United Continental Holdings, Inc. Announces Full-Year and Fourth-Quarter 2011 Profit

Including special items, UAL reported full-year 2011 net income of $840 million or $2.26 per diluted share. UAL reported fourth-quarter net income of $109 million or $0.30 per diluted share, excluding $247 million of special items. Including special items, UAL reported a fourth-quarter 2011 net loss of $138 million or $0.42 loss per share.

• UAL 2011 consolidated passenger revenue increased 9.0 percent compared to the pro forma results for 2010. Consolidated passenger revenue per available seat mile (PRASM) increased 9.2 percent in 2011 compared to the pro forma results for 2010.
• UAL consolidated passenger revenue increased 5.6 percent in the fourth quarter compared to the same period in 2010. Fourth-quarter 2011 consolidated PRASM increased 8.2 percent year-over-year.
• Consolidated fuel expense for 2011, excluding the impact of hedges, increased 36.5 percent, or $3.4 billion, year-over-year on a pro forma basis.
• UAL ended 2011 with $8.3 billion in unrestricted cash, cash equivalents and short term investments and undrawn lines of credit.
• Co-workers earned $265 million in profit sharing for full-year 2011, which will be distributed on Feb. 14, 2012.
• The consolidated network operated more than two million flights and had 142 million passengers in 2011, carrying the most traffic of any airline in the world.

"We made significant progress in 2011 building the world's leading airline, while running a clean, safe and reliable operation," said Jeff Smisek, UAL's president and chief executive officer. "I am proud of the results we achieved by working together at the new United, and I look forward to seeing my co-workers share in our success when we distribute more than a quarter billion dollars of profit sharing on Valentine's Day."

UAL results for the fourth quarter include the financial results of its two operating subsidiaries, United Airlines and Continental Airlines. Prior to the closing of the merger on Oct. 1, 2010, UAL results included only the financial results of United. Pro forma results that consolidate the financial results for Continental for periods prior to the merger are included for meaningful year-over-year comparisons.

Fourth-Quarter Revenue and Capacity

For the fourth quarter of 2011, total revenue was $8.9 billion, an increase of 5.5 percent year-over-year. Fourth-quarter consolidated passenger revenue rose 5.6 percent to $7.8 billion, compared to the same period in 2010.

Consolidated revenue passenger miles (RPMs) for the fourth quarter of 2011 decreased 3.2 percent year-over-year, while capacity (available seat miles or ASMs) decreased 2.5 percent year-over-year, resulting in a fourth-quarter consolidated load factor of 81.5 percent.

Consolidated yield for the fourth quarter of 2011 increased 9.0 percent year-over-year. Fourth-quarter 2011 consolidated PRASM increased 8.2 percent compared to the same period in 2010.

Mainline RPMs in the fourth quarter of 2011 decreased 3.6 percent on a mainline capacity decrease of 2.7 percent year-over-year, resulting in a fourth-quarter mainline load factor of 81.9 percent. Mainline yield for the fourth quarter of 2011 increased 8.3 percent compared to the same period in 2010. Fourth-quarter 2011 mainline PRASM increased 7.4 percent year-over-year.

"Our strong revenue performance is a direct result of offering customers an unmatched global route network and competitive products, and our co-workers' focus on service," said Jim Compton, UAL's executive vice president and chief revenue officer. "Our momentum will help deliver the revenue and profitability necessary for us to continue to invest in a great product for our customers."

Passenger revenue for the fourth quarter of 2011 and period-to-period comparisons of related statistics for UAL's mainline and regional operations are as follows:

Cargo and other revenue in the fourth quarter of 2011 increased 4.8 percent, or $51 million, year-over-year.

Fourth-Quarter Costs

Total operating expenses, including special items, increased $337 million, or 3.9 percent, in the fourth quarter compared to the same period of 2010. Fourth-quarter fuel costs increased $660 million year-over-year. Fourth-quarter 2011 operating expenses, excluding fuel, profit sharing and special items, decreased $86 million, or 1.5 percent, year-over-year.

Consolidated costs per available seat mile (CASM), excluding special items and ancillary business expense, increased 10.1 percent and mainline CASM, excluding special items and ancillary business expense, increased 10.5 percent in the fourth quarter of 2011 compared to the same period of 2010. Fourth-quarter consolidated and mainline CASM, including special items, increased 6.6 and 6.2 percent year-over-year, respectively.

