Attn. United Haters

[furlough-boy]

The title of the WSJ article is :
UAL May Get $3 Billion in Loans As It Seeks to Leave Bankruptcy.

The article states:
The funding would allow UAL to repay a $1.3 billion

The last time I check $3 billion - $1.3 billion = $1.7 Billion. Were you home skooled? The article doesn't mention a single thing about $ 2.8 billion.

Ok genius, let me cut and paste it for you:

http://yahoo.reuters.com/financeQuo...tfh06518_2005-08-25_18-05-51_n25692647_newsml

UPDATE1-UAL reports net loss of $274 million in July
Thu Aug 25, 2005 02:05 PM ET
CHICAGO, Aug 25 (Reuters) - UAL Corp. (UALAQ.OB: Quote, Profile, Research) , parent of bankrupt United Airlines, said on Thursday its net loss was $274 million in July, including $350 million of expenses related to reorganization, and it promised to soon emerge from court protection.
The No. 2 U.S. airline said its July operating profit rose by $62 million from a year earlier, to $113 million, despite a 46 percent increase in jet fuel prices. The carrier said that excluding reorganization expenses, it would have reported a net profit of $76 million.

United has said that as it nears an exit from Chapter 11, reorganization expenses will remain high. The airline has been in bankruptcy since December 2002.

"We have received updated proposals for all-debt exit financing from four financial institutions and we expect to file our plan of reorganization and disclosure statement with the bankruptcy court very soon," said UAL Chief Financial Officer Jake Brace in a statement.

UAL ended July with a cash balance of $2.8 billion, which included $923 million in restricted cash.


So, Johnny has 2.8 apples and a 1.3 apple debt. He gets a 3 apple loan. How many apples does johnny have now if he pays off his original debt?

 

[jettypeguy]

As the old saying goes "I'll believe it when I see it..". UAL has been talking about exiting BK for years now ....The irony of it all is that no one Aspires to be a United pilot anymore and those pilots that interviewed and didn't get hired are now very happy they didn't....

 

[G4G5]

Once again genius were does the $2.8 million come up in the article I posted?

The reality is that UAL doesn't have $2.8 billion laying around either, from Dow Jones:

"The carrier's cash balance increased by $227 million in July to $2.8 billion, with $923 million restricted. It also met its lending requirements for the month."

Having a restricted $923 million is the same as saying the money is already spent.

"So, Johnny has 2.8 apples and a 1.3 apple debt. He gets a 3 apple loan. How many apples does johnny have now if he pays off his original debt?"

But Johnny's mom has already spent 1 apple ($923 million), That Johnny seems to think is his, now how many apples are left?

Now if Johnny was actually paying for his apples that would be pretty cool but making a profit after 33 months in CH11 is nothing to write home about. What happens when Johnny starts paying full price for his apples and NWA and DAL don't have to?

 

[furlough-boy]

Once again genius were does the $2.8 million come up in the article I posted?

Why does it need to be in your article for it to be true?

 

[koko nw]

Once again genius were does the $2.8 million come up in the article I posted?

The reality is that UAL doesn't have $2.8 billion laying around either, from Dow Jones:

"The carrier's cash balance increased by $227 million in July to $2.8 billion, with $923 million restricted. It also met its lending requirements for the month."

Having a restricted $923 million is the same as saying the money is already spent.

"So, Johnny has 2.8 apples and a 1.3 apple debt. He gets a 3 apple loan. How many apples does johnny have now if he pays off his original debt?"

But Johnny's mom has already spent 1 apple ($923 million), That Johnny seems to think is his, now how many apples are left?

Now if Johnny was actually paying for his apples that would be pretty cool but making a profit after 33 months in CH11 is nothing to write home about. What happens when Johnny starts paying full price for his apples and NWA and DAL don't have to?

No, it means we have to ask permission to access it. Call it a line of credit if you will, with the caveat of a "momma may I" clause before you can spend it.

By the way, hope your furlough is a short one...Really. I have many friends at AMR. Our battle is not with you.

 

[G4G5]

AMR also was able to grow its cash balance, ending the period with $3.9 billion in cash and short-term investments, including a restricted balance of $492 million.

http://news.morningstar.com/news/PR/M07/D20/1121862660469.html

Continental ended the second quarter with $2.05 billion in unrestricted cash and short-term investments.

http://news.morningstar.com/news/PR/M07/D20/1121857267003.html

Southwest ended second quarter 2005 with $2.3 billion cash on hand plus a fully available unsecured revolving credit line of $575 million

http://news.morningstar.com/news/PR/M07/D14/1121337660336.html

Still feeling warm and fuzzy with your:
"UAL ended July with a cash balance of $2.8 billion, which included $923 million in restricted cash"
AKA $1.8 billion after operating 33 months in Ch11

I can give you "true " quotes all day long, be careful the truth hurts.

