UAL777UK
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UA Posts Year End Results

Tue Jan 23, 2007 11:14 pm

UA's figures read pretty weel although I will let others pick the bones out of it. They sure do have a healthy bank balance.........I hope we see some orders for new meatal in the near future!

http://biz.yahoo.com/prnews/070123/cgtu017.html?.v=80
 
United777atGU
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RE: UA Posts Year End Results

Wed Jan 24, 2007 12:35 am

At least we end the year with a profit, 'eh? That's black ink, now, not red.
Speechless
 
FriendlySkies
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RE: UA Posts Year End Results

Wed Jan 24, 2007 6:30 am

$61 million is not bad at all, especially when you factor in the seasonally low traffic and the DEN snowstorms.
 
Dtw757
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RE: UA Posts Year End Results

Wed Jan 24, 2007 6:33 am

You too could end the year with a profit if you walked away from your previous stock and screwed every stockholder. Then you turn around and issue yourself new stock. The fact that a company can do something like that to emerge from bankruptcy is outrageous.
721,2,732,3,4,5,G,8,9,741,2,3,4,752,3,762,3,4,772,3,788,D93,5,M80,D10,M11,L10,100,AB6,319,20,21,332,3,346,388,146,CR2,7,
 
gigneil
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RE: UA Posts Year End Results

Wed Jan 24, 2007 6:34 am

Better than going out of business and screwing the creditors.

NS
 
brilondon
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RE: UA Posts Year End Results

Wed Jan 24, 2007 6:42 am

Quoting DTW757 (Reply 3):
You too could end the year with a profit if you walked away from your previous stock and screwed every stockholder. Then you turn around and issue yourself new stock. The fact that a company can do something like that to emerge from bankruptcy is outrageous

There is nothing outrageous about a private enterprise making money. The reason for going into bankruptcy protection is to make an other wise dire situation better in the long run. People should not become stock holders if they cannot stomach the loss. Had UA made large profits they would have expected dividends just like all stockholders get when a company does well.
Rush for ever; Yankees all the way!!
 
Dtw757
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RE: UA Posts Year End Results

Wed Jan 24, 2007 6:45 am

Quoting Brilondon (Reply 5):
There is nothing outrageous about a private enterprise making money. The reason for going into bankruptcy protection is to make an other wise dire situation better in the long run. People should not become stock holders if they cannot stomach the loss. Had UA made large profits they would have expected dividends just like all stockholders get when a company does well.

They should turn right around and issue the former stockholders shares of new stock.
721,2,732,3,4,5,G,8,9,741,2,3,4,752,3,762,3,4,772,3,788,D93,5,M80,D10,M11,L10,100,AB6,319,20,21,332,3,346,388,146,CR2,7,
 
brilondon
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RE: UA Posts Year End Results

Wed Jan 24, 2007 6:54 am

Quoting DTW757 (Reply 6):
They should turn right around and issue the former stockholders shares of new stock.

I could not agree with you more, but your country's bankruptcy laws are to blame for this predicament. The shareholders are welcome to purchase the new shares on the open market just like the rest of the world.
Rush for ever; Yankees all the way!!
 
sllevin
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RE: UA Posts Year End Results

Wed Jan 24, 2007 7:02 am

Quoting DTW757 (Reply 3):
Then you turn around and issue yourself new stock. The fact that a company can do something like that to emerge from bankruptcy is outrageous.

So they should have just screwed the people they owed money to?

The fact is, United is being run now for the benefit of the people it owed money to -- who believe that they stand a better chance of getting their money by keeping United running than by just liquidating the company.

The previous owners..well...they lost out, because they couldn't pay the bills.

Steve
 
gigneil
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RE: UA Posts Year End Results

Wed Jan 24, 2007 9:03 am

Quoting DTW757 (Reply 6):
They should turn right around and issue the former stockholders shares of new stock.

The stockholder are the owners of the company. In every regard, THEY are the ones that owed the money to the debtors.

