiFi and IFE ratings improving
six points year over year on the consumer satisfaction scale, Net
Promoter Score.
- United was awarded the 'Best Business Class Rose' by Business
Traveller as part of its Cellars in the Sky Awards.
Operations
- Achieved the second best on-time departure for any first
quarter in the company's history2.
- Achieved the second best on-time arrival and departure metrics
amongst U.S. airlines for the second quarter in a row – a position
held for the last six months straight.
- Set the record for the highest first quarter consolidated seat
factor ever at 84.1%, with March achieving the highest seat factor
in the month's history.
- Set the record for the greatest number of days carrying over
500,000 passengers in the company's first quarter history at 16
days.
Network
- Announced upcoming services to three new destinations, with
flights between Marrakesh, Morocco
and New York/Newark; Cebu, Philippines and Tokyo-Narita;
and Medellin, Colombia and
Houston, becoming the first U.S.
airline to serve Marrakesh and Cebu. United also announced new
service from the airline's Guam
hub to Tokyo-Haneda, launching in May.
- Announced increased service on three routes, adding a second
summer-seasonal flight between Porto,
Portugal and New
York/Newark, a second
year-round flight between Hong
Kong and Los Angeles
starting in October, and extending the second flight between
Seoul, South Korea and
San Francisco to year-round.
- Announced the return of service between Shanghai and Los
Angeles, with four weekly flights beginning at the end of
August, and increasing to daily service in late October.
- Restarted summer-seasonal service earlier in the year on
popular flights like Washington
D.C. to Lisbon, Portugal;
Barcelona, Spain; and Rome, Italy.
- Inaugurated service to Tulum,
Mexico from Houston and
New York/Newark at the end of March; with services from
Chicago and Los Angeles starting in the second quarter,
announcing an additional inaugural service between Georgetown, Guyana and Houston also in the second quarter.
- Operated United's largest quarterly domestic schedule by
available seat miles, including operating the airline's largest
Florida schedule in company
history with the addition of three new non-stop routes and a year
over year increase of 19% to the popular wintertime
destination.
Employees, Sustainability &
Communities
- Celebrated one year of Innovate, United's digital technology
career pathway program that has a 92% retention rate for
participants.
- Announced the addition of eight new corporate partners to the
UAV Sustainable Flight Fund, bringing the amount of capital
commitments to more than $200 million
from cross-industry businesses to support start-ups focused on
decarbonizing air travel by accelerating the research, production
and technologies associated with sustainable aviation fuel (SAF).
More than 115,000 United customers have contributed nearly
$500,000 to supplement United's
commitment to the Fund.
- Announced Somos, a new employee Business Resource Group focused
on supporting and championing allyship for Latino and Hispanic
employees.
- Throughout the quarter, more than 1,200 employees volunteered
over 8,600 hours at non-profit organizations supporting local
communities around the world.
- United and MileagePlus® members donated nine million miles to
non-profit charities across the globe through the Miles on a
Mission program, including the quarter's two feature non-profit
partners, Make-A-Wish America and Girl Scouts of the USA.
- Transported nearly 299 million pounds of cargo, including
approximately 10.3 million pounds of medical shipments and 263,000
pounds of military shipments.
- Named the inaugural recipient of the Humanitarian Force for
Good Award by Air Transport World in its Airline Industry
Awards.
- Employees from across the U.S. marched alongside United's Black
Business Resource Group BEACON in Martin
Luther King Jr. Day parades in Denver and Los
Angeles and volunteered in community service events across
the system, including sorting 145,000 pounds of food to help
provide more than 174,000 meals to communities in need through the
Los Angeles Regional Food Bank, Food Bank of the Rockies and
Community FoodBank of New
Jersey.
Earnings Call
UAL will hold a conference call to discuss first quarter
financial results, as well as its financial and operational outlook
for the second-quarter 2024 and beyond, on Wednesday, April 17, at 9:30 a.m. CST/10:30 a.m.
EST. 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.
Outlook
This press release should be read in conjunction with the
company's Investor Update issued in connection with this quarterly
earnings announcement, which provides additional information on the
company's business outlook (including certain financial and
operational guidance) and is furnished with this press release to
the U.S. Securities and Exchange Commission on a Current Report on
Form 8-K. The Investor Update is also available at ir.united.com.
Management will also discuss certain business outlook items,
including providing certain full year 2024 financial targets,
during the quarterly earnings conference call.
The company's business outlook is subject to risks and
uncertainties applicable to all forward-looking statements as
described elsewhere in this press release. Please see the section
entitled "Cautionary Statement Regarding Forward-Looking
Statements."
About United
At United, Good Leads The Way. With hubs in Chicago, Denver, Houston, Los
Angeles, New
York/Newark, San Francisco and Washington, D.C., United operates the most
comprehensive global route network among North American carriers,
and is now the largest airline in the world. For more about how to
join the United team, please visit www.united.com/careers and more
information about the company is at www.united.com. United Airlines
Holdings, Inc., the parent company of United Airlines, Inc., is
traded on the Nasdaq under the symbol "UAL".
