CHICAGO, Oct. 20 /PRNewswire-FirstCall/ -- UAL Corporation (Nasdaq: UAUA), the holding company whose primary subsidiary is United Airlines, reported results for the third quarter ended Sept. 30, 2009. The company:
- Reported a net loss of $63 million, or $0.43 per basic share, excluding non-cash, net mark-to-market hedge gains and certain accounting charges as outlined in note 6 of the attached statement of consolidated operations, narrowing its net loss by $202 million compared to the third quarter of 2008. The company reported a GAAP net loss of $57 million, or $0.39 per basic share.
- Reported a year-over-year decline in consolidated passenger revenue per available seat mile (PRASM) of 14.7%, a 2.5-percentage-point improvement compared to the 17.2% decline in the second quarter of 2009.
- Delivered a third consecutive quarter of non-fuel unit cost reduction, with mainline unit cost per available seat mile (CASM) for the quarter down 1.6% year-over-year, excluding fuel and certain accounting charges, despite a reduction in mainline capacity of 8.2% year-over-year. Mainline CASM, including fuel and excluding non-cash, net mark-to-market fuel hedge gains and certain accounting charges, was down 20.3% year-over-year. GAAP mainline unit cost, including these items, was down 24.8%.
- Closed the quarter with total cash of $2.8 billion, unrestricted cash of more than $2.5 billion, and restricted cash of $309 million.
- Completed financings totaling more than $1.5 billion, including $270 million in the third quarter and nearly $1.3 billion early in the fourth quarter, raising roughly $1 billion in new liquidity. Through these financings, the company also reduced its debt and net capital lease obligations for 2010 by $215 million and for 2011 by $100 million.
- As a part of the $1.3 billion in early fourth quarter financings, the company completed a $129 million financing with SkyWest, Inc., one of its regional flying partners. The agreement includes a contract extension on 40 existing aircraft as well as commitments for a small number of additional aircraft.
- Ranked No. 2 in on-time arrivals among the major network carriers year-to-date through September, trailing the leader by less than one half of one percentage point.
- Continued to improve the quality of its products and services, with customer satisfaction scores significantly improving across the board compared to last year.
“Against a challenging environment, our people are delivering improvements across the business. With the work we have done and the strength of our network, we are poised to see better year-over-year unit revenue performance as economies begin to recover and business travel returns,” said Glenn Tilton, UAL Corporation chairman, president and CEO. “We are again demonstrating that we can improve customer satisfaction and on-time performance even while reducing our unit costs.”
Unit Revenue Pressure Moderates From Second Quarter 2009
For the third quarter, consolidated PRASM declined 14.7%, an improvement of 2.5 percentage points compared to the second quarter of 2009. Consolidated yield declined 17.1% and consolidated load factor increased 2.5 points year-over-year. During the quarter, the company recorded a favorable $36 million adjustment to revenue due to certain tax adjustments.
3Q 2009 Passenger
Passenger Revenue % PRASM % ASM(1) %
Revenue Inc./(Dec.) Inc./(Dec.) Inc./(Dec.)
Geographic Area (millions) vs. 3Q 2008 vs. 3Q 2008 vs. 3Q 2008
--------------- ---------- ---------- ---------- ----------
Domestic $1,951 (22.9%) (14.2%) (10.2%)
Pacific 606 (30.0%) (23.9%) (7.9%)
Atlantic 635 (16.3%) (16.1%) (0.3%)
Latin America 75 (40.2%) (26.7%) (18.4%)
---------- ---------- ---------- ----------
International $1,316 (24.8%) (20.3%) (5.6%)
Mainline $3,267 (23.7%) (16.8%) (8.2%)
Regional
Affiliates 844 1.2% (12.3%) 15.3%
---------- ---------- ---------- ----------
Consolidated $4,111 (19.6%) (14.7%) (5.7%)
(1) ASM: Available Seat Miles
Cargo revenue for the quarter decreased 43% year-over-year as a result of lower volumes and continued pressure on yields due to the weak economy. United’s significant presence in the Pacific export markets, which have been particularly impacted by the weakness in the global economy, continues to disproportionately affect its cargo revenue.
Non-Fuel Unit Costs Declined Year-Over-Year for the Third Consecutive Quarter
Total consolidated expense, including fuel, was down $1.4 billion year-over-year in the third quarter, excluding non-cash, net mark-to-market hedge gains and certain accounting charges. Consolidated expense, excluding fuel and certain accounting charges, was down $214 million or 6.7%, as the company continued its success in reducing costs as capacity declined. Total GAAP consolidated expense, including these items, was down $1.7 billion for the quarter.
Mainline CASM, excluding fuel and certain accounting charges, decreased 1.6% in the third quarter, despite an 8.2% decline in mainline capacity. This CASM reduction is about one percentage point better than the guidance provided by the company in September.
Consolidated CASM, excluding fuel and certain accounting charges, decreased 1.0% despite a 5.7% decline in consolidated capacity. GAAP mainline and consolidated CASM, including these items, was down 24.8% and 23.9% respectively, compared to the year-ago quarter.
Fuel Hedge Collateral Returns Offset Cash Hedge Losses
The company recorded $131 million in cash losses on fuel hedges that settled in the quarter. In addition, the company also recorded non-cash, net mark-to-market gains on its fuel hedges of $59 million. The cash losses on the contracts that settled during the quarter were offset by $123 million in cash collateral that was returned during the quarter. The table below details hedge impacts for the quarter:
Fuel Hedge Impacts Three Months Ending Sept. 30, 2009
(in millions)
Included
Included in Non-
in Fuel Operating
Expense Expense Total
------- ------- ------
Non-Cash Net Mark-to-Market
Net Gain $25 $34 $59
Cash Net Loss on Settled
Contracts (92) (39) (131)
------- ------- ------
Total Recorded Net Loss $(67) $(5) $(72)
Return of Hedge Collateral $123
For the fourth quarter, the company has hedged 55% of its estimated consolidated fuel consumption at an average price of $75 per barrel. Excluding the legacy positions put in place in 2008, the company has hedged 43% of estimated consumption at an average price of $63 per barrel. For the full year 2010, the company has hedged 16% of its estimated consolidated fuel consumption at an average price of $74 per barrel, including hedge coverage of 43% of estimated first quarter 2010 consumption at an average price of $74 per barrel.
Raised $1.5 Billion in New Financing, Including Nearly $1.0 Billion in New Liquidity
The company ended the quarter with a total cash balance of $2.8 billion, an unrestricted cash balance of more than $2.5 billion and restricted cash of $309 million.
The company raised approximately $270 million in the third quarter including $155 million from the spare parts financing previously announced in July 2009, $27 million from issuances of common equity to complete the December 2008 offering, $70 million from aircraft secured financings and approximately $20 million from asset sales.
