UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 3, 2009
UAL CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 001-06033 | 36-2675207 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification Number) |
| 77 W. Wacker Drive, Chicago, IL | 60601 | |
| (Address of principal executive offices) | (Zip Code) |
(312) 997-8000
Registrant’s telephone number, including area code
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 7.01 | Regulation FD Disclosure. |
Gregory T. Taylor, Senior Vice President – Corporate Planning & Strategy of United Air Lines, Inc., will speak at the JP Morgan High Yield and Leveraged Finance Conference on Tuesday, February 3, 2009. Attached hereto as Exhibit 99.1 are slides that will be presented at that time.
The information in this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
| Exhibit No. |
Description | |
| 99.1 | UAL slide presentation delivered on February 3, 2009 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| UAL CORPORATION | ||||||
| By: | /s/ Paul R. Lovejoy | |||||
| Name: | Paul R. Lovejoy | |||||
| Title: | Senior Vice President, | |||||
| General Counsel and Secretary | ||||||
| Date: February 3, 2009 |
||||||
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EXHIBIT INDEX
| Exhibit No. |
Description | |
| 99.1* |
UAL slide presentation delivered on February 3, 2009 |
| * | Furnished herewith electronically. |
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1 UAL Corporation UAL Corporation J.P. Morgan Global High Yield & Leveraged Finance Conference 2009 February 3, 2009 Exhibit 99.1 |
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2 p. 2 Safe Harbor Statement And Non-GAAP Reconciliation Safe Harbor Statement And Non-GAAP Reconciliation The information included in this presentation contains certain statements that are “Forward-Looking Statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of assumptions, risks and uncertainties related to the Company’s operations and the business environment in which it operates. Actual results may differ materially from any future results expressed or implied in such Forward-Looking Statements due to numerous factors, many of which are beyond the Company’s control, including factors set forth in the Company’s
Form 10-K for 2007 and 2008 along with other subsequent Company reports
filed with the United States Securities and Exchange Commission. Persons reviewing this presentation are cautioned that the Forward-Looking Statements speak only as of the date made and are not guarantees of future performance. The Company undertakes no obligation to update any Forward- Looking Statements. Information regarding reconciliation of certain non-GAAP financial measures
contained in this presentation is available on the Company's web site at www.united.com/ir The information included in this presentation contains certain statements that are “Forward-Looking Statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of assumptions, risks and uncertainties related to the Company’s operations and the business environment in which it operates. Actual results may differ materially from any future results expressed or implied in such Forward-Looking Statements due to numerous factors, many of which are beyond the Company’s control, including factors set forth in the Company’s
Form 10-K for 2007 and 2008 along with other subsequent Company reports
filed with the United States Securities and Exchange Commission. Persons reviewing this presentation are cautioned that the Forward-Looking Statements speak only as of the date made and are not guarantees of future performance. The Company undertakes no obligation to update any Forward- Looking Statements. Information regarding reconciliation of certain non-GAAP financial measures
contained in this presentation is available on the Company's web site at www.united.com/ir |
