UAL Corporation Reports Fourth Quarter and Full Year 2005 Results
Friday January 27, 9:12 am ET
Operating Earnings Improve Despite Markedly Higher Fuel Prices
Company Prepared to Exit Chapter 11 in Early February
CHICAGO, Jan. 27 /PRNewswire-FirstCall/ -- UAL Corporation (OTC Bulletin Board: UALAQ.OB - News), the holding company whose primary subsidiary is United Airlines, today reported its fourth quarter and full year 2005 financial results.
"We have made fundamental, sustainable changes to United's business and established a solid financial platform," said Glenn Tilton, United's chairman, CEO and president. "Moving forward, our focus is on our customers and continuous improvement in everything we do to drive increased margins and renew profitability. Although operating earnings for both the fourth quarter and the full year 2005 have improved significantly -- despite an increase in system fuel price of over 40 percent -- we know we can do better. We will continue to contain costs, apply sound revenue management and deliver consistent service to our customers."
UAL reported a fourth quarter operating loss of $182 million, a $388 million improvement over the same quarter last year, as revenue improvement and non-fuel cost reduction more than offset a $397 million increase in fuel costs for mainline and regional operations. The company reported a full-year operating loss of $219 million, a $635 million improvement year-over-year, driven by a $1 billion increase in revenue and a $1 billion reduction in non- fuel costs partially offset by $1.4 billion higher fuel costs for mainline and regional operations.
UAL reported a fourth quarter net loss of $17 billion, or $145 per basic share, including non-cash reorganization expenses of $17 billion as described below. Full-year net loss totaled $21 billion, or $182 per basic share, including reorganization expenses of $21 billion. The company believes the best indicator of United's post-reorganization financial performance is its net losses excluding reorganization and special items. Excluding reorganization and special items, UAL reported a net loss for the fourth quarter and full year totaling $297 million and $557 million, respectively. This represents a year-over-year improvement of $333 million and $729 million for the fourth quarter and full year, respectively.
The $17 billion of reorganization items recorded in the fourth quarter represent mostly unsecured claims allowed during the bankruptcy process. These claims, along with similar unsecured claims that the company has recognized in prior periods of the reorganization, are expected to be settled when the company exits bankruptcy for a minor fraction of the amount of the claims recorded. As a result, the company expects to report a substantial gain at exit in early 2006. It is important to note that these items are not expected to have a significant impact on the company's cash position.
United Prepared to Exit Bankruptcy in Early February
On January 20, 2006, the Bankruptcy Court confirmed United's Plan of Reorganization, and the company is prepared to exit on the effective date of the plan, in early February 2006. Over the last three years, United has methodically worked its way through a difficult and multifaceted restructuring, compounded by an unprecedented confluence of external challenges and fundamental changes taking place in the airline industry, with its unparalleled worldwide network, valuable brand and other assets intact. The company has made sustainable improvements in its cost structure, revenue management and operations. United has successfully:
* Achieved significant cost reductions that are expected to result in $7
billion of average annual cost savings by 2010;
* Resized and redeployed the fleet to better meet market demand and
increase operational flexibility;
* Enhanced products and services with the launch of Ted(SM), p.s.(SM), and
explus(SM);
* Improved operational performance across the board;
* Outperformed the industry in revenue improvement;
* Secured $3 billion in all-debt exit financing;
* Received solid credit ratings for our business and financing facility
from both Moody's and Standard & Poor's that are better than the ratings
of our network peers; and,
* Upon exit, will emerge with a stronger balance sheet after eliminating
$13 billion of debt and pension obligations.
! I wonder who UniTEDS savior will be then, Continental, AA, maybe SWA??? 2006 is going to continue to be interesting for UniTED indeed there 787 :blink:
