What's the truth about UAL's current financial condition ?
Jul 11, 2002, 11:33 pm
#16
Guest
Posts: n/a
My understanding was that we had a billion in lease payments due this quarter.
Jul 12, 2002, 12:28 am
#17
Join Date: Oct 2001
Location: Anywhere and Everywhere
Posts: 318
Disclaimer: I do not like United Airlines.
Disclaimer of disclaimer: All the following information is objective and contained in UAL's most recent annual report.
UAL's load factor decreased over 2% in fiscal year ending (FYE) '01 from the previous year.
Their breakeven load increased 30%! Their revenue per available seat mile decreased 11%. They had negative cash flow from operations of $160 million. That's problematic to say the least, given that they have $1.58 BILLION in binding contractual lease obligations for 2002 BEYOND what's recorded as a current liability on their balance sheet. In fact, they have total contractual CASH obligation of $4.42 billion for 2002 but only $1.69 billion of cash on the 2001 year end balance sheet.
Current liabilities on the 2001 year end balance sheet exceeded current assets by $3 billion (not even counting the unrecorded $1.58 billion unrecorded lease liability). I guess that could be chump change but they also have $2.5 billion in pension obligations in excess of the pension assets as of year end 2001 (and I doubt the pension assets have INcreased since then, given the "vicissitudes" of the stock market so far this year).
Of course, we should look at the upside potential as well. OOOPS, they have 10.74 million stock options outstanding, which are all under water ("out of the money"), but would dilute equity by about 15% if they ever somehow got their spit together and began to become profitable again = not much of an upside as far as I can see.
All I can do about this is apologize.
Doakes
[This message has been edited by JoeDoakes (edited 07-12-2002).]
Disclaimer of disclaimer: All the following information is objective and contained in UAL's most recent annual report.
UAL's load factor decreased over 2% in fiscal year ending (FYE) '01 from the previous year.
Their breakeven load increased 30%! Their revenue per available seat mile decreased 11%. They had negative cash flow from operations of $160 million. That's problematic to say the least, given that they have $1.58 BILLION in binding contractual lease obligations for 2002 BEYOND what's recorded as a current liability on their balance sheet. In fact, they have total contractual CASH obligation of $4.42 billion for 2002 but only $1.69 billion of cash on the 2001 year end balance sheet.
Current liabilities on the 2001 year end balance sheet exceeded current assets by $3 billion (not even counting the unrecorded $1.58 billion unrecorded lease liability). I guess that could be chump change but they also have $2.5 billion in pension obligations in excess of the pension assets as of year end 2001 (and I doubt the pension assets have INcreased since then, given the "vicissitudes" of the stock market so far this year).
Of course, we should look at the upside potential as well. OOOPS, they have 10.74 million stock options outstanding, which are all under water ("out of the money"), but would dilute equity by about 15% if they ever somehow got their spit together and began to become profitable again = not much of an upside as far as I can see.
All I can do about this is apologize.
Doakes
[This message has been edited by JoeDoakes (edited 07-12-2002).]