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3 Fourth Quarter 2008 Highlights Fourth Quarter 2008 Highlights Fourth quarter pre-tax loss of $547 million, excluding net non- cash mark-to-market hedge losses and certain accounting items • Consolidated PRASM* grew 4.7% year over year in the fourth quarter, excluding special items and Mileage Plus impacts. • Mainline CASM* excluding fuel was up only 1.6% year over year in the fourth quarter, despite an 11.7% capacity reduction. • Raised $400 million of liquidity in the fourth quarter despite difficult credit markets Fourth quarter pre-tax loss of $547 million, excluding net non- cash mark-to-market hedge losses and certain accounting items • Consolidated PRASM* grew 4.7% year over year in the fourth quarter, excluding special items and Mileage Plus impacts. • Mainline CASM* excluding fuel was up only 1.6% year over year in the fourth quarter, despite an 11.7% capacity reduction. • Raised $400 million of liquidity in the fourth quarter despite difficult credit markets *Excludes impairments, other special items and Mileage Plus impacts as applicable
p. 3 |
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4 United Delivered Competitive RASM and Non-Fuel CASM Over the Twelve Months Ended 4Q 2008 United Delivered Competitive RASM and Non-Fuel CASM Over the Twelve Months Ended 4Q 2008 Mainline CASM Excluding Fuel Twelve Months Ended Dec. 31, 2008 Mainline CASM Excluding Fuel Twelve Months Ended Dec. 31, 2008 Mainline RASM Twelve Months Ended Dec. 31, 2008 Mainline RASM Twelve Months Ended Dec. 31, 2008 10.67 12.46 12.51 13.01 13.19 DAL/NWA AMR 12.69 UAUA CAL LCC LUV 7.85 7.10 8.15 8.36 6.64 7.50 LCC AMR UAUA CAL DAL/NWA LUV (5.7%) 0.6% (4.1%) (3.9%) 0.8% (4.8%) 7.9% 7.4% 7.8% 8.2% 5.6% 5.0% YOY B/(W) YOY B/(W) Sources: Company press releases and Earnings Calls. Adjusted for special items, one-time items, and certain other accounting adjustments;
Impact shown for fresh-start accounting amounts except stock based compensation (2.2%) 3.6% (1.3%) (0.6%) (3.8%) Capacity YOY H/(L) Capacity YOY H/(L) (0.3%) (0.6%) (2.2%) 3.6% (3.9%) (3.8%) (0.3%) |
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5 Pre-Tax Margin Twelve Months Ended December 31, 2008 Pre-Tax Margin Twelve Months Ended December 31, 2008 Pre-Tax Earnings Impacted By Fuel Price And Fuel Hedging Pre-Tax Earnings Impacted By Fuel Price And Fuel Hedging -6.7% -6.6% -5.0% -2.8% -2.6% 4.5% UAUA DAL/NWA CAL AMR LCC LUV YOY Pts (3.3) (10.4) (10.3) (6.5) (6.9) (6.9) Sources: Company press releases and Earnings Calls. Pre-Tax Margin adjusted for special items, one-time items, certain other
accounting adjustments, as well as non-cash fuel hedge impacts to the extent disclosed. Impact shown for fresh start accounting amounts except stock based
compensation. |
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6 $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 The Industry Is Better Prepared To Deal With A Recession Than Ever Before The Industry Is Better Prepared To Deal With A Recession Than Ever Before Jet A and WTI Spot Prices Jet A ($/gal) WTI Crude Oil ($/barrel) -0.5% 2007 -3.8% 2008 -6.8% 2009F Domestic Industry Capacity Year-Over-Year Change 2.0% 2007 1.2% 2008 -2.5% 2009F* US Real GDP Growth * Source: Global Insight estimate Early capacity actions and continued capacity discipline has positioned the industry well for the downturn Early capacity actions and continued capacity discipline has positioned the industry well for the downturn |
