United Airlines Announces Third-Quarter 2024 Financial Results: Exceeds Earnings Per Share Expectations
Announces
Year-to-date generated
Company sees revenue trends improve as industry reached an inflection point in the quarter
The company produced strong financial and operational results in the quarter. As the company expected, revenue trends improved as the industry reached an inflection point in the quarter with unprofitable capacity exiting the market. Domestic unit revenue was positive year-over-year in August and September. Demand continues to be strong for the United product: Corporate revenues were up 13% year over year in September, and in the quarter premium revenues continued to remain resilient and were up 5% year over year and revenue from Basic Economy was up 20% year over year.
"I appreciate the entire United team coming together to take care of our customers by operating a safe and on-time airline this summer," said
Capital Allocation
The company's Board of Directors authorized a new share repurchase program for up to
"In the last four years, we've invested
In the quarter, the company repurchased in the open market just over 2 million shares of UAL common stock in connection with the exercise of roughly 6.4 million warrants issued to the
Under today's
Third-Quarter Financial Results
- Capacity up 4.1% compared to third-quarter 2023.
- Total operating revenue of
$14.8 billion , up 2.5% compared to third-quarter 2023. - TRASM down 1.6% compared to third-quarter 2023.
- CASM up 0.1%, and CASM-ex1 up 6.5%, compared to third-quarter 2023.
- Pre-tax earnings of
$1.3 billion , with a pre-tax margin of 8.7%; adjusted pre-tax earnings1 of$1.4 billion , with an adjusted pre-tax margin1 of 9.7%. - Net income of
$1.0 billion ; adjusted net income1 of$1.1 billion . - Diluted earnings per share of
$2.90 ; adjusted diluted earnings per share1 of$3.33 . - Average fuel price per gallon of
$2.56 . - Ending available liquidity[3] of
$17.1 billion . - Total debt and finance lease obligations of
$25.7 billion at quarter end. - Voluntarily pre-paid the remaining
$1.8 billion outstanding balance of the MileagePlus term loan with an interest rate near 11%. - Net leverage1 of 2.7x.
Key Highlights
- United announced an industry-leading agreement with
SpaceX to bring Starlink's Wi-Fi service to more than 1,000 of the airline's mainline and regional aircraft, providing customers free, fast, reliable internet connectivity on passenger flights as soon as late 2025. - Last week, United announced the largest international expansion in the airline's history, bringing service to eight new
Atlantic and Pacific destinations in summer 2025 (Ulaanbaatar,Mongolia ; Faro,Portugal ;Palermo, Italy ;Dakar, Senegal ;Bilbao, Spain ;Madeira Island ,Portugal ; Nuuk,Greenland ; andKaohsiung, Taiwan ). United will serve more international destinations across theAtlantic and Pacific than all otherU.S. carriers combined with 800 daily flights to and from 147 international destinations, including nearly 40 not served by any otherU.S. airline. - Increased third quarter customer satisfaction ratings by 5.4 points year over year as measured by the Net Promoter Score scale, with improvements to important touchpoints like baggage, inflight entertainment and food and beverage.
- Ranked first in on time departure and second in on time arrival amongst major
U.S. airlines for the third quarter, with the best on time departure in the months of August and September. - United became the first airline to purchase sustainable aviation fuel (SAF) at
Chicago O'Hare International Airport . - United signed an agreement with SkyWest to begin operating the CRJ550 as part of the United Express portfolio, with 11 initial aircraft to start entering the fleet in December of this year and opportunity for more in the future.
Customer Experience
- Saw a 5.8% increase in customer check-in satisfaction, a 6.5% increase in customer checking in digitally and 9% increase in customer bypassing the lobby for the third quarter year over year thanks to check-in process improvements like introducing Spanish translations within features of the United app, enhancing digital check-in options for basic economy and expanding curbside bag drop-off outside airports.
- Opened the newly updated
South Terminal lobby atMiami International Airport , featuring 10 new ticket counters, additional self-serve kiosks and other time-saving app features like bag drop shortcut and updated signage. - Nearly half (49%) of passengers whose trips were cancelled were rebooked through United's automated service or through self-service in the third quarter, an increase in five points year over year.
- Enhanced customers' culinary experience with the introduction of the airline's new domestic economy cabin wine list, which includes canned wine from two women-owned companies and expanded choice for customers with new rose and brut options.
- With Live Activities on Apple Watch, customers can now access important flight information right from their wrist without opening the United app.
