0001193125-17-006846.txt : 20170110 0001193125-17-006846.hdr.sgml : 20170110 20170110161602 ACCESSION NUMBER: 0001193125-17-006846 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20170110 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20170110 DATE AS OF CHANGE: 20170110 FILER: COMPANY DATA: COMPANY CONFORMED NAME: United Continental Holdings, Inc. CENTRAL INDEX KEY: 0000100517 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 362675207 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06033 FILM NUMBER: 17520758 BUSINESS ADDRESS: STREET 1: JENNIFER L. KRAFT - WHQLD STREET 2: 233 SOUTH WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 312-997-8000 MAIL ADDRESS: STREET 1: JENNIFER L. KRAFT - WHQLD STREET 2: 233 SOUTH WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 FORMER COMPANY: FORMER CONFORMED NAME: UAL CORP /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: ALLEGIS CORP DATE OF NAME CHANGE: 19880613 FORMER COMPANY: FORMER CONFORMED NAME: UAL INC DATE OF NAME CHANGE: 19870517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED AIRLINES, INC. CENTRAL INDEX KEY: 0000319687 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 742099724 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10323 FILM NUMBER: 17520759 BUSINESS ADDRESS: STREET 1: 233 SOUTH WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 312-997-8000 MAIL ADDRESS: STREET 1: 233 SOUTH WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 FORMER COMPANY: FORMER CONFORMED NAME: CONTINENTAL AIRLINES, INC. DATE OF NAME CHANGE: 20130212 FORMER COMPANY: FORMER CONFORMED NAME: CONTINENTAL AIRLINES INC /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: PEOPLE EXPRESS AIRLINES INC DATE OF NAME CHANGE: 19890726 8-K 1 d286253d8k.htm FORM 8-K Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 10, 2017

UNITED CONTINENTAL HOLDINGS, INC. UNITED AIRLINES, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   001-06033   36-2675207
Delaware   001-10323   74-2099724

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification Number)

233 S. Wacker Drive, Chicago, IL   60606
233 S. Wacker Drive, Chicago, IL   60606
(Address of principal executive offices)   (Zip Code)

(872) 825-4000

(872) 825-4000

Registrant’s telephone number, including area code 

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On January 10, 2017, United Continental Holdings, Inc. (“UAL”), the holding company whose primary subsidiary is United Airlines, Inc. (“United,” and together with UAL, the “Company”), will provide an investor update related to the preliminary financial and operational results for the Company for fourth quarter and full year 2016. The investor update is attached as Exhibit 99.1 and is incorporated by reference.

The information in this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such filing.

 

Item 7.01 Regulation FD Disclosure.

On January 10, 2017, United issued a press release reporting its December 2016 operational results. The press release is attached as Exhibit 99.2 and is incorporated herein by reference.

The information in this Item 7.01, including Exhibit 99.2, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01 Financial Statements and Exhibits.

 

Exhibit No.

  

Description

99.1*    United Continental Holdings, Inc. Investor Update dated January 10, 2017
99.2*    Press Release issued by United Airlines, Inc. dated January 10, 2017

 

* Furnished herewith electronically.


SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    UNITED CONTINENTAL HOLDINGS, INC.
    UNITED AIRLINES, INC.
    By:  

/s/ Chris Kenny

    Name:   Chris Kenny
    Title:   Vice President and Controller
Date: January 10, 2017      


EXHIBIT INDEX

 

Exhibit No.

  

Description

99.1*    United Continental Holdings, Inc. Investor Update dated January 10, 2017
99.2*    Press Release issued by United Airlines, Inc. dated January 10, 2017

 

* Furnished herewith electronically.
EX-99.1 2 d286253dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO    LOGO
Investor Update    Issue Date: January 10, 2017

This investor update provides guidance and certain forward-looking statements about United Continental Holdings, Inc. (the “Company” or “UAL”). The information in this investor update contains the preliminary financial and operational outlook for the Company for the fourth-quarter and full-year 2016.