Early in the fourth quarter, the company raised an additional $1.3 billion. This includes $345 million from a convertible debt offering, $138 million from the issuance of common equity, $129 million from a financing with SkyWest, Inc., and $659 million from refinancing an enhanced equipment trust certificate (EETC), resulting in $90 million of incremental liquidity between closing and repayment of the existing secured notes. In addition to generating incremental liquidity, the EETC refinancing also reduced the company’s debt amortization for 2010 by $215 million and for 2011 by $100 million.
During the third quarter, the company generated $56 million of positive operating cash flow and $4 million of negative free cash flow, defined as operating cash flow less capital expenditures. The company had scheduled debt and net capital lease payments of $264 million during the third quarter and non-aircraft capital expenditures of $60 million.
“We have made significant progress relative to last year, reporting an operating profit of $123 million excluding charges, and generating what we believe will again be leading cost control among our peers, reducing our mainline unit costs even as we reduce capacity,” said Kathryn Mikells, UAL Corporation's chief financial officer. “We continue to take action to improve our liquidity, and after successfully executing about $1.5 billion in transactions over the last four months, our unrestricted cash balance today stands at more than $3.1 billion, with only about $90 million in debt payments remaining this year."
Strong On-Time Performance and Customer Satisfaction Improvements Continue
United ranked second among the five U.S. network carriers in year-to-date 2009 on-time arrival performance through September, falling just one half of one percentage point behind the No. 1 spot. For the third quarter of 2009, United ranked third in on-time arrival performance, trailing the top spot by less than one percentage point.
The company continues to improve its key customer satisfaction measures among its best customers, with a significant improvement for the fourth consecutive quarter. Improvements were achieved across the travel experience, including aircraft cleanliness, seat and entertainment product workability, and employee courtesy.
Business Highlights
- UAL Corporation announced that Jane C. Garvey, former administrator of the Federal Aviation Administration, has joined the UAL Board of Directors.
- United announced it will be moving its Operations Center to Willis Tower in downtown Chicago. The City of Chicago and United have agreed to an economically viable incentive program that will ensure the city is competitive with other locations and that will make financial sense for United. The package, including tax incentives, grants and job training programs, will be used to offset United’s capital and facility build-out costs.
- United announced that it will begin offering unlimited domestic upgrades to Mileage Plus members with elite status starting in the second quarter of 2010. In addition, Mileage Plus frequent flyers may now use their miles to book hotel stays worldwide and car rentals in the United States and Canada through a simple online booking process at united.com/hotelandcarawards.
- United announced the introductory launch of Premier Baggage, the latest addition to the Travel Options by United(SM) portfolio, enabling customers to pay a flat price to check two standard bags at no additional cost every time they fly on a United- or United Express-operated flight in a year.
- United completed conversion of all of its B747s and B767s to its new international premium class configuration. Beginning in February 2010, the company will begin conversion of its B777s.
2009 Outlook
The company expects mainline CASM, excluding fuel, profit sharing and certain accounting charges for the full year 2009 to be down 0.5% to flat year-over-year. Since the company’s original guidance in January, it has reduced its projected full year mainline non-fuel costs by more than $350 million.
The company expects scheduled debt and capital lease payments of $215 million and capital expenditures of approximately $70 million for the fourth quarter 2009. Complete details on United’s outlook can be found in the Investor Update, available at united.com/ir.
Questions & Answers
Additional information can be found in the Q&A section of this release, beginning on page 8.
About United
United Airlines (Nasdaq: UAUA) operates approximately 3,300* flights a day on United and United Express to more than 200 U.S. domestic and international destinations from its hubs in Los Angeles, San Francisco, Denver, Chicago and Washington, D.C. With key global air rights in the Asia-Pacific region, Europe and Latin America, United is one of the largest international carriers based in the United States. United also is a founding member of Star Alliance, which provides connections for our customers to 916 destinations in 160 countries worldwide. United's 47,000 employees reside in every U.S. state and in many countries around the world. News releases and other information about United can be found at the company's Web site at united.com.
*Based on United's forward-looking flight schedule for October 2009 to October 2010
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements included in this release are forward-looking and thus reflect our current expectations and beliefs with respect to certain current and future events and financial performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to our operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as “expects,” “will,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook” and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this report are based upon information available to us on the date of this report. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise. Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: our ability to comply with the terms of our amended credit facility and other financing arrangements; the costs and availability of financing; our ability to maintain adequate liquidity; our ability to execute our operational plans; our ability to control our costs, including realizing benefits from our resource optimization efforts and cost reduction initiatives; our ability to utilize our net operating losses; our ability to attract and retain customers; demand for transportation in the markets in which we operate; an outbreak of a disease that affects travel demand or travel behavior; demand for travel and the impact the economic recession has on customer travel patterns; the increasing reliance on enhanced video-conferencing and other technology as a means of conducting virtual meetings; general economic conditions (including interest rates, foreign currency exchange rates, investment or credit market conditions, crude oil prices, costs of aviation fuel and refining capacity in relevant markets); our ability to cost-effectively hedge against increases in the price of aviation fuel; any potential realized or unrealized gains or losses related to fuel or currency hedging programs; the effects of any hostilities, act of war or terrorist attack; the ability of other air carriers with whom we have alliances or partnerships to provide the services contemplated by our respective arrangements with such carriers; the costs and availability of aviation and other insurance; the costs associated with security measures and practices; industry consolidation; competitive pressures on pricing and on demand; capacity decisions of United and/or our competitors; U.S. or foreign governmental legislation, regulation and other actions (including open skies agreements); labor costs, our ability to maintain satisfactory labor relations and the results of the collective bargaining agreement process with our union groups; any disruptions to operations due to any potential actions by our labor groups; weather conditions; and other risks and uncertainties, including those set forth under the caption “Risk Factors” in Item 1A. of the 2008 Annual Report, as well as other risks and uncertainties set forth from time to time in the reports we file with the U.S. Securities and Exchange Commission (“SEC”). Consequently, forward-looking statements should not be regarded as representations or warranties by UAL or United that such matters will be realized.