- Unveiled improvements to United's digital offerings by introducing digital food menus for all flights and cabins within the United app and transitioning Hemispheres® magazine to an all-access digital experience on United.com.
- Opened the Reset Suite by Therabody at Chicago O'Hare, a luxury wellness lounge for customers to relax prior to their flight.
Operations
- Operated the busiest third quarter as measured by revenue passenger volumes in company history, setting the record for the most ever passengers carried for the
July 4 andLabor Day holidays and for the highest number of customers carried in a day at 552,000 in July. - Set the company record for the highest daily customer average in a month of September with 474,000 carried.
- United finished the quarter with the best on time departure amongst major
U.S. airlines in six of seven of United'sU.S. hub locations, making it the 30th quarter in a row leading on time departure at United's Chicago O'Hare hub and 10th in a row leading United'sDenver hub. - In September, the airline achieved its highest completion rate year to date.
Network
- United operated its largest domestic
U.S. andCanada third quarter schedule in company history, an increase of 5.2% and 18.5% of flights year over year, respectively. - In the third quarter, United operated the largest schedule to
Europe in United's history, including the largest-ever United schedules to popularSouthern Europe tourist destinations such asPortugal ,Spain ,Italy , andGreece . - The carrier announced its first-ever nonstop flight between its
New York /Newark hub andDominica , to begin service in February subject to government approval. - United added or increased service across 145 flights to help customers reach major special events like the Republican and Democratic National Conventions, college football games across the country, and
Chicago Bears away games, including adding flights for fans to support the team for their international game inLondon . - United launched or reinstated routes from
Washington, D.C. toGreenville, S.C. ;San Francisco toDetroit, Mich. ; andSt. Louis, Mo. , and added an additional route fromSan Francisco toMontréal . - With reinstated service between
Los Angeles andShanghai in the third quarter, United continues to operate the largest mainlandChina network of any carrier and is the onlyU.S. carrier to serve mainlandChina fromLos Angeles .
Awards
- United was recognized for the ninth year in a row as a "Best Place to Work for Disability Inclusion" by Disability Equality Index.
- Executive Vice President and Chief Communication Officer
Josh Earnest was named to PR Week's Power List for the fourth year in a row in recognition of his influential industry leadership. -
Linda Jojo , United's Chief Customer Officer, was reappointed to theFederal Aviation Administration's Management Advisory Council for a second term, serving as the Chair. - United's Digital Technology team won the Digital Leadership Award from the Flight Global Airline Strategy Awards for their innovation and excellence in the market.
- Business Travel News Europe awarded the airline the 2024 Technology Innovation and Traveler Experience award for the United app's improvements to customer experience.
Employees and Communities
- In partnership with United's
Eco-Skies Alliance , United partnered with theSan Francisco 49ers to become the first NFL team to purchase sustainable aviation fuel. - In the third quarter, United saw a nearly 50% growth in employee volunteerism year to date, with nearly 4,000 United employees volunteering more than 16,000 hours, 11,000 hours of which were logged in United's annual month-long volunteer campaign September of Service to honor those affected by 9/11.
- Announced a new sponsorship with the
Washington Capitals , Mystics and Wizards as the three teams' official airline and a founding partner of theMonumental Sports & Entertainment's Capitol One Arena transformation, giving MileagePlus customers access to exclusive experiences. - For the second year in a row, United donated
$1.25 million through the education nonprofit DonorsChoose to support aviation and STEM classroom projects in historically underfunded schools across United's domestic hub communities. - United and
Airlink mobilized 335 responders for 14 emergencies, humanitarian crises and recovery and preparedness initiatives globally, and United shipped 17 million tons of aid cargo to support relief efforts. - Members of United's Black Business Resource Group Beacon participated in
Chicago's Bud Billiken Parade, with United awarding a$2,500 scholarship toEmory University . - United hosted more than 850 girls at 35 different airports across their system to celebrate the 10th anniversary of Girls in Aviation Day, recognizing the achievements of women in aviation and inspiring the next generation of aviators.
