United Airlines 2012 Annual Report Download - page 141

Table of Contents
UAL had firm commitments to purchase 100 new Boeing 737 MAX 9 aircraft scheduled for delivery from 2018 through 2022.
UAL also had options to purchase an additional 100 Boeing 737 MAX 9 aircraft. UAL had the right, and intends in the future, to assign its interest under the
purchase agreement for the 737 MAX 9 aircraft with respect to one or more of the aircraft to either United or Continental.
United had firm commitments to purchase 100 new aircraft (25 Boeing 787 aircraft, 50 Boeing 737-900ER aircraft and 25
Airbus A350XWB aircraft) scheduled for delivery from 2013 through 2020. United also had options and purchase rights for additional aircraft. In 2013,
United expects to take delivery of ten Boeing 737-900ER aircraft.
 Continental had firm commitments to purchase 47 new aircraft (23 Boeing 737 aircraft and 24 Boeing 787 aircraft)
scheduled for delivery from January 1, 2013 through 2016. Continental also had options to purchase 74 Boeing aircraft. In 2013, Continental expects to take
delivery of 14 Boeing 737-900ER aircraft and two Boeing 787-8 aircraft.
As of December 31, 2012, Continental had arranged for EETC financing of 14 Boeing 737-900ER aircraft and one Boeing 787-8 aircraft scheduled for
delivery through July 2013. In addition, United had secured backstop financing commitments from its widebody aircraft and engine manufacturers for a
limited number of its future aircraft deliveries, subject to certain customary conditions. See Note 14 of this report for additional information. However, UAL
and United do not have backstop financing or any other financing currently in place for their firm narrowbody aircraft orders with Boeing, and Continental
does not have backstop financing or any other financing currently in place for its other Boeing aircraft on order. Financing will be necessary to satisfy the
Company’s capital commitments for its firm order aircraft and other related capital expenditures. The Company can provide no assurance that any financing
not already in place for aircraft and spare engine deliveries will be available to the Company on acceptable terms when necessary or at all.
As UAL has the right, and intends in the future, to assign its interest under the purchase agreement for the Boeing 737 MAX 9 aircraft with respect to one or
more of the aircraft to either United or Continental, but has not determined the actual assignment of the Boeing 737 MAX 9 aircraft between United and
Continental, the table above assumes that 50% of the Boeing 737 MAX 9 order is assigned to United and 50% of the Boeing 737 MAX 9 order is assigned to
Continental.
UAL and Continental have concluded their discussions with Boeing regarding delays in delivery of certain Boeing 787 aircraft, and have reached a resolution
with Boeing regarding compensation to be received in connection with those delays.
Credit Card Processing Agreements
The Company has agreements with financial institutions that process customer credit card transactions for the sale of air travel and other services. Under
certain of the Company’s credit card processing agreements, the financial institutions either require, or under certain circumstances have the right to require,
that the Company maintains a reserve equal to a portion of advance ticket sales that has been processed by that financial institution, but for which the
Company has not yet provided the air transportation. Such financial institutions may require additional cash or other collateral reserves to be established or
additional withholding of payments related to receivables collected if the Company does not maintain certain minimum levels of unrestricted cash, cash
equivalents and short term investments. The Company’s current level of unrestricted cash, cash equivalents and short term investments is substantially in
excess of these minimum levels.
Guarantees and Off-Balance Sheet Financing
Fuel Consortia. The Company participates in numerous fuel consortia with other air carriers at major airports to reduce the costs of fuel distribution and
storage. Interline agreements govern the rights and responsibilities of the consortia members and provide for the allocation of the overall costs to operate the
consortia based on usage. The consortia (and in limited cases, the participating carriers) have entered into long-term agreements to lease certain airport fuel
storage and distribution facilities that are typically financed through tax-exempt bonds (either special facilities lease revenue bonds or general airport revenue
bonds), issued by various local municipalities. In
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