Exhibit 99.1
Corporate Communications Contact:
Media Relations (847) 700-5538
Investor Relations Contact:
Patricia Chaplinski (847) 700-7501
UAL CORPORATION REPORTS STRONG SECOND-QUARTER RESULTS DESPITE
CHALLENGING CONDITIONS
- Earnings per share on a fully distributed basis were $3.47,
excluding two special charges.
- Strong revenue growth for the quarter offset challenges
stemming from higher fuel prices and an abnormally high rate
of operational disruptions.
- Third quarter 2000 earnings per share are expected to range
between $2.60 and $3.20.
CHICAGO, July 19, 2000 -- UAL Corporation (NYSE: UAL), the
holding company whose primary subsidiary is United Airlines,
reported second-quarter earnings today.
In accordance with Generally Accepted Accounting Principles
(GAAP), second-quarter net earnings were $374 million ($3.19 per
share) on operating earnings of $666 million, excluding two
special charges described below. These results compare to second
quarter 1999 net earnings of $244 million ($1.92 per share),
excluding an extraordinary item associated with early debt
retirement and an after-tax gain of $428 million associated with
the sale of a portion of the company's stake in Galileo
International. Second quarter 1999 operating earnings were $433
million.
On a pro forma, fully distributed basis (see below for
further explanation of the methodology), second quarter net
earnings were $408 million ($3.47 per share) on second-quarter
operating earnings of $721 million, all before the two special
charges. This compares to second quarter 1999 net earnings of
$349 million ($2.86 per share), excluding the extraordinary item
and after-tax gain, and operating earnings of $615 million.
The company recorded two special charges in the second
quarter of 2000. One was a $23 million (net of tax) non-
recurring charge associated with the planned replacement of the
inflight video system on certain Boeing 777-222 aircraft. The
other was a $15 million (net of tax) charge associated with the
early retirement of seven leased B747-238 aircraft.
Chairman's Comments
"We are pleased with our strong second-quarter results,
which came despite several
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challenges," said James E. Goodwin, UAL Corporation Chairman and
Chief Executive Officer. "The quarter's performance reflects
continued revenue strength, particularly in the United States,
and also in our international regions. These favorable revenue
results offset the effects of higher year-over-year fuel prices
as well as operational disruptions we faced in the quarter. Out
of concern for our customers, we have adjusted our schedule to
reduce the inconvenience caused by the abnormally high rate of
delays and cancellations due to unusually bad weather, air
traffic control-related difficulties and the impact of crew
issues. I want to thank our customers for their patience during
this period, as well as our frontline employees for their effort
and dedication in working to allay the effects of these
disruptions on our customers."
Second-quarter Highlights
Toward enhancing stockholder value, United continued to
develop the core airline and build on the company's other
strategic businesses during the quarter. Highlights include:
US Airways Acquisition. UAL Corporation and US Airways
Group, Inc. announced May 24 that their boards of directors
have approved a definitive merger agreement pursuant to
which US Airways will be acquired by United in an all-cash
transaction valued at $4.3 billion. The combination of
United and US Airways will deliver significant benefits to
millions of passengers and hundreds of communities
throughout the United States. The new network will make
traveling more convenient for passengers, connecting US
Airways' eastern U.S. markets with United's east-west and
international markets. The merger is conditioned upon,
among other things, the approvals of US Airways
stockholders, regulatory clearance and other customary
closing conditions.
UAL Common Stock Dividend. As part of the company's
initiatives to return cash to stockholders UAL Corporation
instituted a $0.3125 dividend on UAL common stock in the second
quarter. A second dividend of $0.3125 has been declared and is
payable on August 1 to stockholders of record July 14, 2000.
E-Commerce. United continued expanding the company's
Internet presence during the quarter. The introduction of
two new features to united.com makes planning trips
worldwide easier and faster: Customers can now print E-
ticket receipts online and download flight schedules for use
without Internet access. In addition, many of United's
international customers now have new travel booking and
purchase opportunities with the launch of online booking
capabilities through 12 new country-specific versions of the
united.com web site. Gross air bookings on united.com grew
over 130 percent over the same period last year. Total
United revenue generated over the Internet reached $204
million in the second quarter versus $80 million a year ago,
representing more than a 150 percent increase.
