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UAL CORP. REPORTS THIRD QUARTER NET PROFIT OF $149 MILLION

 CHICAGO, Oct. 28 /PRNewswire/ -- UAL Corp. (NYSE: UAL), the holding company whose primary subsidiary is United Airlines, today reported third quarter net income of $149 million, or $5.74 per share on a primary basis (after preferred stock dividend requirements). The results include a pre-tax writedown of $59 million associated with the previously announced retirement of 15 McDonnell Douglas DC-10-10s and income of $44 million for the settlement of a pension reversion dating back to 1985. Excluding these items, the net earnings would have been $159 million, or $6.16 per primary share. On a fully diluted basis, earnings per share were $5.21, or $5.56 before the writedown and pension settlement.
 The third quarter results compare with net earnings in the third quarter a year ago of $6 million, or $.27 per share.
 "Our improvement over last year's third quarter is principally attributable to our stringent program of cost control, as well as generally stronger revenue performance on our longer haul routes," said Stephen M. Wolf, chairman and chief executive officer.
 "Our shorter haul operations, however, where we face increasingly intense low-cost competition, produced a loss and continue to negatively impact our overall results," Wolf said.
 "Despite the third quarter profit, we will report a loss in the fourth quarter and for the year as a whole," Wolf pointed out.
 Operating income in the third quarter this year was $281 million, up from $49 million in the same period a year ago. Operating revenues were up 11.6 percent, from $3.576 billion to $3.990 billion, and operating expenses increased 5.2 percent from $3.527 billion to $3.709 billion.
 The company said United Airlines' total unit revenue (revenue per available seat mile flown) was up 1.7 percent, from 9.54 cents in the third quarter a year ago to 9.70 cents this year. The increase resulted from an 8.6 percent increase in revenue passenger yield (from 11.26 cents to 12.23 cents), offset in part by a 5.4 point decline in load factor (from 76.1 percent to 70.7 percent). The company noted that the "50 percent" sale in the third quarter last year adversely affected year-over-year load factor comparisons while benefiting the yield variances.
 The airline's cost per available seat mile showed a 4.2 percent decline, from 9.38 cents in the third quarter last year to 8.99 cents this year.
 The DC-10 retirements, for which the company has recorded a $59 million charge to reduce the net book value to estimated realizable value, are to be completed by year-end 1994. The groundings are part of a previously announced retirement schedule that will have the effect of reducing system capacity next year by some 2 percent.
 The company said the income associated with the pension reversion is the result of a $17 million gain due to the final settlement for overpayment of annuities purchased in 1985 and $27 million of interest income in connection with the settlement.
 For the year to date, the company reported a net profit of $34 million ($.39 a share after preferred stock dividend requirements) before an extraordinary loss on debt retirement, compared with a loss in the same period a year ago of $193 million ($8.04 per share) before the cumulative effect of accounting changes.
 Operating revenues for the year to date were up 12.2 percent from $9.688 billion to $10.870 billion, while operating expenses were up 7.3 percent from $9.9 billion to $10.6 billion. The operating results in the first nine months improved from a loss last year of $212 million to a profit this year of $244 million.
 UAL CORP. AND SUBSIDIARY COMPANIES
 STATEMENT OF CONSOLIDATED OPERATIONS (UNAUDITED)
 (In Millions, Except Per Share)
 Three Months Ended Sept. 30 1993 1992 Pct.Chg.
 Operating revenues:
 Passenger $3,573 $ 3,232 +10.6
 Cargo 254 200 +27.0
 Contract services and other 163 144 +13.2
 3,990 3,576 +11.6
 Operating expenses:
 Salaries and related costs 1,187 1,158 + 2.5
 Commissions 732 635 +15.3
 Aircraft fuel 450 483 - 6.8
 Rentals and landing fees 398 347 +14.7
 Purchased services 256 238 + 7.6
 Depreciation and amortization 190 179 + 6.1
 Aircraft maintenance 99 82 +20.7
 Food and beverages 88 98 -10.2
 Personnel expenses 68 70 - 2.9
 Advertising and promotion 44 55 -20.0
 Other operating expenses 197 182 + 8.2
 3,709 3,527 + 5.2
 Earnings from operations 281 49
 Other income (expense):
 Interest expense (85) (83) + 2.4
 Interest capitalized 10 23 -56.5
 Interest income 45 20
 Equity in earnings of affiliates 10 14 -28.6
 Miscellaneous, net (38) (10)
 (58) (36) +61.1
 Earnings before income taxes 223 13
 Provision for income taxes 74 7
 Net earnings $ 149 $ 6
 Net earnings per share:
 Primary $ 5.74 $ 0.27
 Fully diluted $ 5.21 $ 0.27
 Average shares outstanding:
 Primary 24.3 24.1
 Fully diluted 28.7 24.1
 See accompanying notes.