 

Fourth-Quarter and Full-Year 2016 Financial Update   Estimated 4Q 2016   Estimated FY 2016

Consolidated Capacity Year-Over-Year Change Higher/(Lower)

    2.0%       1.4%  

Pre-Tax Margin, as adjusted1

  9.25%   -   9.75%   12.1%   -   12.3%

Revenue

           

Consolidated PRASM (¢/ASM)

  12.39   -   12.45   12.40   -   12.42

Year-Over-Year Change Higher/(Lower)

  (1.75%)   -   (1.25%)   (5.4%)   -   (5.3%)

Cargo Revenue ($M)

  $240   -   $260   $866   -   $886

Other Revenue ($M)

  $1,035   -   $1,055   $4,217   -   $4,237

Non-Fuel Operating Expense

           

Consolidated CASM Excluding Profit Sharing, Fuel & Third-Party Business Expense1 (¢/ASM)

  10.12   -   10.14   9.81   -   9.82

Year-Over-Year Change Higher/(Lower)

  4.00%   -   4.25%   2.8%   -   2.9%

Third-Party Business Expense2 ($M)

    $70       $258  

Aircraft Rent ($M)

    $160       $681  

Depreciation and Amortization ($M)

    $505       $1,978  

Profit Sharing

  $110   -   $130   $616   -   $636

Consolidated Fuel Expense

           

Fuel Consumption (Million Gallons)

    960       3,902  

Fuel Price Including Operating Cash-Settled Hedges (Price/Gallon)3,4

    $1.62       $1.49  

Operating Cash-Settled Hedge Loss (Price/Gallon)

    ($0.02)       ($0.06)  

Fuel Price Excluding Hedges (Price/Gallon)3

    $1.60       $1.43  

Fuel Price Including Operating Cash-Settled Hedges (Price/Gallon)3,4

    $1.62       $1.43  

Non-Operating Cash-Settled Hedge Loss (Price/Gallon)5

    $0.00       $0.00  

Fuel Price Including All Cash-Settled Hedges (Price/Gallon)3,6

    $1.62       $1.43  

Non-Operating Expense1, 7 ($M)

  $110   -   $120   $507   -   $517

Effective Income Tax Rate

    ~36%       ~36%  

Gross Capital Expenditures8 ($M)

  $1,075   -   $1,095   $3,344   -   $3,364

Debt and Capital Lease Payments ($M)

    $345       $1,350  

Diluted Share Count9 (M)

    316       330  

Quarter End Liquidity ($B)

           

Unrestricted Cash, Cash Equivalents and Short-Term Investments ($B)

    $4.4        

Undrawn Commitments Under Revolving Credit Facility ($B)

    $1.35        

 

  1. Excludes special charges, the nature and amount of which are not determinable at this time
  2. Third-party business revenue associated with third-party business expense is recorded in other revenue
  3. Fuel price including taxes and fees
  4. This price per gallon corresponds to the fuel expense line of the income statement
  5. This price per gallon corresponds to the impact of non-operating hedges that appear in the non-operating line of the income statement
  6. This price per gallon corresponds to the total economic cost of the Company’s fuel consumption including all cash-settled hedges but does not directly correspond to the fuel expense line of the income statement
  7. The Company excludes the non-cash impact of fuel hedges from its non-operating expense guidance and Non-GAAP earnings
  8. Capital expenditures include net purchase deposits, assets acquired through the issuance of debt, airport construction financing and exclude fully reimbursable capital projects
  9. Diluted share count is approximately equal to basic share count

 

 

 

(more)


LOGO

LOGO

 

Passenger Revenue: The Company now expects fourth-quarter 2016 consolidated passenger unit revenue to decline 1.25 to 1.75 percent compared to the fourth quarter of 2015. The outperformance versus initial guidance was due to stronger close-in bookings and yields in November and December. Business demand was stronger than expected in the two weeks prior to Christmas, and leisure demand was better than expected around the holidays.

Non-Fuel Expense: The Company’s fourth-quarter 2016 non-fuel unit cost is expected to include approximately 4.5 points of impact from ratified labor agreements with the pilots, flight attendants, technicians, IAM-represented employees and dispatchers.

Profit Sharing: Due to recently ratified labor agreements, the Company’s profit sharing plans have changed for 2016. The Company now expects to pay:

    Approximately 8.7% of total adjusted earnings up to a 6.9% adjusted pre-tax margin
    Approximately 13.8% for any adjusted earnings above a 6.9% adjusted pre-tax margin
    Approximately 1.6% for any adjusted earnings above the prior year’s pre-tax earnings

Adjusted earnings for the purposes of profit sharing are calculated as GAAP pre-tax earnings, excluding special items, profit sharing expense and share-based compensation program expense. These estimates are consistent with the Company’s current labor agreements. The Company estimates that share-based compensation expense for the purposes of the profit sharing calculation will be approximately $70 million for the full year of 2016.