Website Information
We routinely post important news and information regarding
United on our corporate website, www.united.com, and our investor
relations website, ir.united.com. We use our investor relations
website as a primary channel for disclosing key information to our
investors, including the timing of future investor conferences and
earnings calls, press releases and other information about
financial performance, reports filed or furnished with the U.S.
Securities and Exchange Commission, information on corporate
governance and details related to our annual meeting of
shareholders. We may use our investor relations website as a means
of disclosing material, non-public information and for complying
with our disclosure obligations under Regulation FD. We may also
use social media channels to communicate with our investors and the
public about our company and other matters, and those
communications could be deemed to be material information. The
information contained on, or that may be accessed through, our
website or social media channels are not incorporated by reference
into, and are not a part of, this document.
Cautionary Statement Regarding Forward-Looking
Statements:
This press release and the related attachments and Investor
Update (as well as the oral statements made with respect to
information contained in this release and the attachments) contain
certain "forward-looking statements," within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, relating to, among
other things, goals, plans and projections regarding the company's
financial position, results of operations, market position,
capacity, fleet plan strategy, announced routes (which may be
subject to government approval), product development, ESG-related
strategy initiatives and business strategy. Such forward-looking
statements are based on historical performance and current
expectations, estimates, forecasts and projections about the
company's future financial results, goals, plans, commitments,
strategies and objectives and involve inherent risks, assumptions
and uncertainties, known or unknown, including internal or external
factors that could delay, divert or change any of them, that are
difficult to predict, may be beyond the company's control and could
cause the company's future financial results, goals, plans,
commitments, strategies and objectives to differ materially from
those expressed in, or implied by, the statements. Words such as
"should," "could," "would," "will," "may," "expects," "plans,"
"intends," "anticipates," "indicates," "remains," "believes,"
"estimates," "projects," "forecast," "guidance," "outlook,"
"goals," "targets," "pledge," "confident," "optimistic,"
"dedicated," "positioned," "on track" and other words and terms of
similar meaning and expression are intended to identify
forward-looking statements, although not all forward-looking
statements contain such terms. All statements, other than those
that relate solely to historical facts, are forward-looking
statements.
Additionally, forward-looking statements include conditional
statements and statements that identify uncertainties or trends,
discuss the possible future effects of known trends or
uncertainties, or that 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 or regulation.
Our actual results could differ materially from these
forward-looking statements due to numerous factors including,
without limitation, the following: execution risks associated with
our strategic operating plan; changes in our fleet and network
strategy or other factors outside our control resulting in less
economic aircraft orders, costs related to modification or
termination of aircraft orders or entry into aircraft orders on
less favorable terms, as well as any inability to accept or
integrate new aircraft into our fleet as planned, including as a
result of any mandatory groundings of aircraft; any failure to
effectively manage, and receive anticipated benefits and returns
from, acquisitions, divestitures, investments, joint ventures and
other portfolio actions, or related exposures to unknown
liabilities or other issues or underperformance as compared to our
expectations; adverse publicity, harm to our brand, reduced travel
demand, potential tort liability and operational restrictions as a
result of an accident, catastrophe or incident involving us, our
regional carriers, our codeshare partners or another airline; the
highly competitive nature of the global airline industry and
susceptibility of the industry to price discounting and changes in
capacity, including as a result of alliances, joint business
arrangements or other consolidations; our reliance on a limited
number of suppliers to source a majority of our aircraft, engines
and certain parts, and the impact of any failure to obtain timely
deliveries, additional equipment or support from any of these
suppliers; disruptions to our regional network and United Express
flights provided by third-party regional carriers; unfavorable
economic and political conditions in the
United States and globally; reliance on third-party service
providers and the impact of any significant failure of these
parties to perform as expected, or interruptions in our
relationships with these providers or their provision of services;
extended interruptions or disruptions in service at major airports
where we operate and space, facility and infrastructure constraints
at our hubs or other airports; geopolitical conflict, terrorist
attacks or security events (including the continuation of the
suspension of our overflying in Russian airspace as a result of the
Russia-Ukraine military conflict and an escalation of
the broader economic consequences of the Russia-Ukraine military conflict and the
Israeli-Hamas military conflict beyond their current scope); any
damage to our reputation or brand image; our reliance on technology
and automated systems to operate our business and the impact of any
significant failure or disruption of, or failure to effectively
integrate and implement, these technologies or systems; increasing
privacy, data security and cybersecurity obligations or a
significant data breach; increased use of social media platforms by
us, our employees and others; the impacts of union disputes,
employee strikes or slowdowns, and other labor-related disruptions
or regulatory compliance costs on our operations; any failure to
attract, train or retain skilled personnel, including our senior
management team or other key employees; the monetary and
operational costs of compliance with extensive government
regulation of the airline industry; current or future litigation
and regulatory actions, or failure to comply with the terms of any
settlement, order or agreement relating to these actions; costs,
liabilities and risks associated with environmental regulation and
climate change, and any failure to achieve or demonstrate progress
towards our climate goals; high and/or volatile fuel prices or
significant disruptions in the supply of aircraft fuel (including
as a result of the Russia-Ukraine military conflict); the impacts of our
significant amount of financial leverage from fixed obligations and
the impacts of insufficient liquidity on our financial condition
and business; failure to comply with financial and other covenants
governing our debt, including our MileagePlus® financing
agreements; limitations on our ability to use our net operating
loss carryforwards and certain other tax attributes to offset
future taxable income for U.S. federal income tax purposes; our
failure to realize the full value of our intangible assets or our
long-lived assets, causing us to record impairments; fluctuations
in the price of our common stock; the impacts of seasonality,
weather events, infrastructure and other factors associated with
the airline industry; increases in insurance costs or inadequate
insurance coverage and other risks and uncertainties set forth in
Part I, Item 1A. Risk Factors and under "Economic and Market
Factors" and "Governmental Actions" in Part II, Item 7.
