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United Airlines Holdings 8-K Report, Financial Results (Apr 16, 2024)

Reports
Earnings & Results·Regulation FD·Exhibits & Filings
Filing Date
Filed April 16, 2024
Period End
April 16, 2024
Security
UAL
In the record · 2016–202610-K1110-Q338-K265

UAL filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 265 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · May ’18May ’18
  2. Restructuring8-K · Jul ’20Jul ’20
  3. Leadership change8-K · Mar ’22Mar ’22
  4. Material agreement8-K · Feb ’26Feb ’26

01—Abstract

Summary

Summary of the 8-K filed April 16, 2024. Cited figures are marked; the original filing is the authoritative source.

United Airlines Holdings, Inc. (UAL) reported first-quarter 2024 results in a press release furnished as Exhibit 99.1, showing a pre-tax loss of $164 milliona, an improvement of $92 million over the same quarter last year, and an adjusted pre-tax loss of $79 million, an improvement of $187 million on an adjusted basis.

The company stated that these results include an approximately $200 millionb impact from the Boeing 737 MAX 9 grounding, without which it would have reported a quarterly profit. First-quarter diluted loss per share was $0.38, and adjusted diluted loss per share was $0.15. Total operating revenue was $12.54 billion, up 9.7% from the prior year, and operating cash flow was $2.8 billion, with free cash flow of $1.5 billion.

The company continues to expect full-year 2024 adjusted diluted earnings per share of $9 to $11c. The company also updated its fleet plan in an Investor Update (Exhibit 99.2). Due to aircraft delivery delays, it now expects 61 narrowbody and 5 widebody aircraft deliveries in 2024, and approximately 100 narrowbody deliveries per year on average from 2025 through 2027.

The Investor Update provides second-quarter 2024 adjusted diluted EPS guidance of $3.75 to $4.25d and estimated adjusted total capital expenditures of approximately $6.5 billion for second-quarter 2024 and $7 billion to $9 billion per year for 2025 through 2027. Management indicated that a small number of aircraft scheduled to enter service in the second quarter may slip into the third quarter, which is expected to have minimal impact on capacity.

Balance sheet metrics at March 31, 2024 included total debt and finance lease obligations of $27.2 billion, ending available liquidity of $16.9 billion, and a trailing twelve-month adjusted net debt to adjusted EBITDAR ratio of 2.7x. The company also reported a tentative four-year contract extension with the Teamsters covering 9,700 aircraft technicians, with an earnings call scheduled for April 17, 2024.

02—Key points

Key Highlights

  1. First-quarter 2024 pre-tax loss of $164 million, improved $92 million year over year; adjusted pre-tax loss of $79 million, with the company citing an approximately $200 million impact from the Boeing 737 MAX 9 grounding.
  2. First-quarter diluted loss per share of $0.38 (adjusted $0.15 loss); operating revenue of $12.54 billion, up 9.7%.
  3. Full-year 2024 adjusted diluted EPS guidance of $9.00 to $11.00; second-quarter 2024 adjusted diluted EPS guidance of $3.75 to $4.25.
  4. Fleet plan revised: 61 narrowbody and 5 widebody deliveries expected in 2024, versus 101 narrowbody deliveries previously expected; approximately 100 narrowbody deliveries per year expected from 2025 through 2027.
  5. Converted a portion of Boeing MAX 10 orders to MAX 9 for 2025–2027 and agreed to letters of intent with two lessors for 35 Airbus A321neos expected in 2026 and 2027.
  6. Adjusted total capital expenditures estimated at approximately $6.5 billion for 2Q 2024 and $7 billion to $9 billion per year for 2025–2027.
  7. Liquidity of $16.9 billion at quarter end; total debt and finance lease obligations of $27.2 billion; adjusted net debt to adjusted EBITDAR of 2.7x.

03—Questions

Frequently Asked Questions

  1. Why did United report a loss in the first quarter of 2024?

    The filing attributes the quarterly loss partly to an approximately $200 million impact from the Boeing 737 MAX 9 grounding, which the company says would otherwise have produced a quarterly profit. Operating income was $99 million, while nonoperating expense, net, was $263 million, leaving a pre-tax loss of $164 million.

  2. What changed in United's aircraft delivery outlook?

    Because of manufacturing and certification delays and the 737 MAX 9 grounding, the company now expects 61 narrowbody and 5 widebody deliveries in 2024. Previously it had expected 101 narrowbody deliveries. For 2025 through 2027 it expects approximately 100 narrowbody deliveries per year on average, with a more consistent delivery schedule.

  3. What guidance did United provide for 2024 and the second quarter?

    The company continues to expect full-year 2024 adjusted diluted EPS of $9.00 to $11.00 and provided second-quarter 2024 adjusted diluted EPS guidance of $3.75 to $4.25. It did not provide a GAAP EPS target, stating it cannot predict the excluded items without unreasonable efforts.

  4. How much demand and revenue growth did United report?

    Consolidated capacity (ASMs) rose 9.1% year over year, and total operating revenue rose 9.7% to $12.54 billion. The company reported a double-digit percentage increase in business demand compared with pre-pandemic levels, and Atlantic and Domestic PRASM rose 11% and 6% respectively.

  5. What is United's liquidity and debt position?

    At quarter end, ending available liquidity was $16.9 billion and total debt and finance lease obligations were $27.2 billion. The trailing twelve-month adjusted net debt to adjusted EBITDAR ratio was 2.7x, and first-quarter free cash flow was $1.5 billion.

04—Continue

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