United Airlines 2010 Annual Report Download - page 59

Cash Flows from Financing Activities.
Significant financing events in 2010 were as follows:
• In January 2010, United issued $500 million of 9.875% Senior Secured Notes due 2013 and $200
million of 12.0% Senior Second Lien Notes due 2013, which are secured by United’s route authority to
operate between the United States and Japan and beyond Japan to points in other countries, certain
airport takeoff and landing slots and airport gate leaseholds utilized in connection with these routes.
• In January 2010, United issued the remaining $1.3 billion in principal amount of the equipment notes
relating to the Series 2009-1 and 2009-2 EETCs. Issuance proceeds of approximately $1.1 billion were
used to repay the Series 2000-2 and 2001-1 EETCs and the remaining proceeds were used for general
corporate purposes.
• In December 2010, Continental issued approximately $427 million of Class A and Class B pass-
through certificates through two pass-through trusts. In December 2010, using proceeds from the
issuance of the pass-through certificates, Continental issued equipment notes relating to five currently
owned aircraft, resulting in proceeds of approximately $90 million to be used for general corporate
purposes. Also in December 2010, Continental issued equipment notes resulting in $98 million of
proceeds that were used to purchase three new Boeing 737 aircraft. The proceeds used to purchase the
three new Boeing 737 aircraft were accounted for as a noncash investing and financing activity. In
2011, Continental expects to receive $239 million in net proceeds from the issuance of equipment
notes, of which $142 million relates to seven currently owned aircraft and will be used for general
corporate purposes, and of which $97 million will be used to acquire three additional new Boeing 737
aircraft.
• In 2010, United acquired six aircraft through the exercise of its lease purchase options. Aircraft lease
deposits of $236 million provided financing cash that was primarily utilized by United to make the
final payments due under these capital lease obligations.
Significant financing events in 2009 for UAL and United were as follows:
• $322 million from multiple financings by United that are secured by certain aircraft spare parts, aircraft
and spare engines;
• $345 million from UAL’s issuance of 6% Senior Convertible Notes due 2029 (the “6% Senior
Convertible Notes”);
• $161 million from United’s partial issuance of equipment notes related to the Series 2009-1 and Series
2009-2 EETCs described above in 2010 financing activities; and
• $222 million in net proceeds from the issuance of UAL common stock, consisting of $90 million from
the completion of UAL’s equity offering program that began in 2008 and $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 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, United 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 United to make the final payments due under these lease obligations.
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