United Airlines 2012 Annual Report Download - page 52

Table of Contents
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
Hedging activities Note 13
Long-term debt Note 14
Operating leases Note 15
Regional capacity purchase agreements Note 15
Commitments and contingencies Note 17
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, UAL, United and certain of United’s subsidiaries are guarantors under the Amended Credit Facility and are required to maintain the
minimum of the following as set forth below:
Unrestricted cash balance at all times (as defined in the Amended Credit Facility) $1.0 billion
Ratio of collateral value to debt obligations (that may increase if a specified dollar value of the route collateral is released) 1.5 to 1.0
Fixed charge coverage ratio for twelve month periods measured at the end of each calendar quarter 1.5 to 1.0
Additionally, the Revolving Credit Facility requires the Company to maintain the minimum of the following as set forth below:
Unrestricted liquidity at all times (includes unrestricted cash, short term investments and any undrawn amounts under any
revolving credit facility) $3.0 billion
Ratio of appraised value of collateral to the outstanding obligations under the Revolving Credit Facility 1.67 to 1.0
Among other covenants, the indenture governing Continental’s 6.75% Senior Secured Notes due 2015 (the “Senior Notes”) requires 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 the Senior Notes declines such that
Continental no longer maintains the minimum required ratio of collateral value to debt obligations, Continental may be required to pay additional interest at the
rate of 2% per annum, provide additional collateral to secure the noteholders’ lien or repay a portion of the Senior Notes.
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