United Airlines 2012 Annual Report Download - page 27

Table of Contents
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United’s and Continental’s principal facilities relate to leases of airport facilities, gates, hangar sites, terminal buildings and other facilities in most of the
municipalities they serve with their most significant leases at airport hub locations. United has major terminal facility leases at SFO, Washington Dulles,
Chicago O’Hare, LAX and Denver with expiration dates ranging from 2014 to 2025. Continental has major facility leases at Newark Liberty, Houston Bush,
Cleveland Hopkins and Guam with expiration dates ranging from 2013 through 2041. Substantially all of these facilities are leased on a net-rental basis,
resulting in the Company’s responsibility for maintenance, insurance and other facility-related expenses and services.
United and Continental also maintain administrative offices, terminal, catering, cargo and other airport facilities, training facilities, maintenance facilities and
other facilities to support operations in the cities served. United also has multiple leases, which expire from 2022 through 2028 and include approximately
1,100,000 square feet of office space for its corporate headquarters and operations center in downtown Chicago. Continental also leases approximately 511,000
square feet of office and related space for certain administrative offices and for a former operations center in downtown Houston.
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Brazil Air Cargo Investigation
In April 2008, Brazilian antitrust authorities initiated an administrative proceeding in order to verify the existence of a cartel among certain airlines for the
determination and implementation of a fuel surcharge, including United and its cargo manager. On January 4, 2010, the Economic Law Secretariat of Brazil
issued its opinion recommending that civil penalties be assessed against all parties being investigated, including United, to the Administrative Counsel of
Economic Defense (“CADE”), which is charged with making a determination on the matter. On August 30, 2011, the Brazil Federal Public Prosecutor issued
an opinion to CADE recommending the dismissal of the proceedings against United and its cargo manager, which is currently under consideration by CADE.
United continues to vigorously defend itself before CADE.
United is currently cooperating with CADE’s investigation and continues to analyze whether any potential liability may result. Based on its evaluation of all
information currently available, United has determined that no reserve for potential liability is required and will continue to defend itself against all allegations
that it was aware of or participated in cartel activities. However, penalties for violation of competition laws can be substantial and an ultimate finding that
United engaged in improper activity could have a material adverse impact on the Company’s consolidated financial position and results of operations.
United Injunction Against ALPA and Four Individual Defendants for Unlawful Slowdown Activity under the Railway Labor Act
On July 30, 2008, United filed a lawsuit in the United States Federal Court for the Northern District of Illinois seeking a preliminary injunction against ALPA
and four individual pilot employees for unlawful concerted activity that was disrupting the Company’s operations. The court granted the preliminary
injunction to United in November 2008, which was upheld by the U.S. Court of Appeals for the Seventh Circuit. ALPA and United reached an agreement to
discontinue the ongoing litigation over United’s motion for a permanent injunction and, instead, the preliminary injunction remained in effect until the
conclusion of the ongoing bargaining process for an amended collective bargaining agreement that began on April 9, 2009. On December 15, 2012, the pilots
ratified a new collective bargaining agreement and, on December 28, 2012, the district court vacated the preliminary injunction and the underlying case was
dismissed with prejudice.
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