UAL CORPORATION AND SUBSIDIARY COMPANIES
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
(In millions, except per share amounts)
Three Months Ended %
September 30, Increase/
(In accordance with GAAP) 2009 2008 (Decrease)
---- ---- ----------
As Adjusted
(Note 2)
Operating revenues:
Passenger - United Airlines $3,267 $4,280 (23.7)
Passenger - Regional Affiliates 844 834 1.2
Cargo 125 219 (42.9)
Other operating revenues 197 232 (15.1)
--- ---
4,433 5,565 (20.3)
----- -----
Operating expenses:
Aircraft fuel (Notes 4 and 6) 1,064 2,461 (56.8)
Salaries and related costs (Note 6) 954 1,037 (8.0)
Regional affiliates (a) 775 882 (12.1)
Purchased services 279 327 (14.7)
Aircraft maintenance materials and
outside repairs 253 256 (1.2)
Landing fees and other rent 226 222 1.8
Depreciation and amortization (Note 6) 220 234 (6.0)
Distribution expenses 145 181 (19.9)
Aircraft rent 88 115 (23.5)
Cost of third party sales 59 75 (21.3)
Other impairments and special items
(Note 6) 43 (9) -
Other operating expenses (Note 6) 239 275 (13.1)
--- ---
4,345 6,056 (28.3)
----- -----
Earnings (loss) from operations 88 (491) -
Other income (expense):
Interest expense (146) (144) 1.4
Interest income 3 24 (87.5)
Interest capitalized 3 6 (50.0)
Miscellaneous, net (Note 6) (10) (186) (94.6)
--- ----
(150) (300) (50.0)
Loss before income taxes and equity in
earnings of affiliates (62) (791) (92.2)
Income tax expense (benefit) (Note 6) (4) 2 -
-- -
Loss before equity in earnings of affiliates (58) (793) (92.7)
Equity in earnings of affiliates, net of tax 1 1 -
--- ---
Net loss $(57) $(792) (92.8)
==== =====
Loss per share, basic and diluted $(0.39) $(6.22)
====== ======
Weighted average shares, basic and diluted 145.6 127.3
See accompanying notes.
(a) Regional affiliates expense includes regional aircraft rent
expense. See Note 3 for more information.
UAL CORPORATION AND SUBSIDIARY COMPANIES
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
(In millions, except per share amounts)
Nine Months Ended %
September 30, Increase/
(In accordance with GAAP) 2009 2008 (Decrease)
---- ---- ----------
As Adjusted
(Note 2)
Operating revenues:
Passenger - United Airlines $8,909 $11,924 (25.3)
Passenger - Regional Affiliates 2,252 2,346 (4.0)
Cargo 370 674 (45.1)
Other operating revenues 611 703 (13.1)
--- ---
12,142 15,647 (22.4)
------ ------
Operating expenses:
Salaries and related costs (Note 6) 2,838 3,262 (13.0)
Aircraft fuel (Notes 4 and 6) 2,528 5,884 (57.0)
Regional affiliates (a) 2,154 2,508 (14.1)
Purchased services (Note 6) 852 1,047 (18.6)
Aircraft maintenance materials
and outside repairs 718 868 (17.3)
Landing fees and other rent 676 651 3.8
Depreciation and amortization (Note 6) 675 670 0.7
Distribution expenses 402 558 (28.0)
Aircraft rent 265 314 (15.6)
Cost of third party sales 172 204 (15.7)
Goodwill impairment (Note 6) - 2,277 (100.0)
Other impairments and special items
(Note 6) 250 214 16.8
Other operating expenses (Note 6) 699 816 (14.3)
--- ---
12,229 19,273 (36.5)
------ ------
Loss from operations (87) (3,626) (97.6)
Other income (expense):
Interest expense (415) (428) (3.0)
Interest income 15 100 (85.0)
Interest capitalized 8 16 (50.0)
Miscellaneous, net (Note 6) 19 (177) -
-- ----
(373) (489) (23.7)
Loss before income taxes and equity
in earnings of affiliates (460) (4,115) (88.8)
Income tax benefit (Note 6) (46) (30) 53.3
--- ---
Loss before equity in earnings
of affiliates (414) (4,085) (89.9)
Equity in earnings of affiliates,
net of tax 3 4 (25.0)
- -
Net loss $(411) $(4,081) (89.9)
===== =======
Loss per share, basic and diluted $(2.83) $(32.62)
====== =======
Weighted average shares, basic and diluted 145.1 125.2
See accompanying notes.
(a) Regional affiliates expense includes regional aircraft rent
expense. See Note 3 for more information.
Questions & Answers
Q1: After the financing and refinancing activities over the last several months, what are 2010 debt and net capital lease obligations?
A1: The company’s total debt and net capital lease obligations for 2010 will be approximately $900 million after recently announced transactions. This represents a reduction of approximately $200 million from prior disclosures for 2010 debt and net capital lease obligations.
Q2: How have United’s efforts to generate ancillary revenue performed year-over-year?
A2: United has been a leader in the industry’s move toward unbundling and generating new ancillary revenue streams through our Travel Options by United(SM) program which offers a number of new innovative products that provide customers with the choice to purchase products and services that offer added comfort, convenience and rewards. Ancillary revenue from these options and other fees has increased to a total of $289 million this quarter. These revenues consist of Travel Options products such as Economy Plus upsell, Premier Line, Premier Bags and Award Accelerator, as well as ticket change fees and first and second bag fees. On a per passenger basis, ancillary revenues and fees have increased by almost 13% this quarter compared to last year, to approximately $13 per passenger.
Q3: Which fees and ancillary revenues does United include in passenger revenue and which are included in other revenue? What impact did fees and ancillary revenues have in the quarter?
A3: There is not a consistent industry practice among airlines regarding the recording and classification of ancillary and other revenues. Some ancillary revenue products, such as premium seat upsell revenues, are consistently recorded by most airlines as passenger revenue. Certain other ancillary revenue products, such as first and second bag fees and ticketing and change fees, are classified by some other carriers in other revenue. For United, first and second bag fees and ticketing and change fees are recorded in passenger revenue. Increases in these fees resulted in a 0.9 percentage-point improvement in consolidated PRASM year-over-year.
Q4: What is the status of United’s fleet modernization program?
A4: We are currently in the process of evaluating the proposals for fleet modernization from Airbus, Boeing and various engine manufacturers. We expect to make a decision soon on whether to pursue a potential order.
Q5: Can you provide additional commentary on line items in the income statement where there were significant year-over-year changes in non-fuel cost?
A5: Total non-fuel operating expense declined by $214 million year-over-year in the third quarter, excluding certain accounting charges, or 6.7%, as the company continued its efforts to reduce costs as capacity declined.
Excluding the $22 million impact from special items, salaries decreased $105 million, or 10.1%, as a result of capacity reductions and efficiency improvements across the company. Productivity improved by nearly 3% in the third quarter compared to last year, reflecting both our efforts to improve efficiencies on the front line as well as our previously announced reductions in management and staff.
Distribution expenses decreased $36 million, or 19.9%. The decrease in passenger revenue was the primary driver of distribution expense savings.
Aircraft rent expense decreased $27 million, or 23.5% due to reduced lease payments associated with the elimination of the B737 fleet.