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7 United’s Actions Have Positioned It Well To Deal With Current Challenges United’s Actions Have Positioned It Well To Deal With Current Challenges • Industry-leading capacity reductions to better match supply and demand • Enhancing revenue through redeployment of assets and ancillary revenue streams • Top-tier cost control • Improving operational performance • Industry-leading capacity reductions to better match supply and demand • Enhancing revenue through redeployment of assets and ancillary revenue streams • Top-tier cost control • Improving operational performance • Solid cash position and limited fixed obligations • Solid cash position and limited fixed obligations |
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8 p. 8 United’s Capacity Reductions Are Both Earlier and Deeper than Peers United’s Capacity Reductions Are Both Earlier and Deeper than Peers -8.4% -12.0% UAUA AMR -6.0% -6.9% CAL DAL/NWA -8.5% LCC First Quarter 2009 Year-Over-Year Consolidated Capacity First Quarter 2009 Year-Over-Year Consolidated Capacity -7.5% -5.1% UAUA -7.0% LCC DAL/NWA AMR -7.0% Full Year 2009 Year-Over-Year Consolidated Capacity Full Year 2009 Year-Over-Year Consolidated Capacity Note: CAL did not provide full year capacity guidance Source: Company press releases and SEC filings |
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9 p. 9 United Is Also Leading the Industry Response to Softening International Demand United Is Also Leading the Industry Response to Softening International Demand -14.5% UAUA -4.0% AMR -2.8% CAL 1.0% DAL/NWA First Quarter 2009 Year-Over-Year International Capacity First Quarter 2009 Year-Over-Year International Capacity -5.5% UAUA DAL/NWA AMR -2.5% -4.0% Full Year 2009 Year-Over-Year International Capacity Full Year 2009 Year-Over-Year International Capacity Note: LCC did not provide an international capacity guidance and CAL did not provide
full year capacity guidance Source: Company press releases and SEC
filings |
 p. 10 Capacity Reductions Are Being Achieved Cost Effectively Capacity Reductions Are Being Achieved Cost Effectively • Permanent retirement of the entire B737 fleet by the end of 2009 – Grounded 48 of 94 B737s by the end of 2008 – Elimination of entire fleet will reduce complexity of operations and maintenance • Permanent retirement of 6 B747s from the international fleet • B747s and B737s are the oldest and least fuel efficient aircraft in the fleet • Permanent retirement of the entire B737 fleet by the end of 2009 – Grounded 48 of 94 B737s by the end of 2008 – Elimination of entire fleet will reduce complexity of operations and maintenance • Permanent retirement of 6 B747s from the international fleet • B747s and B737s are the oldest and least fuel efficient aircraft in the fleet |
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11 We Are Maintaining the Breadth And Strength Of Our Network As We Reduce Capacity p. 11 Destinations Served – 1Q 2008: 221 cities – 1Q 2009: 218 cities |
 p. 12 United Is Leading The Development Of New And Innovative Ancillary Revenue Streams United Is Leading The Development Of New And Innovative Ancillary Revenue Streams p. 12 Ticketing Fee Revenue Expansion First/Second Bag Fee Economy Plus And First/Business Class Seat Upsell Door to Door Baggage Award Accelerator Premier Line ~$1.2 Billion In 2009 |
 p. 13 New International Product Right Sizes Premium Cabins And Drives Customer Satisfaction New International Product Right Sizes Premium Cabins And Drives Customer Satisfaction • Installing the new United First Suite and full lie-flat seats in Business Class reduces premium seat counts by over 20% – Over 25% of conversions completed by the end of 2008 – B767s and B747s will be completely converted in 2009 and B777s completed in 2010 • Customer satisfaction ratings more than doubled on reconfigured aircraft in the fourth quarter • Installing the new United First Suite and full lie-flat seats in Business Class reduces premium seat counts by over 20% – Over 25% of conversions completed by the end of 2008 – B767s and B747s will be completely converted in 2009 and B777s completed in 2010 • Customer satisfaction ratings more than doubled on reconfigured aircraft in the fourth quarter New First Suite New Business Class Seat |
