United Airlines 8K Regulation FD Disclosure | UAL 3 Feb 09

p. 1

UAL Corporation

J.P. Morgan Global High Yield & Leveraged

Finance Conference 2009

February 3, 2009

Exhibit 99.1

p. 2

Safe Harbor Statement And

Non-GAAP Reconciliation

Safe Harbor Statement And

Non-GAAP Reconciliation

The information included in this presentation contains certain statements

that

are

“Forward-Looking

Statements”

within

the

meaning

the

Private

Securities Litigation Reform Act of 1995. These statements are subject to

a number of assumptions, risks and uncertainties related to the Company’s

operations and the business environment in which it operates. Actual results

may differ materially from any future results expressed or implied in such

Forward-Looking Statements due to numerous factors, many of which are

beyond the Company’s control, including factors set forth in the Company’s

Form 10-K for 2007 and 2008 along with other subsequent Company reports

filed

with

the

United

States

Securities

and

Exchange

Commission.

Persons

reviewing this presentation are cautioned that the Forward-Looking

Statements

speak

only

the

date

made

and

are

not

guarantees

future

performance. The Company undertakes no obligation to update any Forward-

Looking Statements.

Information regarding reconciliation of certain non-GAAP financial measures

contained

this

presentation

available

the

Company's

web

site

www.united.com/ir

The information included in this presentation contains certain statements

that

are

“Forward-Looking

Statements”

within

the

meaning

the

Private

Securities Litigation Reform Act of 1995. These statements are subject to

a number of assumptions, risks and uncertainties related to the Company’s

operations and the business environment in which it operates. Actual results

may differ materially from any future results expressed or implied in such

Forward-Looking Statements due to numerous factors, many of which are

beyond the Company’s control, including factors set forth in the Company’s

Form 10-K for 2007 and 2008 along with other subsequent Company reports

filed

with

the

United

States

Securities

and

Exchange

Commission.

Persons

reviewing this presentation are cautioned that the Forward-Looking

Statements

speak

only

the

date

made

and

are

not

guarantees

future

performance. The Company undertakes no obligation to update any Forward-

Looking Statements.

Information regarding reconciliation of certain non-GAAP financial measures

contained

this

presentation

available

the

Company's

web

site

www.united.com/ir

p. 3

Fourth Quarter 2008 Highlights

Fourth quarter pre-tax loss of $547 million, excluding net non-

cash mark-to-market hedge losses and certain accounting items

•

Consolidated PRASM* grew 4.7% year over year in the fourth

quarter, excluding special items and Mileage Plus impacts.

•

Mainline CASM* excluding fuel was up only 1.6% year over year

in the fourth quarter, despite an 11.7% capacity reduction.

•

Raised $400 million of liquidity in the fourth quarter despite

difficult credit markets

Fourth quarter pre-tax loss of $547 million, excluding net non-

cash mark-to-market hedge losses and certain accounting items

•

Consolidated PRASM* grew 4.7% year over year in the fourth

quarter, excluding special items and Mileage Plus impacts.

•

Mainline CASM* excluding fuel was up only 1.6% year over year

in the fourth quarter, despite an 11.7% capacity reduction.

•

Raised $400 million of liquidity in the fourth quarter despite

difficult credit markets

*Excludes impairments, other special items and Mileage Plus impacts as applicable

p. 3

p. 4

United Delivered Competitive RASM and Non-Fuel

CASM Over the Twelve Months Ended 4Q 2008

United Delivered Competitive RASM and Non-Fuel

CASM Over the Twelve Months Ended 4Q 2008

Mainline CASM Excluding Fuel

Twelve Months Ended Dec. 31, 2008

Mainline CASM Excluding Fuel

Twelve Months Ended Dec. 31, 2008

Mainline RASM

Twelve Months Ended Dec. 31, 2008

Mainline RASM

Twelve Months Ended Dec. 31, 2008

10.67

12.46

12.51

13.01

13.19

DAL/NWA

AMR

12.69

UAUA

CAL

LCC

LUV

7.85

7.10

8.15

8.36

6.64

7.50

LCC

AMR

UAUA

CAL

DAL/NWA

LUV

(5.7%)

0.6%

(4.1%)

(3.9%)

0.8%

(4.8%)

7.9%

7.4%

7.8%

8.2%

5.6%

5.0%

YOY

B/(W)

YOY

B/(W)

Sources: Company press releases and Earnings Calls.