Excluding the $11 million impact from special items, purchased services and other operating expenses decreased by a combined $73 million, or 12.1%, reflecting our continued focus on reducing costs in this challenging environment. We continue to achieve rate reductions for goods and services through the application of our strategic sourcing process, in areas from ground handling to hotels. We are also benefiting from improved operational reliability, which reduces the waste and disruption associated with delays and cancellations.
Q6: What is the composition of your unencumbered assets?
A6: As of Oct. 20, 2009, the company has more than $600 million in unencumbered assets, with roughly half of the value in aircraft and half in spare engines and other assets.
After the closing of our recent liquidity transactions, our unrestricted cash balance is well above the thresholds in our credit card processor agreements. As a result, we have recently notified our largest credit card processor that we will be terminating our non-cash collateral agreement with them. This action will add $800 million of aircraft collateral to our pool of unencumbered assets during the fourth quarter, bringing total unencumbered assets to almost $1.5 billion, with unencumbered aircraft of over $1.0 billion.
Q7: United has adjusted 2008 interest expense. What was the driver behind this adjustment?
A7: The FASB issued accounting guidance in May 2008 that is effective for fiscal years beginning after Dec. 15, 2008 (referred to as FSP APB 14-1). This new guidance primarily relates to convertible debt that includes a cash settlement option and requires retrospective application to prior period financial statements to the extent the debt was outstanding in those periods. The primary effect of FSP APB 14-1 is to require the company to record a debt discount equal to the difference between the issuance date fair value of the debt without the conversion option and the proceeds received upon debt issuance. The debt discount amortization results in incremental non-cash interest expense in 2006 through 2011. This change increased third quarter 2008 interest expense by $12 million, and increased third quarter 2009 interest expense by $14 million. For the full year, the adjustment increases 2008 interest expense by $48 million and 2009 interest expense by $55 million. All incremental interest expense impacts resulting from FSP APB 14-1 are non-cash charges and have no impact on United’s financial covenant calculations.
Q8: Does the company expect to record income tax provisions or credits in 2009?
A8: Due to the application of accounting guidance issued by FASB for fiscal years beginning after Dec. 15, 2008 (referred to as FAS 141R), which changes the accounting treatment related to tax provisions in purchase accounting, the company expects to offset, through net income, future tax provisions or credits with changes to the valuation allowance. As a result of this treatment, the company expects to record a net zero tax rate, even in periods of profit, until such time as the valuation allowance is consumed or reversed. There may, from time to time, be modest impacts to income tax as a result of special or unusual charges, or as a result of items impacting Other Comprehensive Income. As a result of the company’s significant Net Operating Loss balance, the company carries a $3.0 billion valuation allowance as of Sept. 30, 2009.
UAL CORPORATION AND SUBSIDIARY COMPANIES
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
(In millions)
Three Months Ended % Nine Months Ended %
(In accordance September 30, Increase/ September 30, Increase/
with GAAP) 2009 2008 (Decrease) 2009 2008 (Decrease)
------------------------------- -------------------------
Cash flows
provided
(used) by
operating
activities (a) $56 $(387) - $878 $(250) -
Cash flows
provided
(used) by
investing
activities:
Net sales
of short-
term
investments - - - - 2,295 (100.0)
Additions
to property,
equipment and
deferred
software (60) (117) (48.7) (230) (384) (40.1)
(Increase)
decrease in
restricted
cash (57) 407 - (37) 508 -
Proceeds
from asset
sale-leasebacks 41 59 (30.5) 135 59 128.8
Proceeds
from
litigation
on advance
deposits - - - - 41 (100.0)
Proceeds from
the sale of
property and
equipment 31 29 6.9 77 43 79.1
Other, net 2 1 100.0 3 14 (78.6)
----- ----- ----- -----
(43) 379 - (52) 2,576 -
----- ----- ----- -----
Cash flows
provided
(used) by
financing
activities:
Repayment of
Credit Facility (9) (9) - (18) (18) -
Repayment
of other debt (229) (187) 22.5 (615) (538) 14.3
Special
distribution
to common
shareholders - (2) (100.0) - (253) (100.0)
Principal
payments
under
capital leases (26) (9) 188.9 (129) (209) (38.3)
Decrease in
capital
lease
deposits - - - 22 154 (85.7)
Increase in
deferred
financing
costs (5) (7) (28.6) (9) (118) (92.4)
Proceeds
from
issuance of
long-term
debt 187 253 (26.1) 321 337 (4.7)
Proceeds from
the issuance
of common stock 27 - - 90 - -
Other, net 1 1 - (2) (9) (77.8)
----- ----- ----- -----
(54) 40 - (340) (654) (48.0)
----- ----- ----- -----
Increase (decrease)
in cash
and cash
equivalents
during
the period (41) 32 - 486 1,672 (70.9)
Cash and cash
equivalents
at beginning
of the period 2,566 2,899 (11.5) 2,039 1,259 62.0
----- ----- ----- -----
Cash and cash
equivalents
at end of
the period $2,525 $2,931 (13.9) $2,525 $2,931 (13.9)
====== ====== ====== ======
Reconciliation of cash and cash equivalents to total cash and cash
equivalents and restricted cash:
As of %
September 30, Increase/
2009 2008 (Decrease)
---- ----
Cash and cash
equivalents $2,525 $2,931 (13.9)
Restricted cash 309 248 24.6
----- -----
Total cash and
cash equivalents
and restricted
cash $2,834 $3,179 (10.9)
====== ======
(a) See Note 6(h) for the Company's computation of free cash flow.
CONSOLIDATED NOTES (UNAUDITED)
(1) UAL Corporation ("UAL" or the "Company") is a holding company whose
principal subsidiary is United Air Lines, Inc. ("United").
(2) On January 1, 2009, the Company adopted FASB Staff Position APB
14-1: Accounting for Convertible Debt Instruments That May Be Settled
in Cash upon Conversion (Including Partial Cash Settlement) ("FSP
APB 14-1"). FSP APB 14-1 requires the issuer of certain convertible
debt instruments that may be settled in cash (or other assets) on
conversion to separately account for the liability (debt) and equity
(conversion option) components of the instrument in a manner that
reflects the issuer's non-convertible debt borrowing rate resulting
in additional non-cash interest expense. FSP APB 14-1 requires
retrospective application. The Company has two debt instruments with
a combined principal amount of approximately $875 million that are
impacted by FSP 14-1. The following financial statement line items
for the three and nine months ended September 30, 2008 were affected
by the adoption of this new accounting standard:
Three Months Ended Nine Months Ended
September 30, 2008 September 30, 2008
(In millions,
except per As As Effect of As As Effect of
share) Reported Adjusted Change Reported Adjusted Change
---------- -----------------------------------------------------------
Interest
expense $(131) $(144) $(13) $(392) $(428) $(36)
Nonoperating
expense (287) (300) (13) (453) (489) (36)
Loss before
income taxes
and equity in
earnings of
affiliates (778) (791) (13) (4,079) (4,115) (36)
Net loss (779) (792) (13) (4,045) (4,081) (36)
Loss per share,
basic and
diluted (6.13) (6.22) (0.09) (32.34) (32.62) (0.28)
In addition, the Company adopted FASB Staff Position No. EITF 03-6-1,
Determining Whether Instruments Granted in Share-Based Payment
Transactions are Participating Securities ("EITF 03-6-1") effective
January 1, 2009, which also requires retrospective application. EITF
03-6-1 clarifies that instruments granted in share-based payment
transactions that are considered to be participating securities prior to
vesting should be included in the earnings allocation under the two-class
method of calculating earnings per share. The Company determined that its
previously granted restricted shares are participating securities
because the restricted shares participate in dividends. However, the
impact of these shares was not included in the common shareholder basic
loss per share computation in the 2009 or 2008 periods due to net losses
in these periods.
