United Airlines 2009 Annual Report Download - page 60

Table of Contents
• $132 million, net of fees, from the issuance of 19.0 million shares of UAL common stock in an underwritten, public offering for a price of $7.24 per
share.
The proceeds from these transactions were partially offset by $984 million used for scheduled long-term debt and capital lease payments during 2009, as
well as $49 million used for payment of various costs associated with the financing activities discussed above.
2008 Activity
UAL used $253 million for its special distribution to common stockholders (United issued a $257 million dividend to UAL for this distribution) and $919
million for scheduled long-term debt and capital lease payments. United used cash of $109 million in connection with an amendment to its Amended Credit
Facility, as further discussed below. In 2008, the Company acquired ten aircraft that were being operated under existing leases. These aircraft were acquired
pursuant to existing lease terms. Aircraft lease deposits of $155 million provided financing cash that was primarily utilized by the Company to make the final
payments due under these lease obligations.
United completed a $241 million credit agreement secured by 26 of the Company’s currently owned and mortgaged A319 and A320 aircraft. Borrowings
under the agreement were at a variable interest rate based on LIBOR plus a margin. The agreement requires periodic principal and interest payments through its
final maturity in June 2019. The Company may not prepay the loan prior to July 2012. This agreement did not change the number of the Company’s
unencumbered aircraft as the Company used available equity in these previously owned and mortgaged aircraft as collateral for this financing.
United also entered into an $84 million loan agreement secured by three aircraft, including two Airbus A320 and one Boeing B777. Borrowings under the
agreement were at a variable interest rate based on LIBOR plus a margin. The loan requires principal and interest payments every three months and has a final
maturity in June 2015.
The Company issued 11.2 million shares of UAL common stock as part of a $200 million equity offering during 2008. As of December 31, 2008, the
Company had generated net proceeds of $107 million from this offering.
See Cash Flows from Investing Activities, above, for a discussion of the Company’s 2008 sale-leaseback transactions.
2007 Activity
In 2007, the Company made a $1.0 billion prepayment on its Amended Credit Facility and made $1.1 billion of additional debt payments, which included
$590 million related to the early retirement of debt. The Company prepaid an additional $500 million of the Amended Credit Facility in December 2007. In
addition, the Company completed a $694 million debt issuance, which effectively refinanced the aforementioned early debt retirement and refinanced three
aircraft that had been previously financed through operating lease agreements.
In 2007, the Company completed financing transactions totaling approximately $964 million which included $694 million related to the EETC secured
financing and $270 million of Denver Bonds. A portion of the proceeds of the $694 million EETC transaction was used to repay $590 million of debt obligations
that were secured by ten previously mortgaged, owned aircraft and to finance three previously unencumbered owned aircraft. The proceeds from the Denver
Bonds were used to refinance the former $261 million of Denver Series 1992A bonds.
In 2007, cash from aircraft lease deposits increased $80 million primarily due to the use of the deposits to purchase the three previously leased assets
described above in Cash Flows from Investing Activities. This was reported as a financing cash inflow as the prepayment of the initial deposits were recorded as a
financing cash outflow.
56