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): October 12, 2011

 

 

UNITED CONTINENTAL HOLDINGS, INC.

UNITED AIR LINES, INC.

CONTINENTAL AIRLINES, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

Delaware   001-06033   36-2675207
Delaware   001-11355   36-2675206
Delaware   001-10323   74-2099724
(State or other jurisdiction   (Commission   (IRS Employer
of incorporation)   File Number)   Identification Number)

 

77 W. Wacker Drive, Chicago, IL   60601
77 W. Wacker Drive, Chicago, IL   60601
1600 Smith Street, Dept. HQSEO, Houston, Texas   77002
(Address of principal executive offices)   (Zip Code)

(312) 997-8000

(312) 997-8000

(713) 324-2950

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 7.01 Regulation FD Disclosure.

Gerald Laderman, Senior Vice President Finance and Treasurer of United Continental Holdings, Inc., the holding company whose primary subsidiaries are United Air Lines, Inc. and Continental Airlines, Inc., will speak at the Deutsche Bank 2011 Leveraged Finance Conference on Wednesday, October 12, 2011. Attached hereto as Exhibit 99.1 are slides that will be presented at that time.

The information in this Item 7.01, 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, 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, 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. slide presentation delivered on October 12, 2011

 

* Furnished herewith electronically.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

   

UNITED CONTINENTAL HOLDINGS, INC.

UNITED AIR LINES, INC.

CONTINENTAL AIRLINES, INC.

Date: October 12, 2011     By:   /s/ Chris Kenny        
    Name:   Chris Kenny
    Title:   Vice President and Controller


EXHIBIT INDEX

 

Exhibit No.

  

Description

99.1*    United Continental Holdings, Inc. slide presentation delivered on October 12, 2011

 

* Furnished herewith electronically.
United Continental Holdings, Inc. slide presentation delivered
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%