(3) United has contractual relationships with various regional carriers
to provide regional jet and turboprop service branded as United
Express. Under these agreements, United pays the regional
carriers contractually agreed fees for crew expenses,
maintenance expenses and other costs of operating these
flights. These costs include aircraft rents of $111 million
and $102 million for the three months ended September 30, 2009
and 2008, respectively, and $327 million and $309 million for the
nine months ended September 30, 2009 and 2008, respectively, which
are included in regional affiliate expense in our Statements of
Consolidated Operations.
(4) 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 Regional
affiliates operating expense. In accordance with UAL's
agreement with its regional affiliates, these costs are incurred
by the Company. Fuel hedging gains or losses are not allocated to
Regional affiliates fuel expense.
Year-Over-Year Impact of Fuel Expense
United Mainline and Regional Affiliate Operations
(In millions, Three Months Ended Nine Months Ended
except per September 30, % September 30, %
gallon) 2009 2008 Change 2009 2008 Change
--------------------------- -------------------------
Total mainline
fuel expense $1,064 $2,461 (56.8) $2,528 $5,884 (57.0)
Exclude impact
of non-cash,
net mark-to-market
("MTM") gains
(losses) 25 (336) - 521 (119) -
----------------- ------------------
Mainline fuel
expense excluding
MTM (gains)
losses 1,089 2,125 (48.8) 3,049 5,765 (47.1)
Add: Regional
affiliates fuel
expense 222 377 (41.1) 564 1,010 (44.2)
----------------- ------------------
Consolidated fuel
expense
excluding
MTM gains 1,311 2,502 (47.6) 3,613 6,775 (46.7)
Exclude impact of
fuel hedge
settlements (92) 39 - (491) 102 -
----------------- ------------------
Consolidated fuel
expense
excluding
hedge
impacts (a) $1,219 $2,541 (52.0) $3,122 $6,877 (54.6)
================= ==================
Mainline fuel
consumption
(gallons) 511 564 (9.4) 1,480 1,691 (12.5)
Mainline average
jet fuel price
per gallon
(in cents) 208.2 436.3 (52.3) 170.8 348.0 (50.9)
Mainline average
jet fuel price
per gallon
excluding impact
of non-cash
MTM gains
(in cents) 213.1 376.8 (43.4) 206.0 340.9 (39.6)
Regional affiliates
fuel consumption
(gallons) 105 93 12.9 294 279 5.4
Regional
affiliates
average jet
fuel price
per gallon
(in cents) 211.4 405.4 (47.9) 191.8 362.0 (47.0)
(a) See Note 6 for further information related to fuel hedging and non-
GAAP measures.
(b) Net adjustment for cash paid for fuel hedge settlements during the
period and related collateral returned during the period.
Collateral amounts include only the collateral change associated
with contract settlements.
(5) The table below sets forth certain operating statistics by
geographic region and the Company's mainline, regional affiliates
and consolidated operations:
(% change from prior year)
Three
Months
Ended
September
30, Regional Consoli-
2009 Domestic Pacific Atlantic Latin Mainline Affiliates dated
------------------------------------------------------------------
Passenger
revenues (22.9) (30.0) (16.3) (40.2) (23.7) 1.2 (19.6)
ASM (10.2) (7.9) (0.3) (18.4) (8.2) 15.3 (5.7)
RPM (8.0) (2.0) 1.3 (14.8) (5.4) 19.0 (2.9)
PRASM (14.2) (23.9) (16.1) (26.7) (16.8) (12.3) (14.7)
Yield
(a) (18.5) (24.8) (13.7) (26.8) (19.4) (15.0) (17.1)
Load
factor
(points) 2.0 5.0 1.4 3.4 2.6 2.5 2.5
Nine Months
Ended
September
30, Regional Consoli-
2009 Domestic Pacific Atlantic Latin Mainline Affiliates dated
------------------------------------------------------------------
Passenger
revenues (23.6) (32.6) (19.5) (39.1) (25.3) (4.0) (21.8)
ASM (12.0) (12.3) (2.5) (17.3) (10.7) 9.3 (8.6)
RPM (10.8) (13.5) (3.9) (20.6) (10.6) 11.7 (8.4)
PRASM (13.1) (23.1) (17.5) (26.4) (16.4) (12.2) (14.4)
Yield
(a) (17.2) (17.4) (12.3) (18.1) (16.5) (14.0) (14.6)
Load
factor
(points) 1.3 (1.1) (1.2) (3.1) 0.1 1.6 0.2
(a) Yields for geographic regions exclude charter revenue, industry
reduced fares, passenger charges and related revenue passenger
miles.
