United Airlines 2014 Annual Report Download - page 44

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Table of Contents
Credit Ratings. As of the filing date of this report, UAL and United had the following corporate credit ratings:
S&P Moody’s Fitch
UAL B B1 B
United B * B
*The credit agency does not issue corporate credit ratings for subsidiary entities.
These credit ratings are below investment grade levels. Downgrades from these rating levels, among other things, could restrict the availability or increase the
cost of future financing for the Company.

Below is a summary of additional liquidity matters. See the indicated notes to our consolidated financial statements included in Part II, Item 8 of this report
for additional details related to these and other matters affecting our liquidity and commitments.
Pension and other postretirement plans Note 8
Hedging activities Note 10
Long-term debt and debt covenants (a) Note 11
Leases and capacity purchase agreements Note 13
Commitments and contingencies Note 15
(a) Certain of the Company’s financing agreements have covenants that impose certain operating and financial restrictions, as applicable, on the Company and its material subsidiaries.
Contractual Obligations. The Company’s business is capital intensive, requiring significant amounts of capital to fund the acquisition of assets, particularly
aircraft. In the past, the Company has funded the acquisition of aircraft through outright purchase, by issuing debt, by entering into capital or operating
leases, or through vendor financings. The Company also often enters into long-term lease commitments with airports to ensure access to terminal, cargo,
maintenance and other required facilities.
The table below provides a summary of the Company’s material contractual obligations as of December 31, 2014 (in billions):
 


Long-term debt (a) $ 1.3 $1.2 $0.8 $1.3 $1.7 $ 5.2 $11.5
Capital lease obligations—principal portion 0.1 0.1 0.1 0.1 — 0.3 0.7
Total debt and capital lease obligations 1.4 1.3 0.9 1.4 1.7 5.5 12.2
Interest on debt and capital lease obligations (b) 0.7 0.6 0.5 0.3 0.3 1.1 3.5
Aircraft operating lease obligations 1.4 1.2 1.1 0.9 0.7 2.0 7.3
Regional CPAs (c) 1.9 1.8 1.7 1.3 1.0 3.4 11.1
Other operating lease obligations 1.3 1.1 1.1 0.8 0.8 7.9 13.0
Postretirement obligations (d) 0.1 0.1 0.1 0.1 0.1 0.8 1.3
Pension obligations (e) 0.1 — 0.1 0.2 0.2 1.6 2.2
Capital purchase obligations (f) 3.2 2.3 1.3 2.2 3.3 10.7 23.0
Total contractual obligations $10.1 $8.4 $6.8 $7.2 $8.1 $33.0 $73.6
(a) Long-term debt presented in the Company’s financial statements is net of a $99 million debt discount which is being amortized over the debt terms. Contractual payments are not net of the debt discount.
Contractual long-term debt includes $65 million of non-cash obligations as these debt payments are made directly to the creditor by a company that leases three aircraft from United. The creditor’s only
recourse to United is repossession of the aircraft.
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