Good morning and welcome to United Continental Holdings Earnings Conference Call for the Fourth Quarter and Full Year 2012. My name is Brandon and I’ll be your conference facilitator today. (Operator Instructions). I will now turn the presentation over to your hosts for today's call, Nene Foxhall and Sarah Murphy. Please go ahead.

Thank you Brandon. Good morning everyone, and welcome to United's fourth quarter and full year 2012 earnings conference call. Joining us here in Chicago to discuss our results are Chairman, President, and CEO, Jeff Smisek; Vice Chairman and Chief Revenue Officer, Jim Compton; and Executive Vice President and Chief Financial Officer, John Rainey. Jeff will begin with some overview comments, after which Jim will review operational performance, 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 will open the call for questions, first from analysts and then from the media. We would appreciate if you would limit yourself to one question and one follow-up. With that, I'll turn it over to Sarah Murphy.

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 the 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, a copy of which is available on our website. Unless otherwise noted, special charges are excluded as we walk you through our numbers for the quarter and the full year. These items are detailed in our earnings release, and now I'd like to turn the call over to Jeff Smisek, Chairman, President, and CEO of United.

Thanks Nene and Sarah, and thank you all for joining us on our fourth quarter and full-year 2012 earnings call. Today, we reported net income of $589 million for the full year or $1.59 per diluted share delivering a pre-tax margin of 1.6%. 2012 was the toughest year of our merger integration, and it wasn’t an easy year for our co-workers or our customers. Despite our integration pains, we accomplished an enormous amount and we are now in a position to go forward as a single carrier and compete effectively on a global scale. Our operations are running smoothly where many product improvements are rolling out and our customer satisfaction scores are climbing. I want to thank all of my co-workers for working together during 2012 to help build the base for United’s future. I’m pleased to recognize my co-workers’ hard work with a $119 million of profit sharing which we will distribute to eligible co-workers on February 14. I also want to thank our customers for choosing to fly United. We’re working hard every day to make your travel experience a great one, and you’ll see continued improvement in our product and service as 2013 unfolds. In 2013, we will move beyond our merger; we will continue to deliver on our go-forward plan, the annual operating plan we use to guide our efforts and investments company wide. Our top priorities this year include running a consistently reliable airline, providing great customer service, bringing the rest of our work groups together, continuing to invest in our people, our technology, and our product offering, and running United as a business to achieve our return on invested capital target of 10% over the business cycle. We did not achieve our return on invested capital target in 2012, and we’re absolutely not satisfied…

Thanks Jeff. I would like to take a moment to thank my co-workers for their hard work in 2012. Our operational performance and revenue results last year did not meet our expectations or our potential, but we built the foundation for United from which we’ll provide consistent reliability, a competitive product offering, and a great customer service in 2013. I would also like to thank our customers for choosing to fly United. We appreciate your business and our working together to make United the best airline for you. Our operational performance improved in the fourth quarter, and we delivered 80% on-time performance for the quarter despite severe weather including super-storm Sandy and snow storms. In 2012, we paid out six on-time bonuses totaling $26 million to our co-workers for achieving monthly on-time goals including two pay-outs during the fourth quarter. Our fourth quarter mishandled bag ratio improved nearly 10% from the summer lows. It takes team work, reliable fleet, and the right processes and procedures to run a consistently reliable airline, and we’ll continue to invest in those areas this year. Running a reliable airline is highly correlated with customer satisfaction scores and passenger revenue results. As we improved our reliability at the end of the third quarter and throughout the fourth quarter, our customer satisfaction scores improved nicely, and we have recently seen encouraging progress with passenger revenue. I look forward to more closely integrating the way we manage both operations and revenue in my new role. Our full year consolidated capacity declined 1.5% year-over-year in 2012 demonstrating our continued commitment to capacity discipline. In the fourth quarter, consolidated capacity was 4.2% lower versus 2011. Our approach to capacity deployment remains the same, met supply with demand on a market by market basis. Through this approach, we’re confident we…