Adjusted for special items, one-time items, and certain other accounting adjustments; Impact shown for fresh-start accounting amounts except stock based

compensation

(2.2%)

3.6%

(1.3%)

(0.6%)

(3.8%)

Capacity

YOY

H/(L)

Capacity

YOY

H/(L)

(0.3%)

(0.6%)

(2.2%)

3.6%

(3.9%)

(3.8%)

(0.3%)

p. 5

Pre-Tax Margin

Twelve Months Ended

December 31, 2008

Pre-Tax Margin

Twelve Months Ended

December 31, 2008

Pre-Tax Earnings Impacted By Fuel Price And

Fuel Hedging

Pre-Tax Earnings Impacted By Fuel Price And

Fuel Hedging

-6.7%

-6.6%

-5.0%

-2.8%

-2.6%

4.5%

UAUA

DAL/NWA

CAL

AMR

LCC

LUV

YOY Pts

(3.3)

(10.4)

(10.3)

(6.5)

(6.9)

Sources: Company press releases and Earnings Calls.

Pre-Tax Margin adjusted for special items, one-time items, certain other accounting adjustments, as well as non-cash fuel hedge impacts to the

extent disclosed. Impact shown for fresh start accounting amounts except stock based compensation.

p. 6

$20

$40

$60

$80

$100

$120

$140

$160

$180

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00

The Industry Is Better Prepared To Deal With A

Recession Than Ever Before

The Industry Is Better Prepared To Deal With A

Recession Than Ever Before

Jet A and WTI Spot Prices

Jet A

($/gal)

WTI Crude

Oil

($/barrel)