 p. 14 United Is Improving Relative Non-Fuel Unit Cost Despite Industry Leading Capacity Reductions United Is Improving Relative Non-Fuel Unit Cost Despite Industry Leading Capacity Reductions 6.2% 1.6% UAUA 2.8% DAL/NWA 6.8% AMR LCC 5.0% CAL Sources: Company press releases and Earnings Calls. Adjusted for Special items
and certain accounting charges Capacity YOY H/(L) (4.2%) (8.0%) (11.7%) (8.3%) (5.9%) Fourth Quarter 2008 Mainline CASM Excluding Fuel Year-Over-Year Growth Fourth Quarter 2008 Mainline CASM Excluding Fuel Year-Over-Year Growth |
 p. 15 * Excluding Fuel and Profit Sharing Sources: Company press releases and Earnings Calls. Numbers represent mid-point
of guidance provided. Exclude Special items and certain accounting
charges LCC 3.0% 3.0% UAUA* 5.4% CAL 6.0% DAL/NWA* 9.2% AMR Full Year 2009 Guidance Mainline CASM Excluding Fuel Year-Over-Year Growth Full Year 2009 Guidance Mainline CASM Excluding Fuel Year-Over-Year Growth Capacity YOY H/(L) (9.0%) (5.0%) (7.0%) (4.0%) (6.5%) Carrying Cost Control Momentum Into 2009 Carrying Cost Control Momentum Into 2009 |
 p. 16 Aggressive 2009 Cost Control Program Will Deliver Results Aggressive 2009 Cost Control Program Will Deliver Results ~$1 Billion* Cost Reduction 60% Capacity Related Costs - Consolidated Capacity Expected To be Down 7.0% - 8.0% 40% Fixed Cost Reduction -Optimize Maintenance -Overhead Reduction -Productivity & Efficiency -Fleet Optimization * $750 million cost reduction against inflationary cost pressure of approximately $300 million |
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17 Focus On Maintaining Productivity As Capacity Is Reduced Focus On Maintaining Productivity As Capacity Is Reduced • Management and salaried workforce reduced by 2,500 – Over 1,500 already achieved, remainder by the end of 2009 – Represents almost 30% reduction in management and salaried positions compared to 2007 • Frontline reduction of 6,500 • Committed to minimizing the impact of furloughs on our employees – Nearly 40% of these frontline furloughs have been voluntary • Despite significant capacity reductions, we have maintained our productivity • Management and salaried workforce reduced by 2,500 – Over 1,500 already achieved, remainder by the end of 2009 – Represents almost 30% reduction in management and salaried positions compared to 2007 • Frontline reduction of 6,500 • Committed to minimizing the impact of furloughs on our employees – Nearly 40% of these frontline furloughs have been voluntary • Despite significant capacity reductions, we have maintained our productivity |
 p. 18 United Is Delivering Improved Quality As It Reduces Cost United Is Delivering Improved Quality As It Reduces Cost Core Performance Imperatives DOT service basics Clean, workable product Industry-leading revenues Competitive costs 1 Courteous, caring, respectful 2 3 4 5 |
 p. 19 With A Compensation Structure Aligned to Deliver Results With A Compensation Structure Aligned to Deliver Results • New front-line employee cash incentive program announced – Eligible employees will receive a monthly cash payout if we achieve a first or second-place DOT A:14 ranking amongst the largest network carriers • Management incentive programs directly aligned across the five core performance imperatives • New front-line employee cash incentive program announced – Eligible employees will receive a monthly cash payout if we achieve a first or second-place DOT A:14 ranking amongst the largest network carriers • Management incentive programs directly aligned across the five core performance imperatives |