Management's Discussion and Analysis of Financial Condition and
Results of Operations of our Annual Report on Form 10-K for the
fiscal year ended December 31, 2023,
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.
Non-GAAP Financial Information:
In discussing financial results and guidance, the company refers
to financial measures that are not in accordance with U.S.
Generally Accepted Accounting Principles ("GAAP"). The non-GAAP
financial measures are provided as supplemental information to the
financial measures presented in this press release that are
calculated and presented in accordance with GAAP and are presented
because management believes that they supplement or enhance
management's, analysts' and investors' overall understanding of the
company's underlying financial performance and trends and
facilitate comparisons among current, past and future periods.
Non-GAAP financial measures such as CASM-ex (which excludes the
impact of fuel expense, profit sharing, special charges and
third-party expenses), adjusted pre-tax margin (which is calculated
as pre-tax margin excluding operating and nonoperating special
charges, unrealized (gains) losses on investments, net and debt
extinguishment and modification fees), adjusted pre-tax income,
adjusted earnings per share and adjusted net income typically have
exclusions or adjustments that include one or more of the following
characteristics, such as being highly variable, difficult to
project, unusual in nature, significant to the results of a
particular period or not indicative of past or future operating
results. These items are excluded because the company believes they
neither relate to the ordinary course of the company's business nor
reflect the company's underlying business performance.
Because the non-GAAP financial measures are not calculated in
accordance with GAAP, they should not be considered superior to and
are not intended to be considered in isolation or as a substitute
for the related GAAP financial measures presented in the press
release and may not be the same as or comparable to similarly
titled measures presented by other companies due to possible
differences in method and in the items being adjusted. We encourage
investors to review our financial statements and publicly-filed
reports in their entirety and not to rely on any single financial
measure.
Please refer to the tables accompanying this release for a
description of the non-GAAP adjustments and reconciliations of the
historical non-GAAP financial measures used to the most comparable
GAAP financial measure and related disclosures.
-tables attached-
UNITED
AIRLINES HOLDINGS, INC
STATEMENTS OF
CONSOLIDATED OPERATIONS (UNAUDITED)
|
|
|
|
Three Months Ended
March 31,
|
|
%
Increase/
(Decrease)
|
(In millions, except
for percentage changes and per share data)
|
|
2024
|
|
2023
|
|
Operating
revenue:
|
|
|
|
|
|
|
Passenger
revenue
|
|
$
11,313
|
|
$
10,274
|
|
10.1
|
Cargo
|
|
391
|
|
398
|
|
(1.8)
|
Other operating
revenue
|
|
835
|
|
757
|
|
10.3
|
Total operating
revenue
|
|
12,539
|
|
11,429
|
|
9.7
|
|
|
|
|
|
|
|
Operating
expense:
|
|
|
|
|
|
|
Salaries and related
costs
|
|
3,932
|
|
3,322
|
|
18.4
|
Aircraft
fuel
|
|
2,954
|
|
3,174
|
|
(6.9)
|
Landing fees and other
rent
|
|
804
|
|
717
|
|
12.1
|
Aircraft maintenance
materials and outside repairs
|
|
773
|
|
702
|
|
10.1
|
Depreciation and
amortization
|
|
708
|
|
655
|
|
8.1
|
Regional capacity
purchase
|
|
585
|
|
615
|
|
(4.9)
|
Distribution
expenses
|
|
480
|
|
403
|
|
19.1
|
Aircraft
rent
|
|
43
|
|
56
|
|
(23.2)
|
Special
charges
|
|
13
|
|
14
|
|
NM
|
Other operating
expenses
|
|
2,148
|
|
1,814
|
|
18.4
|
Total operating
expense
|
|
12,440
|
|
11,472
|
|
8.4
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
99
|
|
(43)
|
|
NM
|
|
|
|
|
|
|
|
Nonoperating income
(expense):
|
|
|
|
|
|
|
Interest
expense
|
|
(454)
|
|
(486)
|
|
(6.6)
|
Interest
income
|
|
177
|
|
170
|
|
4.1
|
Interest
capitalized
|
|
61
|
|
38
|
|
60.5
|
Unrealized gains
(losses) on investments, net
|
|
(37)
|
|
24
|
|
NM
|
Miscellaneous,
net
|
|
(10)
|
|
41
|
|
NM
|
Total nonoperating
expense, net
|
|
(263)
|
|
(213)
|
|
23.5
|
|
|
|
|
|
|
|
Loss before income tax
benefit
|
|
(164)
|
|
(256)
|
|
(35.9)
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
(40)
|
|
(62)
|
|
(35.5)
|
Net loss
|
|
$ (124)
|
|
$ (194)
|
|
(36.1)
|
|
|
|
|
|
|
|
Diluted loss per
share
|
|
$
(0.38)
|
|
$
(0.59)
|
|
(35.6)
|
Diluted weighted
average shares
|
|
328.3
|
|
327.4
|
|
0.3
|
|
|
|
|
|
|
|
NM-Greater than 100%
change or otherwise not meaningful.
|
|
|
|
|
|
|
UNITED AIRLINES
HOLDINGS, INC.