NS
 
Boston92
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RE: UA Posts Year End Results

Wed Jan 24, 2007 10:26 am

UA should not be doing the things they are then... like cutting snacks on flights below 759 miles.
"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"
 
Dtw757
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RE: UA Posts Year End Results

Wed Jan 24, 2007 10:48 am

Quoting Sllevin (Reply 8):
So they should have just screwed the people they owed money to?



Quoting Gigneil (Reply 9):
The stockholder are the owners of the company. In every regard, THEY are the ones that owed the money to the debtors.

I am not suggesting in any way that they screw anyone owed money. However, the stockholders did not take the company into bankruptcy, it was the management. Now the previous shareholders have absolutely no stake in a company that still exists and is making profits. Just doesn't seem too fair to me.
721,2,732,3,4,5,G,8,9,741,2,3,4,752,3,762,3,4,772,3,788,D93,5,M80,D10,M11,L10,100,AB6,319,20,21,332,3,346,388,146,CR2,7,
 
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Aaron747
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RE: UA Posts Year End Results

Wed Jan 24, 2007 10:55 am

UA should not be doing the things they are then... like cutting snacks on flights below 759 miles.

This has everything to do with absolutely nothing.
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
halls120
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RE: UA Posts Year End Results

Wed Jan 24, 2007 10:57 am

Quoting DTW757 (Reply 11):
I am not suggesting in any way that they screw anyone owed money. However, the stockholders did not take the company into bankruptcy, it was the management. Now the previous shareholders have absolutely no stake in a company that still exists and is making profits. Just doesn't seem too fair to me.

No one holds a gun to your head and forces you to buy stock in a company. When you do, you take a calculated risk that you might lose all your money, and if you choose wisely, you might hit a gold mine.

You want "fairness"? Don't invest in the market.
"Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself." Mark Twain, a Biography
 
Boston92
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RE: UA Posts Year End Results

Wed Jan 24, 2007 11:28 am

Quoting Aaron747 (Reply 12):
This has everything to do with absolutely nothing.

Really? Why dont elaborate more than just saying something stupid like," This has everything to do with absolutely nothing."
"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"
 
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Aaron747
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RE: UA Posts Year End Results

Wed Jan 24, 2007 12:54 pm

Because it isn't necessary to elaborate more. Anyone with either practical business experience and/or knowledge of this industry is aware that profitability and the offer of snacks on short haul flights are not dependent variables. Your comment distracts from the discussion of the results the company posted and was regarded as such.

[Edited 2007-01-24 04:55:10]
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
worldtraveler
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RE: UA Posts Year End Results

Wed Jan 24, 2007 1:12 pm

returning to the topic at hand, UA's performance was VERY meager for an airline that went through the costliest and longest bankruptcy in aviation history....

this is the peak of the business cycle. UA has to deliver better results.

Is it any surprise that Tilton is such a proponent of consolidation?
 
halls120
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RE: UA Posts Year End Results

Wed Jan 24, 2007 1:33 pm

Quoting WorldTraveler (Reply 16):
returning to the topic at hand, UA's performance was VERY meager for an airline that went through the costliest and longest bankruptcy in aviation history....

this is the peak of the business cycle.

Well, not exactly.

According to CY 2005 DOT statistics, here are the quarterly total industry enplanements (domestic and foreign) on US carriers.

1st qtr - 174m
2nd qtr - 194 m
3rd qtr - 195 m
4th qtr - 198 m

in 2004, the same figures were

1st qtr - 162 m
2nd qtr - 184 m
3rd qtr - 186 m
4th qtr - 179 m

Is the 4th quarter important? Yes. More than the second and third quarters? No. Given that UA suffered horrendous delays at its Denver hub in December, it isn't surprising that their 4th quarter results are less than optimal.
"Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself." Mark Twain, a Biography
 
IPFreely
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RE: UA Posts Year End Results

Wed Jan 24, 2007 2:52 pm

Quoting DTW757 (Reply 11):
However, the stockholders did not take the company into bankruptcy, it was the management. Now the previous shareholders have absolutely no stake in a company that still exists and is making profits.

