Second Qtr Results. Keep up the good work!

767jetz

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Aug 20, 2002
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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:
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.
During the quarter, United made significant progress enhancing its customer value proposition and improving revenue performance, including:
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.
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!
 
UAL's second-quarter loss was $623 million

Six Months Ended June 30

Passenger load factor (percent) 74.3
Breakeven passenger load factor (percent) 93.7
 
I dunno, jetz. While we all (well, most of us anyways) want to be able to see good news about UA, to be fair, you did leave out a few relevant parts of the press release:

--"UAL's second-quarter loss was $623 million, or a loss per basic share of $6.26, which includes a net $(147) million in special items described in the notes to the financial tables. This performance compares to a second-quarter 2002 tax-effected loss of $341 million, or a loss per basic share of $6.08, including special items. Excluding $300 million received from the government in compensation for losses related to the Iraq war and $(447) million in special items, UAL’s loss for the second quarter totaled $476 million, or a loss per basic share of $4.79."

--"UAL’s second quarter 2003 operating revenues were $3.1 billion, down 18% compared to second quarter 2002. Passenger revenue for the quarter was down 18% from last year on a 14% decrease in capacity. System passenger unit revenue was 4% lower on a 7% yield decline and a 2.6 point increase in load factor. Traffic decreased 11% year-over-year. United’s load factor for the quarter was 77%."


Seems there will be plenty here for Chip to put a negative spin on.
 
Lots of special items that worked for and against United this quarter. But, Jesus, $630MM loss while in Chap. 11 is not the best news that you could report.
 
767jetz:

767jetz said: "Sounds pretty positive to me."

Chip answers: You have got to be kidding right? If UA posts a $623 million dollar loss with record load factors, what's the third and fourth quarter going to look like with significant September 11 passenger travel fears and the seasonal traffic drop off? Regardless, I found the following industry comments interesting:

Standard & Poor's analyst Philip Baggaley noted that UAL still risks breaching its financing covenants later this year as requirements become more stringent.

Ray Neidl of Blaylock and Partners said, "This quarter is going to be a determining situation as we see the full effect of a lot of the cost cuts that have been implemented How much traffic falls off and what happens to the economy and to industry pricing are going to be the keys for United.'

UAL chief executive officer Glenn Tilton told employees in a recorded phone message that the carrier has some very "tough decisions ahead."

767jetz, how can it be that an analyst said 'UAL still risks breaching its financing covenants?" Without the federal aid, how much would UAL have lost? Finally, what do you believe will be the "tough decisions ahead" Tilton discussed?

Best regards,

Chip
 
767jetz:

With all due respect, I suggest you get your head out of the sand. Let's do a business partner comparison.

US Airways took a $35 million charge associated with its decision not to take delivery of certain aircraft and also took a $92 million charge related to the stock granted to employees as part of its restructuring. Without these unusual charges, net profit including other one-time items would have been $140 million and the net loss excluding other one-time items would have been ($27 million).
United Airlines reported a number of unusual one-time items. The net profit (loss) excluding one time items only represent a credit for a $365 IRS tax refund and $300 million in federal aid because the other one-time items were associated with the company’s formal reorganization. Without these two gains, United would have lost $1.096 billion during the second quarter.
767jetz, United is not paying all of its bills and the airline has stringent DIP financing requirements to meet in 3 months. I can't believe you're happy with these results, which are stunning loses.
Best regards,
Chip
 
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Ah Chip my friend,

You are so predictable. I knew you would try to start a thread with a dramaticly negative headline to grab peoples attention, so I beat you to the punch with one of a more positive outlook. Sorry, but they closed your thread as a duplicate.


Did you notice the over $300M charge due to BK costs?
Did you notice that we were cash flow positive?
Did you notice we improved our cost more than anyone else?
Did you notice that our cost per seat mile is less than US?
Did you notice that our cash postion improved?
Did you notice you are doing alot of posting on UA's forum when you have in the past criticized UA employees for posting on the US board?
Did you notice ANYTHING positive? Of course not. You are incapable of that. We all know this.

Also, something I have noticed (and probably everyone else who reads your BS) is that whenever Tilton says something postive you tear it down and say, "of course he has to say that... He has to put a good face on it..." But when Tilton says anything vaguely negative your response is, "Look at what he said, it must be the truth, the whole truth, and nothing but the truth... There must be some hidden meaning... Tough choices must mean that you'll be furloghed, your pension will be gone, and US Air will buy your assets."

Give me a break Chipster. You are, and always will be a predictabley negative soul. Go spread your gloom on the US board.
 