-0.5%

2007

-3.8%

2008

-6.8%

2009F

Domestic Industry Capacity

Year-Over-Year Change

2.0%

2007

1.2%

2008

-2.5%

2009F*

US Real GDP Growth

* Source: Global Insight estimate

Early capacity actions and

continued capacity discipline

has positioned the industry

well for the downturn

Early capacity actions and

continued capacity discipline

has positioned the industry

well for the downturn

p. 7

United’s Actions Have Positioned It Well To Deal

With Current Challenges

United’s Actions Have Positioned It Well To Deal

With Current Challenges

•

Industry-leading capacity reductions to better match supply and

demand

•

Enhancing revenue through redeployment of assets and ancillary

revenue streams

•

Top-tier cost control

•

Improving operational performance

•

Industry-leading capacity reductions to better match supply and

demand

•

Enhancing revenue through redeployment of assets and ancillary

revenue streams

•

Top-tier cost control

•

Improving operational performance

•

Solid cash position and limited fixed

obligations

•

Solid cash position and limited fixed

obligations

p. 8

United’s Capacity Reductions Are Both Earlier

and Deeper than Peers

United’s Capacity Reductions Are Both Earlier

and Deeper than Peers

-8.4%

-12.0%

UAUA

AMR

-6.0%

-6.9%

CAL

DAL/NWA

-8.5%

LCC

First Quarter 2009

Year-Over-Year Consolidated Capacity

First Quarter 2009

Year-Over-Year Consolidated Capacity

-7.5%

-5.1%

UAUA

-7.0%

LCC

DAL/NWA

AMR

-7.0%

Full Year 2009

Year-Over-Year Consolidated Capacity

Full Year 2009

Year-Over-Year Consolidated Capacity

Note: CAL did not provide full year capacity guidance

Source: Company press releases and SEC filings

p. 9

United Is Also Leading the Industry Response to

Softening International Demand

United Is Also Leading the Industry Response to

Softening International Demand

-14.5%

UAUA

-4.0%

AMR

-2.8%

CAL

1.0%

DAL/NWA

First Quarter 2009

Year-Over-Year

International Capacity

First Quarter 2009

Year-Over-Year

International Capacity

-5.5%

UAUA

DAL/NWA

AMR

-2.5%

-4.0%

Full Year 2009

Year-Over-Year

International Capacity

Full Year 2009

Year-Over-Year

International Capacity

Note: LCC did not provide an international capacity guidance and CAL did not provide full year capacity guidance

Source: Company press releases and SEC filings

p. 10

Capacity Reductions Are Being Achieved Cost

Effectively

Capacity Reductions Are Being Achieved Cost

Effectively

•

Permanent retirement of the entire B737

fleet by the end of 2009

–

Grounded 48 of 94 B737s by the end

of 2008

–

Elimination of entire fleet will reduce

complexity of operations and

maintenance

•

Permanent retirement of 6 B747s from

the international fleet

•

B747s and B737s are the oldest and

least fuel efficient aircraft in the fleet

•

Permanent retirement of the entire B737

fleet by the end of 2009

–

Grounded 48 of 94 B737s by the end

of 2008

–

Elimination of entire fleet will reduce

complexity of operations and

maintenance

•

Permanent retirement of 6 B747s from

the international fleet

•

B747s and B737s are the oldest and

least fuel efficient aircraft in the fleet

p. 11

We Are Maintaining the Breadth And Strength

Of Our Network As We Reduce Capacity

p. 11

Destinations Served

–

1Q 2008: 221 cities

–

1Q 2009: 218 cities

p. 12

United Is Leading The Development Of New And

Innovative Ancillary Revenue Streams

United Is Leading The Development Of New And

Innovative Ancillary Revenue Streams

p. 12

Ticketing Fee Revenue

Expansion

First/Second Bag Fee

Economy Plus And

First/Business Class Seat Upsell

Door to Door Baggage

Award Accelerator

Premier Line

~$1.2 Billion

2009

p. 13

New International Product Right Sizes Premium

Cabins And Drives Customer Satisfaction

New International Product Right Sizes Premium

Cabins And Drives Customer Satisfaction

•

Installing the new United First Suite and full lie-flat seats in

Business Class reduces premium seat counts by over 20%

–

Over 25% of conversions completed by the end of 2008

–

B767s and B747s will be completely converted in 2009 and B777s

completed in 2010

•

Customer satisfaction ratings more than doubled on reconfigured

aircraft in the fourth quarter

•

Installing the new United First Suite and full lie-flat seats in

Business Class reduces premium seat counts by over 20%

–

Over 25% of conversions completed by the end of 2008

–

B767s and B747s will be completely converted in 2009 and B777s

completed in 2010

•

Customer satisfaction ratings more than doubled on reconfigured

aircraft in the fourth quarter

New First

Suite

New Business

Class Seat

p. 14

United Is Improving Relative Non-Fuel Unit Cost

Despite Industry Leading Capacity Reductions

United Is Improving Relative Non-Fuel Unit Cost

Despite Industry Leading Capacity Reductions

6.2%

1.6%

UAUA

2.8%

DAL/NWA

6.8%

AMR

LCC

5.0%

CAL

Sources: Company press releases and Earnings Calls. Adjusted for Special items and certain accounting charges

Capacity

YOY H/(L)

(4.2%)

(8.0%)

(11.7%)

(8.3%)

(5.9%)

Fourth Quarter 2008

Mainline CASM Excluding Fuel Year-Over-Year Growth

Fourth Quarter 2008

Mainline CASM Excluding Fuel Year-Over-Year Growth

p. 15

* Excluding Fuel and Profit Sharing

Sources: Company press releases and Earnings Calls. Numbers represent mid-point of guidance provided. Exclude Special items and certain

accounting charges

LCC

3.0%

UAUA*

5.4%

CAL

6.0%

DAL/NWA*

9.2%

AMR

Full Year 2009 Guidance

Mainline CASM Excluding Fuel Year-Over-Year Growth

Full Year 2009 Guidance

Mainline CASM Excluding Fuel Year-Over-Year Growth

Capacity

YOY H/(L)