Actually the stockholders were the ones who took the company into bankruptcy. Management is selected by, and works for, the stockholders. The chairman and other board members could have been voted out of office at any time.
 
jacobin777
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RE: UA Posts Year End Results

Wed Jan 24, 2007 3:19 pm

Quoting Brilondon (Reply 5):
People should not become stock holders if they cannot stomach the loss.

I call it "purchasing protective put options"... Wink

Quoting WorldTraveler (Reply 16):
returning to the topic at hand, UA's performance was VERY meager for an airline that went through the costliest and longest bankruptcy in aviation history....

this is the peak of the business cycle. UA has to deliver better results.

Is it any surprise that Tilton is such a proponent of consolidation?

UA had one of the worst bancruptcy proceedings in US history..especially given the circumstances such as 9/11, recession, etc.

DL is fortunate that it is in bankruptcy during a high point in the cycle (or at least during an upswing)...DL is one carrier which might not have made it though bankruptcy had it been in UA's situation just a few years back..DL should consider itself lucky...

Kudos to Tilton for taking such a difficult and complex situation and getting out of it without having to liquidate or be bought out...

UA is only getting stronger...

..at least UA didn't have to worry about being bought out and didn't have to resort to doing this.... Wink

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N174UA
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RE: UA Posts Year End Results

Wed Jan 24, 2007 4:07 pm

Quoting Gigneil (Reply 9):
The stockholder are the owners of the company. In every regard, THEY are the ones that owed the money to the debtors.

Stockholders, as well as the debtholders, i.e. bonds and private placement debt (banks, etc.).

Quoting WorldTraveler (Reply 16):
this is the peak of the business cycle.

Huh? Q4? Funny...I always thought the summer season, from June through early September was the peak of the business cycle.

Quoting IPFreely (Reply 18):
Management is selected by, and works for, the stockholders.

Nope. Shareholders vote for board members. Board members in turn hire management they feel will provide them with their desired rate of return. Management doesn't always serve the best interests of the board and stockholders, in other words, the classic "principal-agent" problem. To solve it, the board of directors structures executive compensation to be tied directly to performance. In some cases, like with UA, they also have to compensate managers to stay during the tough times to keep the firm a "going concern". Otherwise, a manager would likely leave for a more lucrative position elsewhere.
 
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fxramper
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RE: UA Posts Year End Results

Wed Jan 24, 2007 4:24 pm

Net income of $25 mil (US) post bk? Laughable. That won't even cover executive compensation. 14 months ago I applied for management with their company and was told in my 3rd interview, if I wanted it to happen, relocation to DEN or IAD was necessary. I humbly accepted employment elsewhere. If UA wants new metal in 2007, ie. 787, their gonna have to turn more than $25 mi. annually.  duck   rotfl 

Quoting Jacobin777 (Reply 19):
at least UA didn't have to worry about being bought out and didn't have to resort to doing this....

How many Boyd articles did I read this past year linking them to CO trumping them in a take over to survive? At least five, no less.  no 
 
tommytoyz
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RE: UA Posts Year End Results

Wed Jan 24, 2007 6:44 pm

UA actually lost $14 Million per GAAP in the 1st 11 months if you back out the $39 million tax benefit it received in Q4.

From their release :
"The company recorded an income tax benefit in the fourth quarter of 2006 of $39 million associated with the fourth quarter pre-tax loss. At year-end, UAL and its subsidiaries had substantial net operating loss carry-forwards available to reduce tax liabilities in future periods."

I am also stumped as to their fuel hedging tactics with 3 way options that function more like crude oil swaps than like fuel futures or options (SW model). These arrangements can be a larger liability than the mere price of the options.

"Payment obligations on a weighted average basis begin if crude drops below $55 per barrel." (from UA release)

SW doesn't hedge that way. SW hedges refined products like gasoline and heating oil and then mostly via option contracts that cap the price with no payment obligation should the price of the refined products drop bellow the strike price.

