Operating Earnings Improve Despite Markedly Higher Fuel Prices
Company Prepared to Exit Chapter 11 in Early February
CHICAGO, Jan. 27 - UAL Corporation (OTC Bulletin Board: UALAQ.OB), 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.
"In every year of our restructuring, United has steadily improved operating earnings. Our cost per available seat mile (CASM) is now competitive, and revenue continues to outpace the industry average," said Jake Brace, United's executive vice president and chief financial officer. "The recent over-subscription by our lenders of United's exit financing facility demonstrates the market's confidence that United now has the financial and operating flexibility to meet the shifting challenges in our industry, including current high fuel prices."
Revenue Results
During the quarter, mainline passenger unit revenue (PRASM) increased 12 percent and yield increased 8 percent, compared to the fourth quarter of last year. United's PRASM performance outperformed the industry average improvement by 1 point. System load factor increased 3 points to 80 percent over the same period. Results for the fourth quarter of 2005 reflect essentially flat traffic on a 4 percent reduction in system capacity compared with the same period last year. United expects its system length-of-haul adjusted passenger unit revenue to be among the best in the industry. The company continues to see fares increasing industry-wide. United is benefiting from the early decision to move aircraft capacity to more profitable international routes, and is also benefiting from capacity reductions by the company's U.S. competitors in domestic and Asian markets, especially Japan. Total revenue for the fourth quarter and full year improved 10 percent and 6 percent, respectively.
United's strategy of market segmentation is intended to maximize margins from high-yield business travelers and to control costs while offering more price-sensitive leisure travelers the right service at the right price. The company is committed to enhancing the customer experience with such industry- leading products as United Economy Plus(SM) service, explus premium service on 70-seat regional jets for United Express(R), and United's p.s., premium transcontinental service between New York and Los Angeles or San Francisco. At the same time, United's low fare leisure product Ted has been expanded in 2005 from 47 to 56 aircraft serving 20 airports with over 240 daily departures from all United hubs and is a valuable addition to United's portfolio of products. United also continues to transform and optimize all areas of revenue execution, including its business-to-business sales efforts, loyalty programs, revenue management and all areas of network optimization.
"We are offering United's customers the wide range of choices in products and services they demand in today's market, at prices they are willing to pay. Both Ted and p.s. are showing double-digit margin improvements," said John Tague, executive vice president - marketing, sales and revenue. "United will continue to be competitive on price and we are expanding our efforts to better merchandise our services to generate additional revenue. For example, Economy Plus is successfully generating upsell revenue after the initial ticket purchase. Our corporate sales force has been revamped and, armed with United's differentiated premium product offerings, is booking good account wins for higher-yield business travel."
Operating Expenses
During the fourth quarter, mainline operating expense per available seat mile increased by 4 percent from the year-ago quarter largely driven by a 4 percent decrease in capacity and a 44 percent increase in mainline fuel price. Excluding fuel and special items, mainline operating expenses per available seat mile decreased 7 percent.
Mainline fuel expense was $324 million higher than in the fourth quarter 2004. Fuel expense is the company's single largest expense item, surpassing salaries and related expenses. Average mainline fuel price for the quarter was $2.09 per gallon (including taxes). Salaries and related costs were down 27 percent, or $337 million, primarily reflecting labor and benefit cost reductions, including an 8 percent reduction in manpower. Total operating expenses for the quarter and full year were flat and up 2 percent, respectively.
The company had an effective tax rate of zero for all periods presented, which makes UAL's pre-tax loss the same as its net loss.
Cash
The company ended the quarter with an unrestricted cash balance of $1.8 billion, and a restricted cash balance of $957 million, for a total cash balance of $2.7 billion. The unrestricted cash balance increased by $49 million during the quarter.
Operations
In the most recent data available from the U.S. Department of Transportation, United was ranked number 1 for the last 12 months in on-time arrival performance and ranked second in the least mishandled baggage among the six major network carriers. In addition, employee productivity (available seat miles divided by employee equivalents) was up 4 percent for the quarter compared to the same period in 2004.