PASSENGER REVENUE
INFORMATION AND STATISTICS (UNAUDITED)
|
|
Information is as
follows (in millions, except for percentage
changes):
|
|
|
1Q 2024
Passenger
Revenue
|
|
Passenger
Revenue
vs.
1Q 2023
|
|
Passenger
Revenue
per Available
Seat Mile
("PRASM")
vs. 1Q 2023
|
|
Yield vs.
1Q 2023
|
|
Available
Seat Miles
("ASMs")
vs.
1Q 2023
|
|
1Q 2024
ASMs
|
|
1Q 2024 Revenue
Passenger Miles
("RPMs")
|
Domestic
|
$
6,916
|
|
6.6 %
|
|
6.1 %
|
|
2.6 %
|
|
0.5 %
|
|
38,712
|
|
32,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
1,408
|
|
11.7 %
|
|
12.0 %
|
|
7.8 %
|
|
(0.1 %)
|
|
10,162
|
|
7,474
|
Pacific
|
1,388
|
|
44.3 %
|
|
(12.9 %)
|
|
(3.5) %
|
|
65.8 %
|
|
11,856
|
|
8,377
|
Latin
America
|
1,329
|
|
9.6 %
|
|
(12.7 %)
|
|
(10.0 %)
|
|
25.5 %
|
|
8,913
|
|
7,538
|
Middle
East/India/Africa
|
272
|
|
(23.2 %)
|
|
5.3 %
|
|
9.2 %
|
|
(27.0 %)
|
|
2,025
|
|
1,649
|
International
|
4,397
|
|
16.0 %
|
|
(4.2 %)
|
|
(1.0 %)
|
|
21.1 %
|
|
32,956
|
|
25,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
$
11,313
|
|
10.1 %
|
|
1.0 %
|
|
0.7 %
|
|
9.1 %
|
|
71,668
|
|
57,427
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select operating
statistics are as follows:
|
|
|
|
Three Months Ended
March 31,
|
|
%
Increase/
(Decrease)
|
|
|
2024
|
|
2023
|
|
Passengers (thousands)
(a)
|
|
39,325
|
|
36,822
|
|
6.8
|
RPMs (millions)
(b)
|
|
57,427
|
|
52,532
|
|
9.3
|
ASMs (millions)
(c)
|
|
71,668
|
|
65,720
|
|
9.1
|
Passenger load factor:
(d)
|
|
|
|
|
|
|
Consolidated
|
|
80.1 %
|
|
79.9 %
|
|
0.2
pts.
|
Domestic
|
|
83.7 %
|
|
80.9 %
|
|
2.8
pts.
|
International
|
|
76.0 %
|
|
78.5 %
|
|
(2.5)
pts.
|
PRASM
(cents)
|
|
15.79
|
|
15.63
|
|
1.0
|
Total revenue per
available seat mile ("TRASM") (cents)
|
|
17.50
|
|
17.39
|
|
0.6
|
Average yield per RPM
(cents) (e)
|
|
19.70
|
|
19.56
|
|
0.7
|
Cargo revenue ton miles
(millions) (f)
|
|
852
|
|
731
|
|
16.6
|
Aircraft in fleet at
end of period
|
|
1,366
|
|
1,337
|
|
2.2
|
Average stage length
(miles) (g)
|
|
1,481
|
|
1,432
|
|
3.4
|
Employee headcount, as
of March 31 (in thousands)
|
|
104.5
|
|
96.3
|
|
8.5
|
Cost per ASM ("CASM")
(cents)
|
|
17.36
|
|
17.46
|
|
(0.6)
|
CASM-ex (cents)
(h)
|
|
13.13
|
|
12.54
|
|
4.7
|
Average aircraft fuel
price per gallon
|
|
$
2.88
|
|
$
3.33
|
|
(13.5)
|
Fuel gallons consumed
(millions)
|
|
1,025
|
|
952
|
|
7.7
|
_____________________________________
|
(a) The number of
revenue passengers measured by each flight segment
flown.
|
(b) The number of
scheduled miles flown by revenue passengers.
|
(c) The number of
seats available for passengers multiplied by the number of
scheduled miles those seats are flown.
|
(d) RPMs divided
by ASMs.
|
(e) The average
passenger revenue received for each RPM flown.
|
(f) The
number of cargo revenue tons transported multiplied by the number
of miles flown.
|
(g) Average stage
length equals the average distance a flight travels weighted for
size of aircraft.
|
(h) CASM-ex
is CASM less the impact of fuel expense, profit sharing, special
charges and third-party expenses. See NON-GAAP FINANCIAL
INFORMATION for a reconciliation of CASM-ex to CASM, the most
comparable GAAP measure.
|
UNITED AIRLINES HOLDINGS, INC.