(6) The Company incurred special operating charges related to aircraft
lease terminations during the three and nine months ended
September 30, 2009. In addition, the Company recorded unusual
and/or infrequent items related to severance, employee benefits
and depreciation and amortization, as noted below. Collectively,
these charges are identified as "special items and other charges"
in the Regulation G reconciliations below. The Company also
adjusts certain of its financial statement items and measures of
financial performance to primarily present the impacts of its fuel
hedging on an "economic" basis. Items calculated on an "economic"
basis consist of gains or losses for derivative instruments that
settled in the current accounting period, but were recognized in a
prior period in GAAP results, and changes in market value for
derivatives that will be settled in a future period. These charges
are identified as "non-cash, net mark-to-market gains (losses)"
in the Regulation G reconciliations below. These special items and
other charges and non-cash, net mark-to-market adjustments are as
follows:
Three Months Ended
September 30,
(In millions) 2009 2008 Income Statement
Classification
---------------- ----------------
Goodwill impairment $- $- Goodwill impairment
Intangible asset impairments - (16)
Aircraft and deposit
impairments 19 -
----------------
Other impairments 19 (16)
----------------
LAX municipal bond secured
interest (a) - -
Lease termination and special
items 24 7
----------------
Total other impairments and Other impairments and
special items 43 (9) special items
Salaries and related
Severance 22 6 costs
Employee benefit Salaries and related
adjustments (b) - (6) costs
Litigation-related settlement Other operating
gain - - expenses
Other operating
(Gain) loss on asset sales (11) 8 expenses
Purchased services
charges (c) - - Purchased services
Accelerated depreciation
related to aircraft Depreciation and
groundings 6 6 amortization
----------------
Total other charges 17 14
----------------
Total impairments, special
items and other charges $60 $5
================
Operating non-cash, net
mark-to-market (gains)
losses (25) 336 Aircraft fuel
----------------
Total operating impact $35 $341
================
Non-operating non-cash, net
mark-to-market (gains)
losses (34) 183 Miscellaneous, net
----------------
Pre-tax impairments and
other charges 1 524
Income tax benefit on
impairments and other
charges (7) 3 Income tax benefit
----------------
Impairments and other charges,
net of tax $(6) $527
================
Total fuel hedge (gain) loss
adjustment $(59) $519
================
Nine Months Ended
September 30,
(In millions) 2009 2008 Income Statement
-------------- Classification
--------------
Goodwill impairment $- $2,277 Goodwill impairment
Intangible asset impairments 150 64
Aircraft and deposit
impairments 19 143
----------------
Other impairments 169 207
LAX municipal bond secured
interest (a) 27 -
Lease termination and special
items 54 7
----------------
Total other impairments Other impairments and
and special items 250 214 special items
Salaries and related
Severance 23 88 costs
Employee benefit Salaries and related
adjustments (b) (33) 28 costs
Litigation-related Other operating
settlement gain - (29) expenses
Other operating
(Gain) loss on asset sales (11) 8 expenses
Purchased services
charges (c) - 26 Purchased services
Accelerated depreciation
related to aircraft Depreciation and
groundings 38 8 amortization
----------------
Total other charges 17 129
----------------
Total impairments, special
items and other charges $267 $2,620
================
Operating non-cash, net
mark-to-market (gains)
losses (521) 119 Aircraft fuel
----------------
Total operating impact $(254) $2,739
================
Non-operating non-cash, net
mark-to-market (gains)
losses (241) 162 Miscellaneous, net
----------------
Pre-tax impairments and
other charges (495) 2,901
Income tax benefit on
impairments and other
charges (59) (26) Income tax benefit
----------------
Impairments and other
charges, net of tax $(554) $2,875
================
Total fuel hedge (gain)
loss adjustment $(762) $281
================
(a) Amount relates to a pending legal matter that remains unresolved
since the Company's emergence from bankruptcy in 2006.
(b) Amount relates to additional charges to adjust certain employee
benefit obligations.
(c) Amount relates to expense for certain projects and transactions
that have been terminated or indefinitely postponed by the Company.
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
excluding fuel costs from certain measures is useful to investors because
it provides an additional measure of management's performance excluding
the effects of a significant cost item over which management has limited
influence. The Company also believes that adjusting for special items,
and other items unusual or infrequent in nature, is useful to investors
because they are non-recurring items not indicative of the Company's
on-going performance. The Company does not apply cash flow hedge
accounting. The Company believes that the net fuel hedge adjustments
provide management and investors with a better perspective of its
performance and comparison to its peers because the adjustments reflect
the economic fuel cost during the periods presented and many of our
peers apply SFAS 133 cash flow hedge accounting.
The tables below set forth the reconciliation of GAAP and non-GAAP
financial measures for certain operating statistics that are used in
determining key indicators such as adjusted passenger revenue per
revenue passenger mile ("Yield"), operating revenue per available
seat mile ("RASM"), operating expense per available seat mile
("CASM"), operating margin (loss) and net loss.
Three Months Ended Nine Months Ended
September 30, % September 30, %
2009 2008 Change 2009 2008 Change
--------------------------------------------------------
(a) Yield
(In
millions)
Mainline
Passenger -
United
Airlines $3,267 $4,280 (23.7) $8,909 $11,924 (25.3)
Less:
industry
reduced
fares
and
passenger
charges (11) (13) (15.4) (30) (35) (14.3)
--------------- ----------------
Mainline
adjusted
passenger
revenue $3,256 $4,267 (23.7) $8,879 $11,889 (25.3)
=============== ================
Mainline
revenue
passenger
miles 27,611 29,174 (5.4) 76,510 85,544 (10.6)
Adjusted
mainline
yield
(in
cents) 11.79 14.63 (19.4) 11.61 13.90 (16.5)
Consolidated
Consolidated
passenger
revenue $4,111 $5,114 (19.6) $11,161 $14,270 (21.8)
Less:
industry
reduced
fares
and
passenger
charges (11) (13) (15.4) (30) (35) (14.3)
--------------- ----------------
Consolidated
adjusted