Thanks Jim. Today we reported full year net income of $589 million generating a pretax margin on 1.6% for the year. While we reported a full year profit for 2012 these results clearly fell short of our expectations and the return goals we have set. However I don’t want that to take away from the tremendous efforts of our frontline co-workers. They are the face of United to our customers and bore the brunt of the integration challenges last year. And I want to thank them for their work. We’re all glad to have the heavy lifting of a merger integration behind us. For the fourth quarter and full year 2012 our consolidated operating expenses increased 1.1% and 3.2% respectively. Full year 2012 CASM excluding fuel, third party business expense and profit sharing, increased 3.4% year-over-year on 1.5% lower capacity. On a fuel rate and profit sharing neutral basis full year unit cost increased 2.5% versus 2011. Fourth quarter consolidated CASM excluding fuel, third party business expense and profit sharing increased 6.5% versus 2011 on 4.2% lower capacity. Holding fuel rate and profit sharing constant our fourth quarter consolidated unit cost increased 4.8% year-over-year. In 2012 we continue to make progress improving our balance sheet making $1.5 billion of debt in capital lease payments including $265 million of prepayments. We ended the year with $6.5 billion of unrestricted cash. One of the real opportunities we have to provide value to our shareholders is to reduce the level and type of debt in our business and the cost associated with that debt. We’re paying down high coupon, non-aircraft debt and reducing our reliance on debt financing to run the day to day operation instead accessing the capital markets to fund long term investments in our business. We continue to make progress…

Thanks John. We’ve a lot of momentum now and in 2013 we’re going to run a reliable airline and provide great customer service. We’ll deliver on our go-forward plan and use our ever improving fleet, facilities, technology, product, network and customer service to become the airline customers want to fly, investors want to invest in and co-workers want to work for. I’ll now turn over to Sarah to open up the call for questions.

Thank you, Jeff. First we’ll take questions from the analyst community, then we’ll take questions from the media. Please limit yourself to one question and if needed one follow-up question. Brandon, please provide the procedure to ask a question.

(Operator Instructions). Our first question comes from Michael Linenberg from Deutsche Bank. Please go ahead.

Two questions here and maybe the first one is for Jeff. You have the pilot deal, you have that all set up but now you have to go through the seniority integration process, what’s the timing on that and at what point if an agreement is not reached between the two groups would we go to binding arbitration, if you can just update us on that.

Well we expect, Michael, we expect the seniority list integration to be accomplished this year and we currently see no issues in them reaching their agreement at a timely basis.

Okay good, and then just my second question and this is for you Jeff as well. You know 2012 indicated was a tough year, you did about 600 million of net and I look at a company like Delta who has roughly the same size as you on a revenue basis and they were 1.6 billion of net, when you talked earlier about the momentum you felt like that things were really starting to turn. Is that a gap that you think that you can close this year or is it more like a multi-year process to catch up with them. How quickly can things improve now that you’ve gotten over the big hump?

I think as you mentioned obviously a tough year and the biggest, I think I talked about in this way I think the biggest disappointment from my perspective was the revenue, the synergies we faced last year and you know I think expectations I think you can think of one to two points in RASM that we under performed and you know and so my confidence is as John mentioned at close is that given the stability of the operations because I really believe predictability is important, when you’re predictable things just operate so much better across the system and revenue flows with that. So you know we’re excited about 2013 given the initiatives that we have in place and you know we feel that we will certainly close that gap and but we’ll work our way through the year but we’re very optimistic.

Mark I would just add to that, this is John. 2013 is clearly a year where we’re focused on execution and proving our operational reliability. We think though that with the route network that we have and efficient fleet, the employees that we have, the results will take care of themselves if we do the blocking and tackling.

From Wolfe Trahan, we have Hunter Keay

Congratulations on the second bag fee of Japan I think that’s great news, Jim but I noticed correct me if I’m wrong I don’t think ANA has a second bag fee to the United States so it's two part question, did you coordinate with them you know with regard how the JVs has functioned and if they don’t have a second bag fee for the US, are you just going to collect the second bag fee revenue and just give half to them as they don’t have to necessarily deal with the bad publicity associated with the second bag fee.

Hunter I won't get into specifics of how that work. I will tell you that obviously we work very closely with ANA, they are a terrific partner and you know the JV has mechanisms to work through all kinds of different things that come up and that’s what we will do working with them but again we’re seeing the JV quite frankly is delivering terrific results as we’re seeing connections over Narita using ANA and also both of us are partnering with each other in the Trans-Pacific.

And as it pertains to the January PRASM number if you look at the bookings that were up 400 basis points weighted average coming into the month and that was capacity down maybe 400 – 500 basis points. I’m curious to know why the yields came in where they did in January, and is the strategy right now to just to sort of fill the flights and sort of focus on yields as the operational improvement gets better. So you’re just focusing more of load factors in that regard or I guess the real ultimate question is how do yields start to go up again because that’s probably going to have to provide the next leg of PRASM.