1 NON-GAAP FINANCIAL INFORMATION
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 earnings before
interest, taxes, depreciation and amortization (adjusted EBITDA),
adjusted EBITDA margin, adjusted EBITDA excluding aircraft rent
(adjusted EBITDAR), 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, CASM-ex, adjusted capital expenditures, adjusted
total debt, adjusted net debt, free cash flow, and free cash flow,
net of financings, among others. The non-GAAP financial measures
are provided as supplemental information to the financial measures
presented in this press release that are calculated and presented
in accordance with GAAP and are presented because management
believes that they supplement or enhance management's, analysts'
and investors' overall understanding of the company's underlying
financial performance and trends and facilitate comparisons among
current, past and future periods.
Because the non-GAAP financial measures are not calculated in
accordance with GAAP, they should not be considered superior to and
are not intended to be considered in isolation or as a substitute
for the related GAAP financial measures presented in the press
release and may not be the same as or comparable to similarly
titled measures presented by other companies due to possible
differences in method and in the items being adjusted. We encourage
investors to review our financial statements and publicly-filed
reports in their entirety and not to rely on any single financial
measure.
The company does not provide a reconciliation of forward-looking
measures where the company believes such a reconciliation would
imply a degree of precision and certainty that could be confusing
to investors and is unable to reasonably predict certain items
contained in the GAAP measures without unreasonable efforts. This
is due to the inherent difficulty of forecasting the timing or
amount of various items that have not yet occurred and are out of
the company's control or cannot be reasonably predicted. For the
same reasons, the company is unable to address the probable
significance of the unavailable information. Forward-looking
non-GAAP financial measures provided without the most directly
comparable GAAP financial measures may vary materially from the
corresponding GAAP financial measures. See "Cautionary Statement
Regarding Forward-Looking Statements" above. The information below
provides an explanation of certain adjustments reflected in the
non-GAAP financial measures and shows a reconciliation of non-GAAP
financial measures reported in this press release to the most
directly comparable GAAP financial measures. Within the financial
tables presented, certain columns and rows may not add due to the
use of rounded numbers. Percentages and earnings per share amounts
presented are calculated from the underlying amounts.
CASM: 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 expense, and profit sharing. UAL believes that
adjusting for special charges is useful to investors because those
items are not indicative of UAL's ongoing performance. UAL also
believes that excluding third-party business expenses, such as
maintenance, flight academy, ground handling and catering services
for third parties, provides more meaningful disclosure because
these expenses are not directly related to UAL's core business. UAL
also believes that excluding fuel expense 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 it believes that this exclusion allows
investors to better understand and analyze UAL's operating cost
performance and provides a more meaningful comparison of our core
operating costs to the airline industry.
Adjusted EBITDA and EBITDAR: UAL also reports EBITDA and
EBITDAR excluding special charges, nonoperating unrealized (gains)
losses on investments, net and nonoperating debt extinguishment and
modification fees. UAL believes that adjusting for these items is
useful to investors because they are not indicative of UAL's
ongoing performance.
Adjusted Capital Expenditures and Free Cash
Flow: UAL believes that adjusting capital expenditures for
assets acquired through the issuance of debt, finance leases and
other financial liabilities is useful to investors in order to
appropriately reflect the total amounts spent on capital
expenditures. UAL also believes that adjusting net cash provided by
(used in) operating activities for capital expenditures, net of
flight equipment purchase deposit returns, adjusted capital
expenditures, and aircraft operating lease additions is useful to
allow investors to evaluate the company's ability to generate cash
that is available for debt service or general corporate
initiatives.
Adjusted Total Debt and Adjusted Net Debt: Adjusted total
debt is a non-GAAP financial measure that includes current and
long-term debt, operating lease obligations and finance lease
obligations, current and noncurrent other financial liabilities and
noncurrent pension and postretirement obligations. Adjusted net
debt is adjusted total debt minus cash, cash equivalents and
short-term investments. UAL provides adjusted total debt and
adjusted net debt because we believe these measures provide useful
supplemental information for assessing the company's debt and
debt-like obligation profile.
|
|
Three Months Ended
March 31,
|
|
%
Increase/
(Decrease)
|
CASM-ex (in
cents, except for percentage changes)
|
|
2024
|
|
2023
|
|
CASM (GAAP)
|
|
17.36
|
|
17.46
|
|
(0.6)
|
Fuel
expense
|
|
4.13
|
|
4.83
|
|
(14.5)
|
Third-party business
expenses
|
|
0.08
|
|
0.06
|
|
33.3
|
Special
charges
|
|
0.02
|
|
0.03
|
|
NM
|
CASM-ex
(Non-GAAP)
|
|
13.13
|
|
12.54
|
|
4.7
|
UNITED AIRLINES
HOLDINGS, INC.
