Net Income for Month of $68 Million, Excluding Reorganization Expenses

United reported an August net profit of $68 million, which included an operating profit of $105 million for the month. When the consultant and legal expenses, and other Chapter 11 expenses were tallied in, though, that +$68 million was a real -$46 million. Be that as it is, though, UAL, the holding company whose primary subsidiary is United Airlines, filed its August Monthly Operating Report (MOR) with the United States Bankruptcy Court, and reported that the Company had a net income for August of $68 million, excluding reorganization expenses of $114 million. The majority of reorganization expenses were non-cash items resulting from the rejection of aircraft. Operating profit for the month was $105 million. UAL continued to generate positive cash flow during the month, and the Company met the requirements of its debtor-in-possession (DIP) financing for the seventh straight month.

"United delivered another very encouraging month, operationally and financially, particularly in achieving net income of $68 million," said United's executive vice president and chief financial officer, Jake Brace. "United's systemwide passenger unit revenue for August improved 15% year-over- year, with yield up 10% year-over-year, both well ahead of industry averages for the month. We met the requirements of our DIP financing covenants for August and expect to meet them for September, as well. Bookings are better than expected as we move into the Fall-Winter season. United has been working very hard to achieve these positive results, and we are all looking ahead to the Company's emergence from bankruptcy."

Cash position improving

UAL again improved its cash position for the month, ending August with a cash balance of approximately $2.4 billion, which included $698 million in restricted cash (filing entities only). UAL began August with a cash balance of approximately $2.3 billion, which included $714 million in restricted cash (filing entities only). The Company's cash balance increased approximately $109 million for the month or approximately $4 million per day.

UAL says it again met the requirements of its covenants for DIP financing in August. (As part of its DIP financing agreements, UAL's lenders required the Company to achieve a cumulative EBITDAR (earnings before interest, taxes, depreciation, amortization and aircraft rent) loss of no more than $219 million between December 1, 2002 and August 31, 2003.)

FMI: www.united.com