Ual Posts August Profit Meets Dip Target

Fly

Veteran
Mar 7, 2003
2,644
2
Visit site
Bankrupt UAL posts August profit, meets DIP target




CHICAGO, Sept 24 (Reuters) - UAL Corp.'s <UALAQ.OB> United Airlines, operating in bankruptcy protection, said on Wednesday it posted August net income of $68 million, excluding $114 million in costs related to its reorganization.

The No. 2 U.S. airline said it had an operating profit for the month of $105 million.

The Elk Grove Village, Illinois-based carrier filed the largest bankruptcy in aviation history in December, and has said it hopes to emerge from Chapter 11 protection by mid-2004.

United said it continued to generate positive cash flow in August and met the requirements of its debtor-in-possession financing for the seventh straight month.

As part of its DIP financing agreements, UAL's lenders required the company to achieve a cumulative EBITDAR, or earnings before interest, taxes, depreciation, amortization and aircraft rent, loss of no more than $219 million between Dec. 1 and Aug. 31.

United ended August with a cash balance of $2.4 billion, including $698 million in restricted cash and up slightly from $2.3 billion at the start of the month.

Chief Financial Officer Jake Brace said United expects to meet its September DIP covenants as well. He added that bookings are better than expected as the company heads into the fall and winter seasons.

United said its August results were affected by the power blackout last month that disrupted air travel, but the company did not quantify the impact.

Brace said last week that the airline's unit revenue rose 15 percent year-over-year in August, well above the industry's 9 percent systemwide gain.
 

737nCH11

Senior
Mar 4, 2003
395
0
With bookings better than expected for fall and winter this spring ought to be huge! Way to go folks. :up:
 

CAETravlr

Member
Aug 20, 2002
48
0
I just want to say... congratulations guys. That is awesome news. I am sure someone will have a negative spin on it, but it sounds like great news. I miss flying you guys on a regular basis. I took a trip last month to use up most of my FF miles before losing my PE status at the end of this year, and have to tell you, every aspect of the experience was wonderful (well, the Red Carpet staff in CDG might have been a little rude), but the reservations agents, the pilots, the flight crew, EVERYONE was superb, flights were on time and comfortable. You guys are really running a tight ship and coming together. Good luck to you all, and I hope to rejoin you frequently in the skies soon.

Regards,
CAETravlr
 

ual747mech

Senior
Nov 26, 2002
279
0
:down: Bad News, We actually lost money. Here's the book. :down:

UAL CORPORATION AND SUBSIDIARY COMPANIES (filing entities only)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE MONTH ENDED AUGUST 31, 2003
($ amounts in 000's)


UAL
CONSOLIDATING

Total operating revenues 1,398,972

Total operating expenses 1,294,458

Earnings (loss) from operations 104,514

Non-operating income (expenses):
Net interest expense (31,779)
Other income (expenses), net: (4,611)
Total non-operating income (expenses): (36,390)

Earnings (loss) before income taxes 68,124

Total tax provision (credit) -

Net Earnings (loss) before Reorganization items 68,124

Reorganization items (114,389)

Net earnings (loss) (46,265)
 

Busdrvr

Veteran
Aug 20, 2002
2,217
0
"Bad News, We actually lost money. Here's the book"

Not really accurate. Almost ALL of the "re-organization expenses" we "non-cash" items that will never be "paid". we paid approx 8.75 million in "professional services, but I'm not sure if that is included in "RE". Here's how it works. UAL had "equity stakes" in a great number of leased AC and pre-paid leases payments on many others. Lets say we leased a jet for 30K a month. At the end of the Lease term, we were scheduled to "own" the jet. in some cases we made a "down payment" to lower lease costs. Lets pretend it's a 737-500 that UAL planned to promptly park at 20 years anyway and has little resale value. We maybe gave our "equity stake" in the jet a value of 100K. Now UAL tells the leasor that we will only pay 6K a month for the jet. The leasor tells us to pound sand, then comes back when they can't find another taker. They agree to lower the lease payments, BUT UAL forfeits the equity stake. In about 4 months we save more on lease payments than we "lost' in equity. HOWEVER, as soon as the new lease is signed, UAL has a "special charge associated with lease restructuring" of 100K. In theory UAL is "worth" 100K less on the balance sheet. Are we better off from the transaction? ABSOLUTELY. Did it make us money? IT WILL. does it go down as an expense? YES. Same applies to lease pre-payments. although our lease costs go down substantially, we "lose" the pre-payments.