During the fourth quarter, reallocation of aircraft capacity to international markets and further optimization of United's domestic schedule contributed to an increase in mainline fleet utilization of 3 percent compared to the same period last year. As a result, year-over-year the company reduced the number of aircraft in its mainline fleet by 7 percent, while reducing system available seat miles by only 4 percent.
In 2005, the company depeaked its hub in Los Angeles through optimization of the schedule. This initiative reduced costs and increased efficiency, and, by allowing us to eliminate the remote United Express terminal, it also improved the customer experience. In 2006, the company will continue resource optimization and depeaking throughout the United system, beginning with San Francisco in the first quarter. The company plans to eliminate the remote United Express facility in San Francisco as well.
"We will continue to find and implement ways to increase the efficient and effective deployment and utilization of United's core assets," said Pete McDonald, United's chief operating officer. "United employees are engaged in systemwide resource optimization projects that we expect will free up at least 10 aircraft in 2006. We will concentrate on further improving productivity, reliability and cost reduction, while maintaining our focus on delivering consistent service."
Outlook
United expects system mainline capacity to be up approximately 1 percent year-over-year for the first quarter, driven by improved aircraft utilization through the company's resource optimization effort.
The company expects mainline fuel price for the first quarter to average $1.92 per gallon, and for the full-year to average $1.81 per gallon (including taxes). Currently the company has no hedges in place for 2006. For the full- year 2006, the company anticipates fuel expense for mainline and the company's regional affiliates' operations will increase by approximately $885 million over its previous assumption, which was based on a mainline fuel price of $1.48 per gallon (including taxes). The previous assumptions were more fully described in the company's Updated G6 financial projections contained in Exhibit 99.1 to the Form 8-K filed with the SEC on January 17, 2006. The company expects to be able to offset some, but not all, of this increase through higher revenues.
December Monthly Operating Report
UAL today also filed with the United States Bankruptcy Court its Monthly Operating Report for December 2005. The filing entities of the company posted a $122 million operating loss for December. This compares to a $311 million operating loss in the same month last year. Mainline unit revenue improved 12 percent compared to same period last year. UAL met the requirements of its debtor-in-possession (DIP) financing.
News releases and other information about United Airlines can be found at the company's website, http://www.united.com.
Note 8 to the attached Statements of Consolidated Operations provides a reconciliation of net loss reported under GAAP to net loss excluding special items for all periods presented, as well as a reconciliation of other financial measures, including and excluding special charges.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements included in this press release are forward-looking and thus reflect the Company's current expectations and beliefs with respect to certain current and future events and financial performance. Such forward- looking statements are and will be, as the case may be, subject to many risks and uncertainties relating to the operations and business environments of the Company that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Factors that could significantly affect net earnings, revenues, expenses, costs, load factor and capacity include, without limitation, the following: the Company's ability to continue as a going concern; the Company's ability to comply with the terms of the DIP financing or negotiate modifications or amendments thereto as necessary; the Company's ability to obtain court approval with respect to motions in the Chapter 11 proceeding prosecuted by it from time to time; the Company's ability to consummate its plan of reorganization with respect to the Chapter 11 cases; the potential adverse impact of the Chapter 11 cases on the Company's liquidity or results of operations; the appointment of a Chapter 11 trustee or conversion of the cases to Chapter 7; the costs and availability of financing; the Company's ability to execute its business plan; the Company's ability to attract, motivate and/or retain key employees; the Company's ability to attract and retain customers; demand for transportation in the markets in which the Company operates; general economic conditions (including interest rates, foreign currency exchange rates, crude oil prices and refining capacity in relevant markets); the effects of any hostilities or act of war or any terrorist attack; the ability of other air carriers with whom the Company has alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; the costs and availability of aircraft insurance; the costs of aviation fuel; our ability to cost effectively hedge against increases in the price of aviation fuel; the costs associated with security measures and practices; labor costs; competitive pressures on pricing (particularly from lower-cost competitors) and on demand; capacity decisions of our competitors, U.S. or foreign governmental legislation, and regulation and other actions; the ability of the Company to maintain satisfactory labor relations, any disruptions to operations due to any potential actions by our labor groups ; weather conditions; and other risks and uncertainties set forth from time to time in UAL's reports to the United States Securities and Exchange Commission. Consequently, the forward-looking statements should not be regarded as representations or warranties by the Company that such matters will be realized. The Company disclaims any intent or obligation to update or revise any of the forward-looking statements, whether in response to new information, unforeseen events, changed circumstances or otherwise.