Basically, UA's fuel hedging is far more speculative than SW's and now that crude is bellow $55 UA will be paying dearly for that speculation with payment obligations on those swap like arrangements. Not exactly good management on the fuel hedges - again. Apparently these guys love to gamble. Way to run an airline.

And these figures EXCLUDE reorganization charges in every Q AND special items. I mean, wasn't that all written off upon exiting BK?

Again from UA release:
"Note 7 to the attached Statements of Consolidated Operations provides a reconciliation of net income or loss reported under GAAP to net income or loss excluding reorganization items for all periods presented, as well as a reconciliation of other non-GAAP financial measures, including special items."

As far as I can tell these items total $50 million.

As far as I can tell, UA lost $64 million in the 1st 11 months not counting the tax credit. That's what their own data says.
 
jacobin777
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RE: UA Posts Year End Results

Wed Jan 24, 2007 7:13 pm

Quoting FXramper (Reply 21):
How many Boyd articles did I read this past year linking them to CO trumping them in a take over to survive? At least five, no less.  no 

Sure, I agree on that part, but its certainly much different than DL's current situation...Boyd stating UA/CO take over/merger in a bunch of articles is certainly much different than an actual hostile takeover.... yes 

..and it also doesn't address my other comments (i.e.-the difficulty of UA's bankruptcy proceedings over DL's)

Quoting Tommytoyz (Reply 22):
Basically, UA's fuel hedging is far more speculative than SW's and now that crude is bellow $55 UA will be paying dearly for that speculation with payment obligations on those swap like arrangements. Not exactly good management on the fuel hedges - again. Apparently these guys love to gamble. Way to run an airline

1)Depends how long their hedges are in place for
2)value of their hedges
3)Oil is still around $53 1/2, so its not too far off..
4)DL lost money recently in hedges also....
"Up the Irons!"
 
worldtraveler
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RE: UA Posts Year End Results

Wed Jan 24, 2007 10:19 pm

we can always count on you Jacob to throw mud that has nothing to do with the situation while failing to address the real issue.

UA had pitiful financial results. Period. Esp, when you consider that it has been four years since UA filed for BK - and AA which has the highest labor costs in the industry - managed to turn in a performance like this.

This is a UA thread and let's keep it that way.

but I'll respond to the comments about DL. DL is in a position of having to fight off a hostile takeover BECAUSE it filed at the end of the business cycle when others like US had already completed their3rd BK collectively AND because DL has done such a great job of turning itself around - far faster than any other airline.

Tilton is the one who has been spouting consolidation for years. If UA is doing such a bang up job, why hasn't UA been given a buyout offer when that is what Tilton is dreaming will happen?
 
halls120
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RE: UA Posts Year End Results

Wed Jan 24, 2007 10:23 pm

Quoting WorldTraveler (Reply 24):
This is a UA thread and let's keep it that way.

Well, I'm still interested in how you came up with your claim that the 4th quarter is the peak of the business cycle when the DOT stats indicate otherwise, and why you apparently discount the effect of the DEN closures on UA's bottom line.
"Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself." Mark Twain, a Biography
 
worldtraveler
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RE: UA Posts Year End Results

Wed Jan 24, 2007 10:28 pm

I'm not talking about the 4th quarter per se but about this overall period in the business cycle. Cycles are defined by years, not quarters.

Check out the air transport assoc. website for their economical analysis - they show this is one of the strongest periods for the US airline industry in a long time.

UA took a $40M charge for these storms (which I predicted they would when the storms were occurring) but that still doesn't bring their revenue performance up to industry comparable levels. $40M on $4B of revenue is chump change, relatively speaking.
 
halls120
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RE: UA Posts Year End Results

Wed Jan 24, 2007 10:41 pm

Quoting WorldTraveler (Reply 26):
I'm not talking about the 4th quarter per se but about this overall period in the business cycle. Cycles are defined by years, not quarters.

