 Deutsche Bank
Leveraged Finance
Conference
United Continental
Holdings, Inc.
October 12, 2011
Exhibit 99.1 |
 Gerry
Laderman Senior Vice President Finance and Treasurer
United Continental Holdings, Inc. |
 Safe
Harbor Statement 3
3
Certain statements included in this presentation are forward-looking and thus reflect our current
expectations and beliefs with respect to certain current and future events and financial
performance. Such forward-looking statements are and will be subject to many risks and
uncertainties relating to our operations and business environment that may cause actual results
to differ materially from any future results expressed or implied in such forward-looking statements. Words such as
“expects,” “will,” “plans,” “anticipates,”
“indicates,” “believes,” “forecast,” “guidance,” “outlook” and similar expressions
are intended to identify forward-looking statements. Additionally, forward-looking
statements include statements which 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 presentation are
based upon information available to us on the date of this presentation. 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; our ability to control
our costs, including realizing benefits from our resource optimization efforts, cost reduction
initiatives and fleet replacement programs; our ability to utilize our net operating losses; our ability
to attract and retain customers; demand for transportation in the markets in which we operate; an
outbreak of a disease that affects travel demand or travel behavior; demand for travel and the
impact that global economic conditions have on customer travel patterns; excessive taxation and
the inability to offset future taxable income; general economic conditions (including interest
rates, foreign currency exchange rates, investment or credit market conditions, crude oil prices, costs
of aviation fuel and energy refining capacity in relevant markets); our ability to cost-effectively
hedge against increases in the price of aviation fuel; any potential realized or unrealized gains
or losses related to fuel or currency hedging programs; the effects of any hostilities, act of
war or terrorist attack; the ability of other air carriers with whom we have alliances or
partnerships to provide the services contemplated by the respective arrangements with such carriers; the
costs and availability of aviation and other insurance; the costs associated with security
measures and practices; 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); labor costs; our ability to maintain satisfactory labor relations and the
results of the collective bargaining agreement process with our union groups; any disruptions to
operations due to any potential actions by our labor groups; weather conditions; the possibility
that expected merger synergies will not be realized or will not be realized within the expected
time period; and other risks and uncertainties set forth under Item 1A., Risk Factors of the Company’s
Annual Report on Form 10-K, as well as other risks and uncertainties set forth from time to time in
the reports we file with the SEC. Consequently, forward-looking statements should not be
regarded as representations or warranties by us that such matters will be realized.
|
 Building the world’s leading airline
Driving towards sufficient, sustained profitability
4
•
Global network
•
Industry leading financials
•
Capacity discipline
•
Product investment
•
Integration
•
Working together |
 Hubs
in 4 largest U.S. cities Source: U.S. Census Bureau
|
 Serving the most destinations in the U.S. |
 Merger
created global network with unsurpassed scope |
 Merger
created global network with unsurpassed scope |
 Rankings by ASMs as of TME 4Q10
Source: Earnings releases and SEC filings.
Serving the right markets, with the right assets
#1 across the
Pacific
#1 in US /
Canada
#2 across the
Atlantic
#2 to Latin
America |
 United is generating industry leading results
10
Leads network carriers
Revenue
Leads network carriers
Pre-tax
Margin
Leads network carriers
Liquidity
Exceeded cost of capital
ROIC
Metric
Result
Period: TME 2Q 2011
Industry defined as U.S. global carriers |
 United
leads U.S. network carriers in unit revenue and margin Pre-tax
Margin (TME 2Q 2011)
1. Consolidated PRASM numbers for carriers other than UAL adjusted for length of
haul versus UAL’s length of haul 2. Excludes special, one-time items
and non-cash MTM hedge gains/losses. See non-GAAP reconciliation in Appendix A; UAL results
prior to 4Q 2010 pro forma.
Source: Earnings releases and SEC filings.
-2.8%
2.1%
3.2%
4.2%
Unit Passenger Revenue
Growth
(TME 2Q 2011)
9.7%
8.1%
6.8%
12.4%
11
1
2 |
 Committed to strengthening the balance sheet
Liquidity as % of Revenue
(TME 2Q 2011)
16.7%
17.9%
22.4%
24.0%
•
Since closing the merger on Oct. 1,
2010, made $2.4B of debt and capital
lease payments
•
Prepaid more than $480M of debt
•
•
$1.5B of scheduled debt payments in
2012
12
$1.8B of unencumbered assets, half of
which are §1110
aircraft 1.