NON-GAAP FINANCIAL
INFORMATION (Continued)
|
|
|
|
Three Months Ended
March 31,
|
|
Twelve Months Ended
March 31,
|
Adjusted EBITDA and
EBITDAR (in millions)
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net income
(loss)
|
|
$
(124)
|
|
$
(194)
|
|
$ 2,688
|
|
$
1,920
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
708
|
|
655
|
|
2,724
|
|
2,500
|
Interest expense, net
of capitalized interest and interest income
|
|
216
|
|
278
|
|
885
|
|
1,258
|
Income tax expense
(benefit)
|
|
(40)
|
|
(62)
|
|
791
|
|
566
|
Special
charges
|
|
13
|
|
14
|
|
948
|
|
162
|
Nonoperating
unrealized (gains) losses on investments, net
|
|
37
|
|
(24)
|
|
34
|
|
(44)
|
Nonoperating debt
extinguishment and modification fees
|
|
35
|
|
—
|
|
46
|
|
—
|
Adjusted
EBITDA
|
|
$
845
|
|
$
667
|
|
$ 8,116
|
|
$ 6,362
|
Adjusted EBITDA
margin
|
|
6.7 %
|
|
5.8 %
|
|
14.8 %
|
|
13.0 %
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
845
|
|
$
667
|
|
$ 8,116
|
|
$ 6,362
|
Aircraft
rent
|
|
43
|
|
56
|
|
184
|
|
247
|
Adjusted
EBITDAR
|
|
$
888
|
|
$
723
|
|
$ 8,300
|
|
$ 6,609
|
|
Three Months Ended
March 31,
|
Adjusted Capital
Expenditures (in millions)
|
2024
|
|
2023
|
Capital expenditures,
net of flight equipment purchase deposit returns (GAAP)
|
$
1,366
|
|
$
1,843
|
Property and equipment
acquired through the issuance of debt, finance leases,
and other financial liabilities
|
—
|
|
200
|
Adjusted capital
expenditures (Non-GAAP)
|
$
1,366
|
|
$
2,043
|
|
|
|
|
Free Cash Flow
(in millions)
|
|
|
|
Net cash provided by
operating activities (GAAP)
|
$
2,847
|
|
$
3,142
|
Less capital
expenditures, net of flight equipment purchase deposit
returns
|
1,366
|
|
1,843
|
Free cash flow, net of
financings (Non-GAAP)
|
$
1,481
|
|
$
1,299
|
|
|
|
|
Net cash provided by
operating activities (GAAP)
|
$
2,847
|
|
$
3,142
|
Less adjusted capital
expenditures (Non-GAAP)
|
1,366
|
|
2,043
|
Free cash flow
(Non-GAAP)
|
$
1,481
|
|
$
1,099
|
|
|
March 31,
|
|
Increase/
(Decrease)
|
|
Adjusted total debt
and Adjusted net debt (in millions)
|
|
2024
|
|
2023
|
|
|
Debt - current and
noncurrent (GAAP)
|
|
$ 27,017
|
|
$ 30,666
|
|
$ (3,649)
|
|
Operating lease
obligations - current and noncurrent
|
|
5,074
|
|
5,179
|
|
(105)
|
|
Finance lease
obligations - current and noncurrent
|
|
195
|
|
180
|
|
15
|
|
Pension and
postretirement liabilities - noncurrent
|
|
1,610
|
|
1,436
|
|
174
|
|
Other financial
liabilities - current and noncurrent
|
|
2,558
|
|
1,159
|
|
1,399
|
|
Adjusted total debt
(Non-GAAP)
|
|
$ 36,454
|
|
$ 38,620
|
|
(2,166)
|
|
Less: Cash and cash
equivalents
|
|
$
8,401
|
|
$
7,634
|
|
767
|
|
Short-term investments
|
|
5,591
|
|
9,522
|
|
(3,931)
|
|
Adjusted net
debt
|
|
$ 22,462
|
|
$ 21,464
|
|
998
|
|
Adjusted net debt
divided by twelve months ended March 31 adjusted EBITDAR
|
|
2.7
|
|
3.2
|
|
(0.5)
|
pts.
|
UNITED AIRLINES
HOLDINGS, INC.
NON-GAAP FINANCIAL
INFORMATION (Continued)
|
|
|
Three Months Ended
March 31,
|
|
%
Increase/
(Decrease)
|
(in millions, except
for percentage changes and per share data)
|
2024
|
|
2023
|
|
Operating expenses
(GAAP)
|
$ 12,440
|
|
$ 11,472
|
|
8.4
|
Special
charges
|
13
|
|
14
|
|
NM
|
Operating expenses,
excluding special charges
|
12,427
|
|
11,458
|
|
8.5
|
Adjusted to
exclude:
|
|
|
|
|
|
Fuel
expense
|
2,954
|
|
3,174
|
|
(6.9)
|
Profit
sharing
|
3
|
|
—
|
|
NM
|
Third-party business
expenses
|
58
|
|
41
|
|
41.5
|
Adjusted operating
expenses (Non-GAAP)
|
$
9,412
|
|
$
8,243
|
|
14.2
|
|
|
|
|
|
|
Operating income (loss)
(GAAP)
|
$
99
|
|
$ (43)
|
|
NM
|
Special
charges
|
13
|
|
14
|
|
NM
|
Adjusted operating
income (loss) (Non-GAAP)
|
$ 112
|
|
$ (29)
|
|
NM
|
|
|
|
|
|
|
Operating
margin
|
0.8 %
|
|
(0.4) %
|
|
1.2
pts
|
Adjusted operating
margin (Non-GAAP)
|
0.9 %
|
|
(0.3) %
|
|
1.2
pts
|
|
|
|
|
|
|
Pre-tax loss
(GAAP)
|
$ (164)
|
|
$ (256)
|
|
(35.9)
|
Adjusted to
exclude:
|
|
|
|
|
|
Special
charges
|
13
|
|
14
|
|
NM
|
Unrealized (gains)
losses on investments, net
|
37
|
|
(24)
|
|
NM
|
Debt extinguishment
and modification fees
|
35
|
|
—
|
|
NM
|
Adjusted pre-tax loss
(Non-GAAP)
|
$ (79)
|
|
$ (266)
|
|
(70.3)
|
|
|
|
|
|
|
Pre-tax
margin
|
(1.3) %
|
|
(2.2) %
|
|
0.9
pts.