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On 8/1/2003 9:42:49 AM Analyst wrote:



Breakeven passenger load factor (percent) 93.7

----------------​

PLEASE GET YOUR INFO RIGHT BEFORE POSTING IT HERE.
You are quoting VERY outdated information. Break even load factors are FAR below 93.7%
Thanks for playing. Bye, bye...
 
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Chip,

My head may be in the sand, but your head is so far up your -$$ that you'd need a proctologist to remove it.

No one is in denial here, and never said I was happy about losing money. Unlike you, I'd rather see the glass as half full, and refuse to let a person like you affect my optimism. You are really an insignificant spec in my world and in the world of United Airlines. In fact you are an insignificant spec to the aviation world. Personally I wish you would crawl back under the rock you came from, or at least go bother people at your own airline. I am sick to death of your one sided, hollow, self justified, and selfrightious insight into the troubles of United Airlines.

If UA fails and disappears, so be it. I will survive. I just don't believe it will happen, and I KNOW you certainly have no special inside knowledge of what makes UA tick.

There was a time (long ago) that your posts would provoke ineresting discussions or debate. Now your posts have absolutely no constructive value whatsoever. They are purely bait to get a rise out of the good employees and loyal customers who come here to talk about an airline we care about. Have you noticed how few people actually post and talk here anymore????? Since your return to the USAviation world, you have single handedly chased everyone away, except for the last few of us diehards.

Do you really care that much about United Airlines to focus all your attention on us? Obviously not. Your contempt for our great company is OBVIOUS. Please, if you have any descency at all, as a fellow pilot, as a fellow human being, leave this board and go play somewhere else.

I for will be ignoring you from here on in. However I would prefer to come here and discuss the future of my airline with people who are not so single minded. If you do not cease and desist, I will be leaving this site for good, just like the countless others who have just had enough of your presence here.

Your welcome is long overstayed. If you do not leave, I'm afraid everyone else will.

jetz.
 
----------------
On 8/2/2003 12:18:57 AM 767jetz wrote:







----------------
On 8/1/2003 9:42:49 AM Analyst wrote:



Breakeven passenger load factor (percent) 93.7

----------------​

PLEASE GET YOUR INFO RIGHT BEFORE POSTING IT HERE.
You are quoting VERY outdated information. Break even load factors are FAR below 93.7%
Thanks for playing. Bye, bye...

----------------​

Jetz, your comment just goes to show how oblivious you are to facts.

That info that Analyst posted came from United's own PR Newswire news release.

BELF for the 6 months ending June 2003 WAS 93.7%. Don't believe it? Look it up for yourself: http://biz.yahoo.com/prnews/030801/cgf004_1.html

Its at the bottom of the press release.

BELF for the 3 months ending June 2003 was about 91.1%. Again, don't beleive it? Look it up for yourself.

Do yourself a big, fat favor, and check your facts before you write. Otherwise, with every time you put your little fingers to the keyboard, you're digging a deeper and deeper ditch.
 
767jetz:

Thank you for taking Chip on. Your comments are right on the mark. However, NOTHING penetrates him. Chip salivates at the thought of UAL going under and the loss of jobs for 65,000 employees. You are so right about his negativity and self-serving tactics. I have never witnessed another person like Chip before. Who has so much hatred for UAL that he wishes the worst for the company and its employees. His negative commentary or so-called analysis is filled with hidden underpinnings of glee if all 65,000 employees lose their jobs. He feels power over UAL at the ends of his fingertips on the keyboard. This is a very sick person. Do not run away from Chip 767jetz. Keep up with all the positive spin on the company. The real power is in the hands of all of UAL's wonderful employees who go to work every day, take pride in doing a good job and are responsible for the baby steps out of bankruptcy and its survival. I, for one, believe United will make it in the end.

This is a call for all UAL employees and those who believe UAL will prevail to fill the board with positive comments and spin about the company. If enough employees post positive comments, this should dwarf and negate anything Chip posts against UAL.
 
Folks -

While I usually avoid getting into the middle of Chip bashing threads, Chip is right in saying the huge loss UAL posted is disappointing. I think everyone was expecting somewhat better results from a carrier that is in Chapter 11 and able to avoid paying certain bills. This also shows how much stronger AA is when compared to UA, and comparing AA and UA is probably a much more valid comparison than US and UA.
 
767jetz:
I do not want to see UA fail and I post what I believe is accurate information. The UA financial loss was huge by every standard, but this quarter will be a better representation of what the future holds.
767, I sincerely empathize with your company's situation and I wish you know harm. My only interest in UA is how it effects US because our two companies have been tied at the hip for so long.
As I said before, the only reason I posted on this forum was to dispute Uklridge's sophist posts, nothing more, nothing less. If you have anger, I suggest you direct at Ukridge for dragging me onto this board to dispute his posts.
I wish you the best.
Best regards,
Chip
 

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