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Mileage Plus(R). Revenue from third-party mileage sales
reached $114 million during the second quarter, an increase
of 17 percent over the same period last year. United formed
a partnership during the quarter with Abercrombie & Kent,
the renowned upscale tour operator, offering 5,000 Mileage
Plus bonus miles on selected packages booked by the end of
the year.
More Space and Entertainment Options. Response from
United's frequent fliers to the company's new Economy Plus
product has been markedly favorable, as surveys of these
premium customers show approval for Economy Plus' five
inches of added legroom. During the quarter, United became
the first major U.S. airline to offer customers free
headsets for inflight feature viewing in all cabin classes
on U.S. domestic flights offering video programming.
Strategic Alliances. Singapore Airlines joined Star
Alliance during the second quarter. With the addition of
its 11th member, the Star Alliance network provides United
customers with service to more than 810 destinations in 130
countries worldwide. In addition, Star Alliance members
United and Air Canada launched the industry's first true
interline electronic ticketing service in June. The
service, an historic development in that it provides full
functionality on two separate reservations systems, enables
customers to use one electronic ticket to travel on the two
airlines.
Third-quarter and Full-year Year-over-year Outlook
Based on recent booking trends, the company expects
continued strong revenue growth in the third quarter, although at
levels slightly less than in the second quarter. Total unit
revenue is expected to rise between 8 percent and 10 percent.
Unit costs are expected to increase 15.1 percent, based on an
average fuel price of 79 cents per gallon. Excluding fuel, unit
costs are expected to rise 11.8 percent. The increase reflects
lower-than-planned capacity levels as well as wage increases
associated with the end of the ESOP (Employee Stock Ownership
Plan) allocation period. Based on the revenue and cost
projections, the company expects third quarter earnings per share
to range between $2.60 and $3.20.
For the full year, the company now expects fully distributed
earnings per share to range between $8.25 and $9.75, excluding
special charges.
United's second-quarter conference call will be broadcast July 19
on united.com at 9:00 a.m. ET.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: The information contained in the outlook
section of this press release is forward looking and involves
risks and uncertainties that could result in actual results
differing materially from expected results. Forward- looking
statements represent the company's expectations and beliefs
concerning future events, based on information available to the
company as of the date of this press release.
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The company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
Some factors that could significantly impact revenues, unit
revenues, unit costs, earnings per share, fully distributed
earnings per share, capacity and the results and benefits of the
pending merger between United and US Airways include, without limitation,
the airline pricing environment; industry capacity decisions;
competitors' route decisions; the inability to obtain regulatory
approvals for the United and US Airways merger; the inability to
successfully integrate the businesses of United and US Airways;
costs related to the United and US Airways merger; the inability
to achieve cost cutting synergies resulting from the United and
US Airways merger; labor integration issues; the success of the
company's cost control efforts; the cost of crude oil and jet
fuel; the success of fuel hedging strategies; the results of
union contract negotiations and their impact on labor costs;
operational disruptions as a result of bad weather, air traffic
control-related difficulties and the impact of labor issues; the
growth of e-commerce and off-tariff distribution channels; the
implementation of customer service improvement strategies;
actions of the U.S., foreign and local governments; foreign
currency exchange rate fluctuations; the Pacific economic
environment and travel patterns; the stability of the U.S.
economy; inflation; the economic environment of the airline
industry and the economic environment in general.
n.b.: While UAL Corporation reports its earnings under GAAP -
- Generally Accepted Accounting Principles -- a more complete
understanding of UAL Corporation's performance may be gained by
viewing the results on a pro forma, fully distributed basis.
This presentation considers all ESOP shares that will be issued
to employees over the course of the ESOP period to be immediately
outstanding, thus "fully distributed." Consistent with this
presentation, the "ESOP compensation expense" -- which reflects
the commitment of stock to employees -- is excluded from fully
distributed expenses and ESOP convertible preferred stock
dividends are not deducted from earnings attributable to common
stockholders. As of April 2000, all ESOP preferred shares are
considered earned and outstanding for diluted earnings per share
under GAAP. Beginning with the third quarter 2000, fully
distributed and GAAP quarterly earnings will be the same;
however, year-to-date results will continue to be reported on a
fully distributed basis in 2000 using the methodology described
above.