Check out the air transport assoc. website for their economical analysis - they show this is one of the strongest periods for the US airline industry in a long time.

OK, that makes sense. It wasn't clear from your original post.
"Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself." Mark Twain, a Biography
 
jacobin777
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RE: UA Posts Year End Results

Wed Jan 24, 2007 11:04 pm

Quoting WorldTraveler (Reply 24):
we can always count on you Jacob to throw mud that has nothing to do with the situation while failing to address the real issue.

No..I just tend to say things they way they are....UA doesn't function in a vacuum.....

Since we know you are part of the "DL could do no wrong" camp, I felt the need to 'balance' things out....

The real issues are FYI..

1)"United said it's changed to a deferred revenue method for accounting for its frequent-flyer program, which caused a $95 million reduction in revenue in the fourth quarter. The effect of the change, which the company said would make its accounting conform to international standards, would also be felt in the first quarter."
2)"Total mainline passenger revenue climbed 5% in the fourth quarter, reflecting solid demand"
3)"The company's revenue in the three months ended Dec. 31 rose 4.6% to $4.59 billion from $4.39 billion."
4)"The Transportation Department earlier this month awarded United the right to fly a new daily route between the U.S. and China"

http://www.marketwatch.com/news/stor...83B70D5C2%7D&siteid=yhoo&dist=yhoo

5)"United posted a $23 million operating profit, including a one-time $6 million gain in the quarter, compared to a $182 million operations loss during the fourth-quarter last year. For the full year, the airline's operating profit was $447 million"..."the first time its annual earnings from operations were in the black for at least five years."


**-Revenue grew in every segment, including 15% in Latin America and 10% in transatlantic..
- CASM ex fuel and special items (cents) is down to 7.58
- new services between Washington and Beijing, Washington and Rome, San Francisco and Taipei
-2nd daily SFO-FRA

lots of other notes, but those were some highlights..

*UA-8-k-01-23-07

Quoting WorldTraveler (Reply 24):
Tilton is the one who has been spouting consolidation for years. If UA is doing such a bang up job, why hasn't UA been given a buyout offer when that is what Tilton is dreaming will happen?

Yes..Tilton has been talking about consolidation for a few years..he's probably spot on..but we don't know what will happen with UA..maybe it will buy out or be bought out...that's up to the market to decide...at least UA isn't "on the ropes"..I can't say that about DL.... no 

Just because he says "consolidation is needed" doesn't mean it has to happen ASAP...it could happen in many sort of ways.....so your comment about "that is what Tilton dreaming" is a bit off.....


.....on a side note, UA lost $15 million during the 4th quarter on fuel hedges...
"Up the Irons!"
 
ChicagoFlyer
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RE: UA Posts Year End Results

Thu Jan 25, 2007 4:31 am

Quoting Tommytoyz (Reply 22):
UA actually lost $14 Million per GAAP in the 1st 11 months if you back out the $39 million tax benefit it received in Q4.

"OMG accounting manipulation to hide losses!"  confused  The above statement conveniently ignores the $60 million tax expense that UA booked in Q3 (for profits in the 8 months of the year following Ch11 exit). The rest of the math in the post is similar.

Quoting Tommytoyz (Reply 22):
Basically, UA's fuel hedging is far more speculative than SW's and now that crude is bellow $55 UA will be paying dearly for that speculation with payment obligations on those swap like arrangements. Not exactly good management on the fuel hedges - again. Apparently these guys love to gamble. Way to run an airline.

Yeah, any time a hedge results in losses it means management is gambling.  headache  What is true is that UA WAS gambling by being historically the most unhedged of the airlines in the USA and HAS paid for that fuel strategy dearly. As of now they are hedged partially (33% in Q1/2007) through a collar, make some money by writing calls at the high end of the fuel price range and are happy to see it go down because the gains in their unhedged operation. Southwest have been an acknowledged leader in fuel hedging--but they did not do it riskelessly--huge gains came from by being smart AND lucky to bet (from far in advance) on the fuel price going up, and it was not through only buying options!

