Guesstimate?
 

Any wags on profit percentage for this year?

12.3% of 2016 regular earnings is my guess. Slightly less then last year. YTD pretax - no special items we are trakimg a 100M ahead I believe. Remember we started paying income taxes this year so post tax - net earnings way down, but pretax excluding special items almost the same so far first three quarters.

its going to be HUUUGGGEEE!

Believe me. Everybody's talking about it. Repeal and replace. Wall. Lock her up!

8%. 10% at best. We're not doing nearly as well as last year.

Actually first three quarters YTD on a Pre Tax basis we are I believe 100M ahead. Now on a Net profit basis we are way down but that's because all of our loss write offs have been used up and we are paying income tax which we haven't in some time. Hopefully we will continue to track on course on the 4th quarter.

Remember per the UPA our profits sharing is calculated on a pre tax earnings and excludes any special items.

Got it, however Q3 profit was a fraction of last years and per the SEC filing there was close the $70m less in the PS pool YOY.

Good point. Not sure if any other employee group changed profit sharing calculations in 2016 vs 2015, any one know?

The mechanics will be the same this time at 15% basis (got 13% of gross last time) , but for the PS check in Feb 2018 it will be reduced to 5% / 10%

I spent some time reviewing the UPA profit sharing section (language below) and reviewing 2016 & 2015 UAL income statements. Please someone correct me if my math or assumptions are wrong.

As I mentioned previously the biggest difference between 2016 & 2015 is UAL has paid aproximately 35% in income taxes in 2016 and basically none in 2015. But again per UPA pilot profit sharing calculations are based on Pre Tax earnings and excluding special items.

UPA

3-H Profit Sharing 3-H-1 Pilots shall participate in the Company profit sharing plan.

3-H-2 For profit-sharing based on the years 2012 and 2013, the Company profit sharing plan shall be funded with fifteen percent (15%) of pre-tax profit.

3-H-3 For profit-sharing based on the years 2014 and beyond, the Company profit sharing plan shall be funded with ten percent (10%) of pre-tax profit up to a pre-tax margin of six and nine-tenths percent (6.9%) plus twenty percent (20%) of pre-tax profit in excess of a pre-tax margin of six and nine-tenths percent (6.9%).

3-H-4 Special and unusual items shall be excluded from pre-tax profit when making the calculations in Sections 3-H-2 and 3-H-3.


From UAL Income Statements 2016 & 2015 from the Income before Taxes line item.


2016

1Q 494M


2Q 931M


3Q 1,510B.


4Q TBT.





2015

1Q. 511M


2Q. 1,197B


3Q. 1,606B


4Q. 905B

First three quarters YTD. 2,935B (2016) & 3,314B (2015)

I was off on my previous postings but not by that much. YTD we are 379M below 2015 PreTax profits. So I'd guess around 11.5 to 12 percent if we don't blow the 4Q.

Again if I'm missing something please correct me.

Q2 2016 had special charges of $434 mil which brings the number up to $1.3 bil.

We are ahead of last year.


http://i927.photobucket.com/albums/a...squl0mr2t.jpeg

Good catch, thanks.

How much of this years is over the 6.9% margin that triggers the 20%? That's where we make our real money.

I'm going for $15%. I signed a check for a pool and I need that much to cover it. If not, I have a Cousin who might have to make a pickup in his RV so we can renogitate our profit sharing bonus!

New LOA is out. PS has been traded for a year subscription to the Jelly of the Month Club.

Not sure, but we are slightly ahead on profit and expectations for Q4 are for more of the same. In addition, revenue is down a tiny bit so the percentages should be ever so slightly higher than last year. My personal guess is that this year's profit sharing will be ever so slightly higher than last year's percentage. If I remember correctly, last year's PS was 13% so I'll take a SWAG here and say PS payout in 2017 will be 14% of your 2016 W2 wages.

Of course, as always, should any member of your team be caught or killed, we will disavow any knowledge of said SWAG, and furthermore one should never put a down payment on a new boat based on the SWAG of some internet kook :D

Not quite true.

We are accounting for taxes but not actually paying them. No cash out the door. And we still have NOL's on the book in the several billion$$ range.