Earnings Call
UAL will hold a conference call to discuss third-quarter financial results, as well as its financial and operational outlook for the fourth-quarter 2024 and beyond, on
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
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
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
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
Non-GAAP Financial Information:
In discussing financial results and guidance, the company refers to financial measures that are not in accordance with
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-
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED) |
|||||||||||||
|
|||||||||||||
|
|
Three Months Ended |
|
% Increase/ (Decrease) |
|
|
Nine Months Ended |
|
% Increase/ (Decrease) |
||||
(In millions, except for percentage changes and per share data) |
|
2024 |
|
2023 |
|
|
|
2024 |
|
2023 |
|
||
Operating revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger revenue |
|
$ 13,561 |
|
$ 13,349 |
|
1.6 |
|
|
$ 38,554 |
|
$ 36,625 |
|
5.3 |
Cargo |
|
417 |
|
333 |
|
25.2 |
|
|
1,222 |
|
1,093 |
|
11.8 |
Other operating revenue |
|
865 |
|
802 |
|
7.9 |
|
|
2,592 |
|
2,373 |
|
9.2 |
Total operating revenue |
|
14,843 |
|
14,484 |
|
2.5 |
|
|
42,368 |
|
40,091 |
|
5.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and related costs |
|
4,323 |
|
3,914 |
|
10.4 |
|
|
12,353 |
|
10,946 |
|
12.9 |
Aircraft fuel |
|
2,993 |
|
3,342 |
|
(10.4) |
|
|
9,080 |
|
9,336 |
|
(2.7) |
Landing fees and other rent |
|
866 |
|
801 |
|
8.1 |
|
|
2,536 |
|
2,283 |
|
11.1 |
Aircraft maintenance materials and outside repairs |
|
765 |
|
684 |
|
11.8 |
|
|
2,254 |
|
2,072 |
|
8.8 |
Depreciation and amortization |
|
742 |
|
663 |
|
11.9 |
|
|
2,169 |
|
1,987 |
|
9.2 |
Regional capacity purchase |
|
651 |
|
592 |
|
10.0 |
|
|
1,848 |
|
1,806 |
|
2.3 |
Distribution expenses |
|
574 |
|
516 |
|
11.2 |
|
|
1,680 |
|
1,406 |
|
19.5 |
Aircraft rent |
|
65 |
|
46 |
|
41.3 |
|
|
148 |
|
151 |
|
(2.0) |
Special charges |
|
(5) |
|
29 |
|
NM |
|
|
44 |
|
902 |
|
NM |
Other operating expenses |
|
2,304 |
|
2,158 |
|
6.8 |
|
|
6,663 |
|
5,989 |
|
11.3 |
Total operating expense |
|
13,278 |
|
12,745 |
|
4.2 |
|
|
38,775 |
|
36,878 |
|
5.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
1,565 |
|
1,739 |
|
(10.0) |
|
|
3,593 |
|
3,213 |
|
11.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(379) |
|
(493) |
|
(23.1) |
|
|
(1,260) |
|
(1,472) |
|
(14.4) |
Interest income |
|
187 |
|
234 |
|
(20.1) |
|
|
554 |
|
620 |
|
(10.6) |
Interest capitalized |
|
53 |
|
48 |
|
10.4 |
|
|
174 |
|
128 |
|
35.9 |
Unrealized gains (losses) on investments, net |
|
(90) |
|
(54) |
|
66.7 |
|
|
(160) |
|
54 |
|
NM |
Miscellaneous, net |
|
(50) |
|
11 |
|
NM |
|
|
(40) |
|
73 |
|
NM |
Total nonoperating expense, net |
|
(279) |
|
(254) |
|
9.8 |
|
|
(732) |
|
(597) |
|
22.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income tax expense |
|
1,286 |
|
1,485 |
|
(13.4) |
|
|
2,861 |
|
2,616 |
|
9.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
321 |
|
348 |
|
(7.8) |
|
|
697 |
|
598 |
|
16.6 |
Net income |
|
$ 965 |
|
$ 1,137 |
|
(15.1) |
|
|
$ 2,164 |
|
$ 2,018 |
|
7.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
$ 2.90 |
|
$ 3.42 |
|
(15.2) |
|
|
$ 6.49 |
|
$ 6.08 |
|
6.7 |
Diluted weighted average shares |
|
332.7 |
|
332.4 |
|
0.1 |
|
|
333.3 |
|
331.8 |
|
