United Airlines 2012 Annual Report Download - page 134

Table of Contents
The Company’s debt and associated collateral and cross default provisions are summarized in the tables below:
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Revolving Credit Facility Secured by take-off and landing slots of United and Continental at Newark Liberty, LaGuardia and
Washington Reagan and certain of their other assets. The 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 at all times. The
facility contains events of default customary for this type of financing, including a cross default and cross
acceleration provision to certain other material indebtedness of UAL, United and Continental.
Amended Credit Facility Secured by certain of United’s international route authorities, international slots and related gate interests and
associated rights. The international routes include the Pacific (including China and Hong Kong, but excluding
Japan) and London Heathrow routes.
The Amended Credit Facility contains covenants, that among other things, restrict the ability of United and the
guarantors under the facility to sell assets, incur additional indebtedness, make investments, pay dividends on
or repurchase stock, or merge with other companies. UAL and United must also maintain a specified minimum
1.5 to 1.0 ratio of EBITDAR to the sum of the following fixed charges for all applicable periods: (a) cash
interest expense and (b) cash aircraft operating rental expense. The Amended Credit Facility also requires
compliance with the following financial covenants: (i) a minimum unrestricted cash balance of $1.0 billion at
all times, and (ii) a minimum collateral ratio. The facility contains events of default customary for this type of
financing, including a cross default and cross acceleration provision to certain other material indebtedness of
UAL and the guarantors under the facility.
New PBGC Notes The amended and restated indenture for these notes, which are unsecured, contains covenants that, among other
things, restrict the ability of UAL and its subsidiaries to incur additional indebtedness and pay dividends on or
repurchase stock.
These covenants cease to be in effect when the indenture covering the Senior Notes is discharged. However, if
UAL at that time or thereafter has a series of public debt securities with a principal amount of $300 million or
more that has the benefit of covenants that are substantially similar to those contained in the indenture for the
New PBGC Notes, then subject to certain conditions and upon written request of the PBGC to UAL, UAL and
United will use commercially reasonable efforts to amend the indenture for the New PBGC Notes to include
such covenants.
Continental EETCs Secured by Spare
Parts Inventory
Continental has a collateral maintenance agreement requiring it, among other things, to maintain a loan-to-
collateral value ratio of not greater than 45% with respect to the senior series of equipment notes and a loan-to-
collateral value ratio of not greater than 75% with respect to both series of notes combined. Continental must
also maintain a certain level of rotable components within the spare parts collateral pool.
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