United Airlines 2007 Annual Report Download - page 171
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Exhibit 12.2
United Air Lines, Inc. and Subsidiary Companies
Computation of Ratio of Earnings to Fixed Charges
and Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements
Successor
Predecessor
(In millions)
2007
Period from
February 1 to
December 31,
2006
Period from
January 1 to
January 31,
2006
2005
2004
2003
Earnings (losses):
Earnings (loss) before income taxes &
adjustments for minority interest
and equity earnings/(losses) in affiliates $ 696 $ 62 $ 22,620 $ (21,038) $ (1,682) $ (2,772)
Add (deduct):
Fixed charges, from below 895 1,053 64 786 620 654
Distributed earnings of affiliates 3 4 — 3 2 2
Amortization of capitalized interest 1 — 1 14 16 17
Minority interest (2) (4) — — — —
Interest capitalized (19) (15) — 3 (1) (3)
Earnings (loss) as adjusted $ 1,574 $ 1,100 $ 22,685 $ (20,232) $ (1,045) $ (2,102)
Fixed charges:
Interest expensed and capitalized and
amortization of debt discounts and
issuance costs(a) $ 660 $ 729 $ 42 $ 495 $ 462 $ 538
Portion of rental expense
representative of the interest factor 235 324 22 291 158 116
Fixed charges, as above 895 1,053 64 786 620 654
Preferred stock dividend requirements
(pre-tax)(b) 18 18 — — — —
Fixed charges including preferred
stock dividends $ 913 $ 1,071 $ 64 $ 786 $ 620 $ 654
Ratio of earnings to fixed charges 1.76 1.05 354.45 (c) (c) (c)
Ratio of earnings to fixed charges and
preferred dividend requirements 1.72 1.03 (b) (b) (b) (b)
(a)
Amortization of debt discounts includes amortization of fresh-start valuation discounts.
(b)
Successor Company dividends were adjusted using 2007 and 2006 effective tax rates of approximately 43% and 50%, respectively. Preferred dividend
requirements were nonexistent for the Predecessor Company as push down accounting was not applied prior to the adoption of fresh-start reporting.
(c)
Earnings were inadequate to cover fixed charges by $21.0 billion in 2005, $1.7 billion in 2004 and $2.8 billion in 2003.
Source: UNITED AIR LINES INC, 10-K, February 29, 2008