0.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM-Greater than 100% change or otherwise not meaningful. |
|
|
|
|
|
|
|
|
|
|
|
|
|
PASSENGER REVENUE INFORMATION AND STATISTICS (UNAUDITED) |
|||||||||||||
|
|||||||||||||
Information is as follows (in millions, except for percentage changes): |
|||||||||||||
|
|||||||||||||
|
3Q 2024 Passenger Revenue |
|
Passenger Revenue vs. 3Q 2023 |
|
Passenger |
|
Yield vs. |
|
Available
Seat Miles vs. 3Q 2023 |
|
3Q 2024 |
|
3Q 2024 |
Domestic |
$ 7,857 |
|
2.4 % |
|
(0.8 %) |
|
(0.4 %) |
|
3.3 % |
|
43,746 |
|
37,784 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,972 |
|
1.4 % |
|
(0.9 %) |
|
(0.7 %) |
|
2.3 % |
|
17,906 |
|
15,469 |
|
265 |
|
(35.7 %) |
|
5.4 % |
|
9.8 % |
|
(38.9 %) |
|
1,853 |
|
1,562 |
|
3,237 |
|
(3.2 %) |
|
0.6 % |
|
1.4 % |
|
(3.8 %) |
|
19,759 |
|
17,031 |
Pacific |
1,335 |
|
7.2 % |
|
(15.7 %) |
|
(9.9) % |
|
27.2 % |
|
10,461 |
|
8,095 |
|
1,132 |
|
3.8 % |
|
(0.8 %) |
|
(0.9 %) |
|
4.6 % |
|
7,575 |
|
6,639 |
International |
5,704 |
|
0.4 % |
|
(4.3 %) |
|
(2.1 %) |
|
5.0 % |
|
37,795 |
|
31,765 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
$ 13,561 |
|
1.6 % |
|
(2.4 %) |
|
(1.1 %) |
|
4.1 % |
|
81,541 |
|
69,549 |
Select operating statistics are as follows: |
|||||||||||||||
|
|||||||||||||||
|
|
Three Months Ended |
|
% Increase/ (Decrease) |
|
|
Nine Months Ended |
|
% Increase/ (Decrease) |
|
|||||
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
|
||||
Passengers (thousands) (a) |
|
45,559 |
|
44,381 |
|
2.7 |
|
|
129,259 |
|
123,148 |
|
5.0 |
|
|
RPMs (millions) (b) |
|
69,549 |
|
67,691 |
|
2.7 |
|
|
194,040 |
|
183,764 |
|
5.6 |
|
|
ASMs (millions) (c) |
|
81,541 |
|
78,348 |
|
4.1 |
|
|
232,887 |
|
217,606 |
|
7.0 |
|
|
Passenger load factor: (d) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
85.3 % |
|
86.4 % |
|
(1.1) |
pts. |
|
83.3 % |
|
84.4 % |
|
(1.1) |
pts. |
|
Domestic |
|
86.4 % |
|
86.7 % |
|
(0.3) |
pts. |
|
85.5 % |
|
85.0 % |
|
0.5 |
pts. |
|
International |
|
84.0 % |
|
86.0 % |
|
(2.0) |
pts. |
|
80.8 % |
|
83.8 % |
|
(3.0) |
pts. |
|
PRASM (cents) |
|
16.63 |
|
17.04 |
|
(2.4) |
|
|
16.55 |
|
16.83 |
|
(1.7) |
|
|
Total revenue per available seat mile ("TRASM") (cents) |
|
18.20 |
|
18.49 |
|
(1.6) |
|
|
18.19 |
|
18.42 |
|
(1.2) |
|
|
Average yield per RPM (cents) (e) |
|
19.50 |
|
19.72 |
|
(1.1) |
|
|
19.87 |
|
19.93 |
|
(0.3) |
|
|
Cargo revenue ton miles (millions) (f) |
|
881 |
|
766 |
|
15.0 |
|
|
2,623 |
|
2,265 |
|
15.8 |
|
|
Aircraft in fleet at end of period |
|
1,381 |
|
1,335 |
|
3.4 |
|
|
1,381 |
|
1,335 |
|
3.4 |
|
|
Average stage length (miles) (g) |
|
1,510 |
|
1,506 |
|
0.3 |
|
|
1,503 |
|
1,480 |
|
1.6 |
|
|
Employee headcount, as of |
|
106.5 |
|
102.0 |
|
4.4 |
|
|
106.5 |
|
102.0 |
|
4.4 |
|
|
Cost per ASM ("CASM") (cents) |
|
16.28 |
|
16.27 |
|
0.1 |
|
|
16.65 |
|
16.95 |
|
(1.8) |
|
|
CASM-ex (cents) (h) |
|
12.26 |
|
11.51 |
|
6.5 |
|
|
12.47 |
|
11.94 |
|
4.4 |
|
|
Average aircraft fuel price per gallon |
|
$ 2.56 |
|
$ 2.95 |
|
(13.2) |
|
|
|
|
|
|
(8.1) |
|
|
Fuel gallons consumed (millions) |
|
1,170 |
|
1,132 |
|
3.4 |
|
|
3,329 |
|
3,146 |
|
5.8 |
|
(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. |
1 NON-GAAP FINANCIAL INFORMATION
UAL evaluates its financial performance utilizing various accounting principles generally accepted in
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.
