UAL Reports February

UAL Corporation (NYSE: UAL), the holding company whose primary subsidiary is United Airlines, today filed its Monthly Operating Report (MOR) for February and said that it met the first critical requirement of its debtor-in-possession (DIP) financing by a wide margin.Ê ÊAs part of its DIP financing agreements, United’s lenders required the company to achieve a cumulative EBITDAR (earnings before interest, taxes, depreciation, amortization and aircraft rent) loss of no more than $964 million between December 1, 2002 and February 28, 2003.

During the period, United`s operating results, and therefore its EBITDAR, benefited from several factors:Ê Bankruptcy-related booking changes were less than expected, interim wage reductions were implemented, and the company was able to implement non-labor cost cutting initiatives more quickly than expected.Ê Cash flow also was positively affected by these factors and by the fact that Chapter 11 allowed United to postpone some aircraft payments for December 2002 and January 2003.

February cash flow results reflect the resumption of certain scheduled aircraft payments. The company reported that it made payments of $182 million during the month in connection with various aircraft financings, which included some payments for the period from December 2002 through February 2003.Ê ÊUnited began February with a cash balance of approximately $1.8 billion, including restricted cash.Ê It reported a decrease in cash of approximately $300 million for February and ended the month with a cash balance of approximately $1.5 billion.Ê This change in cash balance was better than previous company forecasts due to lower than expected aircraft payments in February.Ê

The company said that it incurred a loss from operations of $307 million and a net loss of $367 million for February 2003.ÊÊ

United`s Executive Vice President and Chief Financial Officer Jake Brace said, “Our results for the past three months show that United has made good progress in restructuring its operations and finances.Ê ÊCumulative EBITDAR figures for December through February were an important test of the company’s ability to significantly reduce our costs and effectively manage our business.”


Mr. Brace continued: “However, the war in Iraq presents a number of serious challenges that are already affecting the industry and that are expected to negatively impact earnings and cash flow for United and its competitors.Ê ÊWe are moving rapidly to address those challenges.”

United has contingency planning for the war in Iraq in place and is executing on those plans as appropriate.Ê ÊThe company is reducing capacity by an additional eight percent in April and will place a portion of its workforce on temporary unpaid leave.Ê In addition to the company`s own initiatives, United is also actively seeking financial assistance from the U.S. government for the airline industry as a whole to mitigate the disproportionate impact the war is having on the industry.Ê Although United will continue to pursue relief from the government and other sources, given the uncertain situation, further temporary reductions in employee compensation may be needed in the future.

During the month of February, United’s employees continued to perform well in a number of areas of critical importance to customers.Ê ÊPreliminary results reflect strong performance in on-time flights, as well as in customer service and satisfaction.

Pete McDonald, United’s Executive Vice President-Operations, said, “The people of United - through their hard work and exceptionally sharp focus on customers - are stepping forward to reestablish this company as the world’s premier airline.Ê Though the challenges are formidable, United`s employees have demonstrated the dedication and fortitude necessary to make United an even more competitive enterprise now and in the long-term.”

United operates more than 1,700 flights a day on a route network that spans the globe.Ê ÊNews releases and other information about United may be found at the company’s website at