UAL posts $48 million second-quarter operating earnings

By Caroline Salls

Pittsburgh, July 28 - UAL Corp. reported second-quarter operating earnings of $48 million, according to a company news release.

Excluding an impairment charge of $18 million for regional aircraft, operating earnings were $66 million, $59 million better than the $7 million reported in the same quarter last year.

This earnings increase was realized despite $262 million in higher fuel expenses in 2005 than in 2004.

UAL reported a net loss of $1.43 billion, or a loss per basic share of $12.33, which includes $1.39 billion in reorganization items, including curtailment and settlement losses of $602 million related to the Pension Benefit Guaranty Corp.'s takeover of the company's defined benefit pension plans for ground employees, management and public contact employees and flight attendants, $212 million in charges related to the rejection of aircraft and $509 million in contract rejection charges.

"We have reduced United's costs, we are posting industry-competitive revenue performance and our employees are delivering excellent operational performance," said Glenn Tilton, chairman, chief executive officer and president, in the release.

"Although the harsh economic environment, including very high fuel costs, presents difficult challenges for the industry, United's restructuring has earned us the opportunity to compete for a place among the leading network carriers."

The company ended the quarter with an unrestricted cash balance of $1.7 billion and a restricted cash balance of $968 million, for a total cash balance of $2.6 billion.

The unrestricted cash balance increased by $295 million during the quarter. Subsequently in July, the company added an additional $310 million to its unrestricted cash balance by using the amended DIP facility.

June operating profit $132.53 million

According to its monthly operating report filed Thursday with the U.S. Bankruptcy Court for the Northern District of Illinois, UAL reported a $132.53 million operating profit for June on $1.72 billion in revenues.

The net loss for June was $1.2 billion.

Cash on June 30 was $2.61 billion.

The Chicago-based parent of United Airlines filed for bankruptcy on Dec. 9, 2002 with the U.S. Bankruptcy Court for the Northern District of Illinois. Its Chapter 11 case number is 02-48191.

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