Net Leverage: Net leverage is a non-GAAP financial measure that is equal to adjusted net debt divided by trailing twelve month adjusted EBITDAR. UAL provides net leverage because we believe it provides useful supplemental information for assessing the company's debt level.
|
|
Three Months Ended |
|
% Increase/ (Decrease) |
|
Nine Months Ended |
|
% Increase/ (Decrease) |
||||
CASM-ex (in cents, except for percentage changes) |
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
||
CASM (GAAP) |
|
16.28 |
|
16.27 |
|
0.1 |
|
16.65 |
|
16.95 |
|
(1.8) |
Fuel expense |
|
3.68 |
|
4.26 |
|
(13.6) |
|
3.90 |
|
4.29 |
|
(9.1) |
Profit sharing |
|
0.28 |
|
0.39 |
|
(28.2) |
|
0.18 |
|
0.24 |
|
(25.0) |
Third-party business expenses |
|
0.07 |
|
0.07 |
|
— |
|
0.08 |
|
0.06 |
|
33.3 |
Special charges |
|
(0.01) |
|
0.04 |
|
NM |
|
0.02 |
|
0.42 |
|
NM |
CASM-ex (Non-GAAP) |
|
12.26 |
|
11.51 |
|
6.5 |
|
12.47 |
|
11.94 |
|
4.4 |
NON-GAAP FINANCIAL INFORMATION (Continued) |
||||||||||||
|
||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
|
Twelve Months Ended |
||||||
Adjusted EBITDA and EBITDAR (in millions) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Net income (GAAP) |
|
$ 965 |
|
|
|
|
|
|
|
|
|
|
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
742 |
|
663 |
|
2,169 |
|
1,987 |
|
2,853 |
|
2,611 |
Interest expense, net of capitalized interest and interest income |
|
139 |
|
211 |
|
532 |
|
724 |
|
755 |
|
1,015 |
Income tax expense |
|
321 |
|
348 |
|
697 |
|
598 |
|
868 |
|
885 |
Special charges |
|
(5) |
|
29 |
|
44 |
|
902 |
|
91 |
|
918 |
Nonoperating unrealized (gains) losses on investments, net |
|
90 |
|
54 |
|
160 |
|
(54) |
|
187 |
|
(86) |
Nonoperating debt extinguishment and modification fees |
|
75 |
|
— |
|
110 |
|
11 |
|
110 |
|
11 |
Adjusted EBITDA (non-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin (non-GAAP) |
|
15.7 % |
|
16.9 % |
|
13.9 % |
|
15.4 % |
|
13.6 % |
|
15.7 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (non-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
|
Aircraft rent |
|
65 |
|
46 |
|
148 |
|
151 |
|
194 |
|
210 |
Adjusted EBITDAR (non-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||
Adjusted Capital Expenditures (in millions) |
2024 |
|
2023 |
|
2024 |
|
2023 |
Capital expenditures, net of flight equipment purchase deposit returns (GAAP) |
$ 1,410 |
|
$ 1,842 |
|
$ 3,940 |
|
$ 5,105 |
Property and equipment acquired through the issuance of debt, finance leases, |
47 |
|
118 |
|
(159) |
|
677 |
Adjusted capital expenditures (Non-GAAP) |
$ 1,457 |
|
$ 1,960 |
|
$ 3,781 |
|
$ 5,782 |
|
|
|
|
|
|
|
|
Free Cash Flow (in millions) |
|
|
|
|
|
|
|
Net cash provided by operating activities (GAAP) |
$ 1,498 |
|
$ 880 |
|
$ 7,221 |
|
$ 7,821 |
Less capital expenditures, net of flight equipment purchase deposit returns |
1,410 |
|
1,842 |
|
3,940 |
|
5,105 |
Free cash flow, net of financings (Non-GAAP) |
$ 88 |
|
$ (962) |
|
$ 3,281 |
|
$ 2,716 |
|
|
|
|
|
|
|
|
Net cash provided by operating activities (GAAP) |
$ 1,498 |
|
$ 880 |
|
$ 7,221 |
|
$ 7,821 |
Less adjusted capital expenditures (Non-GAAP) |
1,457 |
|
1,960 |
|
3,781 |
|
5,782 |
Free cash flow (Non-GAAP) |
$ 41 |
|
$ (1,080) |
|
$ 3,440 |
|
$ 2,039 |
|
|
|
|
Increase/ (Decrease) |
|
||
Adjusted total debt and Adjusted net debt (in millions) |
|
2024 |
|
2023 |
|
|
|
Debt - current and noncurrent (GAAP) |
|
$ 25,486 |
|
$ 29,581 |
|
$ (4,095) |
|