 

[G4G5]

No, it means we have to ask permission to access it. Call it a line of credit if you will, with the caveat of a "momma may I" clause before you can spend it.

By the way, hope your furlough is a short one...Really. I have many friends at AMR. Our battle is not with you.

A line of credit is a nice way to put it. Bottom line, it's not your money.

Nor is my battle with you. I have friends at UAL and have no personal interest in seeing them fail.

Honestly I have little faith in UAL's current mgt team. They have shown me very little if anything that would lead me to belive that they are capable to exit CH11 and directly compete with the likes of AMR, CAL and SWA, in a $65 dollar a barrel world with NWA and DAL entering ch11 (for upto the next 3 years).

This just seems really fishy to me when all of a sudden 4 major banks come running to loan money, when last month their was no exit plan. I hope I am wrong, good luck.

 

[F9 Driver]

After bending over everybody who had good faith agreements with it (and some of our posters are proud to be bent.) Untied pulls off a small (relative to revenue) profit (after three years in CH11) in the best Q and month of the year. YEHAAAA!

When (if) UAL does come out of BK, and sells their product for more than it costs to produce everybody who doesn't work for UAL will be happy. IMHO.

Spin it anyway you like - Figures don't lie, but liers figure. (gosh I like old sayings.)

When Uncle Gordo takes over I'll take Untied seriously. Till then I'm just happy they are the only ones on B.

 

[ualdriver]

"The carrier's cash balance increased by $227 million in July to $2.8 billion, with $923 million restricted. It also met its lending requirements for the month."

Having a restricted $923 million is the same as saying the money is already spent.

"So, Johnny has 2.8 apples and a 1.3 apple debt. He gets a 3 apple loan. How many apples does johnny have now if he pays off his original debt?"

But Johnny's mom has already spent 1 apple ($923 million), That Johnny seems to think is his, now how many apples are left?

First of all, is Johnny a United employee? Because if he is, I want an apple too if he got one. It's not fair that Johnny gets an apple and I don't. Especially after I lost my pension and took this big pay cut.

UAL's restricted cash requirements (or any other airline's/company's for that matter) doesn't mean that the money is "already spent." It's money that is, from an accounting standpoint "set aside." For example off the top of my head, in Delta's 1st Quarter 10Q, when they got saved by AMEX and GE, part of the "deal" was that they couldn't let their cash balance fall below X dollars (I think X was around 1B but I don't remember and I'm too lazy to look it up again). Well, whatever X is becomes "restricted." Further, Delta just renegotiated a deal with their credit card issuers. They have to "set aside" like 600M (or something around that, I don't have the numbers in front of me) in order to protect the credit card issuers from defaulting on tickets that were paid for by its customers if DAL files or worse. That money becomes "restricted" cash. When the "restriction" is lifted for whatever reason, it becomes "unrestricted" and can be used to pay Tilton and the boys a big, fat bonus, for example. Or buy more apples. I like apples.


This just seems really fishy to me when all of a sudden 4 major banks come running to loan money, when last month their was no exit plan.

Just because YOU, ME, or anyone else on this forum didn't see an "exit plan" doesn't mean that one didn't exist. It exists, did exist, and was CONSTANTLY modified as the dynamics of this industry changed over the past 2 years. Tilton's not going to call you up on the phone G4G5 and say, "Shhh....can you keep a secret? When we exit bankruptcy, we plan on doing this, that or the other. But please don't tell anyone. We don't want our competitors to plan ahead of our future moves." Just because you didn't get to see it ever (and you probably never will nor I) doesn't mean it isn't out there somewhere, in a leather briefcase under those 4 banks' desks.

And FYI, these banks didn't come out "all of a sudden." In fact, there was a press release in February saying that they backed UAL's plan to exit bankruptcy. I think they were going to pony up something around 2B-2.5B. But now they're willing to give us 3B (assuming something catastrophic doesn't happen between now and then). So I guess one could argue that, as far as the big boys at the banks are concerned, things for UAL are looking better than they were several months ago. Go figure. I wouldn't lend UAL or any airline for that matter one dime. But our opinions just don't matter

 

[Andy]

Let's use some common sence her folks. Why all of a sudden would Citibank get involved with UAL? They underwrite AMR's FF program and have been in bed with AMR for years?

I'd have to dig through the DIP funding sources, but I'm almost positive that Citi ponied up >$500 mil in DIP financing.
So Citigroup is not all of a sudden involved with UAL; they've been loaning UAL money for a long time. As for the reason why C is there, that's very simple. To make money. And C makes money on all sorts of fees associated with these loans.