 p. 20 Operational Performance Is Already Improving Operational Performance Is Already Improving 78.5% LCC 75.3% DAL/NWA 72.5% CAL 66.9% UAUA 66.4% AMR 80.6% LCC 79.8% UAUA 79.3% AMR 77.6% DAL/NWA 75.1% CAL United Had Its Best On-Time Performance in the Fourth Quarter Since 2004 4 th Place Summer 2008 On-Time Arrival Performance DOT: Arrival 14 Summer 2008 On-Time Arrival Performance DOT: Arrival 14 Fourth Quarter 2008 On-Time Arrival Performance DOT: Arrival 14 Fourth Quarter 2008 On-Time Arrival Performance DOT: Arrival 14 2 nd Place |
 p. 21 And Product Quality Improvements Are Beginning to Deliver Results for Our Customers And Product Quality Improvements Are Beginning to Deliver Results for Our Customers • Ensuring the workability of onboard equipment – Increasing frequency of in-flight entertainment equipment maintenance – Upgrading entertainment equipment • Focused on improving cabin cleanliness – Doubling the frequency of heavy cleans – Rigorous performance audits • Ensuring the workability of onboard equipment – Increasing frequency of in-flight entertainment equipment maintenance – Upgrading entertainment equipment • Focused on improving cabin cleanliness – Doubling the frequency of heavy cleans – Rigorous performance audits Customer Satisfaction Scores For Workability Have Improved By 10 points In 2008 Apr May Jun July Aug Sep Oct Nov Dec 2007 2008 Workability of Onboard Equipment Customer Satisfaction Score Workability of Onboard Equipment Customer Satisfaction Score |
 p. 22 United Closed 2008 With A Solid Liquidity Position United Closed 2008 With A Solid Liquidity Position • $2 billion in unrestricted cash – $400M of additional liquidity raised in fourth quarter • $2 billion in unencumbered assets • Fuel hedge collateral fully covers entire hedge portfolio losses at current prices • $2 billion in unrestricted cash – $400M of additional liquidity raised in fourth quarter • $2 billion in unencumbered assets • Fuel hedge collateral fully covers entire hedge portfolio losses at current prices $1B Unrestricted Cash $2B Unencumbered Assets: Aircraft & Engines $1B Unencumbered Assets: Other |
 p. 23 Fuel Hedge Losses Will Impact Earnings in 2009, But Cash Has Already Been Posted Fuel Hedge Losses Will Impact Earnings in 2009, But Cash Has Already Been Posted Unhedged Mainline Fuel price* Unhedged Mainline Fuel price* $1.73 $1.73 $1.79 $1.79 $1.89 $1.89 $1.91 $1.91 Collateral and fuel prices are based on January 16, 2008 closing forward crude oil prices *Fuel price per gallon including taxes and transportation costs **Net cash hedge gains or losses per gallon included in mainline fuel expense ***Net cash hedge gains or losses recorded in non-operating expense Collateral and fuel prices are based on January 16, 2008 closing forward crude oil prices *Fuel price per gallon including taxes and transportation costs **Net cash hedge gains or losses per gallon included in mainline fuel expense ***Net cash hedge gains or losses recorded in non-operating expense Hedge Impact In Non-Operating Expense*** Hedge Impact In Non-Operating Expense*** $81M $81M $111M $111M $53M $53M $52M $52M Hedge Impact In Fuel Expense** Hedge Impact In Fuel Expense** $0.49 $0.49 $0.39 $0.39 $0.26 $0.26 $0.09 $0.09 $1.83 $1.83 $297M $297M $0.31 $0.31 Full Year 2009 Full Year 2009 Q3 2009 Q3 2009 Q2 2009 Q2 2009 Q1 2009 Q1 2009 Q4 2009 Q4 2009 • United has already posted collateral covering fuel hedge losses at current prices – as hedges settle, collateral is returned to cover cash settled losses • United has already posted collateral covering fuel hedge losses at current prices – as hedges settle, collateral is returned to cover cash settled losses |