Operating lease obligations - current and noncurrent |
|
4,923 |
|
5,091 |
|
(168) |
|
Finance lease obligations - current and noncurrent |
|
176 |
|
342 |
|
(166) |
|
Pension and postretirement liabilities - noncurrent |
|
1,624 |
|
1,421 |
|
203 |
|
Other financial liabilities - current and noncurrent |
|
2,774 |
|
1,692 |
|
1,082 |
|
Adjusted total debt (Non-GAAP) |
|
$ 34,983 |
|
$ 38,127 |
|
(3,144) |
|
Less: Cash and cash equivalents |
|
$ 8,812 |
|
$ 7,478 |
|
1,334 |
|
Short-term investments |
|
5,352 |
|
9,608 |
|
(4,256) |
|
Adjusted net debt (Non-GAAP) |
|
$ 20,819 |
|
$ 21,041 |
|
(222) |
|
Net leverage |
|
2.7 |
|
2.5 |
|
0.2 |
pts. |
NON-GAAP FINANCIAL INFORMATION (Continued) |
|||||||||||
|
|||||||||||
|
Three Months Ended |
|
% Increase/ (Decrease) |
|
Nine Months Ended |
|
% Increase/ (Decrease) |
||||
(in millions, except for percentage changes and per share data) |
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
||
Operating expenses (GAAP) |
|
|
|
|
4.2 |
|
|
|
|
|
5.1 |
Special charges |
(5) |
|
29 |
|
NM |
|
44 |
|
902 |
|
NM |
Operating expenses, excluding special charges |
13,283 |
|
12,716 |
|
4.5 |
|
38,731 |
|
35,976 |
|
7.7 |
Adjusted to exclude: |
|
|
|
|
|
|
|
|
|
|
|
Fuel expense |
2,993 |
|
3,342 |
|
(10.4) |
|
9,080 |
|
9,336 |
|
(2.7) |
Profit sharing |
231 |
|
301 |
|
(23.3) |
|
419 |
|
521 |
|
(19.6) |
Third-party business expenses |
61 |
|
52 |
|
17.3 |
|
183 |
|
139 |
|
31.7 |
Adjusted operating expenses (Non-GAAP) |
$ 9,998 |
|
$ 9,021 |
|
10.8 |
|
|
|
|
|
11.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (GAAP) |
$ 1,565 |
|
$ 1,739 |
|
(10.0) |
|
$ 3,593 |
|
$ 3,213 |
|
11.8 |
Special charges |
(5) |
|
29 |
|
NM |
|
44 |
|
902 |
|
NM |
Adjusted operating income (Non-GAAP) |
$ 1,560 |
|
$ 1,768 |
|
(11.8) |
|
$ 3,637 |
|
$ 4,115 |
|
(11.6) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin |
10.5 % |
|
12.0 % |
|
(1.5) pts. |
|
8.5 % |
|
8.0 % |
|
.5 pts. |
Adjusted operating margin (Non-GAAP) |
10.5 % |
|
12.2 % |
|
(1.7) pts. |
|
8.6 % |
|
10.3 % |
|
(1.7) pts. |
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income (GAAP) |
$ 1,286 |
|
$ 1,485 |
|
(13.4) |
|
$ 2,861 |
|
$ 2,616 |
|
9.4 |
Adjusted to exclude: |
|
|
|
|
|
|
|
|
|
|
|
Special charges |
(5) |
|
29 |
|
NM |
|
44 |
|
902 |
|
NM |
Unrealized (gains) losses on investments, net |
90 |
|
54 |
|
NM |
|
160 |
|
(54) |
|
NM |
Debt extinguishment and modification fees |
75 |
|
— |
|
NM |
|
110 |
|
11 |
|
NM |
Adjusted pre-tax income (Non-GAAP) |
$ 1,446 |
|
$ 1,568 |
|
(7.8) |
|
$ 3,175 |
|
$ 3,475 |
|
(8.6) |
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax margin |
8.7 % |
|
10.3 % |
|
(1.6) pts. |
|
6.8 % |
|
6.5 % |
|
.3 pts. |
Adjusted pre-tax margin (Non-GAAP) |
9.7 % |
|
10.8 % |
|
(1.1) pts. |
|
7.5 % |
|
8.7 % |
|
(1.2) pts. |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (GAAP) |
$ 965 |
|
$ 1,137 |
|
(15.1) |
|
$ 2,164 |
|
$ 2,018 |
|
7.2 |
Adjusted to exclude: |
|
|
|
|
|
|
|
|
|
|
|
Special charges |
(5) |
|
29 |
|
NM |
|
44 |
|
902 |
|
NM |
Unrealized (gains) losses on investments, net |
90 |
|
54 |
|
NM |
|
160 |
|
(54) |
|
NM |
Debt extinguishment and modification fees |
75 |
|
— |
|
NM |
|
110 |
|
11 |
|
NM |
Income tax benefit on adjustments, net |
(15) |
|
(7) |
|
NM |
|
(34) |
|
(204) |
|
NM |
Adjusted net income (Non-GAAP) |
$ 1,110 |
|
$ 1,213 |
|
(8.5) |
|
$ 2,444 |
|
$ 2,673 |
|
(8.6) |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share (GAAP) |
$ 2.90 |
|
$ 3.42 |
|