In the fourth quarter, consolidated and mainline CASM, excluding special items and ancillary business expense and holding fuel rate and profit sharing constant, increased 0.5 percent and 0.7 percent, respectively, compared to the results for the same period of 2010.

"Our results reflect the work of our entire team to operate our airline in a cost effective manner and help deliver a strong profit during our first full year as a merged company," said Zane Rowe, UAL's executive vice president and chief financial officer. "We are well positioned to reach our integration milestones and synergy goals in 2012."

Year-End Liquidity and Fourth-Quarter Cash Flow

During the fourth quarter, UAL entered into a new $500 million revolving credit facility. UAL ended 2011 with $8.3 billion in unrestricted liquidity, comprised of $7.8 billion of cash, cash equivalents and short-term investments and $500 million of undrawn commitments under the new revolving credit facility. During the fourth quarter, the company generated $265 million of operating cash flow and had gross capital expenditures of $204 million. The company made scheduled debt and net capital lease payments of $423 million and prepaid $71 million of debt and capital leases in the fourth quarter. For the full year, the company made $2.6 billion of debt and capital lease payments, including prepayments.

Integration Progress

In 2011, United accomplished several milestones toward completing full integration, including obtaining a single operating certificate from the Federal Aviation Administration.

United announced several product improvements in 2011, including a $550 million investment in its onboard product, and aligned meal, snack and beverage services on board flights and in airport club lounges. The company also introduced MileagePlus as its loyalty program and unveiled its 2012 benefits and services for United's most-frequent flyers.

The company has co-located check-in, ticket counter and gate facilities at 66 airports since closing the merger and now has a single area for check-in at 291 airports systemwide. More than 800 aircraft are now rebranded in the new United livery.

United remained focused on building its Working Together culture to ensure that co-workers share in the success they help create. During the year, United introduced new perfect-attendance, on-time bonus, profit-sharing and pass-travel programs for co-workers.

Notable 2011 Accomplishments

• United and Continental recorded U.S. Department of Transportation domestic on-time arrival rates of 80.2 percent and 77.1 percent, respectively, and system completion factors of 98.5 percent and 98.6 percent, respectively, for the year. For international flights, United and Continental both recorded on-time arrival rates of 77.4 percent. The on-time arrival rates are based on flights arriving within 14 minutes of scheduled arrival time.
• Co-workers of the combined company earned cash incentive payments for on-time performance totaling $40 million during 2011.
• Technicians at the company's United subsidiary ratified a new labor agreement, and professional engineers at United and Continental rejected union representation. The company also made substantial progress on a new agreement with the United flight attendants in 2011, which led to a tentative agreement in January 2012.
• The company inducted five Next Generation Boeing narrowbody aircraft into its fleet and continued to retire older, less-efficient models, including six Boeing 737 classics, three Boeing 757-200s, two Boeing 767-200ERs and one Boeing 747-400.
• The company expanded its global route network, launching nonstop flights to several international destinations including Lagos, Nigeria; Stuttgart, Germany; Providenciales, Turks and Caicos Islands; Port-au-Prince, Haiti; Guadalajara, Mexico; and Shanghai, China. The company also announced new daily nonstop international flights beginning in 2012 to Manchester, England; Dublin, Ireland; Buenos Aires, Argentina; and Doha, Qatar via Dubai, United Arab Emirates.
• The company announced its intent to install satellite based WiFi on its entire mainline fleet.
• The company continued to install flat-bed seats in first and business class on its international fleet, and now has the new seats on 136 aircraft, more than any other U.S. carrier.
• United and its partner Chase introduced the new United MileagePlus Explorer Card, offering a wide range of benefits for cardmembers.
• The company operated the first U.S. commercial flight powered by advanced biofuels.

About United Continental Holdings, Inc.

United Continental Holdings, Inc. (NYSE: UAL) is the holding company for both United Airlines and Continental Airlines. Together with United Express, Continental Express and Continental Connection, these airlines operate an average of 5,656 flights a day to 376 airports on six continents from their hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York/Newark Liberty, San Francisco, Tokyo and Washington, D.C. United and Continental are members of Star Alliance, which offers more than 21,000 daily flights to 1,290 airports in 189 countries. United and Continental's more than 80,000 employees reside in every U.S. state and in many countries around the world. For more information about United Continental Holdings, Inc., go to UnitedContinentalHoldings.com. For more information about the airlines, see united.com and continental.com or follow United on Twitter and Facebook.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements included in this release 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 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. 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 and environmental regulations); 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 our 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.

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SOURCE United Continental Holdings, Inc.

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