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UAL CORPORATION AND SUBSIDIARY COMPANIES
DEBTOR AND DEBTOR-IN-POSSESSION
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
(In Millions, Except Per Share)
(In accordance with GAAP) Three Months Ended December 31
2005 2004 % Change
Operating revenues:
Passenger - United Airlines $3,230 $2,995 7.8
- Regional Affiliates 611 490 24.7
Cargo 203 218 (6.9)
Other operating revenues 342 285 20.0
4,386 3,988 10.0
Operating expenses:
Aircraft fuel 1,166 842 38.5
Salaries and related costs 934 1,271 (26.5)
Regional affiliates 694 693 0.1
Purchased services 405 369 9.8
Aircraft maintenance 236 185 27.6
Depreciation and amortization 236 213 10.8
Landing fees and other rent 222 254 (12.6)
Cost of sales 205 156 31.4
Aircraft rent 86 129 (33.3)
Commissions 78 65 20.0
Special operating items -- -- --
Other operating expenses 306 381 (19.7)
4,568 4,558 0.2
Loss from operations (182) (570) (68.1)
Other income (expense):
Interest expense (133) (112) 18.8
Interest capitalized 1 -- --
Interest income 20 6 --
Gain on sale of investments -- 158 (100.0)
Special non-operating items -- -- --
Miscellaneous, net (3) (6) (50.0)
(115) 46 --
Loss before reorganization items,
income taxes and equity in earnings
of affiliates (297) (524) (43.3)
Reorganization items, net (16,607) (222) --
Loss before income taxes and equity
in earnings of affiliates (16,904) (746) --
Credit for income taxes -- -- --
Loss before equity in earnings of
affiliates (16,904) (746) --
Equity in earnings of affiliates -- 5 (100.0)
Net loss $(16,904) $(741) --
Loss per share, basic $(145.47) $(6.39)
Weighted average shares 116.2 116.2
See accompanying notes.
UAL CORPORATION AND SUBSIDIARY COMPANIES
DEBTOR AND DEBTOR-IN-POSSESSION
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
(In Millions, Except Per Share)
(In accordance with GAAP) Twelve Months Ended December 31
2005 2004 % Change
Operating revenues:
Passenger - United Airlines $12,914 $12,542 3.0
- Regional Affiliates 2,429 1,931 25.8
Cargo 729 704 3.6
Other operating revenues 1,307 1,214 7.7
17,379 16,391 6.0
Operating expenses:
Aircraft fuel 4,032 2,943 37.0
Salaries and related costs 4,027 5,006 (19.6)
Regional affiliates 2,746 2,425 13.2
Purchased services 1,524 1,462 4.2
Landing fees and other rent 915 964 (5.1)
Aircraft maintenance 881 747 17.9
Depreciation and amortization 856 874 (2.1)
Cost of sales 685 709 (3.4)
Aircraft rent 402 533 (24.6)
Commissions 305 305 --
Special operating items 18 -- --
Other operating expenses 1,207 1,277 (5.5)
17,598 17,245 2.0
Loss from operations (219) (854) (74.4)
Other income (expense):
Interest expense (482) (449) 7.3
Interest capitalized (3) 1 --
Interest income 38 25 52.0
Gain on sale of investments -- 158 (100.0)
Special non-operating items -- 5 (100.0)
Miscellaneous, net 87 (1) --
(360) (261) 37.9
Loss before reorganization items,
income taxes and equity in
earnings of affiliates (579) (1,115) (48.1)
Reorganization items, net (20,601) (611) --
Loss before income taxes and equity
in earnings of affiliates (21,180) (1,726) --
Credit for income taxes -- -- --
Loss before equity in earnings of
affiliates (21,180) (1,726) --
Equity in earnings of affiliates 4 5 (20.0)
Net loss $(21,176) $(1,721) --
Loss per share, basic $(182.29) $(15.25)
Weighted average shares 116.2 113.5
See accompanying notes.