From the October investor update:

http://ir.united.com/~/media/Files/U...ate-101116.pdf

Quote:
Originally Posted by Boeing Aviator View Post
Actually first three quarters YTD on a Pre Tax basis we are I believe 100M ahead. Now on a Net profit basis we are way down but that's because all of our loss write offs have been used up and we are paying income tax which we haven't in some time. Hopefully we will continue to track on course on the 4th quarter.

Remember per the UPA our profits sharing is calculated on a pre tax earnings and excludes any special items.
Not quite true.

We are accounting for taxes but not actually paying them. No cash out the door. And we still have NOL's on the book in the several billion$$ range.


From the October investor update:

http://ir.united.com/~/media/Files/U...ate-101116.pdf

Quote:
Taxes: The Company expects a tax rate of approximately 36% for the third quarter of 2016. However, the Company expects that there will be no material cash taxes due to United’s net operating loss carryforwards (NOLs), which were approximately $8 billion as of year- end 2015. These NOLs are projected to offset (or minimize) cash income taxes for several years.


So he does this affect the pilot profit sharing pool? Good, bad or indifferent? Sorry but was a engineering major.

The gift that keeps on giving!

http://i927.photobucket.com/albums/a...squl0mr2t.jpeg[/QUOTE]


I don't think it matters for profit sharing caluations whether it's actual cash or not. For purposes of our profit sharing calculations per the UPA it's based on pretax income excluding any special items.

So the only relevance to us on the income statement is the line item above stating - income before income taxes. Not the Net income two lines below. Then adding in any special items. In this example special charges (note 10) 434M is added to the 931M income before income taxes figure. So in this example 1,365B is the number used for calculating pilot profit sharing for the 2nd Quarter 2016.

I've gone back and looked at pretax numbers plus added back any special items for the first three quarters of both 2016 & 2015 and I stand by my original statement. Through the 3rd quarter for profit sharing calculations we are 100M head this year vs last year.

Concur with above. We are about $100 million ahead of last year. Through nine months ending 30 September 2015 United earned $3.509B excluding special items. The same figure for 2016 is $3.604B. The pretext margin excluding special items for 2015 through nine months was 12.3% and for 2016 is 13.1%. That means we are $100 million ahead of last year and our overall margin is 80 basis points ahead.

Fellas, I think Boeing Aviator is correct.
You have to add the special charges (and the associated tax benefit for those special charges) back in with the PS pool from the SEC filing. If you look at the 3Q2016 report and compare to 3Q2015, you will see that in the nine months of 2016 UAL reported(in mil):

3Q2016
$2935 (income before taxes)
$506 (PS expenses page 11)
$669 (special charges-page 5)
$241 (Special charges tax benefit- page 8).
Total- $4351
Revenues- $27,504
Margin- 15.8%

On the same pages and same lines for 2015 you see:
3Q2015
$3314 (income before taxes)
$545 (PS expenses)
$195 (special charges-page 5)
$0 (Special charges tax benefit- page 8)
Total- $4054
Revenue- $28,828
Margin- 14.06%

With that I'm showing us $297 ahead with a slightly higher margin...on paper...but wait there's more.

Now look at the 4Q2015 annual numbers to see what we need for this current quarter:

$4219 (income before taxes)
$1035 PS and adjustments ($698-PS expenses, $326-special charges, $11-Special charges tax benefit)
Total- $5254
Revenues- $37,864
Margin- 13.9%

Now reference the link to see how the company calculates it all and start substituting the numbers where appropriate.
https://flyingtogether.ual.com/web/content.jsp?SID=FlyingTogether_HR&path=/documents/Comp/25524_Infographic_v16_10-20.pdf

...but wait there's still more.
The denominator is a moving target unknown to us. The 2015 numbers show $6061 for UAL wide employee considered earnings. Who knows what that will be is year. I can think of these factors affecting the denominator:
1) All employee groups have gotten a pay raise and make more money
2) Level 3-4 salary grade employees are NOT participating for 2016 (See Profit Sharing FAQs from last year)
2a) does anyone know what a salary 3-4 is and how many we have?
3) Lots of high paying senior positions leaving and lower paying new hires coming in (and not eligible in 1st year)
3a) I still a slight uptick is salary and related costs showing on 3Q16 filing...roughly 6-9%
4) we just reduced CAPEX....when will we see the associated expense reduction? Lower expenses would make more profit...right?

I think in the 2016 annual report, when compared to 2015, we will see lower revenues, lower operating expenses, slightly lower PTIX, higher special charges all creating a higher margin in 2016. I think overall eligible employee earnings will be up and therefore I'm mailing in a solid 12.9% payout percentage for those who care.

