Last updated: 11:05 AM ET, Thu January 24 2013

United Reports $589 Million Full-Year Profit, Fourth-Quarter Loss

Features & Advice | United Airlines | January 24, 2013

United Continental Holdings Inc. reported full-year 2012 net income of $589 million, or $1.59 per share, excluding $1.3 billion of special charges. Including special charges, UAL reported a full-year 2012 net loss of $723 million, or $2.18 per share.

The company reported a fourth-quarter 2012 net loss of $190 million, or 58 cents per share, excluding $430 million of special charges. Including special charges, UAL reported a fourth-quarter 2012 net loss of $620 million, or $1.87 per share. Superstorm Sandy reduced fourth-quarter revenue by approximately $140 million and profit by about $85 million. The fourth quarter load factor was 82.3 percent. 

“I want to thank my co-workers for working together in 2012 as we completed the most difficult aspects of our merger integration,” said Jeff Smisek, UAL’s chairman, president and CEO. “With much of our integration behind us, our significantly improved operational performance and our increasing customer satisfaction, we can now go forward as one company. This year we will continue on our path to becoming the world's leading airline.”

For fourth-quarter 2012, total revenue was $8.7 billion, a decrease of 2.5 percent year-over-year. Fourth-quarter consolidated passenger revenue decreased 3.6 percent to $7.5 billion, compared to the same period in 2011. 

“While we didn’t meet our revenue goals in 2012, we have addressed the integration issues that drove our underperformance,” said Jim Compton, UAL’s vice chairman and chief revenue officer. “We’re now positioned to capitalize on market opportunities across our network, and to earn back our share of revenue, based on solid operations and great customer service.”   

Total operating expenses, excluding special charges, increased $94 million, or 1.1 percent, in the fourth quarter versus the same period in 2011. Including special charges, fourth-quarter total operating expenses increased $284 million, or 3.2 percent, year-over-year. Third-party business expense was $118 million in the fourth quarter.

“While we reported a full-year profit in 2012, these results clearly fell short of our expectations and the return goals we have set,” said John Rainey, UAL’s executive vice president and chief financial officer. “2013 will be an important year for us as we take the necessary steps to create economic value and achieve a sufficient level of profitability.”

UAL ended the year with $7 billion in unrestricted liquidity, including $500 million of undrawn commitments under a revolving credit facility. During the fourth quarter, the company generated $31 million of operating cash flow and had gross capital expenditures and purchase deposits of $1 billion, which included the delivery of 11 aircraft. The company’s return on invested capital for the year ended Dec. 31, 2012, was 8 percent, below the company’s goal of a 10 percent return over the business cycle.

For the fourth quarter, United recorded a U.S. Department of Transportation domestic on-time arrival rate of 80.1 percent, exceeding its goal for the quarter. For the full year, United recorded a domestic on-time arrival rate of 77.3 percent and a system completion factor of 98.6 percent. For international flights, United recorded an on-time arrival rate of 73.7 percent. The on-time arrival rates are based on flights arriving within 14 minutes of scheduled arrival time.

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