 p. 24 United Has Modest Fixed Obligations Moving Into 2009 United Has Modest Fixed Obligations Moving Into 2009 • No material defined benefit pension plans – Virtually all domestic employees on defined contribution plans • No capital requirements for new aircraft in 2009 – no new aircraft financing required • Moderate capital spending in 2008 at only $450 million – Discipline will continue in 2009 with a non-aircraft capital budget of only $450 million on customer focused projects, including premium seat programs • No material defined benefit pension plans – Virtually all domestic employees on defined contribution plans • No capital requirements for new aircraft in 2009 – no new aircraft financing required • Moderate capital spending in 2008 at only $450 million – Discipline will continue in 2009 with a non-aircraft capital budget of only $450 million on customer focused projects, including premium seat programs • No major debt maturities in 2009 – debt repayments will total ~$900 million • No major debt maturities in 2009 – debt repayments will total ~$900 million |
 p. 25 Successfully Continuing To Enhance Liquidity In The First Quarter Of 2009 Successfully Continuing To Enhance Liquidity In The First Quarter Of 2009 Aircraft Financing $95 million About $350 million expected in 1Q through transactions completed and underway Cargo Facility Relocation Agreement ~$160 million Equity Issuances $62 million (completed) $27 million (expected) |
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26 United Retains Flexibility to Adapt to Uncertain Economic Environment United Retains Flexibility to Adapt to Uncertain Economic Environment • Capacity Flexibility – Unencumbered operational aircraft – Labor contract flexibility • Current fuel hedge portfolio provides protection against volatility – Collateral already posted covers fuel hedge losses at current prices – Portfolio provides a high level of downside participation at lower prices – Hedge collateral returns provide immediate protection at higher prices • Capacity Flexibility – Unencumbered operational aircraft – Labor contract flexibility • Current fuel hedge portfolio provides protection against volatility – Collateral already posted covers fuel hedge losses at current prices – Portfolio provides a high level of downside participation at lower prices – Hedge collateral returns provide immediate protection at higher prices |
 p. 27 United Is Well Positioned For Success United Is Well Positioned For Success • Aggressive actions taken in response to the challenging environment • Led the industry in capacity reductions, revenue initiatives and cost control • Raising new capital despite the tough credit markets • Maintaining flexibility to adapt to the uncertain economic environment • Aggressive actions taken in response to the challenging environment • Led the industry in capacity reductions, revenue initiatives and cost control • Raising new capital despite the tough credit markets • Maintaining flexibility to adapt to the uncertain economic environment |
 p. 28 Q & A Q & A |
 p. 29 GAAP To Non-GAAP Reconciliation GAAP To Non-GAAP Reconciliation |
 p. 30 Pre-Tax Margin Reconciliation Pre-Tax Margin Reconciliation Three Months Ending 4Q08 ($ in Millions) Consolidated Pre-Tax Income/(Loss) (1,300) $ Add (less): non-cash, net mark-to-market (gains) losses 566 Add (less): impairments, special items and other charges 187 Adjusted Pre-Tax (547) $ |
 p. 31 Consolidated Passenger Revenue Per Available Seat Mile Fourth Quarter 2008 Consolidated Passenger Revenue Per Available Seat Mile Fourth Quarter 2008 Three Months Ended 12/31/2008 12/31/2007 ($ in Millions) Consolidated Passenger Revenue 4,165 $ 4,562 $ Add (less): Mileage Plus - effect of accounting change 48 61 Add (less): Mileage Plus - effect of expiration period change - (121) Consolidated Passenger Revenue Ex Specials & Fresh Start 4,213 $ 4,502 $ Consolidated Available Seat Miles 34,816 38,948 Adjusted PRASM (in cents) 12.10 11.56 Year-Over-Year Change (%) 4.7% |