That’s a great question, from my perspective the way I look at it is somewhat as you described, right, I think our challenges last year from the management’s perspective is that we actually manage less flights that we underperformed in load factor and so as that load factor comes in what happens is we begin to manage more flights and [revenue manage analyst] [ph] begin to manage the buckets and so forth. So not talking too much about yield going forward but again as our corporate customers recognize what we’re doing from a reliability point of view as those, as the demand continues to grow we will manage the inventory to optimize that revenue.

From UBS we have Kevin Crissey online. Please go ahead. Kevin Crissey – UBS: So is there - can you talk about maybe if not the exact percentages but the progression of capacity, because 2.5% I think is lower than where people would have thought given the capacity cuts for the quarter so maybe there is something unique about January capacity relative to the rest of the quarter if you can talk about that.

So I think the way to think about the quarter for us that 4.1% to 5.1% down in the first quarter is February even adjusting for leap year will be the most significant capacity cut month followed by not as much but March. So January is the least capacity year-over-year reduction of the quarter.

And then just looking at the numbers you guys overall, I mean so I would hope that then you would have a pick up from here because if you look at I don’t think your comparisons are more difficult than say U.S. airways or Delta but you’re, there seems to be quite a bit of continued under improvement unless you have a significant pick-up from in February and March given where their guidance is for RASM, is that fair?

I think again the when I talk about January, one data point for us is January is a little bit more difficult comp for us on a, if we went on a two year over two year just kind of put a framework reference in December we’re 8% up over 2 years that 2.5% represents a beat of that 8% on the two year basis. So any given month I guess it's hard, things can fluctuate and change. I think the investor updates were very feel good about the demand, the booking curve that we see going forward.

And I guess similar to Mike’s question I guess, the way I’m thinking is laborers gotten their pay increase. I know they didn’t had in a while but you bought them a car, the pilots a car and then effectively with the amount of back pay and then you’re buying them a car each year in terms of forward pay. The customers are getting a better product hopefully they will get a better operation as we move forward and yet the financial returns aren’t improved, they have diminished. So what I’m trying to understand is whether this is a function of the challenges uniquely to your integration or if you rethink the timing of the synergies overall and whether they are more back loaded the benefits of the mergers in general, thanks.

I think speaking to synergy achievement, we targeted about to achieve 75% of the 1 billion to 1.2 billion last year and we did a good job in terms of other revenue and cost synergies. Those two combined amounted to about $650 million but as I said in my remarks earlier we clearly underperformed from a passenger revenue perspective. We have every bit of confidence that we will achieve the full run-rate of the 1 to 1.2 and we’re actually are optimistic about that. In terms of the timing, getting back to Mike’s question. We love to get that in 2013 but it's also reasonable to assume that that could be a difficult bar and it could slip into 2014.

JP Morgan we have Jamie Baker online. Please go ahead.

Jeff you and I sparred a little bit on the last conference call on the subject to pilot costs and to your credit the deal did come shortly thereafter so looking back I respect your decision to remain tight lipped, but you can’t blame me for trying the same approach as it relates to mechanics and flight attendants. So, if we set aside wages, are there any competitor work rules incorporated into the contracts that are already out there that could afford you some greater flexibility or should we simply view this exercise as one of increased expense?

Jamie, we’re trying to make sure that in return for marking the market with wages and the benefits of our co-workers, in return we get good productivity from them and flexibility because this is an industry that requires flexibility and you know we’re making -- very good progress with the IAAM. We’re also making good progress with our teamsters and I hope to be able to announce some new deals as we go forward in time this year. Jamie Baker – JPMorgan: Excellent and for my follow-up obviously unit margins lagging those of the industry you know I’d argue and I sense you to agree that the only thing standing between you and margin parity is execution as opposed to being anything structurally wrong with the franchise but as we think about closing the margin gap what are the key drivers, what is the waterfall chart look like. Does fleet optimization drive a quarter of the gap and improve customer service another quarter, sending the management rank a few points do you have to buy an oil refinery, I mean what gets you from where you are today to where you know Delta already is.

I think you know clearly we got to make up a big part of that gap in terms of our revenue performance and some of that will come through corporate shares, some of it will be harvesting the benefits of the mergers through redeployment of aircraft in that nature but we also have a significant opportunity in terms of becoming more efficient., We have attacked some of our operational problems with, call it a blunt instrument and we have thrown head count at it and I think that we can be a lot more efficient. We can better deploy technology, put it in the hands of the customer and I think overtime we can actually see significant savings in other areas on the expense side.

From Morgan Stanley we have John Godyn online. Please go ahead.

Just a follow-up on some of the questions on closing the margin gap, as you know one of your competitors is very focused on announcing a plan for returning capital to shareholders this year. Once you do close the margin gap it's moving in that direction the next step?

