United Continental Holdings (UAL)
Q2 2012 Earnings Call
July 26, 2012 10:30 am ET
Irene E. Foxhall - Executive Vice President of Communications & Government Affairs
Jeffery A. Smisek - Chief Executive Officer, President, Director, Member of Executive Committee and Member of Finance Committee
James E. Compton - Chief Revenue Officer and Executive Vice President
John Rainey - Chief Financial Officer and Executive Vice President
Peter D. McDonald - Chief Operations Officer and Executive Vice President
Michael Linenberg - Deutsche Bank AG, Research Division
Jamie N. Baker - JP Morgan Chase & Co, Research Division
Hunter K. Keay - Wolfe Trahan & Co.
John D. Godyn - Morgan Stanley, Research Division
Glenn D. Engel - BofA Merrill Lynch, Research Division
David E. Fintzen - Barclays Capital, Research Division
Previous Statements by UAL
» United Continental Holdings' CEO Discusses Q1 2012 Results - Earnings Call Transcript
» United Continental Holdings CEO Discusses Q4 2011 Results - Earnings Call Transcript
» United Continental Holdings' CEO Discusses Q3 2011 Results - Earnings Call Transcript
Good morning, and welcome to United Continental Holdings Earnings Conference Call for the Second Quarter of 2012. My name is Brandon and I will be your conference facilitator today. [Operator Instructions] This call is being recorded and is copyrighted. Please note that no portion of the 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, Nene Foxhall and Sarah Murphy. Please go ahead.
Irene E. Foxhall
Thank you, Brandon. Good morning, everyone and welcome to United's Second Quarter 2012 Earnings Conference Call. Joining us in Chicago to discuss our results are President and CEO, Jeff Smisek; Executive Vice President and Chief Revenue Officer, Jim Compton; Executive Vice President and Chief Financial Officer, John Rainey; Executive Vice President and Chief Operations Officer, Pete McDonald; and Senior Vice President of Finance and Treasurer, Gerry Laderman. Jeff will begin with some overview comments, after which, Jim will review capacity and revenue results. John will follow with a discussion of our cost structure, balance sheet and guidance. Jeff will make a few closing remarks, and then we'll 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 Sarah Murphy, our new Head of Investor Relations.
Thank you, Nene. This morning. we issued our earnings release and separate investor update. Both are available on our website at ir.united.com. Let me point out that information in this morning's earnings release and investor update and the remarks made during this conference call may contain forward-looking statements, which represents 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 SEC by United Continental Holdings, United Airlines and Continental Airlines for a more thorough description of these factors.
Also during the course of our call, we will discuss several non-GAAP financial measures. For a reconciliation of these non-GAAP measures to GAAP measures, please refer to the tables at the end of our earnings release. Unless otherwise noted, special charges are excluded as we walk you through our numbers for the quarter. These items are detailed in our earnings release.
And now, I'd like to turn the call over to Jeff Smisek, President and CEO of United.
Jeffery A. Smisek
Thanks, Nene and Sarah, and thank you all for joining us on our second quarter 2012 earnings call.
Today, we reported net income of $545 million for the second quarter or $1.41 per diluted share, delivering a pre-tax margin of 5.5%. Based on our year-to-date profit, we've accrued $54 million in profit-sharing for our coworkers so far this year.
This is our first full quarter operating as a single airline, following our conversion to a single passenger service system. Now, all of our customers can purchase tickets through a single website, united.com, experience a single check-in process through our mobile app, website or at the airport, and earn miles in a single loyalty program, MileagePlus.
The shares conversion was successful, but following the cutover, we faced a number of issues. As we identify these conversion-related issue, our top priority was to improve the customer and coworker experience by determining the cause and quickly deploying teams to fix the problem. We made significant progress on these issues during the second quarter, and customers calling our reservations line now experience normal wait and handle times, MileagePlus miles for United flight now post within 48 hours of travel, and complementary upgrades for our premier members now clear in a timely manner.
I'd like to thank my coworkers for working together to promptly resolve the conversion-related issues and for their commitment to taking care of customers during a challenging time.
Although working with a new system and implementing new processes are not easy, we're excited to begin using the share system because of the power and flexibility it provides. We plan a number of improvements, including an enhanced front-end interface for our airport and contact center agents. This new tool will make fulfilling customer requests and making changes easier and faster for our coworkers. We rolled out a test of the first of several planed releases for our airport agent interface 2 weeks ago, improving the speed and ease of handling premium cabin up-sells, same-day upgrades and standby requests.