Fuel Expense: United expects a fourth-quarter 2016 hedge loss of approximately $0.02 per gallon, or approximately $20 million in total, which is comprised of operating cash-settled hedge losses included in fuel expense.

Taxes: The Company expects a tax rate of approximately 36% for the fourth quarter of 2016. However, the Company expects that there will be no material cash taxes due to United’s net operating loss carryforwards (NOLs), which were approximately $8 billion as of year-end 2015. These NOLs are projected to offset (or minimize) cash income taxes for several years.

Capital Expenditures: Fourth-quarter and full-year 2016 gross capital expenditures were higher than previous guidance in part due to the delivery of a 777-300ER aircraft in the fourth quarter of 2016 that was originally scheduled for delivery in the first quarter of 2017 and purchase deposits related to the Embraer 175 aircraft purchase agreement announced on November 15, 2016.

(more)

 

2


LOGO

 

Fourth-Quarter and Full-Year 2016 Capacity

      Estimated 4Q 2016     Year-Over-Year
% Change
Higher/(Lower)
     Estimated FY 2016      Year-Over-Year
% Change
Higher/(Lower)
 

Capacity (Million ASMs)

              

Mainline Capacity

              

Domestic

     28,328                    4.3%           111,453                     3.1%     

Atlantic

     10,474                    (2.4%)           47,107                     (0.2%)     

Pacific

     10,895                    8.1%           41,640                     2.0%     

Latin America

     5,743                    (1.6%)           24,492                     2.8%     

Total Mainline Capacity

     55,440                    3.0%           224,692                     2.1%     

Regional1

     7,078                    (5.5%)           28,898                     (3.7%)     

Consolidated Capacity

              

Domestic System

     35,084                    2.1%           139,066                     1.6%     

International System

     27,434                    1.8%           114,524                     1.3%     

Total Consolidated Capacity

     62,518                    2.0%           253,590                     1.4%     

Traffic (Million RPMs)

              

Mainline Traffic

              

Domestic

     24,206                    3.4%           95,493                     2.3%     

Atlantic

     7,971                    (5.0%)           35,888                     (4.3%)     

Pacific

     8,621                    8.6%           34,186                     2.7%     

Latin America

     4,810                    1.7%           20,614                     5.5%     

Total Mainline Traffic

     45,608                    2.6%           186,181                     1.4%     

Regional Traffic1

     5,930                                  (5.1%)           24,128                                   (3.4%)     

Consolidated Traffic

              

Domestic System

     29,902                    1.6%           118,694                     1.1%     

International System

     21,636                    1.7%           91,615                     0.4%     

Total Consolidated Traffic

     51,538                    1.6%           210,309                     0.8%     

Load Factor

              

Mainline Load Factor

              

Domestic

     85.4%                    (0.8)        pts         85.7%                     (0.6)        pts   

Atlantic

     76.1%                    (2.1)        pts         76.2%                     (3.3)        pts   

Pacific

     79.1%                    0.3        pts         82.1%                     0.6        pts   

Latin America

     83.8%                    2.7        pts         84.2%                     2.2        pts   

Total Mainline Load Factor

     82.3%                    (0.3)        pts         82.9%                     (0.6)        pts   

Regional Load Factor1

     83.8%                    0.4        pts         83.5%                     0.3        pts   

Consolidated Load Factor

              

Domestic System

     85.2%                    (0.5)        pts         85.4%                     (0.3)        pts   

International System

     78.9%                    (0.1)        pts         80.0%                     (0.7)        pts   

Total Consolidated Load Factor

     82.4%                    (0.3)        pts         82.9%                     (0.5)        pts   

 

 

1Regional results reflect flights operated under capacity purchase agreements

Note: See Part II, Item 6 Selected Financial Data of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 for the definition of these statistics

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LOGO

 

GAAP to Non-GAAP Reconciliations

UAL is providing guidance utilizing various accounting principles generally accepted in the United States of America (“GAAP”) and Non-GAAP financial measures, including pre-tax margin, as adjusted, non-operating expense and cost per available seat mile (“CASM”), as adjusted. CASM is a common metric used in the airline industry to measure an airline’s cost structure and efficiency. UAL reports CASM excluding profit sharing, third-party business expenses, fuel and special charges. Non-GAAP financial measures are presented because they provide management and investors the ability to measure and monitor UAL’s performance on a consistent basis.

