UAL posts $182 million fourth-quarter operating loss, $219 million for full-year 2005

By Caroline Salls

Pittsburgh, Jan. 27 - UAL Corp. reported a $182 million operating loss for the fourth quarter of 2005, a $388 million improvement over the same quarter in 2004. Revenue improvement and non-fuel cost reduction more than offset a $397 million increase in fuel costs, according to a company news release.

"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% - we know we can do better," chairman, chief executive officer and president Glen Tilton said in the release.

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, attributed to $17 billion in non-cash reorganization expenses. The full-year net loss totaled $21 billion, due to reorganization expenses of $21 billion.

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.

According to the release, the $17 billion of reorganization items recorded in the fourth quarter represent mostly unsecured claims allowed during the bankruptcy process.

These claims are expected to be settled when the company exits bankruptcy for a minor fraction of the amount of the claims recorded, the company said. As a result, UAL predicted it will report a substantial gain at exit in early 2006.

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.

UAL also reported a $122 million operating loss for December, compared with $9 million in operating earnings in November and a $311 million operating loss in December 2004.

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

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