United Airlines 2015 Annual Report Download - page 44

The table below provides a summary of the Company’s material contractual obligations as of December 31, 2015 (in billions):
    
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 
Long-term debt (a) $1.2 $0.8 $1.4 $1.8 $0.9 $ 4.9 $11.0
Capital lease obligations—principal portion 0.1 0.1 0.1 0.1 — 0.5 0.9
Total debt and capital lease obligations 1.3 0.9 1.5 1.9 0.9 5.4 11.9
Interest on debt and capital lease obligations (b) 0.6 0.5 0.4 0.3 0.3 0.9 3.0
Aircraft operating lease obligations 1.3 1.3 1.1 0.9 0.7 2.7 8.0
Regional CPAs (c) 1.8 1.9 1.6 1.3 1.2 4.8 12.6
Other operating lease obligations 1.3 1.2 0.9 0.8 0.9 6.7 11.8
Postretirement obligations (d) 0.1 0.1 0.1 0.1 0.2 0.8 1.4
Pension obligations (e) — — — — 0.4 1.6 2.0
Capital purchase obligations (f) 3.4 3.1 3.3 2.9 2.8 7.7 23.2
Total contractual obligations $9.8 $9.0 $8.9 $8.2 $7.4 $30.6 $73.9
(a) Long-term debt presented in the Company’s financial statements is net of $145 million of debt discount, premiums and debt issuance costs which are being amortized over the debt terms. Contractual
payments are not net of the debt discount, premiums and debt issuance costs. Contractual long-term debt includes $20 million of non-cash obligations as these debt payments are made directly to the
creditor by a company that leases one aircraft from United. The creditor’s only recourse to United is repossession of the aircraft.
(b) Includes interest portion of capital lease obligations of $71 million in 2016, $55 million in 2017, $45 million in 2018, $39 million in 2019, $37 million in 2020 and $309 million thereafter. Future
interest payments on variable rate debt are estimated using estimated future variable rates based on a yield curve.
(c) Represents our estimates of future minimum noncancelable commitments under our CPAs and does not include the portion of the underlying obligations for aircraft and facility rent that is disclosed as part
of aircraft and nonaircraft operating leases. Amounts also exclude a portion of United’s capital lease obligation recorded for certain of its CPAs. See Note 13 to the financial statements included in Part II,
Item 8 of this report for the significant assumptions used to estimate the payments.
(d) Amounts represent postretirement benefit payments, net of subsidy receipts, through 2025. Benefit payments approximate plan contributions as plans are substantially unfunded.
(e) Represents estimate of the minimum funding requirements as determined by government regulations for United’s material pension plans. Amounts are subject to change based on numerous assumptions,
including the performance of assets in the plan and bond rates. See Critical Accounting Policies, below, for a discussion of our current year assumptions regarding United’s pension plans.
(f) Represents contractual commitments for firm order aircraft and spare engines only and noncancelable commitments to purchase goods and services, primarily information technology support. In January
2016, UAL entered into a purchase agreement amendment with Boeing for a firm narrowbody aircraft order of 40 Boeing 737NG aircraft and the table above is adjusted to include that impact. See Note 15
to the financial statements included in Part II, Item 8 of this report for a discussion of our purchase commitments.
Off-Balance Sheet Arrangements. An off-balance sheet arrangement is any transaction, agreement or other contractual arrangement involving an
unconsolidated entity under which a company has (1) made guarantees, (2) a retained or a contingent interest in transferred assets, (3) an obligation under
derivative instruments classified as equity, or (4) any obligation arising out of a material variable interest in an unconsolidated entity that provides financing,
liquidity, market risk or credit risk support, or that engages in leasing, hedging or research and development arrangements. The Company’s primary off-
balance sheet arrangements include operating leases, which are summarized in the contractual obligations table in above, and
certain municipal bond obligations, as discussed below.
As of December 31, 2015, United had cash collateralized $70 million of letters of credit. United also had $437 million of performance bonds relating to
various real estate, customs and aircraft financing obligations at December 31, 2015. Most of the letters of credit have evergreen clauses and are expected to
be renewed on an annual basis and the performance bonds have expiration dates through 2019.
As of December 31, 2015, United is the guarantor of approximately $1.9 billion in aggregate principal amount of tax-exempt special facilities revenue bonds
and interest thereon. These bonds, issued by various airport municipalities, are payable solely from rentals paid under long-term agreements with the
respective governing
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Source: United Continental Holdings, Inc., 10-K, February 18, 2016 Powered by Morningstar® Document Research℠
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