-UAL-
The web page address for UAL Corp. and United Airlines is
united.com
UAL CORPORATION AND SUBSIDIARY COMPANIES
EARNINGS AND EARNINGS PER SHARE (Unaudited)
-------------------------------------------
(In Millions, Except Per Share)
Three Months Ended
June 30, 2000 June 30, 1999
------------- -------------
GAAP "Fully GAAP "Fully
Basis Distributed"(1) Basis Distributed"(1)
EARNINGS
Operating revenues $5,109 $5,109 $4,541 $4,541
Operating expenses
(excluding special
charges
and ESOP (4,388) (4,388) (3,926) (3,926)
compensation expense)
ESOP compensation (55) N/A (182) N/A
expense
Special charges
(61) (61) - -
Operating earnings 605 660 433 615
Gain on sale of - - 669 669
Galileo stock
Non-operating expense
(69) (69) (50) (50)
Earnings before
income taxes,
distributions on
preferred securities
and extraordinary 536 591 1,052 1,234
item
Provision for income
taxes 199 220 379 469
Earnings before
distributions on
preferred
securities and 337 371 673 765
extraordinary item
Distributions on
preferred securities, (1) (1) (1) (1)
net
Extraordinary loss on
debt
extinguishment, net
- - (3) (3)
Net earnings 336 370 669 761
==== ==== ==== ====
Preferred stock
dividends (3) (3) (32) (2)
Earnings attributable
to common
shareholders $ 333 $ 367 $ 637 $ 759
==== ==== ==== ====
SHARES
Average common shares
assumed
outstanding 50.5 50.5 52.2 52.2
ESOP preferred shares
assumed
outstanding 65.4 65.4 56.7 67.4
Other
0.9 0.9 1.4 1.5
Total shares assumed 116.8 116.8 110.3 121.1
outstanding ==== ==== ==== ====
PER SHARE, DILUTED:
Earnings before
special charges, gain
on
sale and $3.19 $3.47 $1.92 $2.86
extraordinary item
Special charges, net (0.33) (0.33)
Gain on sale, net - - 3.88 3.43
Extraordinary item,
net - - (0.02) (0.02)
Net earnings $2.86 $3.14 $5.78 $6.27
==== ==== ==== ====
__________
See accompanying notes.
(1) "Fully distributed" earnings and earnings per share are pro
forma presentations which consider all ESOP shares which will
ultimately be released to employees by the end of the ESOP period
to be immediately outstanding. Therefore, the ESOP compensation
expense has been excluded from fully distributed earnings and
ESOP convertible preferred stock dividends have not been deducted
from earnings attributable to common shareholders. In the third
quarter 2000, Fully Distributed and GAAP earnings will be the
same.
UAL CORPORATION AND SUBSIDIARY COMPANIES
EARNINGS AND EARNINGS PER SHARE (Unaudited)
(In Millions, Except Per Share)
Six Months Ended
----------------
June 30, 2000 June 30, 1999
------------- -------------
GAAP "Fully GAAP "Fully
Basis Distributed"(1) Basis Distributed"(1)
EARNINGS
Operating revenues $9,654 $9,654 $8,702 $8,702
4 4 2 2
Operating expenses
(excluding special
charges
and ESOP (8,547) (8,547) (7,759) (7,759)
compensation expense)
ESOP compensation (147) N/A (364) N/A
expense
Special charges
(102) (102) - -
Operating earnings 858 1,00 579 943
5
Gain on sale of - - 669 669
Galileo stock
Non-operating expense
(144) (144) (72) (72)
Earnings before income
taxes, distributions
on preferred
securities,
extraordinary
item and 714 861 1,176 1,540
cumulative effect
Provision for income
taxes 265 323 423 585
Earnings before
distributions on
preferred
securities and 449 538 753 955
extraordinary item
Distributions on (3) (3) (3) (3)
preferred securities,
net
Extraordinary loss on
debt
extinguishment, - - (3) (3)
net
Cumulative effect of
accounting change, net (209) (209) - -
Net earnings 237 326 747 949
==== ==== ==== ====
Preferred stock
dividends (41) (5) (63) (5)
Earnings attributable
to common
shareholders $ 196 $ 321 $ 684 $ 944
==== ==== ==== ====
SHARES
Average common shares
assumed
outstanding 50.5 50.5 51.8 51.8
ESOP preferred shares
assumed
outstanding 65.0 65.8 55.4 67.7
Other
0.9 0.9 1.4 1.4
Total shares assumed 116.4 117.2 108.6 120.9
outstanding ==== ==== ==== ====
PER SHARE, DILUTED:
Earnings before special
charges, cumulative
effect,
gain on sale and
extraordinary item $ 4.04 $ 5.08 $ 2.38 $ 4.40
Special charges, net (0.56) (0.55) - -
Cumulative effect of
accounting
change, net (1.80) (1.79) - -
Gain on sale, net - - 3.95 3.43
Extraordinary item,
net - - (0.03) (0.02)
Net earnings
$ 1.68 $ 2.74 $ 6.30 $ 7.81
==== ==== ==== ====
__________
See accompanying notes.