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

UAL believes excluding profit sharing allows investors to better understand and analyze our recurring cost performance and provides a more meaningful comparison of our core operating costs to the airline industry. UAL believes that adjusting for special charges is useful to investors because they are non-recurring charges not indicative of UAL’s ongoing performance. UAL also believes that excluding third-party business expenses, such as maintenance, ground handling and catering services for third parties, fuel sales and non-air mileage redemptions, provides more meaningful disclosure because these expenses are not directly related to UAL’s core business. UAL 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. In addition, UAL believes that excluding non-cash (gains)/losses on fuel derivative contracts from non-operating expense is useful because it allows investors to better understand the impact of settled hedges on a given period’s results.

 

Consolidated Unit Cost (¢/ASM)   Estimated 4Q
2016
    Estimated FY
2016
 

Consolidated CASM Excluding Profit Sharing & Special Charges (a)

      12.72          -             12.74            12.20          -             12.21     

Less: Third-Party Business Expenses

    0.11          -        0.11          0.10          -        0.10     
 

 

 

     

 

 

   

 

 

     

 

 

 

Consolidated CASM Excluding Profit Sharing, Third-Party Business Expenses & Special Charges

    12.61          -        12.63          12.10          -        12.11     

Less: Fuel Expense (b)

    2.49          -        2.49          2.29          -        2.29     
 

 

 

     

 

 

   

 

 

     

 

 

 

Consolidated CASM Excluding Profit Sharing, Third-Party Business Expenses, Fuel & Special Charges

    10.12          -        10.14          9.81          -        9.82     

 

Non-Operating Expense ($M)

 

 

Estimated 4Q

2016

   

 

Estimated FY

2016

 

Non-operating expense

    $114          -        $124          $514          -        $524     

Exclude: hedge program adjustments (c)

    (4)          -        (4)          (6)          -        (6)     

Exclude: other special items

    -          -        -          (1)          -        (1)     
 

 

 

     

 

 

   

 

 

     

 

 

 

Non-operating expense, adjusted

    $110          -        $120          $507          -        $517     

 

(a) Operating expense per ASM – CASM excludes profit sharing and special charges, the impact of certain primarily non-cash impairment, severance and other similar accounting charges. While the Company anticipates that it will record such special charges throughout the year and may record profit sharing, at this time the Company is unable to provide an estimate of these charges with reasonable certainty.

(b) Both the cost and availability of fuel are subject to many economic and political factors and are therefore beyond the Company’s control.

(c) Hedge program adjustments consist of excluding mark-to-market (MTM) (gains) and losses from fuel derivative contracts settling in future periods and adding back prior period gains and losses on fuel contracts settled in the current period. The purpose of hedge program adjustments is to adjust GAAP fuel derivative contract (gains) / losses to a cash-settled amount.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

Certain statements included in this investor update are forward-looking and thus reflect our current expectations and beliefs with respect to certain current and future events and anticipated financial and operating performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to our operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as “expects,” “will,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook” and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this investor update are based upon information available to us on the date of this investor update. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law. Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: our ability to comply with the terms of our various financing arrangements; the costs and availability of financing; our ability to maintain adequate liquidity; our ability to execute our operational plans and revenue-generating initiatives, including optimizing our revenue; our ability to control our costs, including realizing benefits from our resource optimization efforts, revenue-generating initiatives, cost reduction initiatives and fleet replacement programs; our ability to utilize our net operating losses; our ability to attract and retain customers; demand for transportation in the markets in which we operate; an outbreak of a disease that affects travel demand or travel behavior; demand for travel and the impact that global economic conditions have on customer travel patterns; excessive taxation and the inability to offset future taxable income; general economic conditions (including interest rates, foreign currency exchange rates, investment or credit market conditions, crude oil prices, costs of aircraft fuel and energy refining capacity in relevant markets); economic and political instability and other risks of doing business globally; any potential realized or unrealized gains or losses related to fuel or currency hedging programs; the effects of any hostilities, act of war or terrorist attack; the ability of other air carriers with whom we have alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; disruptions to our regional network; the costs and availability of aviation and other insurance; industry consolidation or changes in airline alliances; competitive pressures on pricing and on demand; our capacity decisions and the capacity decisions of our competitors; U.S. or foreign governmental legislation, regulation and other actions (including Open Skies agreements and environmental regulations); the impact of regulatory, investigative and legal proceedings and legal compliance risks; the impact of any management changes; labor costs; our ability to maintain satisfactory labor relations and the results of any collective bargaining agreement process with our union groups; any disruptions to operations due to any potential actions by our labor groups; weather conditions; and other risks and uncertainties set forth under Part I, Item 1A., “Risk Factors,” of UAL’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as well as other risks and uncertainties set forth from time to time in the reports we file with the U.S. Securities and Exchange Commission.