Clearly, we have the aspiration of getting there, I would remind you that Delta is two years ahead of us in their integration and you know that the way that we have framed this internally is I would prioritize as we want to get the operation running like it needs to be and then we want to continue to pay down a lot of the non-aircraft debt, we got a significant amount of non-aircraft debt that’s coming due in the next few years and then I think we can have a very healthy discussion about returning cash to shareholders. Now I would say I don’t think all those have to happen in a serial fashion but clearly in terms of how I prioritize those that’s what it would be.

Jim just a follow-up on some of the PRASM questions which I guess suggest that maybe Jan was a little bit weak, I know you can’t give numbers for all the sort of comps issues but is it fair to say that it sounds like the completion factor that you’re looking at for Jan and shift in Chinese New Year or maybe bringing Jan a little lower than maybe people would have expected and as we look into February certainly again the shift in Chinese New Year the easy comps perhaps depending on how the completion factor fairs and maybe some accounting adjustments are actually going to just naturally create a very big bump to PRASM, is that a fair way kind of framework for thinking about it?

It is understood John. First of all the completion factor is exceeding our expectations, the operations has been stellar this month from a completion and so we’re generating the ASMs from a completion factor point of view. The second point is on the Chinese New Year’s a little bit is a good point also, a little perspective is January last year we cancelled 25 round trips because of the New Year and TransPac to support what become very much not a business travel period. That is shifted to February and so is a specific capacity you know is running kind of a more normal time with the Chinese New Year been in there. So both of those things affect exactly what you’re talking about.

Okay thanks and I couldn’t help to notice that the advance book factor for the pacific was up meaningfully. Is it fair to say that you’re seeing evidence of some of those easier reacceleration that we might be seeing in other date and other companies we track?

In terms of leisure in general John?

I just mean in terms of traffic levels and demand.

I think what we’re seeing is kind of ongoing, we’re seeing the ongoing kind of general economic environment that we saw in 2012 and seeing still good demand really in all the booking windows going out.

From Barclays, we have David Fintzen on the line. Please go ahead. David Fintzen – Barclays: You know you mentioned I think as Jim mentioned sort of corporate customers around a bit of detour, I’m curious obviously there is a lot you can do to improve the operation, but if (inaudible) find someone else, how do you make sure they know what you’re doing and the piece of that is if you’re hitting sort of your on-time performance targets, is it really your target that matter or do you think you have to make sure that you are towards to the top of the industry, so you can maybe show a customer who has gone somewhere else that your competitive in terms of the operation. I’m curious how you think about that both in terms of the outreach and in terms of the absolute performance and the relative performance on the on-time side.

It's a combination of things, it's not just the on-time performance and you need to be reliable and different levels of reliability above 80% have diminishing returns, but it's really also -- it’s many different factors, it's also very important as the customer service and which is why we’re focusing so heavily on customer service this year as you know I mean you all fly. A good customer service can take even delayed flight or a flight where there is an issue on-board the aircraft, a broken piece of IFE (ph) or something. And good service can turn that into a really good flight, you can also have a perfectly on-time flight on a brand new airplane everything works and if you’re not getting good service it's going to be a crappy flight. So you know we’re also focusing very, very heavily on customer service both at the airport, on contact center agents with flight attendants and I think that’s and I think you can see that in our improving customer satisfaction scores and I believe those scores will continue to improve. We have enormous amount of folks on it including we’re going to have a broad-based quarterly bonus program for all of our co-workers based on improvements in customer satisfaction scores. So we’re going to focus heavily on that and as people fly as the word does get out and we’re significantly better today for sure than we’re in the summer and I believe this time next year we’ll be significantly better than we’re today and with that I would take it over to Jim.

I think as we mentioned kind of in the comments that the last duty integration put a lot of stress on our employees and our customers. I’ll tell you that in that group of employees that a lot of stress was on with our sales force. And our sales force literally was always out there with our corporate partners and travel managers. The difference is the conversation was a little bit different than what we had hoped for. The conversation was about some of the integration issues and so forth. What’s happened with the on-time performance in the fourth quarter, the improvements we’re seeing now they have really -- the sales force has always been very present with our corporate travel partners and now what they are doing is again talking about the network, the value of the network that it brings to them, what it can do for them in their travel needs. So I guess the point is how did the awareness that things are back. I think the awareness is driven by the fact that they have the sales force is out there communicating, I mentioned a couple of forms we do with advisory boards but really every day they are calling on their customers and letting them know where we’re are at and how we can help them in their travel needs.