(15.2) |
|
$ 6.49 |
|
$ 6.08 |
|
6.7 |
Adjusted to exclude: |
|
|
|
|
|
|
|
|
|
|
|
Special charges |
(0.01) |
|
0.09 |
|
NM |
|
0.13 |
|
2.72 |
|
NM |
Unrealized (gains) losses on investments, net |
0.27 |
|
0.16 |
|
NM |
|
0.48 |
|
(0.16) |
|
NM |
Debt extinguishment and modification fees |
0.22 |
|
— |
|
NM |
|
0.33 |
|
0.03 |
|
NM |
Income tax benefit on adjustments, net |
(0.05) |
|
(0.02) |
|
NM |
|
(0.10) |
|
(0.61) |
|
NM |
Adjusted diluted earnings per share (Non-GAAP) |
$ 3.33 |
|
$ 3.65 |
|
(8.8) |
|
$ 7.33 |
|
$ 8.06 |
|
(9.1) |
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||
|
|||
(in millions) |
|
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ 8,812 |
|
$ 6,058 |
Short-term investments |
5,352 |
|
8,330 |
Restricted cash |
36 |
|
31 |
Receivables, less allowance for credit losses (2024 — |
2,042 |
|
1,898 |
Aircraft fuel, spare parts and supplies, less obsolescence allowance (2024 — |
1,639 |
|
1,561 |
Prepaid expenses and other |
690 |
|
609 |
Total current assets |
18,571 |
|
18,487 |
|
|
|
|
Total operating property and equipment, net |
41,680 |
|
39,815 |
Operating lease right-of-use assets |
3,782 |
|
3,914 |
Other assets: |
|
|
|
|
4,527 |
|
4,527 |
Intangibles, less accumulated amortization (2024 — |
2,691 |
|
2,725 |
Restricted cash |
180 |
|
245 |
Investments in affiliates and other, less allowance for credit losses (2024 — |
1,209 |
|
1,391 |
Total other assets |
8,607 |
|
8,888 |
Total assets |
$ 72,640 |
|
$ 71,104 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ 4,008 |
|
$ 3,835 |
Accrued salaries and benefits |
2,802 |
|
2,940 |
Advance ticket sales |
8,477 |
|
6,704 |
Frequent flyer deferred revenue |
3,314 |
|
3,095 |
Current maturities of long-term debt |
3,279 |
|
4,018 |
Current maturities of operating leases |
491 |
|
576 |
Current maturities of finance leases |
87 |
|
172 |
Current maturities of other financial liabilities |
69 |
|
57 |
Other |
838 |
|
806 |
Total current liabilities |
23,365 |
|
22,203 |
Long-term liabilities and deferred credits: |
|
|
|
Long-term debt |
22,207 |
|
25,057 |
Long-term obligations under operating leases |
4,432 |
|
4,503 |
Long-term obligations under finance leases |
89 |
|
91 |
Frequent flyer deferred revenue |
4,057 |
|
4,048 |
Pension liability |
1,030 |
|
968 |
Postretirement benefit liability |
594 |
|
637 |
Deferred income taxes |
1,224 |
|
594 |
Other financial liabilities |
2,705 |
|
2,265 |
Other |
1,500 |
|
1,414 |
Total long-term liabilities and deferred credits |
37,838 |
|
39,577 |
Total stockholders' equity |
11,437 |
|
9,324 |
Total liabilities and stockholders' equity |
$ 72,640 |
|
$ 71,104 |
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
|
|||
|
|||
(in millions) |
Nine Months Ended |
||
|
2024 |
|
2023 |
Cash Flows from Operating Activities: |
|
|
|
Net cash provided by operating activities |
$ 7,221 |
|
$ 7,821 |
|
|
|
|
Cash Flows from Investing Activities: |
|
|
|
Capital expenditures, net of flight equipment purchase deposit returns |
(3,940) |
|
(5,105) |
Purchases of short-term and other investments |
(4,057) |
|
(8,875) |
Proceeds from sale of short-term and other investments |
7,206 |
|
8,614 |
Proceeds from sale of property and equipment |
66 |
|
20 |
Other, net |
(211) |
|
(17) |
Net cash used in investing activities |
(936) |
|
(5,363) |
|
|
|
|
Cash Flows from Financing Activities: |
|
|
|
Proceeds from issuance of debt and other financing liabilities, net of discounts and fees |