(9.0%)

(5.0%)

(7.0%)

(4.0%)

(6.5%)

Carrying Cost Control Momentum Into 2009

p. 16

Aggressive 2009 Cost Control Program Will

Deliver Results

Aggressive 2009 Cost Control Program Will

Deliver Results

~$1 Billion*

Cost Reduction

60% Capacity

Related Costs

Consolidated Capacity

Expected To be Down

7.0% -

8.0%

40% Fixed Cost

Reduction

-Optimize Maintenance

-Overhead Reduction

-Productivity & Efficiency

-Fleet Optimization

* $750

million

cost

reduction

against

inflationary

cost

pressure

approximately

$300

million

p. 17

Focus On Maintaining Productivity As Capacity Is

Reduced

Focus On Maintaining Productivity As Capacity Is

Reduced

•

Management and salaried workforce reduced by 2,500

–

Over 1,500 already achieved, remainder by the end of 2009

–

Represents almost 30% reduction in management and salaried

positions compared to 2007

•

Frontline reduction of 6,500

•

Committed to minimizing the impact of furloughs on our

employees

–

Nearly 40% of these frontline furloughs have been voluntary

•

Despite significant capacity reductions, we have maintained

our productivity

•

Management and salaried workforce reduced by 2,500

–

Over 1,500 already achieved, remainder by the end of 2009

–

Represents almost 30% reduction in management and salaried

positions compared to 2007

•

Frontline reduction of 6,500

•

Committed to minimizing the impact of furloughs on our

employees

–

Nearly 40% of these frontline furloughs have been voluntary

•

Despite significant capacity reductions, we have maintained

our productivity

p. 18

United Is Delivering Improved Quality As It

Reduces Cost

United Is Delivering Improved Quality As It

Reduces Cost

Core Performance Imperatives

DOT service basics

Clean, workable product

Industry-leading revenues

Competitive costs

Courteous, caring, respectful

p. 19

With A Compensation Structure Aligned to Deliver

Results

With A Compensation Structure Aligned to Deliver

Results

•

New front-line employee cash incentive program announced

–

Eligible employees will receive a monthly cash payout if we

achieve a first or second-place DOT A:14 ranking amongst the

largest network carriers

•

Management

incentive programs directly aligned across the

five core performance imperatives

•

New front-line employee cash incentive program announced

–

Eligible employees will receive a monthly cash payout if we

achieve a first or second-place DOT A:14 ranking amongst the

largest network carriers

•

Management

incentive programs directly aligned across the

five core performance imperatives

p. 20

Operational Performance Is Already Improving

78.5%

LCC

75.3%

DAL/NWA

72.5%

CAL

66.9%

UAUA

66.4%

AMR

80.6%

LCC

79.8%

UAUA

79.3%

AMR

77.6%

DAL/NWA

75.1%

CAL

United Had Its Best On-Time Performance in the

Fourth Quarter Since 2004

Place

Summer 2008

On-Time Arrival Performance

DOT: Arrival 14

Summer 2008

On-Time Arrival Performance

DOT: Arrival 14

Fourth Quarter 2008

On-Time Arrival Performance

DOT: Arrival 14

Fourth Quarter 2008

On-Time Arrival Performance

DOT: Arrival 14

Place

p. 21

And Product Quality Improvements Are Beginning

to Deliver Results for Our Customers

And Product Quality Improvements Are Beginning

to Deliver Results for Our Customers

•

Ensuring the workability of

onboard equipment

–

Increasing frequency of

in-flight entertainment

equipment maintenance

–

Upgrading entertainment

equipment

•

Focused

on improving cabin

cleanliness

–

Doubling the frequency of

heavy cleans

–

Rigorous performance audits

•

Ensuring the workability of

onboard equipment

–

Increasing frequency of

in-flight entertainment

equipment maintenance

–

Upgrading entertainment

equipment

•

Focused

on improving cabin

cleanliness

–

Doubling the frequency of

heavy cleans

–