 Nine Months Ended Sept. 30 1993 1992 Pct.Chg.
 Operating revenues:
 Passenger $ 9,698 $ 8,687 +11.6
 Cargo 696 571 +21.9
 Contract services and other 476 430 +10.7
 10,870 9,688 +12.2
 Operating expenses:
 Salaries and related costs 3,530 3,363 + 5.0
 Commissions 1,892 1,685 +12.3
 Aircraft fuel 1,318 1,250 + 5.4
 Rentals and landing fees 1,119 982 +14.0
 Purchased services 749 678 +10.5
 Depreciation and amortization 574 530 + 8.3
 Aircraft maintenance 297 247 +20.2
 Food and beverages 238 250 - 4.8
 Personnel expenses 196 198 - 1.0
 Advertising and promotion 120 157 -23.6
 Other operating expenses 593 560 + 5.9
 10,626 9,900 + 7.3
 Earnings (loss) from operations 244 (212)
 Other income (expense):
 Interest expense (275) (239) +15.1
 Interest capitalized 43 72 -40.3
 Interest income 81 52 +55.8
 Equity in earnings of affiliates 25 34 -26.5
 Miscellaneous, net (68) (11)
 (194) (92)
 Earnings (loss) before income taxes,
 extraordinary item and cumulative
 effect of accounting changes 50 (304)
 Provision (credit) for income taxes 16 (111)
 Earnings (loss) before extraordinary
 item and cumulative effect of
 accounting changes 34 (193)
 Extraordinary loss on early
 extinguishment of debt, net of tax (19) -
 Cumulative effect of accounting
 changes, net of tax - (540)
 Net earnings (loss) $ 15 $ (733)
 Per share:
 Earnings (loss) before extraordinary
 item and cumulative effect of
 accounting changes $ 0.39 $ (8.04)
 Extraordinary loss on debt
 extinguishment (0.77) -
 Cumulative effect of accounting
 changes - (22.44)
 Net earnings (loss) $(0.38) $(30.48)
 Average shares outstanding 24.2 24.0
 See accompanying notes.
 Consolidated Notes
 (1) UAL Corp. is a holding company whose principal subsidiary
 is United Air Lines, Inc.
 (2) Included in "Miscellaneous, net" in the 1993 third quarter and
 nine-month period was a $59 million charge to reduce the net book
 value of 15 DC-10 aircraft to estimated realizable value and a
 $17 million gain resulting from the final settlement for
 overpayment of annuities purchased in 1985 to cover certain
 vested pension benefits. United also recorded $27 million of
 interest income in connection with the final settlement of the
 pension benefits. Included in the 1993 third quarter and
 nine-month period were foreign exchange gains (losses) of $8
 million and $(16) million, respectively. Included in the 1992
 third quarter were foreign exchange losses of $16 million, gains
 on disposition of property of $18 million and charges of $8
 million related to certain litigation. Included in the 1992
 nine-month period were foreign exchange losses of $10 million,
 gains on disposition of property of $22 million, a charge of $13
 million to record the cash settlement of class action claims
 resulting from litigation relating to the use of airline fare
 data and charges of $8 million related to certain litigation.
 (3) In September 1993, the merger of the Covia Partnership and The
 Galileo Company Limited was consummated. The merger resulted in
 the formation of Apollo Travel Services, 77 percent owned by United,
 and Galileo International, 38 percent owned by United.
 (4) The provisions (credits) for income taxes are based on estimated
 annual effective tax rates which differ from the federal
 statutory rates principally due to state income taxes and certain
 nondeductible expenses.
 (5) In the second quarter of 1993, United retired $500 million of
 senior subordinated notes. The notes were scheduled to mature in
 1995 and 1998 for $150 million and $350 million, respectively.