(1) "Fully distributed" earnings and earnings per share are pro
forma presentations which consider all ESOP shares which will
ultimately be released to employees by the end of the ESOP period
to be immediately outstanding. Therefore, the ESOP compensation
expense has been excluded from fully distributed earnings and
ESOP convertible preferred stock dividends have not been deducted
from earnings attributable to common shareholders. In the third
quarter 2000, Fully Distributed and GAAP earnings will be the
same.
UAL CORPORATION AND SUBSIDIARY COMPANIES
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
(In Millions, Except Per Share)
(In accordance with GAAP) Three Months
Ended June 30
2000 1999 % Change
Operating revenues:
Passenger $4,567 $3,989 +14.5
Cargo 233 227
+2.6
Other operating revenues 309 -4.9
325
5,109 4,541 +12.5
Operating expenses:
Salaries and related costs 1,589 1,420 +11.9
ESOP compensation expense 55 182 -69.8
Aircraft fuel 589 420 +40.2
Commissions 252 291 -13.4
Purchased services 429 379 +13.2
Aircraft rent 223 219 +1.8
Landing fees and other rent 247 244 +1.2
Depreciation and amortization 247 213 +16.0
Special charges 61 - -
Aircraft maintenance 163 176 -7.4
Other operating expenses 649 +15.1
564
4,504 4,108 +9.6
Earnings from operations 605 +39.7
433
Other income (expense):
Interest expense (94) (91) +3.3
Interest capitalized 20 17 +17.6
Interest income 20 12 +66.7
Equity (loss) in earnings of (1) 15 -
affiliates
Gain on sale of Galileo stock - 669 -
Miscellaneous, net (14) -
(3)
(69)
619
Earnings before income taxes,
distributions on
preferred securities and 536
extraordinary item 1,052
Provision for income taxes 199 379
Earnings before distributions on
preferred
securities and extraordinary 337 673
item
Distributions on preferred (1)
securities, net of tax (1)
Earnings before extraordinary 336 672
item
Extraordinary loss on early
extinguishment
of debt, net of tax -
(3)
Net earnings $ 336 $
669
==== ====
Per share, basic:
Earnings before extraordinary $ 6.61 $
item 12.26
Extraordinary loss on debt, net
of tax - (0.05)
Net earnings $ 6.61 $12.21
===== =====
Per share, diluted:
Earnings before extraordinary $ 2.86 $
item 5.80
Extraordinary loss on debt, net
of tax - (0.02)
Net earnings $ 2.86 $
5.78
===== =====
____________________
See accompanying notes.