Consolidated Notes (Unaudited)
(1) UAL Corporation ("UAL" or the "Company") is a holding company whose
principal subsidiary is United Air Lines, Inc. ("United"). On
December 9, 2002, UAL, United and twenty-six direct and indirect
wholly owned subsidiaries filed Chapter 11 petitions for relief in
the U.S. Bankruptcy Court for the Northern District of Illinois.
(2) In connection with its bankruptcy proceedings, the Company recorded
the following largely non-cash reorganization items:
Three Months Ended Twelve Months Ended
December 31, December 31,
(In millions) 2005 2004 2005 2004
Pension-related charges $7,880 $152 $8,925 $152
Employee-related charges 6,506 6 6,529 13
Aircraft claim charges 810 29 3,005 341
Municipal bond charges 406 -- 688 --
Contract rejection charges 262 -- 523 --
Retiree-related charges 652 -- 652 --
Professional fees 96 37 230 160
Impairment on lease
certificates -- -- 134 --
Aircraft refinance
adjustments (1) -- (60) --
Other (4) (2) (25) (55)
$16,607 $222 $20,601 $611
Pension-related charges are predominantly non-cash and include a
final settlement with the Pension Benefit Guaranty Corporation and
curtailment and net settlement losses as a result of the termination
of several defined benefit pension plans.
Employee-related charges are predominantly non-cash costs and include
the Company's estimated value of the deemed claim that each union
labor group will receive upon exit from bankruptcy. The value is
based upon the cost savings provided by each union labor group during
the bankruptcy process.
Aircraft claim charges include the Company's estimate of claims
incurred as a result of the rejection of certain aircraft leases and
return of aircraft as part of the bankruptcy process, together with
certain claims resulting from the modification of other aircraft
financings in bankruptcy.
Municipal bond charges include the Company's estimate of claims
incurred as a result of certain restructured municipal bond
obligations, together with certain claims resulting from the
rejection and litigation of other municipal bond obligations.
Contract rejection charges are non-cash costs that include our
estimate of claims resulting from the Company's rejection of certain
contractual obligations such as executory contracts, unexpired leases
and regional carrier contracts.
Retiree-related charges are non-cash costs that include the Company's
estimate of claims incurred as a result of an agreement reached to
modify the medical and life insurance benefits for individuals who
had retired from United prior to July of 2003.
In the third quarter of 2005, the Company agreed to cancel certain
EETC certificates that were held by a related party in accordance
with the term sheets reached with certain aircraft financiers.
Accordingly, the Company recorded a non-cash charge in the amount of
$134 million for principal and interest on such cancelled
certificates. In addition, the Company recorded adjustments
retroactively for aircraft rent and interest expense in the amount of
$59 million to reflect the revised financing terms.
(3) Special operating items:
In the second quarter of 2005, the Company recognized a charge of $18
million for aircraft impairment related to planned accelerated
retirement of certain aircraft operated by Air Wisconsin Airlines
Corporation ("AWAC").