 p. 32 Mainline Revenue Per Available Seat Mile Twelve Months Ended Mainline Revenue Per Available Seat Mile Twelve Months Ended Twelve Months Ending 4Q08 4Q07 ($ and ASM in Millions; Rates in cents) Consolidated Operating Revenues 20,194 $ 20,143 $ Less: Passenger - Regional Affiliates (3,098) (3,063) Less: Regional Affiliates Specials - (8) Mainline Operating Revenues 17,096 $ 17,072 $ Less: Income from Special Items - (37) Add: Mileage Plus Impacts 139 26 Adjusted Mainline 17,235 $ 17,061 $ Mainline available seat miles 135,861 141,890 Adjusted Mainline RASM 12.69 12.02 Year-Over-Year Change 5.6% |
 p. 33 Mainline Cost Per Available Seat Mile Twelve Months Ended Mainline Cost Per Available Seat Mile Twelve Months Ended Twelve Months Ending 4Q08 4Q07 ($ and ASM in Millions; Rates in cents) Consolidated Operating Expenses 24,632 $ 19,106 $ Less: Regional Affiliates (3,248) (2,941) Mainline Operating Expense 21,384 $ 16,165 $ Add (Less)Less: Mainline Fuel Expense (excluding non-cash, net
mark-to-market (gains) losses) (7,154) (5,023) Add (Less): UAFC (4) (36) Add (Less): Impairments, special items other charges and non-cash, net mark-to market
(gains)losses (3,375) 64 Add (Less): Mainline Fresh Start Adjustments (excluding stock based compensation) (184) (174) Adjusted Mainline Expenses 10,667 $ 10,996 $ Mainline available seat miles 135,861 141,890 Adjusted Mainline CASM 7.85 7.75 Year-Over-Year Change 1.3% |
 p. 34 Pre-Tax Margin Twelve Months Ended Pre-Tax Margin Twelve Months Ended *Includes special items of $44 million and a one time gain of $41 million from ARINC sale and a $22 million gain from early debt retirement. Twelve Months Ending 4Q08 4Q07 ($ in Millions) Consolidated Operating Revenue 20,194 $ 20,143 $ Less: Income from Special Items - (45) Add: Mileage Plus Adjustments 167 31 Adjusted Consolidated Operating Revenue 20,361 $ 20,129 $ Consolidated Pre-Tax Income/(Loss) (5,379) $ 695 $ Less: income from special revenue item - (45) Add (less): non-cash, net mark-to-market (gains) losses 847 (20) Add (less): impairments, special items and other charges 2,807 (107) Add (less): fresh start (excluding stock based compensation) 368 199 Adjusted Pre-Tax (1,357) $ 722 $ Adjusted Margin (6.7)% 3.6% YOY Percentage Point Change (10.3) |
 p. 35 Mainline Cost Per Available Seat Mile Fourth Quarter 2008 Mainline Cost Per Available Seat Mile Fourth Quarter 2008 Twelve Months Ending 4Q08 4Q07 ($ and ASM in Millions; Rates in cents) Consolidated Operating Expenses 24,632 $ 19,106 $ Less: Regional Affiliates (3,248) (2,941) Mainline Operating Expense 21,384 $ 16,165 $ Add (Less): Mainline Fuel Expense (excluding non-cash, net
mark-to-market (gains) losses) (7,154) (5,023) Add (Less): UAFC (4) (36) Add (Less): Impairments, special items other charges and non-cash, net mark-to market
(gains)losses (3,375) 64 Add (Less): Mainline Fresh Start Adjustments (excluding stock based compensation) (184) (174) Adjusted Mainline Expenses 10,667 $ 10,996 $ Mainline available seat miles 135,861 141,890 Adjusted Mainline CASM 7.85 7.75 Year-Over-Year Change 1.3% |
 p. 36 Mainline Cost Per Available Seat Mile 2009 Guidance Mainline Cost Per Available Seat Mile 2009 Guidance (i) as these items are unknown and cannot be predicted with certainty.
CASM also excludes the impact of future special items and other
charges, including profit sharing, 2008 Operating expense per ASM - CASM (cents) (i) Low High Actual Mainline operating expense - - 15.74 - - Less: profit sharing programs - - (0.04) - - Mainline excluding profit sharing programs 11.17 11.25 15.70 (28.9) (28.3) Less: fuel expense & cost of third party sales - UAFC (3.02) (3.02) (5.68) (46.8) (46.8) Mainline excluding profit sharing, fuel & UAFC 8.15 8.23 10.02 (18.7) (17.9) Add (less): impairments and other charges and special items - - (2.07) - - Mainline excluding profit sharing, fuel, UAFC, impairments and other charges and special items 8.15 8.23 7.95 2.5 3.5 Midpoint of Guidance 3.0 Twelve Months Ending December 31, % Change 2009 Estimate YOY |