UAL CORPORATION AND SUBSIDIARY COMPANIES
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
(In Millions, Except Per Share)
(In accordance with GAAP) Six Months
Ended June 30
2000 1999 % Change
Operating revenues:
Passenger $8,535 $7,669 +11.3
Cargo 450 435
+3.4
Other operating revenues 669 +11.9
598
9,654 8,702 +10.9
Operating expenses:
Salaries and related costs 3,013 2,829 +6.5
ESOP compensation expense 147 364 -59.6
Aircraft fuel 1,128 815 +38.4
Commissions 501 574 -12.7
Purchased services 832 759 +9.6
Aircraft rent 444 438 +1.4
Landing fees and other rent 475 467 +1.7
Depreciation and amortization 478 424 +12.7
Special charges 102 - -
Aircraft maintenance 352 354 -0.6
Other operating expenses 1,324 1,099 +20.5
8,796 8,123 +8.3
Earnings from operations 858 +48.2
579
Other income (expense):
Interest expense (192) (184) +4.3
Interest capitalized 40 36 +11.1
Interest income 36 23 +56.5
Equity in earnings of (2) 39 -
affiliates
Gain on sale of Galileo stock - 669 -
Miscellaneous, net -
(26) 14
(144)
597
Earnings before income taxes,
distributions on preferred
securities, extraordinary item 714
and cumulative effect 1,176
Provision for income taxes 265
423
Earnings before distributions on
preferred securities,
extraordinary item and 449 753
cumulative effect
Distributions on preferred
securities, net of tax (3) (3)
Earnings before extraordinary 446 750
item and cumulative effect
Extraordinary loss on early
extinguishment
of debt, net of tax - (3)
Cumulative effect of accounting (209)
change, net of tax -
Net earnings $ 237 $ 747
===== =====
Per share, basic:
Earnings before extraordinary $ 8.02 $ 13.27
item and cumulative effect
Extraordinary loss on debt, net - (0.05)
of tax
Cumulative effect of accounting (4.14)
change, net of tax -
Net earnings $ 3.88 $ 13.22
===== =====
Per share, diluted:
Earnings before extraordinary $ 3.48 $ 6.33
item and cumulative effect
Extraordinary loss on debt, net - (0.03)
of tax
Cumulative effect of accounting (1.80)
change, net of tax -
Net earnings $ 1.68 $ 6.30
===== =====
See accompanying notes.
Consolidated Notes
(1) UAL Corporation is a holding company whose
principal subsidiary is United Air Lines, Inc.
(2) "ESOP compensation expense" represents the estimated
average fair value of ESOP convertible preferred stock
committed to be released to employees for the period,
net of amounts used to satisfy dividend requirements
for previously allocated ESOP convertible preferred
shares, under Employee Stock Ownership Plans. The
fair value of ESOP convertible preferred stock is
estimated based on the market value of UAL's common
stock. The average market price of UAL's common stock
was $58 per share during the second quarter of 2000
versus $74 per share during the 1999 second quarter.
The average price during the six-month period ending
June 30, 2000, was $57 per share versus $69 per share
for the same six-month period in 1999. The final ESOP
compensation expense was recorded in April 2000 as the
ESOP expired on April 12, 2000.
(3) Per share amounts were calculated after providing
for dividends on preferred stock, including ESOP
convertible preferred stock, of $3 million in the 2000
second quarter, $32 million in the 1999 second quarter,
$41 million in the 2000 six-month period ending June 30
and $63 million in the 1999 six-month period ending June
30. Basic per share amounts were based on weighted
average common shares outstanding. Diluted per share
amounts include potential common shares including ESOP
shares committed to be released. Average shares used in
the computations were as follows:
2000 1999
(In Millions)
Second quarter:
Basic 50.5 52.2
Diluted 116.8 110.3
Six-month period:
Basic 50.5 51.8
Diluted 116.4 108.6
(4) "Miscellaneous, net" consisted of the following:
Second Six-month
Quarter Period
2000 1999 2000 1999
Currency option foreign
exchange
gains (losses) $ $ $ $
(3) 2 (10) 16
Other foreign exchange (3) 1 4
gains (losses) (4)
Other
(7) (2) (17) (6)
$
(14) $ $ $
(3) (26) 14
==== ==== ==== ===
(5) During the first quarter of 2000, UAL changed its
method of accounting for the sale of mileage to
participating partners in the Mileage Plus program, in
accordance with Staff Accounting Bulletin No. 101,
"Revenue Recognition in Financial Statements." Under
the new accounting method, a portion of the revenue
from the sale of mileage is deferred and recognized
when the transportation is provided. Accordingly, UAL
has recorded a charge of $209 million, net of tax, for
the cumulative effect of a change in accounting
principle to reflect application of the accounting
method to prior years. This change resulted in a
reduction to revenues of approximately $x million in
the first six months of 2000 and would have impacted
the first six months of 1999 revenues by approximately
$x million. UAL anticipates full-year 2000 revenues
to be reduced by approximately $32 million as compared
to results anticipated under the previous accounting
method.