In the fourth quarter of 2004, the Company recognized a charge of $47
million for its frequent flyer mileage program due to higher costs
associated with expected mileage redemptions on other airline
partners. In addition, in the first quarter of 2004, the Company
recorded a $60 million special operating item in connection with an
adjustment to passenger revenue.
Special non-operating items:
In the third quarter of 2004, the Company recorded a gain of $18
million from the sale of its pre-petition claim against Air Canada in
connection with their bankruptcy related to the Company's equity
interest in three Airbus A330 aircraft leased to Air Canada. In
addition, in the first quarter of 2004, the Company recorded a $13
million special non-operating charge as a result of the write-down of
the non-operating B767-200s to net realizable value.
(4) Included in UAL's operating loss are the results of its wholly owned
subsidiary United Aviation Fuels Corporation ("UAFC").
Three Months Ended Twelve Months Ended
December 31, % December 31, %
UAFC (in millions) 2005 2004 Change 2005 2004 Change
Other operating
revenues $117 $72 62.5 $343 $408 (15.9)
Cost of sales 115 81 42.0 336 430 (21.9)
Income/(loss)
from operations $2 $(9) -- $7 $(22) --
(5) During the second quarter of 2005, the Company received $22 million
as a result of the transition agreement with AWAC. This refund was
recorded as a reduction to Regional Affiliates operating expense.
(6) During the fourth quarter of 2004, the Company sold its investment
in Orbitz for cash proceeds of approximately $185 million and
recognized a gain of $158 million.
(7) UAL's results of operations include aircraft fuel expense for both
United mainline jet operations and regional affiliates. Aircraft
fuel expense incurred as a result of the Company's regional
affiliates' operations is reflected in the Regional Affiliates
operating expenses. In accordance with UAL's agreement with its
regional affiliates, these costs are incurred by the Company.
Year-Over-Year Impact of Fuel Expense
United Mainline and Regional Affiliate Jet
Operations
Three Months Ended
December 31, Change %
2005 2004 +/- Change
GAAP mainline fuel expense
(in millions) $1,166 $842 $324 38.5
Regional affiliates fuel expense
(in millions) 203 130 73 56.2
United system fuel expense
(in millions) $1,369 $972 $397 40.8
Mainline fuel consumption
(in gallons/millions) 558 581 (23) (4.0)
Regional affiliates fuel
consumption (in gallons/millions) 87 77 10 13.0
United system fuel consumption
(in gallons/millions) 645 658 (13) (2.0)
Mainline average jet fuel price
per gallon $2.09 $1.45 $0.64 44.1
Regional affiliates average jet
fuel price per gallon $2.33 $1.69 $0.64 37.9
United system average jet fuel
price per gallon $2.12 $1.48 $0.64 43.2
Twelve Months Ended
December 31, Change %
2005 2004 +/- Change
GAAP mainline fuel expense
(in millions) $4,032 $2,943 $1,089 37.0
Regional affiliates fuel expense
(in millions) 709 427 282 66.0
United system fuel expense
(in millions) $4,741 $3,370 $1,371 40.7
Mainline fuel consumption
(in gallons/millions) 2,250 2,349 (99) (4.2)
Regional affiliates fuel
consumption (in gallons/millions) 353 296 57 19.3
United system fuel consumption
(in gallons/millions) 2,603 2,645 (42) (1.6)
Mainline average jet fuel price
per gallon $1.79 $1.25 $0.54 43.2
Regional affiliates average jet
fuel price per gallon $2.01 $1.44 $0.57 39.6
United system average jet fuel
price per gallon $1.82 $1.27 $0.55 43.3
(8) Pursuant to SEC Regulation G, the Company has included the following
reconciliation of reported non-GAAP financial measures to comparable
financial measures reported on a GAAP basis. The Company believes
that the reported non-GAAP financial results provide management and
investors a better perspective of the Company's core business and
on-going financial performance and trends by excluding special and
reorganization items for comparative purposes. Statistical
information is for United mainline jet operations only.