I appreciate that and maybe just a quick one now that the pilot contracts done and you have the scope really on the RJs, and is that something that we should look for reasonably large changes in ‘14 or is that a smaller component trying to get a sense of what your opportunities does that some of these higher labor cost down the road with similar to what Deltas did.

The new contract as it relates to regional does present us with a tremendous amount of flexibility to be competitive in the 70 seat market. Really, the first phase of this year quite frankly is with the new agreement is being able to redeploy the current 70 seaters that we have across the system to optimize the network, some of the things we talked about in terms of synergies for the first year. But as you’re moving to 2014, then we will be able to kind of take that second phase, but this year will be about using the aircrafts that we have and redeploying, but that contract does create tremendous amount of flexibility for us to be competitive in that space.

We’ve time for one last question from Evercore Partners, we have Duane Pfennigwerth online. Please go ahead.

Just wondering when you think you will be able to expand margins year-to-year with this first quarter CASM guidance, do you think revenue can be good enough to start that process this quarter?

I don’t want to comment on revenue Duane, I think you know as I alluded to earlier in response to Mike. We’re extremely focused on execution we have a plan, we’re following that plan I think that if we execute on that and we do the things that we’re capable of and you combine that with the product that we’re providing, the network that we have, I think that you will begin to see margin expansion clearly. We wanted as badly as our investors, our employee’s want it and I think that 2013 as I said is an important year for us as we’re beginning to put all these different items in place to enable us to achieve that.

And then just I will ask one follow-up just in terms of your difference between your first quarter CASM guidance and your full year what are the things that sort of drive that moderation other than just more ASMs?

You’re right, ASM is a significant piece of that but probably two thirds of the cost guidance in the first quarter or the cost increase is related to labor and that’s simply the anniversary effect of lapping some of the labor agreements of last year, results were put in the place during the year. So labor is a piece of that, the only other thing that I would call out as significant as we have got a higher than normal volume of engine events in our V2500 engines in the first and second quarter. So I would expect maintenance expense related those items will be up $30 million to $40 million each quarter, but that tells often back half of the year we actually see some improvements.

Thank you ladies and gentlemen this concludes the analyst and investor portion of our call today. We will now take calls from the media. (Operator Instructions). Our first question comes from Josh Freed from the Associated Press. Please go ahead.

Has either Boeing or the FFA given you any guidance at all on when you can expect to get your 787s flying again?

No.

Okay and are you, what are you hearing from your pilots on the subject of the 787, Are they seeking any additional safeguards it might be in addition to whatever the FAA comes up with, is there any push back from them at all on 787?

Look, Josh, safety is obviously very important than and I’m confident that when the regulatory authorities and Boeing working together determine the cause of the battery issues and the [fixed] board that we will implement whatever that fix is under the (inaudible) permit us to fly the aircraft safely again. So there is no distinction between us and our pilots with respect to safety.

Very, very quickly, can you put any numbers on the head count reduction? I know you gave in terms of percentage can you say any numbers on the number of people you expect to end up cutting?

Sure it's over 600.

From Wall Street Journal, we have Doug Cameron online. Please go ahead.

Just going up on Josh’s question, Jeff and you won't be surprised, but as often no one is going to buy the 787 from (inaudible) 100% safety….

Doug, we’re having a hard time hearing you from this end.

I mean this is for Jeff and Jim, obviously the industry is not going to fly the 787 until the industry, (inaudible) 100% confident in safety –so, but how do you and other operators start going about convincing the traveling public if that’s the case?

Once the NTSP, GTSP together and FA work together to [determine causality] and Boeing fixes it or done because look the aircraft is a terrific aircraft and customers love the airplane and I have no doubt that customers will flock back to that airplane as soon as we get it back up again. But this is a problem that Boeing and the regulatory authorities need to deal with, they should deal with it, we support them, we will give them every bit of assistance that we possibly can because we too want to get the airplane up and flying safely and I’m confident that will occur. I don’t know when that will occur but we will learn more with time.

What gives you that confidence though?

Well in terms that they will find a fix, I mean in history.

No, the confidence that customers will flock back.

Look it's a terrific airplane, I mean ask anybody who has flown that airplane it’s spectacular and once this particular issue is solved it's solved and it's just a matter of whatever time it takes to solve it.

With that we’re out of time. We’ll conclude. Thanks to all of you on the call for joining us today. Please call Investor Relations if you have any further questions and we look forward to talking to you next quarter. Good bye.

Ladies and gentlemen this concludes today’s conference. Thank you for participating. You may now disconnect.