|
Adjusted pre-tax
margin (Non-GAAP)
|
(0.6) %
|
|
(2.3) %
|
|
1.7
pts.
|
|
|
|
|
|
|
Net loss
(GAAP)
|
$ (124)
|
|
$ (194)
|
|
(36.1)
|
Adjusted to
exclude:
|
|
|
|
|
|
Special
charges
|
13
|
|
14
|
|
NM
|
Unrealized (gains)
losses on investments, net
|
37
|
|
(24)
|
|
NM
|
Debt extinguishment
and modification fees
|
35
|
|
—
|
|
NM
|
Income tax benefit on
adjustments, net
|
(11)
|
|
(3)
|
|
NM
|
Adjusted net loss
(Non-GAAP)
|
$ (50)
|
|
$ (207)
|
|
(75.8)
|
|
|
|
|
|
|
Diluted loss per
share (GAAP)
|
$
(0.38)
|
|
$
(0.59)
|
|
(35.6)
|
Adjusted to
exclude:
|
|
|
|
|
|
Special
charges
|
0.04
|
|
0.04
|
|
NM
|
Unrealized (gains)
losses on investments, net
|
0.11
|
|
(0.07)
|
|
NM
|
Debt extinguishment
and modification fees
|
0.11
|
|
—
|
|
NM
|
Income tax benefit on
adjustments, net
|
(0.03)
|
|
(0.01)
|
|
NM
|
Adjusted diluted loss
per share (Non-GAAP)
|
$
(0.15)
|
|
$
(0.63)
|
|
(76.2)
|
UNITED AIRLINES
HOLDINGS, INC
CONDENSED CONSOLIDATED
BALANCE SHEETS
|
|
(in
millions)
|
March 31, 2024
(UNAUDITED)
|
|
December 31,
2023
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
8,401
|
|
$
6,058
|
Short-term
investments
|
5,591
|
|
8,330
|
Restricted
cash
|
40
|
|
31
|
Receivables, less
allowance for credit losses (2024 — $19; 2023 — $18)
|
2,259
|
|
1,898
|
Aircraft fuel, spare
parts and supplies, less obsolescence allowance (2024 — $721; 2023
— $689)
|
1,675
|
|
1,561
|
Prepaid expenses and
other
|
730
|
|
609
|
Total current
assets
|
18,696
|
|
18,487
|
|
|
|
|
Total operating
property and equipment, net
|
40,470
|
|
39,815
|
Operating lease
right-of-use assets
|
3,895
|
|
3,914
|
Other
assets:
|
|
|
|
Goodwill
|
4,527
|
|
4,527
|
Intangibles, less
accumulated amortization (2024 — $1,339; 2023 — $1,495)
|
2,717
|
|
2,725
|
Restricted
cash
|
244
|
|
245
|
Investments in
affiliates and other, less allowance for credit losses (2024 — $32;
2023 — $38)
|
1,353
|
|
1,391
|
Total other
assets
|
8,841
|
|
8,888
|
Total assets
|
$
71,902
|
|
$
71,104
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
4,344
|
|
$
3,835
|
Accrued salaries and
benefits
|
2,128
|
|
2,940
|
Advance ticket
sales
|
9,601
|
|
6,704
|
Frequent flyer
deferred revenue
|
3,086
|
|
3,095
|
Current maturities of
long-term debt
|
3,958
|
|
4,018
|
Current maturities of
operating leases
|
557
|
|
576
|
Current maturities of
finance leases
|
117
|
|
172
|
Current maturities of
other financial liabilities
|
63
|
|
57
|
Other
|
910
|
|
806
|
Total current
liabilities
|
24,764
|
|
22,203
|
Long-term liabilities
and deferred credits:
|
|
|
|
Long-term
debt
|
23,059
|
|
25,057
|
Long-term obligations
under operating leases
|
4,517
|
|
4,503
|
Long-term obligations
under finance leases
|
78
|
|
91
|
Frequent flyer
deferred revenue
|
4,193
|
|
4,048
|
Pension
liability
|
985
|
|
968
|
Postretirement benefit
liability
|
625
|
|
637
|
Deferred income
taxes
|
545
|
|
594
|
Other financial
liabilities
|
2,495
|
|
2,265
|
Other
|
1,453
|
|
1,414
|
Total long-term
liabilities and deferred credits
|
37,950
|
|
39,577
|
Total stockholders'
equity
|
9,188
|
|
9,324
|
Total liabilities and
stockholders' equity
|
$
71,902
|
|
$
71,104
|
UNITED AIRLINES
HOLDINGS, INC.
