United Continental : Quarterly report which provides a continuing view of a company's financial position

e5c1b374-0119-48e1-9233-27c519c6e5ea.pdf

Morningstar® Document Research℠

FORM 10-Q United Continental Holdings, Inc. - UAL Filed: April 21, 2016 (period: March 31, 2016)

Quarterly report with a continuing view of a company's financial position

The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.

Table of Contents‌

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

OR

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number

Exact Name of Registrant as Specified in its Charter, Principal Executive Office Address and Telephone Number

State of Incorporation

I.R.S. Employer Identification No.

001-06033 United Continental Holdings, Inc.

233 South Wacker Drive, Chicago, Illinois 60606

(872) 825-4000

001-10323 United Airlines, Inc.

233 South Wacker Drive, Chicago, Illinois 60606

(872) 825-4000

Delaware 36-2675207

Delaware 74-2099724

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

United Continental Holdings, Inc. Yes x No ¨

United Airlines, Inc. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

United Continental Holdings, Inc. Yes x No ¨

United Airlines, Inc. Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

United Continental Holdings, Inc.	Large accelerated filer x	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨
United Airlines, Inc.	Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer x	Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

United Continental Holdings, Inc. Yes ¨ No x

United Airlines, Inc. Yes ¨ No x

The number of shares outstanding of each of the issuer's classes of common stock as of April 11, 2016 is shown below:

United Continental Holdings, Inc. 336,823,228 shares of common stock ($0.01 par value)

United Airlines, Inc. 1,000 (100% owned by United Continental Holdings, Inc.) There is no market for United Airlines, Inc. common stock.

OMISSION OF CERTAIN INFORMATION

This combined Quarterly Report on Form 10-Q is separately filed by United Continental Holdings, Inc. and United Airlines, Inc. United Airlines, Inc. meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format allowed under that General Instruction.

United Continental Holdings, Inc. United Airlines, Inc. Quarterly Report on Form 10-Q For the Quarter Ended March 31, 2016

Item 1. Financial Statements‌‌

United Continental Holdings, Inc.:

PART I. FINANCIAL INFORMATION

Page

Statements of Consolidated Operations 3

Statements of Consolidated Comprehensive Income (Loss) 4

Consolidated Balance Sheets 5

Condensed Statements of Consolidated Cash Flows 7

United Airlines, Inc.:

Statements of Consolidated Operations	8
Statements of Consolidated Comprehensive Income (Loss)	9
Consolidated Balance Sheets	10
Condensed Statements of Consolidated Cash Flows	12
Combined Notes to Condensed Consolidated Financial Statements
(United Continental Holdings, Inc. and United Airlines, Inc.)	13
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	36

PART II. OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 37

Item 6. Exhibits 37

Signatures 38

Exhibit Index 39

PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS.‌‌ UNITED CONTINENTAL HOLDINGS, INC. STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED) (In millions, except per share amounts)

Operating revenue:

Three Months Ended March 31, 2016 2015

Passenger-Mainline $ 5,577 $ 5,938

Passenger-Regional 1,413 1,482

Total passenger revenue 6,990 7,420

Cargo 194 242

Other operating revenue 1,011 946

8,195 8,608

Operating expense: Salaries and related costs 2,490 2,301

Aircraft fuel 1,218 1,864

Landing fees and other rent 525 543

Regional capacity purchase 522 570

Depreciation and amortization 479 429

Aircraft maintenance materials and outside repairs 402 397

Distribution expenses 303 312

Aircraft rent 178 201

Special charges (Note 10) 190 64

Other operating expenses 1,239 1,186

7,546 7,867

Operating income 649 741

Nonoperating income (expense): Interest expense (159) (173)

Interest capitalized 14 12

Interest income 8 5

Miscellaneous, net (Note 10) (18) (74)

(155) (230)

Income before income taxes 494 511

Income tax expense 181 3

Net income $ 313 $ 508

Earnings per share, basic $ 0.88 $ 1.33

Earnings per share, diluted $ 0.88 $ 1.32

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

3