Rigorous performance audits

Customer Satisfaction Scores For Workability Have Improved

points

2008

Apr

May

Jun

July

Aug

Sep

Oct

Nov

Dec

2007

2008

Workability of Onboard Equipment

Customer Satisfaction Score

Workability of Onboard Equipment

Customer Satisfaction Score

p. 22

United Closed 2008 With A Solid Liquidity Position

•

$2 billion in unrestricted cash

–

$400M of additional

liquidity raised in fourth

quarter

•

$2 billion in unencumbered

assets

•

Fuel

hedge collateral fully

covers entire hedge portfolio

losses at current prices

•

$2 billion in unrestricted cash

–

$400M of additional

liquidity raised in fourth

quarter

•

$2 billion in unencumbered

assets

•

Fuel

hedge collateral fully

covers entire hedge portfolio

losses at current prices

$1B

Unrestricted

Cash

$2B

Unencumbered

Assets:

Aircraft &

Engines

$1B

Unencumbered

Assets:

Other

p. 23

Fuel Hedge Losses Will Impact Earnings in 2009,

But Cash Has Already Been Posted

Fuel Hedge Losses Will Impact Earnings in 2009,

But Cash Has Already Been Posted

Unhedged Mainline

Fuel price*

Unhedged Mainline

Fuel price*

$1.73

$1.79

$1.89

$1.91

Collateral

and

fuel

prices

are

based

January

16,

2008

closing

forward

crude

oil

prices

*Fuel price per gallon including taxes and transportation costs

**Net

cash

hedge

gains

losses

per

gallon

included

mainline

fuel

expense

***Net cash hedge gains or losses recorded in non-operating expense

Collateral

and

fuel

prices

are

based

January

16,

2008

closing

forward

crude

oil

prices

*Fuel price per gallon including taxes and transportation costs

**Net

cash

hedge

gains

losses

per

gallon

included

mainline

fuel

expense

***Net cash hedge gains or losses recorded in non-operating expense

Hedge Impact In

Non-Operating

Expense***

Hedge Impact In

Non-Operating

Expense***

$81M

$111M

$53M

$52M

Hedge Impact In Fuel

Expense**

Hedge Impact In Fuel

Expense**

$0.49

$0.39

$0.26

$0.09

$1.83

$297M

$0.31

Full Year

2009

Full Year

2009

•

United has already posted collateral covering fuel hedge

losses

current

prices

–

hedges

settle,

collateral

returned to cover cash settled losses

•

United has already posted collateral covering fuel hedge

losses

current

prices

–

hedges

settle,

collateral

returned to cover cash settled losses

p. 24

United Has Modest Fixed Obligations Moving

Into 2009

United Has Modest Fixed Obligations Moving

Into 2009

•

No material defined benefit pension plans

–

Virtually all domestic employees on defined contribution plans

•

capital

requirements

for

new

aircraft

2009

–

new

aircraft

financing required

•

Moderate capital spending in 2008 at only $450 million

–

Discipline will continue in 2009 with a non-aircraft capital

budget of only $450 million on customer focused projects,

including premium seat programs

•

No material defined benefit pension plans

–

Virtually all domestic employees on defined contribution plans

•

capital

requirements

for

new

aircraft

2009

–

new

aircraft

financing required

•

Moderate capital spending in 2008 at only $450 million

–

Discipline will continue in 2009 with a non-aircraft capital

budget of only $450 million on customer focused projects,

including premium seat programs

•

major

debt

maturities

2009

–

debt

repayments will total ~$900 million

•

major

debt

maturities

2009

–

debt

repayments will total ~$900 million

p. 25

Successfully Continuing To Enhance Liquidity In

The First Quarter Of 2009

Successfully Continuing To Enhance Liquidity In

The First Quarter Of 2009

Aircraft Financing

$95 million

About $350 million

expected in 1Q

through

transactions

completed and

underway

Cargo Facility

Relocation Agreement

~$160 million

Equity Issuances

$62 million (completed)