Three Months Ended December 31,
In Millions EPS
2005 2004 2005 2004
GAAP net loss $(16,904) $(741) $(145.47) $(6.39)
Adjusted for:
Reorganization items, net 16,607 222 142.89 1.91
Special operating items -- 47 -- 0.40
Special non-operating items -- -- -- --
Net loss excluding
reorganization and special
items (297) (472) (2.58) (4.08)
Gain on sale of investment -- (158) -- (1.35)
Net loss excluding
reorganization, special and
other items $(297) $(630) $(2.58) $(5.43)
Twelve Months Ended December 31,
In Millions EPS
2005 2004 2005 2004
GAAP net loss $(21,176) $(1,721) $(182.29) $(15.25)
Adjusted for:
Reorganization items, net 20,601 611 177.26 5.38
Special operating items 18 (13) 0.15 (0.12)
Special non-operating items -- (5) -- (0.05)
Net loss excluding
reorganization and special
items (557) (1,128) (4.88) (10.04)
Gain on sale of investment -- (158) -- (1.38)
Net loss excluding
reorganization, special and
other items $(557) $(1,286) $(4.88) $(11.42)
Three Months Ended Twelve Months Ended
December 31, % December 31, %
Cost per asm - CASM(cents) 2005 2004 Change 2005 2004 Change
GAAP mainline operating
expense per asm 11.13 10.72 3.8 10.59 10.20 3.8
Less: Special
operating items -- 0.13 (100.0) 0.02 0.04 (50.0)
Mainline operating
expense per asm excluding
special operating
items 11.13 10.59 5.1 10.57 10.16 4.0
Less: UAFC(a) 0.33 0.23 43.5 0.24 0.29 (17.2)
Mainline operating
expense per asm excluding
special operating
items and UAFC 10.80 10.36 4.2 10.33 9.87 4.7
Less: fuel expense 3.35 2.33 43.8 2.87 2.03 41.4
Mainline operating
expense per asm excluding
special operating items,
UAFC and fuel expense(b) 7.45 8.03 (7.2) 7.46 7.84 (4.8)
Yield (cents)
GAAP passenger
revenue per rpm 11.54 10.71 7.7 11.25 10.83 3.9
Less: revenue adjustment -- -- -- -- 0.04 (100.0)
Passenger revenue per
rpm excl revenue
adjustment 11.54 10.71 7.7 11.25 10.79 4.3
Operating revenue
per asm - RASM (cents)
GAAP mainline operating
revenue per asm 10.85 9.70 11.9 10.66 9.95 7.1
Less: revenue adjustment -- -- -- -- 0.04 (100.0)
Mainline operating revenue
per asm excluding revenue
adjustment 10.85 9.70 11.9 10.66 9.91 7.6
Less: UAFC(a) 0.34 0.20 70.0 0.25 0.28 (10.7)
Mainline operating revenue
per asm excluding revenue
adjustment and UAFC 10.51 9.50 10.6 10.41 9.63 8.1
Passenger revenue
per asm - PRASM(cents)
GAAP mainline passenger
revenue per asm 9.28 8.31 11.7 9.20 8.63 6.6
Less: revenue adjustment -- -- -- -- 0.04 (100.0)
Mainline passenger revenue
per asm excluding
revenue adjustment 9.28 8.31 11.7 9.20 8.59 7.1 (a) UAFC's revenues and expenses are not derived from mainline jet
operations. Therefore, UAL has excluded these revenues and expenses
from the above reported GAAP financial measures. See Note 4 above
for more details. (b) Because the price of fuel is driven by economic and political factors
not within management's control, management believes that excluding
fuel cost from unit cost provides a meaningful comparative basis for
investors to evaluate the Company's performance with respect to more
controllable operating expenses.
