United Airlines Holdings, Inc.

Good morning and welcome to United Continental Holdings Earnings Conference Call for the first quarter 2019. My name is Vanessa and I will be your conference facilitator today. Following the initial remarks from management, we will open up the lines for questions. At that time, if you have a question, please press star followed by one on your touchtone phone. 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 will now turn the presentation over to your host for today's call, Mike Leskinen, Vice President of Corporate Development and Investor Relations.

Thank you, Vanessa. Good morning everyone and welcome to United's first quarter 2019 earnings conference call. Yesterday we issued our earnings release and separate investor update. Additionally, this morning we issued a presentation to accompany this call. All three of these documents are available on our website at ir.united.com. Information in yesterday's release and investor update, the accompanying presentation, and the remarks made during the 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. The number of factors can cause actual results to differ materially from our current expectations. Please refer to our earnings release, Form 10-K, and other reports filed with the SEC by United Continental Holdings and United 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 reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, please refer to the tables at the end of our earnings release, investor update, and presentation, copies of which are available on our website. Joining us here in Chicago to discuss the results and outlook are Chief Executive Officer Oscar Munoz, President Scott Kirby, Executive Vice President and Chief Operations Officer Greg Hart. Executive Vice President and Chief Commercial Officer Andrew Nacella. And Executive Vice President and Chief Financial Officer Jerry Letterman. In addition, we have other members of the team in the room available to assist with Q&A. And now I'd like to turn the call over to Oscar.

Thank you, Mike. And my thanks to all of you for joining us today. With the tailwind of an outstanding 2018 at our back, United came right out of the gate in the first quarter of 2019 with strong unit revenue growth, effective cost management, and a second consecutive quarter of adjusted pre-tax margin expansion, an emerging trend we expect to continue. Now running an efficient airline is precisely what has allowed us to make a series of industry-leading investments this quarter that are increasingly making United the airline people choose to fly. But first, let's turn to slide four. As the financial results this quarter affirm, clearly our strategy is working. The first quarter adjusted pre-tax earnings were $389 million, when the adjusted pre-tax margin was 4.1%. An increase of more than 200 basis points year over year, and the best first quarter we've had in three years. We more than doubled our first quarter earnings per share year over year. So this puts us well on track to achieve our 2019 adjusted EPS targets of $10 to $12, and gives us confidence that we will meet or exceed our 2020 adjusted EPS. From an operational perspective, this was not an easy quarter, especially considering the harsh winter weather, the max grounding, and several other events that Greg will cover later. So I want to thank our employees for their hard work in demonstrating once again the proof, not promises mentality you've heard us talk so much about. And by combining this impressive operational performance and making smart investments in the customer service, we've been able to elevate our customers' experience in tangible ways while strategically managing our costs. Here are just a few examples of the customer benefits we unveiled in the last few months. First, we made the United app even better. We debuted a new version of the most downloaded airline app in the world by making it more intuitive and a more personalized resource for our customers. Second, more than 100 channels of light television are now free for every customer and every class of service on more than 200 United aircraft. Third, on the fleet, we announced the two-cabin, 50-seat Bombardier CRJ-550 aircraft. When it is launched later this year, it will be a game-changer for regional flying for offering a first class cabin, economy-class seating, Wi-Fi, and more amenities than any other 50-seat regional aircraft operating today. This regional aircraft innovation will benefit, in particular, our customers in spoke cities who can enjoy more consistent product when connecting through our hubs to travel internationally. In addition, we announced the significant expansion of our premium offering by adding an additional 1,600 United Polaris business class and United first seats, which means more than 100 United aircraft will see their premium capacity increase by 50% or more. Fourth, we continue to grow our network to better serve our customers. We announced earlier this week that United is returning to Africa, applying to wide service between Newark, New York, and Cape Town, South Africa. And last month, we unveiled our plan to ramp up our service to Asia and launch six daily nonstop flights to Tokyo's Haneda Airport. Our success this quarter demonstrates our strategy to grow our airline, invest in our customer service, and effectively manage our costs of working. It is inspiring our workforce, it's winning over our customers, and it's delivering for our investors. Our momentum is only starting to build, and our future is really as bright as ever. So now let me hand it over to Scott for his take on the quarter and to discuss several uniquely united opportunities that won't be realized immediately, but over the long term will have a significant and positive impact on our airline and our customers. These opportunities have bigger outside potential for us than any of our competitors, and we're determined to make the most of them.