Net debt includes capitalized operating leases. Note:
Change in Debt, Capital Leases for the period 10/1/2010 through 6/30/2011; Debt and Capital Lease prepayments for the
period 10/1/2010 through 7/21/2011. Source: Earnings
releases and SEC filings. |
 Focused on generating returns that exceed our cost of
capital over the business cycle
Return on Invested Capital
Lower
(-)
Higher
(+)
Economic
Value Added
UAL
2010
UAL
2007
UAL
2006-2010
UAL
TME 2Q11
Fleet
Strategy
Network / Route
Analysis
ROIC imbedded in
business decisions
Product
Investment
13 |
 Flexible fleet permits adjustments for fuel prices
14
Mainline Fleet Flexibility
Maximum
Retirements
Maximum
Options
2010
2015E
Jet-A Fuel Prices LTM
~45%
Sept.
2010
Sept.
2011 |
 Expect 2012 consolidated capacity to be flat
Reduce domestic capacity while growing international
Based on the latest delivery schedule, the company expects delivery of
5 B787 Dreamliner aircraft in 2012
Expect to take delivery of 24 new, fuel efficient aircraft in 2012
19 B737-900ER & 5 B787
15
Installing EconomyPlus on Continental
Aircraft in 2012
Up to 5 more inches of space in coach |
 Refreshing aircraft interiors…
Boeing Sky Interior
Nearly doubling capacity of Airbus
overhead bins
16 |
 …investing in better seats…
17
•
Flat bed seats in international premium cabins
•
Full refresh of p.s. transcontinental fleet
•
Expanding EconomyPlus to Continental fleet |
 …redefining United’s inflight entertainment experience.
18
WiFi & Wireless Streaming Video
In seat entertainment |
 Working Together
19 |
 20
Working Together
Work
Group
Flight
Attendants
Mechanics
Passenger
Service Agents
Determine Union
Representation
Bargaining
Pilots
Ramp Agents
In joint negotiations
Single carrier finding
requested by IAM
S-CO: No bargaining required
S-UA: In negotiations
S-CO: Agreement
S-UA: In negotiations
S-CO: Agreement
S-UA: In negotiations
S-CO: Agreement
S-UA: In negotiations
Joint negotiations upcoming
Joint negotiations upcoming
Joint negotiations upcoming |
 21
Merger progressing
Airport Co-location & Branding
Management Team
Co-branded Credit Card
On track to achieve 25% of synergies in 2011
New Livery |
 Have
captured more than $130M in synergies year-to-date On track to achieve
25% of $1.0 – 1.2B run rate synergies in 2011
2011 Integration Success
$1.0B -
1.2B
Cross-fleeting
Completed 1/3 of airport co-
locations system-wide
Insurance
Prescription benefits
In-flight magazine
Rebranded hubs: ORD, SFO,
CLE, DEN
75%
100%
2011
2012
2013
25%
22 |
 23
2012 synergy capture enabled by integration and technology
FAA Certification:
Single Operating Certificate
Technology:
Passenger Service System
Expected by year-end 2011
Expected
first
quarter
2012
Enables:
•
•
Marketing and selling all flights
with single code
Joint operations once JCBAs in
place
Enables:
•
•
•
•
Common check-in process
Aircraft and gate optimization
Selling ancillary products
Single loyalty program |
 United –
the world’s leading airline
Fly to Win
Make Reliability a Reality
Working Together
Fund the Future
24 |
 United Continental Holdings, Inc. |
 26
Appendix A
Non-GAAP Financial Reconciliation
Note: UAL 3Q 2010 results pro forma.
Twelve Months Ended
(In $M)
6/30/2011
Pre-tax Margin
Earnings / (Loss) before income taxes
$857
Add: Special items
645
Adjusted pre-tax Income (Loss)
$1,502
Total operating revenue
$35,829
Less: Special Items
(107)
Adjusted total operating revenue
$35,722
Adjusted pre-tax margin
4.2% |