UAL CORPORATION AND SUBSIDIARY COMPANIES
DEBTOR AND DEBTOR-IN-POSSESSION
Three Months Ended December 31
2005 2004 % Change
OPERATING STATISTICS
United Mainline Jet Operations
Revenue passengers (in thousands) 16,498 17,143 (3.8)
Revenue passenger miles (in millions) 27,881 27,853 0.1
Available seat miles (in millions) 34,792 36,062 (3.5)
Charter available seat miles (in millions) 98 193 (49.2)
Passenger load factor (percent) 80.1 77.2 2.9 pt.
Breakeven passenger load factor (percent) 84.7 92.0 (7.3) pt.
GAAP passenger revenue per passenger
mile - yield (cents) 11.54 10.71 7.7
GAAP passenger revenue per available
seat mile - PRASM (cents) 9.28 8.31 11.7
GAAP operating revenue per available
seat mile - RASM (cents) 10.85 9.70 11.9
Operating revenue per available seat
mile excluding UAFC - RASM (cents) 10.51 9.50 10.6
GAAP operating expense per available
seat mile - CASM (cents) 11.13 10.72 3.8
Operating expenses per available seat
mile excluding operating special
items, UAFC and
fuel expense - CASM (cents) 7.45 8.03 (7.2)
Average price per gallon of jet fuel
(cents) 208.8 145.1 43.9
Number of aircraft in operating fleet
at end of period 460 497 (7.4)
Average full-time equivalent
employees (thousands) 53.2 57.5 (7.5)
ASMs per equivalent employee -
productivity (thousands) 654 627 4.3
Average stage length (in miles) 1,350 1,303 3.6
Revenue block hours (in thousands) 454 481 (5.6)
Plane days (in thousands) 42 46 (8.7)
Fleet utilization (in hours and minutes) 10:44 10:28 2.5
UAL CORPORATION AND SUBSIDIARY COMPANIES
DEBTOR AND DEBTOR-IN-POSSESSION
Twelve Months Ended December 31
2005 2004 % Change
OPERATING STATISTICS
United Mainline Jet Operations
Revenue passengers (in thousands) 66,803 70,914 (5.8)
Revenue passenger miles (in millions) 114,272 115,198 (0.8)
Available seat miles (in millions) 140,300 145,361 (3.5)
Charter available seat miles (in
millions) 494 818 (39.6)
Passenger load factor (percent) 81.4 79.2 2.2 pt.
Breakeven passenger load factor
(percent) 82.8 84.7 (1.9) pt.
GAAP passenger revenue per passenger
mile - yield (cents) 11.25 10.83 3.9
Passenger revenue per passenger mile
excluding revenue adjustment - yield
(cents) 11.25 10.79 4.3
GAAP passenger revenue per available
seat mile - PRASM (cents) 9.20 8.63 6.6
Passenger revenue per available seat
mile excluding revenue adjustment -
PRASM (cents) 9.20 8.59 7.1
GAAP operating revenue per available
seat mile - RASM (cents) 10.66 9.95 7.1
Operating revenue per available seat
mile excluding revenue adjustment -
RASM (cents) 10.66 9.91 7.6
Operating revenue per available seat
mile excluding revenue adjustment
and UAFC - RASM (cents) 10.41 9.63 8.1
GAAP operating expense per available
seat mile - CASM (cents) 10.59 10.20 3.8
Operating expenses per available seat
mile excluding operating special
items, UAFC and
fuel expense - CASM (cents) 7.46 7.84 (4.8)
Average price per gallon of jet fuel
(cents) 179.2 125.3 43.0
Number of aircraft in operating fleet
at end of period 460 497 (7.4)
Average full-time equivalent
employees (thousands) 55.0 58.9 (6.6)
ASMs per equivalent employee -
productivity (thousands) 2,551 2,468 3.4
Average stage length (in miles) 1,368 1,293 5.8
Revenue block hours (in thousands) 1,833 1,957 (6.3)
Plane days (in thousands) 169 190 (11.1)
Fleet utilization (in hours and minutes) 10:52 10:19 5.3
