The firm spend $131 million on capital expenditures and $122 million for debt payments.

- It ended the period with a total cash balance of $5 billion of which unrestricted cash and short-term investments made up to $4.2 billion.
- Total balance sheet debt including capital leases ended the year at $10.6 billion.
- The firm expects to reduce the cash balance by about $1 billion by paying down debt and has launched the syndication of a new $2 billion loan facility to replace the $3 billion exit facility.

Strategic Insights:

- Earlier during the year, the firm announced a significant upgrade to the international premium class product, which will begin to roll out in late 2007.
- This product will be installed on all 97 of the international aircraft by the end of 2009.
- The firm also recently added services to Kuwait and will start soon to add service to Rome, Frankfurt, Hong Kong and Taipei.

Starting in March, it will begin connecting the capitals of the United States and China, with the Beijing-Dallas route.

- This combination of targeted products and unmatched network and an improving customer experience is enabling United to win significant and profitable corporate accounts away from the largest competitors.
- Work on resource and network optimization have enabled it to add flights without having to purchase additional airplanes.

Update on Initiatives:

- In the first quarter of 2006, ground time was 3% lower than it had been in the first quarter of 2005 and by the fourth quarter, ground time was fully 7% lower than it had been in 2005.
- Using standard work packages in all of the ground operation is the best way to improve ability to consistently and safely turn aircraft in these reduced timeframes.
- Aircraft utilization was up 3% in 2006 compared to 2005, despite an increase in 2006 mainline load factor of 0.7 points to 82.1% from an already high load factor in 2005.
- The firm also took real estate out of the system where it made sense such as by transitioning out of remote express facilities in San Francisco, Los Angeles, and Washington Dulles.

Resource optimization allowed the company to generate the equivalent of nine mainline and 18 express aircraft without having to purchase any incremental aeroplanes.

- Arrival 14 performance came in at 74% and by November, had improved to 78%, coming in third in the Department of Transportation.
- The firm faces other cost pressures on the airport environment such as a 10% increase in the average number of bags checked for passenger since the foiled London-Paris flight last August.
- To enhance security, the firm is installing cameras in the largest airport lobbies so that it can move staff to the premium check-in and security lines as required to deliver on service standards for the most valued customers.
- The percentage of flights cancelled due to weather in December 2006 was nearly five times higher than the average rate of the 12 previous December''s.

Operational Highlights:

- In 2007 United will continue expanding internationally with new passenger and cargo service between Washington and Beijing, Washington and Rome, San Francisco and Taipei and a second daily flight between San Francisco and Frankfurt.
- During October 2006, United launched new daily nonstop passenger and cargo service between Washington and Tokyo Narita.
- In addition, United also launched its new tri-weekly nonstop passenger and cargo service between Washington and Kuwait City, expanding United''s global network into the fast-growing Middle East region.
- United unveiled initial details of a new upgrade to the international widebody fleet that includes a new United First Suite, which provides passengers with more privacy, personal space and comfort on overseas flights.

Fiscal 2007 Outlook:

- The firm expects mainline capacity to increase between 0 and 1%.
- United Express capacity is expected to grow between 3.5 and 4.5% leading to a consolidated capacity increase of 0 to 1%.
- First quarter mainline capacity is expected to grow between 0.5 and 1%, express capacity to grow 7 to 7.5% and consolidated capacity to grow 1 to 1.5%.

Mainline CASM ex-fuel and profit sharing programs is expected to be down 1 to 1.5% in 2007 as compared to 2006 with the full-year mainline CASM ex-fuel and profit sharing programs is expected to be up 0.5 to 1.5%.

- The decrease in planned 2007 capacity growth had the effect of somewhat increasing the 2007 CASM guidance.
- The firm had hedged 33% of forecasted fuel consumption for the first quarter 2007 predominantly through crude oil, three-way options with upside protection on a weighted average basis beginning at $65 per barrel, and capped at $74 per barrel.

Key questions and answers from the fourth quarter earnings call conducted by United Airline Corp. on January 23, 2007.

David Strine: Can you comment on the revenue fluctuations?

Graham Atkinson: When we adopted this standard, we began to see the volatility in the performance, and we did not forecast it very well in the fourth quarter which is why we significantly increased the estimate of it.

David Strine: On RASM, are you seeing any meaningful difference in terms of the year-over-year growth rate or things remaining steady?