For further questions, contact Investor Relations at (872) 825-8610 or investorrelations@united.com.

####

 

4

EX-99.2 3 d286253dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

 

News Release

   LOGO

United Airlines

  
Worldwide Media Relations   
872.825.8640   
media.relations@united.com   

United Reports December 2016

Operational Performance

CHICAGO, Jan. 10, 2017 – United Airlines (UAL) today reported December 2016 operational results.

UAL’s December 2016 consolidated traffic (revenue passenger miles) increased 2.6 percent and consolidated capacity (available seat miles) increased 2.6 percent versus December 2015. UAL’s December 2016 consolidated load factor increased 0.1 points compared to December 2015.

The company now expects fourth-quarter 2016 consolidated passenger unit revenue to decline 1.25 to 1.75 percent compared to the fourth quarter of 2015. The improvement from revised guidance provided on Dec. 8 is due to stronger than expected close-in bookings and yields during the month of December.

About United

United Airlines and United Express operate more than 4,500 flights a day to 339 airports across five continents. In 2016, United and United Express operated more than 1.6 million flights carrying more than 143 million customers. United is proud to have the world’s most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C. The airline is a founding member of Star Alliance, which provides service to 192 countries via 28 member airlines. For more information, visit united.com, follow @United on Twitter or connect on Facebook. The common stock of United’s parent, United Continental Holdings, Inc., is traded on the NYSE under the symbol UAL.

- more -


United Reports December 2016 Operational Performance / Page 2

 

Preliminary Operational Results

 

    December     Full Year  
    2016     2015     Change     2016     2015     Change  

REVENUE PASSENGER MILES (000)

           

Domestic

    8,051,111        7,763,750        3.7     95,493,391        93,310,381        2.3

International

    7,596,469        7,348,858        3.4     90,688,065        90,332,113        0.4

Atlantic

    2,510,125        2,587,269        (3.0 %)      35,888,147        37,492,500        (4.3 %) 

Pacific

    3,025,679        2,746,177        10.2     34,185,845        33,299,439        2.7

Latin

    2,060,665        2,015,412        2.2     20,614,073        19,540,174        5.5

Mainline

    15,647,580        15,112,608        3.5     186,181,456        183,642,494        1.4

Regional

    1,948,414        2,036,267        (4.3 %)      24,127,972        24,968,714        (3.4 %) 

Consolidated

    17,595,994        17,148,875        2.6     210,309,428        208,611,208        0.8

AVAILABLE SEAT MILES (000)

           

Domestic

    9,469,788        9,070,643        4.4     111,452,951        108,140,642        3.1

International

    9,387,777        9,149,908        2.6     113,238,631        111,848,191        1.2

Atlantic

    3,196,530        3,335,361        (4.2 %)      47,106,793        47,188,858        (0.2 %) 

Pacific

    3,723,163        3,369,717        10.5     41,640,158        40,841,434        2.0

Latin

    2,468,084        2,444,830        1.0     24,491,680        23,817,899        2.8

Mainline

    18,857,565        18,220,551        3.5     224,691,582        219,988,833        2.1

Regional

    2,324,061        2,434,232        (4.5 %)      28,897,972        30,014,601        (3.7 %) 

Consolidated

    21,181,626        20,654,783        2.6     253,589,554        250,003,434        1.4

PASSENGER LOAD FACTOR

           