Q3 2002, UAL had on-balance sheet lease and depreciation expenses of approx half a billion or 170 million a month. that number has come down as leases are renegotiated, and depreciation excellerated. However, a rational evaluation of the EBIDTAR for the month would indicate a PROFIT of between 200 and 250 MILLION DOLLARS (Operating profit - D, R and A)
 

ual747mech

Senior
Nov 26, 2002
279
0
Busdrvr said:
"Bad News, We actually lost money. Here's the book"

Not really accurate. Almost ALL of the "re-organization expenses" we "non-cash" items that will never be "paid". we paid approx 8.75 million in "professional services, but I'm not sure if that is included in "RE". Here's how it works. UAL had "equity stakes" in a great number of leased AC and pre-paid leases payments on many others. Lets say we leased a jet for 30K a month. At the end of the Lease term, we were scheduled to "own" the jet. in some cases we made a "down payment" to lower lease costs. Lets pretend it's a 737-500 that UAL planned to promptly park at 20 years anyway and has little resale value. We maybe gave our "equity stake" in the jet a value of 100K. Now UAL tells the leasor that we will only pay 6K a month for the jet. The leasor tells us to pound sand, then comes back when they can't find another taker. They agree to lower the lease payments, BUT UAL forfeits the equity stake. In about 4 months we save more on lease payments than we "lost' in equity. HOWEVER, as soon as the new lease is signed, UAL has a "special charge associated with lease restructuring" of 100K. In theory UAL is "worth" 100K less on the balance sheet. Are we better off from the transaction? ABSOLUTELY. Did it make us money? IT WILL. does it go down as an expense? YES. Same applies to lease pre-payments. although our lease costs go down substantially, we "lose" the pre-payments.

Q3 2002, UAL had on-balance sheet lease and depreciation expenses of approx half a billion or 170 million a month. that number has come down as leases are renegotiated, and depreciation excellerated. However, a rational evaluation of the EBIDTAR for the month would indicate a PROFIT of between 200 and 250 MILLION DOLLARS (Operating profit - D, R and A)
:D I was only kidding, I agree, this is really a good news for us. Our cash flow keep increasing. "United ended August with a cash balance of $2.4 billion, including $698 million in restricted cash and up slightly from $2.3 billion at the start of the month." I thought I was going to have fun and see who else was going to follow with more negative spin(I thought Chip was going to come out and take the bait :D )

One thing you need to look at though is that it is costing us a lot of money being in Bankruptcy so we need to get out as soon as possible in my opinion.

Q: What other restructuring charges did the company
take this month?

A: United reported a total of 114 million dollars
in reorganization expenses this month. The majority
of reorganization expenses were non-cash items
resulting from the rejection of aircraft and also
included severance payments and professional fees.
 

USA320Pilot

Veteran
May 18, 2003
8,175
1,539
www.usaviation.com
Yesterday Reuters reported Standard & Poor's analyst Philip Baggaley in a report issued on Thursday said United has missed payments on most of its airport revenue bonds and said it has stopped making any such payments since April. "The ongoing disputes with a wide range of creditors are likely to make potential lenders cautious in future dealings with United if and when it reorganizes successfully," Baggaley said.

Chip asks: During the recent US Airways MEC meeting ALPA President Captain Duane Woerth said United was just making its DIP covenants. I wonder how United’s financial results and its ability to meet strict DIP requirements would be effected if the airline would be making all of its payments?

For example, in Pittsburgh US Airways' annual operating expense is $62 million per year, for just one airport. Considering the size of United and its airport revenue bond payments, how much money is United in default on?

Respectfully,

Chip
 
OP
F

Fly

Veteran
Mar 7, 2003
2,644
2
Visit site
Chip asks: During the recent US Airways MEC meeting ALPA President Captain Duane Woerth said United was just making its DIP covenants.

That's the name of the game Chipwich......you either Make them or Not! :stupid:
 

737nCH11

Senior
Mar 4, 2003
395
0
Chip,

The moderators on the U board have exposed you for what you truly are. Please do us a favor and go away.


Bob,

Hope you have a great trip. Please make sure that you aren't flying on an RJ. I was thinking that flight numbers starting with 7 were UAX.
 

novaqt

Senior
Aug 20, 2002
488
0
Chip:

"The ongoing disputes with a wide range of creditors ARE LIKELY to make potential lenders cautious in future dealings with United IF AND WHEN it reorganizes successfully,"

As you can see, Chip, the reporter is merely speculating and has provided no factual basis for his report you provided to us. You still haven't learned have you?
WE, THE FINE EMPLOYEES AND CUSTOMERS OF UNITED AIRLINES, ARE NOT INTERESTED IN ANYTHING YOU HAVE TO REPORT, ANALYZE AND/OR SAY!!!

Novaqt :down:
 

CAETravlr

Member
Aug 20, 2002
48
0
737nCH11 said:
Bob,

Hope you have a great trip. Please make sure that you aren't flying on an RJ. I was thinking that flight numbers starting with 7 were UAX.
737nCh11,

You are right, all of the UAL flight numbers beginning with 7 are UAX flights. However, the flight number he mentions is a USAirways flight number, and it is the codeshare on UAL. From UALs website, it looks like the UAL flight number is 1471.

Not being a smart a@@, just trying to clear up the confusion. :D

Regards,
CAETravlr
 

USFlyer

Veteran
Aug 19, 2002
2,084
292
novaqt said:
CUSTOMERS OF UNITED AIRLINES, ARE NOT INTERESTED IN ANYTHING YOU HAVE TO REPORT, ANALYZE AND/OR SAY!!!
Please only speak for yourself, thanks. I'm a UA customer too and want to hear what Chip has to say, whether I agree with it or not.