 An extraordinary loss of $19 million, net of tax benefits of
 $9 million, was recorded in the first quarter of 1993, based on
 United's stated intention to retire the notes.
 (6) In the fourth quarter of 1992, UAL adopted SFAS No. 106,
 "Employers' Accounting for Postretirement Benefits Other Than
 Pensions," and SFAS No. 109, "Accounting for Income Taxes,"
 effective Jan. 1, 1992. The effect of adopting SFAS No. 106
 was a cumulative charge of $580 million, net of tax benefits of
 $345 million, and increases in operating expenses of
 approximately $19 million in the third quarter of 1992 and $56
 million in the 1992 nine-month period. The effect of adopting
 SFAS No. 109 was a cumulative benefit of $40 million and an
 additional provision (credit) for income taxes of approximately
 $3 million in the third quarter of 1992 and $(8) million in the
 1992 nine-month period. The statements of consolidated
 operations for the 1992 periods presented have been restated to
 reflect the adoption of these standards.
 (7) UAL issued six million shares of cumulative 6.25 percent
 convertible preferred stock in February 1993. Primary net earnings
 per share were calculated after preferred dividend requirements of
 $9 million and $24 million for the three months and nine months
 ended Sept. 30, 1993, respectively. Fully diluted earnings
 per share assume conversion of the preferred stock and
 elimination of the dividends.
 UNITED AIR LINES, INC. AND SUBSIDIARY COMPANIES
 Three Months Ended Sept. 30 1993 1992 Pct.Chg.
 FINANCIAL SUMMARY (UNAUDITED)
 (in millions)
 Operating revenues $3,952 $3,531 +11.9
 Operating expenses 3,664 3,472 + 5.5
 Earnings from operations $ 288 $ 59
 OPERATING STATISTICS
 Revenue passengers
 (in thousands) 19,378 20,090 - 3.5
 Revenue passenger miles
 (in millions) 28,799 28,162 + 2.3
 Available seat miles
 (in millions) 40,736 36,996 +10.1
 Passenger load factor (percent) 70.7 76.1 -5.4
 Breakeven passenger load factor
 (percent) 64.9 74.7 -9.8
 Revenue per passenger mile (cents) 12.23 11.26 + 8.6
 Operating revenue per
 available seat mile (cents) 9.70 9.54 + 1.7
 Operating expenses per
 available seat mile (cents) 8.99 9.38 - 4.2
 Average price per gallon of jet
 fuel (cents) 61.0 69.5 -12.2
 Number of aircraft in operating
 fleet at end of period 549 518
 Number of employees at end
 of period (thousands) 82.4 83.1 - 0.8
 Nine Months Ended Sept. 30 1993 1992 Pct.Chg.
 FINANCIAL SUMMARY (UNAUDITED)
 (in millions)
 Operating revenues $10,745 $ 9,567 +12.3
 Operating expenses 10,471 9,752 + 7.4
 Earnings (loss) from operations $ 274 $ (185)
 OPERATING STATISTICS
 Revenue passengers
 (in thousands) 52,713 50,360 + 4.7
 Revenue passenger miles
 (in millions) 76,576 69,921 + 9.5
 Available seat miles
 (in millions) 113,557 102,004 +11.3
 Passenger load factor (percent) 67.4 68.5 - 1.1
 Breakeven passenger load factor
 (percent) 65.5 70.0 - 4.5
 Revenue per passenger mile (cents) 12.45 12.18 + 2.2
 Operating revenue per
 available seat mile (cents) 9.46 9.38 + 0.9
 Operating expenses per
 available seat mile (cents) 9.22 9.56 - 3.6
 Average price per gallon of jet
 fuel (cents) 63.9 65.7 - 2.7
 Number of aircraft in operating
 fleet at end of period 549 518
 Number of employees at end
 of period (thousands) 82.4 83.1 - 0.8
 -0- 10/28/93
 /CONTACT: John Kiker, 708-952-4162, Joe Hopkins, 708-952-5770, or Tony Molinaro, 708-952-4971 (Night: 708-952-4088); investors: Pamela Hanlon, 708-952-7501/
 (UAL)


CO: UAL Corp; United Airlines ST: Illinois IN: AIR SU: ERN

JS -- NY063 -- 7931 10/28/93 12:37 EDT
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Date:Oct 28, 1993
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