This summary is based on the fourth quarter fiscal 2007 earnings call conducted by UAL Corporation (UAUA) on January 22, 2008.

Management:

Chairman, President and CEO UAL Corporation and United Airlines: Glenn F. Tilton
EVP and CFO: Frederic F. Brace
EVP and Chief Revenue Officer: John P. Tague
VP, IR: Kathryn A. Mikells
EVP and COO: Peter D. McDonald

Key Investors Issues

- The company reported EPS loss of 47 cents per share compared to 55 cents per share last year.
- The company’s loss amounted to $53 million compared to $61 milliona year earlier.
- Operating revenue rose to $5.03 billion from $4.59 billion a year earlier.

Fourth Quarter Highlights

The company recognized $121 million of non-cash revenue from the change in the mileage expiration policy.

$55 million of that related to normal quarterly amortization this year while $66 million reflected the fact that the company actually recorded higher mileage breakage than estimated in previous quarters when the Mileage Plus miles expired for the first time under the new policy on December 31st of 2007. This benefit was partially offset by the effect of the change to deferred revenue accounting from the previous incremental cost method. This lowered revenue for the quarter by $61 million. Net-net, the impact for the quarter versus the incremental cost method was an increase in passenger revenue of $60 million. On a year over year basis, these changes resulted in fourth quarter consolidated passenger revenue increasing by $155 million.

Oil hit $100 a barrel, and strong revenue performance alone was not enough to counter the impact of the sharp increase that sharp increase had on margin, and consolidated fuel costs increased by $359 million, more than 25% from the year-ago period.

Despite the challenges from higher fuel and severe weather in December, the worst in history for the month of December, adjusted pretax profit in the fourth quarter was $7 million better than the fourth quarter of last year.

Five-year plan provides a road map at United to continue to differentiate ourselves with best customers and enable further revenue premiums while maintaining competitive industry costs.

The company faced a steep fuel increase with consolidated fuel costs, up $359 million.

- This equates to more than seven points of margin headwind compared to the fourth quarter of 2006.
- United led several fuel surcharge and fare increase attempts but as an industry, the company was unsuccessful in passing along the full effect of this commodity cost increase.

- Despite the negative effect of the fuel increase, pretax loss of $98 million was $7 million better than the previous year.
- The company recorded a net loss of $53 million, $10 million better then a year ago, resulting in a basic and loss of 47 cents per share compared to a consensus 89 cents per share loss.
- The company recorded a largely non-cash income tax benefit of $43 million in the fourth quarter based on 44% tax rate.

Purchased service expense was $366 million, up 14.7% year over year, as the company invested $20 million on information technology deployment and also made investments of about $15 million in efficiency and revenue improvement initiatives.

- Navigation charges were also up due to increased international volume.
- Salaries and related expense line grew 5.7% year over year driven by accruals for profit sharing which increased by approximately $45 million year over year along with $5 million in increased labor costs related to the December storms.

- Other operating expense was $56 million higher year over year reflecting both tough comps from 2006 and storm related costs.
- The company had two insurance settlements in the fourth quarter of 2006 that lowered expenses by $23 million.
- December storm related costs increase this line by approximately $10 million and the company recorded $5 million in non-cash assets write-downs in this line.

The company closed the quarter with one last reminder of the challenges it faces from constrained ATC environment when you add bad weather to the equation.

The company experienced winter storms in both Chicago and Denver, and as a result, December contained more severe weather days than any December on record for United and more than three times the number of severe record days faced in 2006. The storms in the month contributed to fourth quarter mainline CASM, excluding fuel and special items, coming in 1.7 points higher than guidance. The storm lowered ASMs, higher staffing, glycol and other storm related costs added about 0.7% to CASM. Another 0.6% of a percent of the CASM increase was due to increased profit sharing as stronger revenue performance and lower than expected fuel price resulted in earnings better than anticipated.

Mainline CASM excluding the impact of fuel and special items was up 9.2% on 1% lower capacity as mainline non-fuel operating costs rose by 8.1%. A number of items drove the increase. Aircraft maintenance materials and outside repair costs were $306 million, 27% higher than a year ago, driven by higher airframe heavy maintenance volumes and higher engine maintenance costs. The company had 28 heavy maintenance visits this quarter compared with 11 visits in the fourth quarter of 2006. Additionally, the company experienced inflationary pressures from V2500 engine maintenance contracts.