United Airlines 2012 Annual Report Download - page 56

Table of Contents
Fuel Consortia. The Company participates in numerous fuel consortia with other 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 general, each consortium lease agreement requires the consortium to make lease payments in amounts
sufficient to pay the maturing principal and interest payments on the bonds. As of December 31, 2012, approximately $1.3 billion principal amount of such
bonds were secured by significant fuel facility leases in which UAL participates, as to which UAL and each of the signatory airlines have provided indirect
guarantees of the debt. As of December 31, 2012, UAL’s contingent exposure was approximately $259 million principal amount of such bonds based on its
recent consortia participation. As of December 31, 2012, United’s and Continental’s contingent exposure related to these bonds, based on its recent consortia
participation, was approximately $198 million and $61 million, respectively. The Company’s contingent exposure could increase if the participation of other
air carriers decreases. The guarantees will expire when the tax-exempt bonds are paid in full, which range from 2014 to 2041. The Company did not record a
liability at the time these indirect guarantees were made.
United and Continental - Cash Flows Activities - 2012 Compared to 2011
United
Operating Activities
United’s cash from operating activities decreased by $556 million in 2012 as compared to 2011. This year-over-year decrease was primarily due to United’s
net income being $1.5 billion lower in 2012 than 2011 which was largely offset by an increase in advance ticket sales and receivables.
Investing Activities
United’s capital expenditures, including aircraft purchase deposits, were $791 million and $470 million in 2012 and 2011, respectively. United’s capital
expenditures in 2012 related to upgrades to existing aircraft in addition to asset improvements to facilities and other ground equipment.
Financing Activities
United’s significant financing activities in 2012 and 2011 are described in the above discussion of UAL’s financing activities in 
 and Note 14 to the financial statements in Item 8 of this report.
Continental
Operating Activities
Continental’s cash from operating activities decreased by $920 million in 2012 as compared to the 2011 period. This year-over-year decrease was primarily
due to a decrease in receivables and advance ticket sales.
Investing Activities
Continental’s capital expenditures, including aircraft purchase deposits, were $1.2 billion and $370 million in 2012 and 2011, respectively. Consistent with
UAL’s investing activities above, Continental’s capital expenditures in 2012 relate to the purchase of new Boeing aircraft and other fleet-related expenditures to
improve the onboard experience of our existing aircraft.
Financing Activities
Continental’s significant financing activities in 2012 and 2011 are described in the above discussion of UAL’s financing activities in 
 and Note 14 to the financial statements in Item 8 of this report.
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