$27 million (expected)

p. 26

United Retains Flexibility to Adapt to Uncertain

Economic Environment

United Retains Flexibility to Adapt to Uncertain

Economic Environment

•

Capacity Flexibility

–

Unencumbered operational aircraft

–

Labor contract flexibility

•

Current

fuel hedge portfolio provides protection against

volatility

–

Collateral already posted covers fuel hedge losses at current

prices

–

Portfolio provides a high level of downside participation at

lower prices

–

Hedge collateral returns provide immediate protection at higher

prices

•

Capacity Flexibility

–

Unencumbered operational aircraft

–

Labor contract flexibility

•

Current

fuel hedge portfolio provides protection against

volatility

–

Collateral already posted covers fuel hedge losses at current

prices

–

Portfolio provides a high level of downside participation at

lower prices

–

Hedge collateral returns provide immediate protection at higher

prices

p. 27

United Is Well Positioned For Success

•

Aggressive actions taken in response to the challenging

environment

•

Led the industry in capacity reductions, revenue initiatives and

cost control

•

Raising new capital despite the tough credit markets

•

Maintaining flexibility to adapt to the uncertain economic

environment

•

Aggressive actions taken in response to the challenging

environment

•

Led the industry in capacity reductions, revenue initiatives and

cost control

•

Raising new capital despite the tough credit markets

•

Maintaining flexibility to adapt to the uncertain economic

environment

p. 28

Q & A

p. 29

GAAP To Non-GAAP

Reconciliation

GAAP To Non-GAAP

Reconciliation

p. 30

Pre-Tax Margin Reconciliation

Three Months Ending

4Q08

($ in Millions)

Consolidated Pre-Tax Income/(Loss)

(1,300)

Add (less): non-cash, net mark-to-market (gains) losses

566

Add (less): impairments, special items and other charges

187

Adjusted Pre-Tax

(547)

p. 31

Consolidated Passenger Revenue Per

Available

Seat

Mile

Fourth

Quarter

2008

Consolidated Passenger Revenue Per

Available

Seat

Mile

Fourth

Quarter

2008

Three Months Ended

12/31/2008

12/31/2007

($ in Millions)

Consolidated Passenger Revenue

4,165

4,562

Add (less): Mileage Plus - effect of accounting change

Add (less): Mileage Plus - effect of expiration period change

(121)

Consolidated Passenger Revenue Ex Specials & Fresh Start

4,213

4,502

Consolidated Available Seat Miles

34,816

38,948

Adjusted PRASM (in cents)

12.10

11.56

Year-Over-Year Change (%)

4.7%

p. 32

Mainline Revenue Per Available Seat Mile

Twelve Months Ended

Mainline Revenue Per Available Seat Mile

Twelve Months Ended

Twelve Months Ending

4Q08

4Q07

($ and ASM in Millions; Rates in cents)

Consolidated Operating Revenues

20,194

20,143

Less: Passenger - Regional Affiliates

(3,098)

(3,063)

Less: Regional Affiliates Specials

(8)

Mainline Operating Revenues

17,096

17,072

Less: Income from Special Items

(37)

Add: Mileage Plus Impacts

139

Adjusted Mainline

17,235

17,061

Mainline available seat miles

135,861

141,890

Adjusted Mainline RASM

12.69

12.02

Year-Over-Year Change

5.6%

p. 33

Mainline Cost Per Available Seat Mile

Twelve Months Ended

Mainline Cost Per Available Seat Mile

Twelve Months Ended

Twelve Months Ending

4Q08

4Q07

($ and ASM in Millions; Rates in cents)