5,302 |
|
1,685 |
Payments of long-term debt, finance leases and other financing liabilities |
(8,792) |
|
(3,423) |
Repurchase of common stock |
(82) |
|
— |
Other, net |
(19) |
|
(31) |
Net cash used in financing activities |
(3,591) |
|
(1,769) |
Net increase in cash, cash equivalents and restricted cash |
2,694 |
|
689 |
Cash, cash equivalents and restricted cash at beginning of the period |
6,334 |
|
7,421 |
Cash, cash equivalents and restricted cash at end of the period |
$ 9,028 |
|
$ 8,110 |
|
|
|
|
Investing and Financing Activities Not Affecting Cash: |
|
|
|
Property and equipment acquired through the issuance of debt, finance leases and other |
$ (159) |
|
$ 677 |
Right-of-use assets acquired through operating leases |
376 |
|
470 |
Lease modifications and lease conversions |
117 |
|
438 |
Investment interests received in exchange for loans, goods and services |
18 |
|
25 |
NOTES (UNAUDITED) |
||||||||
|
||||||||
Special charges and unrealized (gains) losses on investments, net include the following: |
||||||||
|
||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||
(in millions) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Operating: |
|
|
|
|
|
|
|
|
(Gains) losses on sale of assets and other special charges |
|
$ (5) |
|
$ 28 |
|
$ 44 |
|
$ 88 |
Labor contract ratification bonuses |
|
— |
|
1 |
|
— |
|
814 |
Total operating special charges |
|
(5) |
|
29 |
|
44 |
|
902 |
|
|
|
|
|
|
|
|
|
Nonoperating: |
|
|
|
|
|
|
|
|
Nonoperating unrealized (gains) losses on investments, net |
|
90 |
|
54 |
|
160 |
|
(54) |
Nonoperating debt extinguishment and modification fees |
|
75 |
|
— |
|
110 |
|
11 |
Total nonoperating special charges and unrealized (gains) losses on investments, net |
|
165 |
|
54 |
|
270 |
|
(43) |
Total operating and nonoperating special charges and unrealized (gains) losses on investments, net |
|
160 |
|
83 |
|
314 |
|
859 |
Income tax benefit, net of valuation allowance |
|
(15) |
|
(7) |
|
(34) |
|
(204) |
Total operating and non-operating special charges and unrealized (gains) losses on investments, net of income taxes |
|
$ 145 |
|
$ 76 |
|
$ 280 |
|
$ 655 |
(Gains) losses on sale of assets and other special charges: During the three and nine months ended
During the three and nine months ended
Labor contract ratification bonuses. During the nine months ended
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 and nine months ended
During the nine months ended
Effective tax rate:
The company's effective tax rates were as follows:
|
Three Months Ended |
|
Nine Months Ended |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Effective tax rate |
25.0 % |
|
23.4 % |
|
24.4 % |
|
22.9 % |
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 Net leverage is a non-GAAP measure that is equal to adjusted net debt divided by trailing twelve month adjusted EBITDAR. We are not providing a target for or a reconciliation to total debt or net income, the most directly comparable GAAP measures, because we are unable to predict special charges (credits) and unrealized (gains) losses on investments contained in the GAAP measure without unreasonable efforts, and therefore we also are not able to predict the probable significance of such items contained in the GAAP measures 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. |
3 Includes cash, cash equivalents, short-term investments and undrawn credit facilities. |
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