passenger
revenue $4,100 $5,101 (19.6) $11,131 $14,235 (21.8)
=============== ================
Consolidated
revenue
passenger
miles 31,425 32,379 (2.9) 86,734 94,696 (8.4)
Adjusted
consolidated
yield (in
cents) 13.05 15.75 (17.1) 12.83 15.03 (14.6)
(b) RASM
(In
millions)
Mainline
Consolidated
operating
revenues $4,433 $5,565 (20.3) $12,142 $15,647 (22.4)
Less:
Passenger -
Regional
Affiliates (844) (834) 1.2 (2,252) (2,346) (4.0)
--------------- ----------------
Mainline
operating
revenues $3,589 $4,731 (24.1) $9,890 $13,301 (25.6)
=============== ================
Mainline
available
seat
miles 32,193 35,082 (8.2) 93,746 105,004 (10.7)
Mainline
RASM (in
cents) 11.15 13.49 (17.3) 10.55 12.67 (16.7)
(c) CASM
(In
millions)
Mainline
Consolidated
operating
expenses $4,345 $6,056 (28.3) $12,229 $19,273 (36.5)
Less:
Regional
affiliates (775) (882) (12.1) (2,154) (2,508) (14.1)
--------------- ----------------
Mainline
operating
expenses $3,570 $5,174 (31.0) $10,075 $16,765 (39.9)
=============== ================
Mainline
available
seat
miles 32,193 35,082 (8.2) 93,746 105,004 (10.7)
Mainline
CASM (in
cents) 11.09 14.75 (24.8) 10.75 15.97 (32.7)
Mainline
operating
expenses $3,570 $5,174 (31.0) $10,075 $16,765 (39.9)
Add
(less):
impairments,
special
items
and
other
charges
and non-
cash, net
mark-to-
market
gains/
losses (35) (341) (89.7) 254 (2,739) -
--------------- ----------------
Adjusted
mainline
operating
expense $3,535 $4,833 (26.9) $10,329 $14,026 (26.4)
=============== ================
Adjusted
mainline
CASM (in
cents) 10.98 13.78 (20.3) 11.02 13.36 (17.5)
Adjusted
mainline
operating
expense $3,535 $4,833 (26.9) $10,329 $14,026 (26.4)
Less:
mainline
fuel
expense
(excluding
non-cash,
net mark-to-
market
gains/
losses) (1,089) (2,125) (48.8) (3,049) (5,765) (47.1)
--------------- ----------------
Adjusted
mainline
operating
expense $2,446 $2,708 (9.7) $7,280 $8,261 (11.9)
=============== ================
Adjusted
mainline
CASM (in
cents) 7.60 7.72 (1.6) 7.77 7.87 (1.3)
Three Months Ended Nine Months Ended
September 30, % September 30, %
2009 2008 Change 2009 2008 Change
---------------------------------------------------
Consolidated
Consolidated
operating
expenses $4,345 $6,056 (28.3) $12,229 $19,273 (36.5)
Add
(less):
impairments,
special
items and
other
charges
and non-
cash, net
mark-to-
market
gains/
losses (35) (341) (89.7) 254 (2,739) -
-------------------------------------------------
Adjusted
consolidated
operating
expenses $4,310 $5,715 (24.6) $12,483 $16,534 (24.5)
=====================================================
Consolidated
available
seat
miles 37,034 39,280 (5.7) 107,086 117,209 (8.6)
Adjusted
consolidated
CASM (in
cents) 11.64 14.55 (20.0) 11.66 14.11 (17.4)
Adjusted
consolidated
operating
expenses $4,310 $5,715 (24.6) $12,483 $16,534 (24.5)
Less:
consolidated
fuel
expense
(excluding
non-
cash, net
mark-to-
market
gains/
losses) (1,311) (2,502) (47.6) (3,613) (6,775) (46.7)
--------------- ----------------
Adjusted
consolidated
operating
expenses $2,999 $3,213 (6.7) $8,870 $9,759 (9.1)
=============== ================
Adjusted
consolidated
CASM (in
cents) 8.10 8.18 (1.0) 8.28 8.33 (0.6)
(d) Operating
Margin
(Loss)
(In
millions)
Consolidated
operating
earnings
(loss) $88 $(491) - $(87) $(3,626) (97.6)
Add
(less):
impairments,
special
items
and other
charges
and non-
cash, net
mark-to-
market
gains/
losses 35 341 (89.7) (254) 2,739 -
--------------- ----------------
Adjusted
operating
earnings
(loss) $123 $(150) - $(341) $(887) (61.6)
=============== ================
Consolidated
operating
revenues $4,433 $5,565 (20.3) $12,142 $15,647 (22.4)
Operating
margin
(loss)
(percent) 2.0 (8.8) 10.8 pt. (0.7) (23.2) 22.5 pt.
Adjusted
operating
margin
(loss)
(percent) 2.8 (2.7) 5.5 pt. (2.8) (5.7) 2.9 pt.
(e) Pre-tax
loss (In
millions)
Loss
before
income
taxes
and
equity
in earnings
of
affiliates $(62) $(791) (92.2) $(460) $(4,115) (88.8)
Add
(less):
impairments,
special
items and
other
charges
and non-
cash, net
mark-to-
market
gains/
losses 35 341 (89.7) (254) 2,739 -
Add
(less):
non-operating
fuel hedge
adjustments (34) 183 - (241) 162 -
--------------- ----------------
Adjusted
pre-tax
loss $(61) $(267) (77.2) $(955) $(1,214) (21.3)
=============== ================
Pre-tax
loss
(percent) (1.4) (14.2) 12.8 pt. (3.8) (26.3) 22.5 pt.
Adjusted
pre-tax
loss
(percent) (1.4) (4.8) 3.4 pt. (7.9) (7.8) (0.1) pt.
(f) Net loss
(In
millions)
Net loss $(57) $(792) (92.8) $(411) $(4,081) (89.9)
Add
(less):
impairments,
special
items and
other
charges
and net
operating
fuel hedge
adjustments 35 341 (89.7) (254) 2,739 -
Add
(less):
non-operating
fuel
hedge
adjustments (34) 183 - (241) 162 -
Add
(less):
income
tax
benefit (i) (7) 3 - (59) (26) 126.9
--------------- ----------------
Adjusted
net loss $(63) $(265) (76.2) $(965) $(1,206) (20.0)
=============== ================
(g) Loss
per
share
Basic
loss
per
share -
GAAP $(0.39) $(6.22) (93.7) $(2.83) $(32.62) (91.3)
Add:
impairments,
special
operating
items and
other
charges (ii) 0.37 0.05 NM 1.43 20.71 (93.1)
Less:
net fuel
hedge
adjustments (0.41) 4.08 - (5.25) 2.25 -
--------------- ----------------
Basic
and
diluted
loss per
share
excluding
special
operating
items and
other
charges
and net
fuel
hedge
adjustments $(0.43) $(2.09) (79.4) $(6.65) $(9.66) (31.2)
=============== ================
(h) Operating
cash
flow (In
millions)
Operating
cash flow $56 $(387) - $878 $(250) -
Less:
capital
expenditures (60) (117) (48.7) (230) (384) (40.1)
--------------- ----------------
Add:
proceeds
from
litigation
on advance
deposits - - - - 41 (100.0)
--------------- ----------------
Free cash
flow $(4) $(504) - $648 $(593) -
=============== ================
(i) The Company's tax benefit in the three and nine months ended
September 30, 2009 primarily related to impairments, special
items and indefinite lived intangible assets.
(ii) Includes related tax benefits.
UAL CORPORATION AND SUBSIDIARY COMPANIES
(Mainline and Regional Affiliates (a))
Three Months Ended
September 30, %
2009 2008 Change
------ ------ ------
Revenue passengers (In thousands)
Mainline 15,179 16,758 (9.4)
Regional affiliates 6,897 6,092 13.2
------ ------
Consolidated 22,076 22,850 (3.4)
Revenue passenger miles - RPM
(In millions)
Mainline 27,611 29,174 (5.4)
Regional affiliates 3,814 3,205 19.0
------ ------
Consolidated 31,425 32,379 (2.9)
Available seat miles - ASM
(In millions)
Mainline 32,193 35,082 (8.2)
Regional affiliates 4,841 4,198 15.3
------ ------
Consolidated 37,034 39,280 (5.7)
Passenger load factor (percent)
Mainline 85.8 83.2 2.6 pt.
Regional affiliates 78.8 76.3 2.5 pt.
Consolidated 84.9 82.4 2.5 pt.