Consolidated Operating Expenses

24,632

19,106

Less: Regional Affiliates

(3,248)

(2,941)

Mainline Operating Expense

21,384

16,165

Add (Less)Less: Mainline Fuel Expense

(excluding non-cash, net mark-to-market (gains) losses)

(7,154)

(5,023)

Add (Less): UAFC

(4)

(36)

Add (Less): Impairments, special items other charges and non-cash,

net mark-to market (gains)losses

(3,375)

Add (Less): Mainline Fresh Start Adjustments (excluding

stock based compensation)

(184)

(174)

Adjusted Mainline Expenses

10,667

10,996

Mainline available seat miles

135,861

141,890

Adjusted Mainline CASM

7.85

7.75

Year-Over-Year Change

1.3%

p. 34

Pre-Tax Margin

Twelve Months Ended

Pre-Tax Margin

Twelve Months Ended

*Includes

special

items

$44

million

and

one

time

gain

$41

million

from

ARINC

sale

and

$22

million

gain

from

early

debt

retirement.

Twelve Months Ending

4Q08

4Q07

($ in Millions)

Consolidated Operating Revenue

20,194

20,143

Less: Income from Special Items

(45)

Add: Mileage Plus Adjustments

167

Adjusted Consolidated Operating Revenue

20,361

20,129

Consolidated Pre-Tax Income/(Loss)

(5,379)

695

Less: income from special revenue item

(45)

Add (less): non-cash, net mark-to-market (gains) losses

847

(20)

Add (less): impairments, special items and other charges

2,807

(107)

Add (less): fresh start (excluding stock based compensation)

368

199

Adjusted Pre-Tax

(1,357)

722

Adjusted Margin

(6.7)%

3.6%

YOY Percentage Point Change

(10.3)

p. 35

Mainline Cost Per Available Seat Mile

Fourth Quarter 2008

Mainline Cost Per Available Seat Mile

Fourth Quarter 2008

Twelve Months Ending

4Q08

4Q07

($ and ASM in Millions; Rates in cents)

Consolidated Operating Expenses

24,632

19,106

Less: Regional Affiliates

(3,248)

(2,941)

Mainline Operating Expense

21,384

16,165

Add (Less): Mainline Fuel Expense

(excluding non-cash, net mark-to-market (gains) losses)

(7,154)

(5,023)

Add (Less): UAFC

(4)

(36)

Add (Less): Impairments, special items other charges and non-cash,

net mark-to market (gains)losses

(3,375)

Add (Less): Mainline Fresh Start Adjustments (excluding

stock based compensation)

(184)

(174)

Adjusted Mainline Expenses

10,667

10,996

Mainline available seat miles

135,861

141,890

Adjusted Mainline CASM

7.85

7.75

Year-Over-Year Change

1.3%

p. 36

Mainline Cost Per Available Seat Mile

2009 Guidance

Mainline Cost Per Available Seat Mile

2009 Guidance

(i)

as these items are unknown and cannot be predicted with certainty.

CASM also excludes the impact of future special items and other charges, including profit sharing,

2008

Operating expense per ASM -

CASM (cents) (i)

Low

High

Actual

Mainline operating expense

15.74

Less: profit sharing programs

(0.04)

Mainline excluding profit sharing programs

11.17

11.25

15.70

(28.9)

(28.3)

Less: fuel expense & cost of third party sales -

UAFC

(3.02)

(5.68)

(46.8)

Mainline excluding profit sharing, fuel & UAFC

8.15

8.23

10.02

(18.7)

(17.9)

Add (less): impairments and other charges and special items

(2.07)

Mainline excluding profit sharing, fuel, UAFC, impairments

and other charges and special items

8.15

8.23

7.95

2.5

3.5

Midpoint of Guidance

3.0

Twelve Months Ending

December 31,

% Change

2009 Estimate

YOY

United Airlines (UAL) 8-KRegulation FD Disclosure