- Aug 20, 2002
- 3,286
- 2,779
UAL Corporation Reports Second-Quarter Results
Friday August 1, 10:00 am ET
Reports Positive Operating Cash Flow and Cash Position Improves Significantly
Meets DIP Covenant Requirements for June
Unit Costs Significantly Improved
Salaries and Related Costs Down $543 Million
The second quarter began as a severe challenge for United and the industry as a whole, but we saw a particularly positive trend as we moved through the period, said Glenn Tilton, chairman, president and chief executive officer. We steadily improved revenue and realized a 4% improvement in domestic passenger unit revenue for June over the same month last year. We also achieved a large decrease in our labor and other costs as we continue to implement our various cost-reduction initiatives, continued Tilton. Despite the continued difficult economic environment, the improvement in both revenue and cost is encouraging.
The Company recorded positive operating cash flow of almost $2 million per day in the quarter, excluding the $300 million in government reimbursement and a $365 million income tax refund the Company received during the quarter. The Company's cash position increased to $2.3 billion, including $684 million in restricted cash.
In June, for the fifth straight month, United satisfied the covenants of its debtor-in-possession (DIP) financing, which required the Company to achieve a cumulative EBITDAR (earnings before interest, taxes, depreciation, amortization and aircraft rent) loss of no more than $585 million between December 2002 and June 2003.
Operational Performance
As the Company continued to reduce unit costs during the quarter, United employees delivered strong operational performance, including:
During the quarter, United made significant progress enhancing its customer value proposition and improving revenue performance, including:
United's operating expenses for the quarter were $3.5 billion, down 17% from the same quarter last year. While the Company's unit cost (operating expenses per available seat mile) decreased 3%, excluding its fuel subsidiary and special items, unit cost decreased 6% year-over-year. This unit cost improvement was among the best in the industry.
Aircraft rent was down $73 million or 35% compared to second quarter 2002. United is still in negotiations with respect to a large number of aircraft in its fleet and further savings are expected to be realized as these negotiations are finalized over the next several months.
United began June with a cash balance of approximately $2.2 billion, which included $659 million in restricted cash (filing entities only). It ended the month with a cash balance of approximately $2.3 billion, which included $674 million in restricted cash (filing entities only). The Company's cash balance increased approximately $92 million for the month, or approximately $3 million per day. The Company said it also expects to meet the EBITDAR requirements for its DIP agreements in July.
The Company said that it had earnings from operations of $20 million and a net loss of $310 million for June 2003, which includes $334 million in reorganization expense.
767jetz says:
Sounds pretty positive to me. I wonder how old You-Know-Who will try to spin this report into a doom and gloom scenario where UA is ready to close the door without help from their code-share-partner?
Everyone brace for impact! Here comes Chip!
Friday August 1, 10:00 am ET
Reports Positive Operating Cash Flow and Cash Position Improves Significantly
Meets DIP Covenant Requirements for June
Unit Costs Significantly Improved
Salaries and Related Costs Down $543 Million
The second quarter began as a severe challenge for United and the industry as a whole, but we saw a particularly positive trend as we moved through the period, said Glenn Tilton, chairman, president and chief executive officer. We steadily improved revenue and realized a 4% improvement in domestic passenger unit revenue for June over the same month last year. We also achieved a large decrease in our labor and other costs as we continue to implement our various cost-reduction initiatives, continued Tilton. Despite the continued difficult economic environment, the improvement in both revenue and cost is encouraging.
The Company recorded positive operating cash flow of almost $2 million per day in the quarter, excluding the $300 million in government reimbursement and a $365 million income tax refund the Company received during the quarter. The Company's cash position increased to $2.3 billion, including $684 million in restricted cash.
In June, for the fifth straight month, United satisfied the covenants of its debtor-in-possession (DIP) financing, which required the Company to achieve a cumulative EBITDAR (earnings before interest, taxes, depreciation, amortization and aircraft rent) loss of no more than $585 million between December 2002 and June 2003.
Operational Performance
As the Company continued to reduce unit costs during the quarter, United employees delivered strong operational performance, including:
Code:
* On-time departure performance in the quarter was the best in United's
history at 76.9 %.
* Arrivals within 14 minutes of schedule was 86.1% for the quarter,
another all-time record for United, compared to 82.3% for the same
period last year.
* For January through May 2003, United is #1 in arrivals within 14 minutes
of schedule among the six major network carriers, according to the U.S.
Department of Transportation.
* For January through May 2003, United had the second fewest passenger
complaints among the six major network carriers, also according to US
DOT rankings.
* For the first six months of 2003, United recorded its highest customer
satisfaction since the Company began studying a set of key customer
perception and service metrics in 1996. Performance in all the metrics
on which the survey is based, including flight attendant service, check-
in efficiency and on-time performance among others, were well above last
year's levels.
Code:
* Fully restoring United's transatlantic schedule by June 2, 2003.
* Announcing the phased restoration of United's Pacific schedules to be
completed by September 3, 2003.
* Adding 160 domestic flights to accommodate current strong levels of
demand.
* Executing agreements to expand United's regional jet network and
significantly reducing turboprop operations.
* Continuing efforts to further improve United's Mileage Plus program,
already recognized as the industry's leading frequent flyer program,
with well-received marketing initiatives targeting our core business
customers, including Fly Three, Fly Free and Travel the World for
Free incentives.
* Introducing Verizon JetConnect onboard e-mail access, online check-in,
Easy Update -- an industry-leading wireless flight information
notification service -- and a new, more customer-friendly boarding
process.17% from the same quarter last year.Aircraft rent was down $73 million or 35% compared to second quarter 2002. United is still in negotiations with respect to a large number of aircraft in its fleet and further savings are expected to be realized as these negotiations are finalized over the next several months.
United began June with a cash balance of approximately $2.2 billion, which included $659 million in restricted cash (filing entities only). It ended the month with a cash balance of approximately $2.3 billion, which included $674 million in restricted cash (filing entities only). The Company's cash balance increased approximately $92 million for the month, or approximately $3 million per day. The Company said it also expects to meet the EBITDAR requirements for its DIP agreements in July.
The Company said that it had earnings from operations of $20 million and a net loss of $310 million for June 2003, which includes $334 million in reorganization expense.
767jetz says:
Sounds pretty positive to me. I wonder how old You-Know-Who will try to spin this report into a doom and gloom scenario where UA is ready to close the door without help from their code-share-partner?
Everyone brace for impact! Here comes Chip!