CONDENSED STATEMENTS OF
CONSOLIDATED CASH FLOWS (UNAUDITED)
|
|
(in
millions)
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Cash Flows from
Operating Activities:
|
|
|
|
Net cash provided by
operating activities
|
$
2,847
|
|
$
3,142
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital expenditures,
net of flight equipment purchase deposit returns
|
(1,366)
|
|
(1,843)
|
Purchases of
short-term and other investments
|
(866)
|
|
(4,193)
|
Proceeds from sale of
short-term and other investments
|
3,657
|
|
4,061
|
Proceeds from sale of
property and equipment
|
20
|
|
1
|
Other, net
|
(4)
|
|
6
|
Net cash provided by
(used in) investing activities
|
1,441
|
|
(1,968)
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Proceeds from issuance
of debt and other financial liabilities, net of discounts and
fees
|
3,111
|
|
288
|
Payments of long-term
debt, finance leases and other financial liabilities
|
(5,031)
|
|
(820)
|
Other, net
|
(18)
|
|
(31)
|
Net cash used in
financing activities
|
(1,938)
|
|
(563)
|
Net increase in cash,
cash equivalents and restricted cash
|
2,350
|
|
611
|
Cash, cash equivalents
and restricted cash at beginning of the period
|
6,335
|
|
7,421
|
Cash, cash equivalents
and restricted cash at end of the period
|
$
8,685
|
|
$
8,032
|
|
|
|
|
Investing and Financing
Activities Not Affecting Cash:
|
|
|
|
Property and equipment
acquired through the issuance of debt, finance leases and
other
|
—
|
|
200
|
Right-of-use assets
acquired through operating leases
|
132
|
|
295
|
Lease modifications
and lease conversions
|
14
|
|
23
|
Investment interests
received in exchange for loans, goods and services
|
18
|
|
21
|
UNITED AIRLINES
HOLDINGS, INC.
NOTES
(UNAUDITED)
|
|
Special
charges and unrealized (gains) losses on investments, net include
the following:
|
|
|
|
Three Months Ended
March 31,
|
(in
millions)
|
|
2024
|
|
2023
|
Operating:
|
|
|
|
|
(Gains) losses on sale
of assets and other special charges
|
|
$
13
|
|
$
14
|
Total operating special
charges
|
|
13
|
|
14
|
|
|
|
|
|
Nonoperating:
|
|
|
|
|
Nonoperating unrealized
(gains) losses on investments, net
|
|
37
|
|
(24)
|
Nonoperating debt
extinguishment and modification fees
|
|
35
|
|
—
|
Total nonoperating special
charges and unrealized (gains) losses on investments,
net
|
|
72
|
|
(24)
|
Total operating and
nonoperating special charges and unrealized (gains) losses on
investments, net
|
|
85
|
|
(10)
|
Income tax benefit, net
of valuation allowance
|
|
(11)
|
|
(3)
|
Total operating and non-operating special charges and unrealized
(gains) losses on investments,
net of income taxes
|
|
$
74
|
|
$
(13)
|
(Gains) losses on sale of assets and other special charges:
During the three months ended March 31,
2024, the company incurred $13 million of charges
primarily consisting of a settlement related to a certain pilot
long term disability plan, accelerated depreciation on assets with
shortened lives, and other losses on disposal of assets, which were
partially offset by a gain from a favorable outcome related to a
certain contract dispute as well as gains on sales of assets.
During the three months ended March 31,
2023, the company recorded $14
million of net charges primarily comprised of accelerated
depreciation related to certain of the company's assets that were
retired early and other gains and losses on the sale of assets.
Nonoperating unrealized (gains) losses on investments,
net: All amounts represent changes to the market value of
equity investments.
Nonoperating debt extinguishment and modification fees:
During the three months ended March 31, 2024, the company
recorded $35 million of charges primarily related to the
refinancing of its 2021 term loans.
Effective tax rate:
The company's effective tax rates were as follows:
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Effective tax
rate
|
24.4 %
|
|
24.2 %
|
The provision for income taxes is based on the estimated annual
effective tax rate, which represents a blend of federal, state and
foreign taxes and includes the impact of certain nondeductible
items.
_________________________________________________
|
1 For additional
information about the non-GAAP measures used in this press release,
see "Non-GAAP Financial Information" below.
|
2 Excluding years
impacted by the COVID-19 pandemic — 2020 and 2021.
|
3 We are not providing
a target for or a reconciliation to diluted earnings per share, the
most directly comparable GAAP measure, because we are unable to
predict the excluded items noted above contained in the GAAP
measure without unreasonable efforts, and therefore we also are not
able to predict the probable significance of such items. For
additional information about the non-GAAP measures used in this
press release, see "Non-GAAP Financial Information"
below.
|
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SOURCE United Airlines