United Airlines 2011 Annual Report Download - page 52

Table of Contents
• $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 such transactions.
For additional information regarding these matters and other liquidity events, see Notes 5, 14 and 15 to the financial statements in Item 8 of this report.
Credit Ratings. As of the filing date of this report, UAL, United and Continental had the following corporate credit ratings:
S&P
Moody’
s Fitch
UAL B B2 B
United B B2 B
Continental B B2 B
These credit ratings are below investment grade levels. Downgrades from these rating levels, among other things, could restrict the availability and/or increase
the cost of future financing for the Company.
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Below is a summary of additional liquidity matters. See the indicated notes to our consolidated financial statements contained in Item 8 of this report for
additional details related to these and other matters affecting our liquidity and commitments.
Pension and other postretirement benefit obligations Note 9
Investment in student loan-related auction rate securities Note 12
Fuel hedges Note 13
Long-term debt and related covenants Note 14
Operating leases Note 15
Regional capacity purchase agreements Note 15
Guarantees and indemnifications, credit card processing agreements, and environmental liabilities Note 17
Debt Covenants. Certain of the Company’s financing agreements have covenants that impose certain operating and financial restrictions, as applicable, on
the Company, on United and its material subsidiaries, or on Continental and its subsidiaries. Among other covenants, the Amended Credit Facility requires
UAL, United and certain of United’s material subsidiaries who are guarantors under the Amended Credit Facility to maintain a minimum unrestricted cash
balance (as defined in the Amended Credit Facility) of $1.0 billion at all times; a minimum ratio of collateral value to debt obligations (that may increase if a
specified dollar value of the route collateral is released); and a minimum fixed charge coverage ratio of 1.5 to 1.0 for twelve month periods measured at the end
of each calendar quarter. The Revolving Credit Facility requires the Company to maintain at least $3.0 billion of unrestricted liquidity at all times, which
includes unrestricted cash, short term investments and any undrawn amounts under any revolving credit facility, and to maintain a minimum ratio of
appraised value of collateral to the outstanding obligations under the Revolving Credit Facility of 1.67 to 1.0. Among other covenants, the indentures governing
the Senior Notes require the issuer to maintain a minimum ratio of collateral value to debt obligations as of certain reference periods. If the value of the collateral
underlying that issuer’s Senior Notes declines such that the issuer no longer maintains the minimum required ratio of collateral value to
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