United Airlines News
United Receives Lender Approval for Credit Facility Amendment
"This amendment gives us the flexibility to implement the significant actions we are taking to combat higher fuel costs including reducing capacity, creating new streams of revenue and lowering our costs," said
After the May amendment, the company is required to comply with the following financial covenants:
The company must maintain a specified minimum ratio of EBITDAR to the sum of the following fixed charges for all applicable periods: (a) cash interest expense and (b) cash aircraft operating rental expense. EBITDAR represents earnings before interest expense net of interest income, income taxes, depreciation, amortization, aircraft rent and certain cash and non-cash charges as further defined by the Credit Facility.
The requirement to meet the above fixed charge coverage ratio is suspended for four quarters, beginning with the second quarter of 2008, and ending with the first quarter of 2009. Starting with the second quarter of 2009, the ratio will be determined as set forth below:
Number of Preceding Required Months Covered Period Ending Coverage Ratio Three June 30, 2009 1.0 to 1.0 Six September 30, 2009 1.1 to 1.0 Nine December 31, 2009 1.2 to 1.0 Twelve March 31, 2010 1.3 to 1.0 Twelve June 30, 2010 1.4 to 1.0 Twelve September 30, 2010 1.5 to 1.0 (and each quarter ending thereafter)
The company must also maintain a minimum unrestricted cash balance of
All other provisions of the Credit Facility remain unchanged.
These amendments will provide United with more financial flexibility as it implements its action plan to combat high fuel costs.
As of
About United
United Airlines (Nasdaq: UAUA) operates more than 3,200* flights a day on United, United Express and Ted to more than 200 U.S. domestic and international destinations from its hubs in
* Based on United's flight schedule between Jan. 1, 2008 and Dec. 31, 2008.
The information included in this press release contains certain statements that are "Forward-Looking Statements" within the meaning of 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 2006 and other subsequent Company reports filed with the United States Securities and Exchange Commission. Persons reviewing this press release are cautioned that the Forward-Looking Statements speak only as of the date made and are not guarantees of future performance. The Company undertakes no obligation to update any Forward-Looking Statements.
SOURCE UAL Corporation
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