(6) Also during the first quarter, UAL recorded a
special charge of $26 million, net of tax, associated
with the write-down and losses related to subleases
on non-operating British Aerospace Advanced Turbo-
Prop aircraft previously used in the United Express
operation.
(7) During the second quarter, UAL recorded a special
charge of $15 million, net of tax, for seven leased
B747-238B aircraft that will continue to be leased
but will no longer be used for operating purposes
beginning in October 2000. In addition, United
recorded a special charge of $23 million, net of tax,
for the retirement of the inflight video system on
certain B777-222 aircraft, which is being replaced by
an enhanced and more reliable inflight video system.
(8) In June 1999, United sold 17.5 million shares of
common stock in Galileo International, Inc. ("Galileo")
in a secondary offering by Galileo for $766 million.
This transaction resulted in a pre-tax gain of
approximately $669 million.
UNITED AIR LINES, INC AND SUBSIDIARY COMPANIES
Three Months
Ended June 30
2000 1999 % Change
FINANCIAL SUMMARY (UNAUDITED)
(in millions)
Operating revenues $5,098 $4,530 +12.5
Operating expenses (excluding ESOP
compensation expense) 4,446 3,924 +13.3
ESOP compensation expense 182 -69.8
55
4,501 4,106 +9.6
Earnings from operations (in $ 597 $ 424 +40.8
accordance with GAAP)
==== ====
OPERATING STATISTICS
Revenue passengers (in thousands) 22,412 21,744 +3.1
Revenue passenger miles (in 33,328 31,193 +6.8
millions)
Available seat miles (in millions) 44,073 44,475 -0.9
Passenger load factor (percent) 75.6 70.1 +5.5
Breakeven passenger load factor
excluding
ESOP charges (percent) 64.7 59.4 +5.3
Passenger revenue per passenger mile 13.62 12.69 +7.3
(cents)
Operating revenue per available
seat mile (cents) 11.57 10.19 +13.5
Operating expenses excluding ESOP
charges per available seat mile 10.09 8.82 +14.4
(cents)
Average price per gallon of jet fuel 75.0 54.5 +37.6
(cents)
Number of aircraft in operating
fleet
at end of period 602 593
Average full-time equivalent 98.3 94.5 +4.0
employees (thousands)
Note: Revenue and expenses associated with United's
dedicated freighter operations are included in the
calculations of unit revenue and unit cost. However,
dedicated freighter operations do not increase available
seat miles, which is used as the denominator in the
calculation of unit revenue and unit cost. The inclusion
of these revenues and expenses do not have a material
effect on unit revenue and unit cost.
UNITED AIR LINES, INC AND SUBSIDIARY COMPANIES
Six Months
Ended June 30
2000 1999 % Change
FINANCIAL SUMMARY (UNAUDITED)
(in millions)
Operating revenues $9,631 $8,680 +11.0
Operating expenses (excluding ESOP
compensation expense) 8,605 7,751 +11.0
ESOP compensation expense -59.6
147 364
8,752 8,115 +7.8
Earnings from operations (in $ 879 $ 565 +55.6
accordance with GAAP)
==== ====
OPERATING STATISTICS
Revenue passengers (in thousands) 42,554 41,856 +1.7
Revenue passenger miles (in 62,342 60,336 +3.3
millions)
Available seat miles (in millions) 86,597 86,726 -0.1
Passenger load factor (percent) 72.0 69.6 +2.4
Breakeven passenger load factor
excluding
ESOP charges (percent) 63.3 61.1 +2.2
Passenger revenue per passenger mile 13.60 12.61 +7.9
(cents)
Operating revenue per available
seat mile (cents) 11.12 10.01 +11.1
Operating expenses excluding ESOP
charges per available seat mile 9.94 8.94 +11.2
(cents)
Average price per gallon of jet fuel 74.1 59.4 +24.7
(cents)
Number of aircraft in operating
fleet
at end of period 602 593
Average full-time equivalent 97.2 94.3 +3.1
employees (thousands)
Note: Revenue and expenses associated with United's dedicated
freighter operations are included in the calculations of unit
revenue and unit cost. However, dedicated freighter operations
do not increase available seat miles, which is used as the
denominator in the calculation of unit revenue and unit cost.
The inclusion of these revenues and expenses do not have a
material effect on unit revenue and unit cost.
