cgull

Did the financing occur before the merger or because of the merger?

Did CAL have the money or financing to pay for all the planes they had on order?

I was looking for the details on the financing of the CAL aircraft orders but could not find it. Maybe someone is familiar with when the financing occurred, who financed and the conditions for financing. With CAL having mortgages on essentially all aircraft and engines I was wondering how the financing occurred.

Craig


http://www.sec.gov/Archives/edgar/da.../filename1.pdf

Note 18-Commitments and Contingencies, page 120
4. We note that you have firm commitments for 91 new Boeing aircraft scheduled
Mr. Lawerence W. Kellner
Continental Airlines, Inc.
March 7, 2008
Page 3
for delivery from 2008 through 2013, with an estimated aggregate cost of $5.1 billion including related spare engines, as well as options to purchase a total of 93 additional Boeing aircraft as of December 31, 2007. Furthermore, you state that in February 2008, you reached an agreement with The Boeing Company to order additional Boeing 737 aircraft that brings your total firm commitments to 111 new aircraft, with scheduled deliveries between February 2008, and the end of 2013, and an estimated cost of $6.3 billion. We also note that you have secured financing or have access to backstop financing for approximately half of those aircraft, without backstop or any other financing currently in place for the balance of the aircraft on order. Although we understand it is industry practice to order aircraft before securing the necessary financing, in light of increasing fuel prices, reduced consumer spending due to a contracting economy, and market concerns regarding the effects of the economy on the airline industry as a whole, we believe more disclosure is warranted in addition to that already provided. Supplementally advise us and expand your disclosure in future filings regarding whether your contracts for the delivery of new aircraft are of non-cancelable nature, whether you could face claims for breach of contract if you are unable to secure the necessary financing, and what type of relief might be sought by counterparties in that event.
Other

http://secfilings.nyse.com/filing.php?ipage=6152442&DSEQ=&SEQ=5&SQDESC=SECTIO N_PAGE

"Item 1A. Risk Factors.
"In addition, we have substantial non-cancelable commitments for capital expenditures, including the acquisition of new aircraft and related spare engines. We have financing in place for three of the Boeing 737 aircraft scheduled for delivery in 2009 and have reached an agreement in principle with a bank for it to provide financing for three other Boeing 737 aircraft scheduled for delivery in 2009. Boeing has agreed to provide backstop financing for all of the additional 11 Boeing 737 aircraft scheduled for delivery through February 2010 (or 14 such additional aircraft if we fail to reach a definitive agreement for the financing described in the previous sentence), subject to customary conditions. However, we do not have backstop financing or any other financing currently in place for our other aircraft on order."