Anyway, I'm not an expert but I did stay at a Holiday Inn last night.

You must be related to the most interesting man in the world, no??

Ahh, we must learn to enjoy the good times :D


I, for one, am trying not to dig too deep into the numbers for fear of "jinxing" the outcome, but I love to bet so in that sentiment:

I bet you $1 cagilllion monopoly dollars that the UAL pilot profit sharing payout percentage will be closer to 14% than it is to 13%.

What say you my good man?? Do we have a bet?? Can you stomach $1 cagillion???

signed this 8th day of December in the year of Our Lord 2016,

2 Sunny in New York

You're on ol' boy. I see your cagillion and raise you a trigillion

My Rosie numbers go as high as 14.2% based upon our downward trend in Operating and Non-Operating expenses and "no real increase" in employee considered earnings.

My Realistic numbers go as high as 13.4% if I factor in higher employee earnings.

My cup half full numbers as low as 6.9%....but I've already mailed in my 12.9%

Either way, better save it for a rainy day regardless what the % is. Storms-a-looming on the horizon.

Viperhawkdriver: There was so much math there my head nearly exploded but thanks for reducing it all to a 3rd grade math level so even I can understand it.

I don't think it matters for profit sharing caluations whether it's actual cash or not. For purposes of our profit sharing calculations per the UPA it's based on pretax income excluding any special items.

So the only relevance to us on the income statement is the line item above stating - income before income taxes. Not the Net income two lines below. Then adding in any special items. In this example special charges (note 10) 434M is added to the 931M income before income taxes figure. So in this example 1,365B is the number used for calculating pilot profit sharing for the 2nd Quarter 2016.

I've gone back and looked at pretax numbers plus added back any special items for the first three quarters of both 2016 & 2015 and I stand by my original statement. Through the 3rd quarter for profit sharing calculations we are 100M head this year vs last year.[/QUOTE]

I wasn't disputing your +100 million estimation. Just pointing out some of your facts were wrong regarding the NOL's and paying income taxes.

Looking at the Investor Relations section of United.com, I could find no information on the pre-tax margin for Q1 or Q2. However, pre-tax margin for Q3 2016 was 15.7% per the company's own earning release. The company is not consistent in the information they put in their easy-to-read statements on the IR site.

Per the November operational and metrics release yesterday:

CHICAGO, Dec. 8, 2016 /PRNewswire/ -- United Airlines (UAL) today reported November 2016 operational results.

UAL's November 2016 consolidated traffic (revenue passenger miles) increased 1.7 percent and consolidated capacity (available seat miles) increased 1.6 percent versus November 2015. UAL's November 2016 consolidated load factor increased 0.1 points compared to November 2015.

For the month of November, UAL had the fewest cancelations of any month in the company's history. Additionally, during the Thanksgiving travel period, the company had its best consolidated Thanksgiving on-time arrival performance in its history.

The company now expects fourth-quarter 2016 consolidated passenger unit revenue to decline 3.0 to 4.0 percent compared to the fourth quarter of 2015. The improvement from prior guidance is due to stronger than expected bookings during the second half of the quarter.

On Dec. 5, 2016, UAL technicians and related employees ratified a new contract. The impact from this newly ratified agreement is expected to increase fourth-quarter 2016 consolidated unit cost per available seat mile (CASM) excluding fuel, profit sharing and third-party expenses by approximately 0.5 points. Despite this additional expense in the quarter, the company now expects fourth-quarter 2016 CASM excluding fuel, profit sharing and third-party expenses to increase 4.0 to 4.5 percent compared to the fourth quarter of 2015. The revised guidance is better than original expectations due to certain benefits-related expenses expected to end the year lower than initially anticipated.

The company now expects fourth-quarter 2016 pre-tax margin to be between 7.5 and 8.5 percent.

Why they aren't consistent in the stating it who knows. But from the preliminary updates (released after the quarter closed but before "official" earning announcements so it should be close to accurate.)

Q1 2016 estimate was 8-8.5%. (http://ir.united.com/~/media/Files/U...date-final.pdf)

Q2 estimate was 14-14.5% (http://ir.united.com/~/media/Files/U...tor-update.pdf)

Q3 estimate was 15.5-16% Form 8-K