WN is hedged almost 100% for 2007 at $50 through CUSTOM over-the-counter derivatives. This strategy, even if UA were to get a copy of it, would not be available to them, because on the one hand, they cannot go back in time 3 years (when Southwest implemented many of their successful hedges), and secondly, cet. par. custom transactions would cost more for them to enter into with their credit rating. And then, should the oil price drop to $45/bbl, do you not think there will not be hedging losses at Southwest? There will, but they know they can make plenty of $$ with the operation hedged at $50--this was the whole point of doing this 'gamble'!

Quoting Jacobin777 (Reply 28):
1)"United said it's changed to a deferred revenue method for accounting for its frequent-flyer program, which caused a $95 million reduction in revenue in the fourth quarter. The effect of the change, which the company said would make its accounting conform to international standards, would also be felt in the first quarter."

 checkmark  Do not ignore these little accounting things. Of course, someone only focusing on the negative would, and no amount of logical persuasion will change it.

Quoting WorldTraveler (Reply 24):
UA had pitiful financial results.

Look, it was not a stellar quarter by any means for UAUA. However, they had an excuse (estimated $40 million in revenue and $30 million in profit lost to the storms), and the outlook is OK. I do think the stock was overvalued, but I think too many people have been using too strong words....
 
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airzim
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RE: UA Posts Year End Results

Thu Jan 25, 2007 4:36 am

Quoting WorldTraveler (Reply 24):
AND because DL has done such a great job of turning itself around - far faster than any other airline.

Really? Not sure that's conclusive yet.
 
tommytoyz
Posts: 1195
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RE: UA Posts Year End Results

Thu Jan 25, 2007 10:50 am

Quoting ChicagoFlyer (Reply 29):
Look, it was not a stellar quarter by any means for UAUA. However, they had an excuse (estimated $40 million in revenue and $30 million in profit lost to the storms),

- And the other airlines were not affected by weather?

Quoting ChicagoFlyer (Reply 29):
Quoting Tommytoyz (Reply 22):
UA actually lost $14 Million per GAAP in the 1st 11 months if you back out the $39 million tax benefit it received in Q4.

"OMG accounting manipulation to hide losses!" confused The above statement conveniently ignores the $60 million tax expense that UA booked in Q3 (for profits in the 8 months of the year following Ch11 exit).

- No it does not ignore that expense at all. But if I had ignored it, the loss would have been $74 million. So no, I did not ignore it. It's only a $14 million loss.

Quoting ChicagoFlyer (Reply 29):
Yeah, any time a hedge results in losses it means management is gambling. headache What is true is that UA WAS gambling by being historically the most unhedged of the airlines in the USA and HAS paid for that fuel strategy dearly.

DL, UA, AA, NW, US the lot of them were almost unhedged at the worst possible time. Delta in particular should not be forgiven for SELLING their hedges to improve their cash balance. That's one thing they never should have done. Even entering BK with the hedges intact would have been better.

Now, UA is in a swap arrangement where they are liable for payments if the price of oil falls too low. WN doesn't enter hedging that way. They basically just cap the price. Even UA can hedge in an exchange traded option, future or derivative. No credit rating required except for the up front cash for the hedges. You don't have to do OTC hedges.
 
CTHEWORLD
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RE: UA Posts Year End Results

Thu Jan 25, 2007 11:37 am

Quoting DTW757 (Reply 3):
You too could end the year with a profit if you walked away from your previous stock and screwed every stockholder. Then you turn around and issue yourself new stock. The fact that a company can do something like that to emerge from bankruptcy is outrageous.

What an idiot, stock has nothing to do with profits and revenue generation. Grow up and get educated.
 
smashme33
Posts: 98
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RE: UA Posts Year End Results

Thu Jan 25, 2007 12:02 pm

I wonder which employees had to suffer to make this profit turn up?

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