Domestic

    85.0     85.6     (0.6 ) pts      85.7     86.3     (0.6 ) pts 

International

    80.9     80.3     0.6   pts      80.1     80.8     (0.7 ) pts 

Atlantic

    78.5     77.6     0.9   pts      76.2     79.5     (3.3 ) pts 

Pacific

    81.3     81.5     (0.2 ) pts      82.1     81.5     0.6   pts 

Latin

    83.5     82.4     1.1   pts      84.2     82.0     2.2   pts 

Mainline

    83.0     82.9     0.1   pts      82.9     83.5     (0.6 ) pts 

Regional

    83.8     83.7     0.1   pts      83.5     83.2     0.3   pts 

Consolidated

    83.1     83.0     0.1   pts      82.9     83.4     (0.5 ) pts 
ONBOARD PASSENGERS (000)            

Mainline

    8,539        8,086        5.6     101,007        96,327        4.9

Regional

    3,376        3,517        (4.0 %)      42,170        44,042        (4.3 %) 

Consolidated

    11,915        11,603        2.7     143,177        140,369        2.0

CARGO REVENUE TON MILES (000)

           

Total

    258,651        223,908        15.5     2,805,292        2,614,125        7.3

Note: See Part II, Item 6 Selected Financial Data of the company’s Annual Report on Form 10-K for the year ended December 31, 2015 for the definition of these statistics

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United Reports December 2016 Operational Performance / Page 3

 

Fourth Quarter Preliminary Fuel Costs Per Gallon

 

Estimated average price per gallon of fuel, including operating cash-settled hedges1

   $1.62

Operating cash-settled hedge loss price per gallon

   ($0.02)

Estimated average price per gallon of fuel, excluding hedges

   $1.60

Estimated average price per gallon of fuel, including operating cash-settled hedges1

   $1.62

Non-operating cash-settled hedge loss price per gallon2

   $0.00

Estimated average price per gallon of fuel, including all cash-settled hedges3

   $1.62

 

1  This price per gallon corresponds to fuel expense in UAL’s income statement
2  This price per gallon corresponds to the impact of non-operating hedges that appear in non-operating expense in the income statement
3  This price per gallon corresponds to the total economic cost of the company’s fuel consumption including all cash-settled hedges but does not directly correspond to fuel expense in UAL’s income statement

Preliminary Operational Results

 

     2016     2015     Change  

December On-Time Performance4

     55.8     58.4     (2.6 ) pts 

December Completion Factor5

     96.7     96.6     0.1   pts 

 

4  Based on consolidated scheduled flights arriving on or before scheduled arrival time
5  Consolidated completion percentage

Safe Harbor Statement

        Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements included in this investor update are forward-looking and thus reflect our current expectations and beliefs with respect to certain current and future events and anticipated financial and operating performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to our operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as “expects,” “will,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook” and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this investor update are based upon information available to us on the date of this investor update. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law. Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: our ability to comply with the terms of our various financing arrangements; the costs and availability of financing; our ability to maintain adequate liquidity; our ability to execute our operational plans and revenue-generating initiatives, including optimizing our revenue; our ability to control our costs, including realizing benefits from our resource optimization efforts, revenue-generating initiatives, cost reduction initiatives and fleet replacement programs; our ability to utilize our net operating losses; our ability to attract and retain customers; demand for transportation in the markets in which we operate; an outbreak of a disease that affects travel demand or travel behavior; demand for travel and the impact that global economic conditions have on customer travel patterns; excessive taxation and the inability to offset future taxable income; general economic conditions (including interest rates, foreign currency exchange rates, investment or credit market conditions, crude oil prices, costs of aircraft fuel and energy refining capacity in relevant markets); economic and political instability and other risks of doing business globally; any potential realized or unrealized gains or losses related to fuel or currency hedging programs; the effects of any hostilities, act of war or terrorist attack; the ability of other air carriers with whom we have alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; disruptions to our regional network; the costs and availability of aviation and other insurance; industry consolidation or changes in airline alliances; competitive pressures on pricing and on demand; our capacity decisions and the capacity decisions of our competitors; U.S. or foreign governmental legislation, regulation and other actions (including Open Skies agreements and environmental regulations); the impact of regulatory, investigative and legal proceedings and legal compliance risks; the impact of any management changes; labor costs; our ability to maintain satisfactory labor relations and the results of any collective bargaining agreement process with our union groups; any disruptions to operations due to any potential actions by our labor groups; weather conditions; and other risks and uncertainties set forth under Part I, Item 1A., “Risk Factors,” of UAL’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as well as other risks and uncertainties set forth from time to time in the reports we file with the U.S. Securities and Exchange Commission.

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