Consolidated operating breakeven
passenger load factor (percent) 83.0 90.4 (7.4) pt.
Passenger revenue per passenger mile -
Yield (cents) (See Note 6(a))
Mainline adjusted 11.79 14.63 (19.4)
Regional affiliates 22.13 26.02 (15.0)
Consolidated adjusted 13.05 15.75 (17.1)
Passenger revenue per available
seat mile - PRASM (cents)
Mainline 10.15 12.20 (16.8)
Regional affiliates 17.43 19.87 (12.3)
Consolidated 11.10 13.02 (14.7)
Operating revenue per available
seat mile - RASM (cents)
(See Note 6(b))
Mainline 11.15 13.49 (17.3)
Regional affiliates 17.43 19.87 (12.3)
Consolidated 11.97 14.17 (15.5)
Operating expense per available
seat mile - CASM (cents)
(See Note 6(c))
Mainline 11.09 14.75 (24.8)
Mainline excluding special items,
other charges and non-cash, net
mark-to-market gains/losses 10.98 13.78 (20.3)
Mainline excluding special items,
other charges, non-cash, net
mark-to-market gains/losses
and fuel 7.60 7.72 (1.6)
Regional affiliates 16.01 21.01 (23.8)
Consolidated 11.73 15.42 (23.9)
Consolidated excluding special
items, other charges and non-cash,
net mark-to-market gains/losses 11.64 14.55 (20.0)
Consolidated excluding special
items, other charges, non-cash,
net mark-to-market gains/losses
and fuel 8.10 8.18 (1.0)
Mainline unit earnings (loss)
(in cents) (b) 0.06 (1.26) -
Mainline unit earnings excluding
special items, other charges,
non-cash, net mark-to-market
gains/losses and fuel
(in cents) (b) 3.55 5.77 (38.5)
Number of aircraft in operating
fleet at end of period
Mainline 371 433 (14.3)
Regional affiliates 292 275 6.2
------ ------
Consolidated 663 708 (6.4)
Other Statistics
Mainline average price per gallon
of jet fuel (cents) 208.2 436.3 (52.3)
Mainline average price per gallon
of jet fuel excluding non-cash,
net mark-to-market (gains) losses
(cents) 213.1 376.8 (43.4)
Mainline average full-time equivalent
employees (thousands) 43.6 49.0 (11.0)
Mainline ASMs per equivalent
employee - productivity (thousands) 738 716 3.1
Average stage length (in miles)
Mainline 1,459 1,398 4.4
Regional affiliates 499 465 7.3
Mainline fleet utilization
(in hours and minutes) 11:14 10:50 3.7
(a) Mainline includes United Air Lines, Inc. scheduled and chartered
jet operations. Regional affiliates include operations from
regional carriers with whom the Company has entered into capacity
purchase agreements to provide jet and turboprop operations branded
as United Express.
(b) Unit earnings are calculated as RASM minus CASM.
UAL CORPORATION AND SUBSIDIARY COMPANIES
(Mainline and Regional Affiliates (a))
Nine Months Ended
September 30, %
2009 2008 Change
------ ------ ------
Revenue passengers (In thousands)
Mainline 42,933 49,002 (12.4)
Regional affiliates 18,875 17,554 7.5
------ ------
Consolidated 61,808 66,556 (7.1)
Revenue passenger miles - RPM
(In millions)
Mainline 76,510 85,544 (10.6)
Regional affiliates 10,224 9,152 11.7
------ ------
Consolidated 86,734 94,696 (8.4)
Available seat miles - ASM
(In millions)
Mainline 93,746 105,004 (10.7)
Regional affiliates 13,340 12,205 9.3
------ ------
Consolidated 107,086 117,209 (8.6)
Passenger load factor (percent)
Mainline 81.6 81.5 0.1 pt.
Regional affiliates 76.6 75.0 1.6 pt.
Consolidated 81.0 80.8 0.2 pt.
Consolidated operating breakeven
passenger load factor (percent) 81.6 NM NM
Passenger revenue per passenger mile -
Yield (cents) (See Note 6(a))
Mainline adjusted 11.61 13.90 (16.5)
Regional affiliates 22.03 25.63 (14.0)
Consolidated adjusted 12.83 15.03 (14.6)
Passenger revenue per available seat
mile - PRASM (cents)
Mainline 9.50 11.36 (16.4)
Regional affiliates 16.88 19.22 (12.2)
Consolidated 10.42 12.17 (14.4)
Operating revenue per available seat
mile - RASM (cents) (See Note 6(b))
Mainline 10.55 12.67 (16.7)
Regional affiliates 16.88 19.22 (12.2)
Consolidated 11.34 13.35 (15.1)
Operating expense per available seat
mile - CASM (cents) (See Note 6(c))
Mainline 10.75 15.97 (32.7)
Mainline excluding special items,
other charges and non-cash, net
mark-to-market gains/losses 11.02 13.36 (17.5)
Mainline excluding special items,
other charges, non-cash, net
mark-to-market gains/losses and fuel 7.77 7.87 (1.3)
Regional affiliates 16.15 20.55 (21.4)
Consolidated 11.42 16.44 (30.5)
Consolidated excluding special
items, other charges and non-cash,
net mark-to-market gains/losses 11.66 14.11 (17.4)
Consolidated excluding special items,
other charges, non-cash, net
mark-to-market gains/losses and fuel 8.28 8.33 (0.6)
Mainline unit loss (cents) (b) (0.20) (3.30) (93.9)
Mainline unit earnings excluding special
items, other charges, non-cash, net
mark-to-market gains/losses and fuel
(in cents) (b) 2.78 4.80 (42.1)
Number of aircraft in operating fleet
at end of period
Mainline 371 433 (14.3)
Regional affiliates 292 275 6.2
------ ------
Consolidated 663 708 (6.4)
Other Statistics
Mainline average price per gallon of
jet fuel (cents) 170.8 348.0 (50.9)
Mainline average price per gallon of
jet fuel excluding non-cash, net
mark-to-market (gains) losses (cents) 206.0 340.9 (39.6)
Mainline average full-time equivalent
employees (thousands) 44.0 50.8 (13.4)
Mainline ASMs per equivalent employee -
productivity (thousands) 2,131 2,067 3.1
Average stage length (in miles)
Mainline 1,440 1,402 2.7
Regional affiliates 485 460 5.4
Mainline fleet utilization (in hours
and minutes) 10:50 10:54 (0.6)
(a) Mainline includes United Air Lines, Inc. scheduled and chartered jet
operations. Regional affiliates include operations from regional
carriers with whom the Company has entered into capacity purchase
agreements to provide jet and turboprop operations branded as
United Express.
(b) Unit earnings are calculated as RASM minus CASM.
NM - Not meaningful
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