This summary is based on the fourth quarter fiscal 2008 earnings call conducted by UAL Corp. (UAUA) on 21 January, 2009.

Management:

- Chairman, President and CEO: Glenn Tilton
- CFO: Kathryn Mikells
- COO: John Tague

Key Investors Issues

- The firm realized a loss of $1.3 billion or $9.91 a share, from a loss of $53 million or 47 cents a share in 2007.
- Revenue dropped 10% to $4.5 billion from $5 billion in the prior year.

Full Year Highlights:

- Revenue was up 0.3% to $20 billion
- The firm realized a loss of $5 billion or $42.21 a share, down from a profit of $403 million or $3.34 a share.

Fourth Quarter Highlights

The company’s pre-tax loss was $1.3 billion or $9.91 a share compared to a pre-tax loss of $53 million or 47 cents a share in 2007 impacted by losses on fuel hedge contracts put in place to offset the rapid rise in fuel prices last summer.

- Revenue dropped 10% to $4.5 billion from $5 billion in the prior year though it exceeded the top-end of guidance for unit revenue growth by almost a percentage point with, both Mainline and consolidated PRASM increasing roughly 4.5% year-over-year.
- The nearly 11% reduction in consolidated capacity implemented in the quarter enabled the company to deliver positive unit revenue growth despite a 9% decline in consolidated passenger revenue.
- Cargo and other revenue was $382 million, down about 18% from a year ago, reflecting recessionary demand trends, as well as the elimination of over 20% of freight capacity, as we pull down some of our international wide-body flying.

Fuel hedge losses are having a negative impact on cost, but that impact is clearly short-term.

- The firm took action to mitigate the negative impact of the price drop on fuel hedges, by purchasing put contracts to cap the losses on much of the portfolio.
- The purchased put paid more than $50 million and helped to dampen the loss incurred as contracts settled.
- In total, it recorded $370 million in cash losses on fuel hedge contracts that settled in the quarter, with $142 million booked to the fuel lines and $228 million booked in non-operating expenses.
- The un-hedged fuel price was $2.53 a gallon, which is about 59 cents above average stock prices during the quarter, due to a timing difference.

Salaries decreased $110 million as a result of eliminating more than 1,500 management positions in 2008 as well as the commitment to maintain front-line productivity as it reduced capacity significantly.

- Aircraft maintenance and materials and outside repairs decreased $78 million or about 25%, as the work being done all year to improve maintenance costs continue to bear fruit.
- There was also lower engine and air-frame volumes in the quarter compared to last year in part due to the significant retirement program that''s underway.
- Distribution expenses decreased $31 million or 17%, significantly more than the corresponding reduction in passenger revenue, as it continued the successful pattern of targeting high-cost channels for cost reduction, particularly in the area of commissions.
- Purchased services and other operating expenses decreased $38 million each, as it worked hard to reduce costs in line with capacity.

While interest expense improved by $24 million, on lower debt levels and lower interest rates, interest income declined by $54 million, again on lower rates as well as lower cash balances.

- The firm raised nearly $400 million; $215 million from two aircraft financings, $66 million from asset sales, and $107 million through the equity offering announced in December.
- It also successfully executed an amendment to the Chase credit card processing agreement that allows it to substitute aircraft collateral in place of incremental cash pullbacks.
- It generated negative operating cash flow of $980 million, which includes $586 million of net incremental collateral that was posted with hedge counter parties and free cash flow came in at negative $1.1 billion.

UAL reduced on and off balance sheet debt by about $400 million ending the year with total debt of $11.2 billion and net debt of $9.2 billion.

- It closed out the year with $2 billion in unrestricted cash, in line with guidance.
- In early January, the firm closed a new aircraft financing deal for $95 million and has continued the equity offering in January raising an additional $63 million prior to the start of the quiet period.
- It expects to raise approximately $160 million from a cargo facility relocation agreement with Chicago''s O''Hare Airport that''s part of the planning for the next new runway, and expects another $27 million as it completes the equity offering.

Operational Highlights:][]

- As the price of oil skyrocketed, the firm led the industry with a substantial capacity response to a new demand reality, with the elimination of the entire 737 fleet, while making sure it maintained the breadth and the relevance of the network.
- UAL was well out in front of the downturn in international demand, as the first carrier to announce international capacity reduction, along with the removal of six Boeing 747s from the fleet.

It also led the industry toward unbundling and ancillary revenue growth, with the January announcement of second bag charges and new product launches throughout the year.