United Continental Holdings Inc. (

UAL

)

Q4 2011 Earnings Call

January 26, 2012; 10:30am ET

Executives

Jeff Smisek - President & Chief Executive Officer

Jim Compton - Executive Vice President & Chief Revenue Officer

Zane Rowe - Executive Vice President & Chief Financial Officer

Tyler Reddian - Managing Director of Investor Relations

Nene Foxhall - Executive Vice President of Communications & Government Affairs

Analysts

Hunter Keay - Wolfe Trahan

Bill Greene - Morgan Stanley

Michael Linenberg - Deutsche Bank

Duane Pfennigwerth - Evercore Partners

Glenn Engel - Bank of America

Jamie Baker - JP Morgan

Kevin Crissey - UBS

Gary Chase - Barclays Capital

Josh Freed - Associated Press

Mary Jane Credeur - Bloomberg News

Ronnie Crocker - Houston Chronicle

Presentation

Operator

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Good morning and welcome to the United Continental Holdings earnings conference call for the full year and fourth quarter 2011. My name is Michelle and I will be your conference facilitator for today. Following the initial remarks from management we will open the lines for questions. (Operator Instructions)

This call is being recorded and is copyrighted. Please note that no portion of this call may be recorded, transcribed or rebroadcast without the company's permission. Your participation implies your consent to our recording of this call. If you do not agree with these terms, simply drop off the line.

I would now like to turn the presentation over to your host for today’s call, Ms. Nene Foxhall and Mr. Tyler Reddian. Please go ahead.

Nene Foxhall

Thank you, Michelle. Good morning everyone and welcome to United Continental Holdings full year and fourth quarter 2011 earnings conference call. Joining us here in Chicago to discuss our results are President and CEO, Jeff Smisek; Executive Vice President and Chief Revenue Officer, Jim Compton; and Executive Vice President and CFO, Zane Rowe.

Jeff will begin with some overview comments, after which Jim will review capacity and revenue results. Zane will follow with the discussion of our cost structure, the balance sheet and guidance. Jeff will make a few closing remarks and then we will open the call for questions, first from analysts and then from the media. We would appreciate it if you would limit yourself to one question and one follow-up.

With that, I'll turn it over to Tyler. Thank you.

Tyler Reddian

Thank you Nene. Our earnings release and separate investor update were issued this morning and are available on our website at ir.unitedcontinentalholdings.com.

Let me point out that information in this morning's earnings press release and investor update and the remarks made during this conference call may contain forward-looking statements, which represent the company's current expectations or beliefs concerning future events and financial performance. All forward-looking statements are based upon information currently available to the company.

A number of factors could cause actual results to differ materially from our current expectations. Please refer to our press release, Form 10-K and other reports filed with the SEC by United Continental Holdings, United Airlines and Continental Airlines for a more thorough description of these factors.

Also during the course of the call we’ll be discussing several non-GAAP financial measures. For a reconciliation of these non-GAAP measures to GAAP measures, please refer to the table at the end of the earnings release, a copy of which is available on our website.

Our full year 2011 results are presented on a combined basis for United Continental Holdings. Full year 2011 results discussed today, including comparisons against prior year will be based on unaudited pro forma financial results for the combined company and include estimates of the impact of purchase accounting. For additional details, please refer to our investor updates issued during 2011 and the fourth quarter of 2010, which are also available on our website.

Unless otherwise noted, as we walk you through our numbers for the quarter we will be excluding special items, merger-related expenses and/or fuel hedged non-cash net mark-to-market gains and losses. These items are detailed in our earnings release.

In the fourth quarter we reclassified revenue associated with our non-air mileage redemption through our MileagePlus loyalty program from passenger revenue to other revenue in 2010 and 2011 and these results have been adjusted to reflect the change. For additional information, please refer to our investor update issued today.

And now I’d like to turn the call over to Jeffery Smisek, President and CEO of United.

Jeffery Smisek

Thanks Nene and Tyler and good morning and thank you all for joining us for our 2011 full year earnings call. Today we reported net income of $1.3 billion for the full year or $3.49 per diluted share, delivering a 3.6% pre-tax margin. For the quarter we earned $109 million of profit or $0.30 per diluted share.

2011, our first full year as a merged airline was a year on many successes for the new United. We received our single operating certificate, made good progress with our labor groups, delivered record passenger revenue, exceeded our goal of achieving 25% of our merger synergies for the year and generated returns in excess of our cost of capital.

My co-workers worked together all year to run a clean, safe and reliable airline, while integrating our two subsidiaries. I am proud of the progress we made in 2011 and I thank my co-workers for all they did for the new United this past year. All their hard work paid off as we accrued $265 million of profit sharing for 2011. That represents about 5% of the eligible compensation of each participant in the program. My management team and I look forward to distributing profit sharing cheques to co-workers on Valentines Day, February 14, as we share in the profit that we all helped to create.

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