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SEC to Kellner, "Wheres the financing for AC"

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SEC to Kellner, "Wheres the financing for AC"

Old 12-18-2012, 07:52 AM
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Default SEC to Kellner, "Wheres the financing for AC"

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.
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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."

http://yahoo.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHtmlSection1?SectionID=636 7276-52851-75022&SessionID=pLGJH6ACwIM68z7

"Continental’s total Debt and Capital Leases balance at year end 2008 was $5.9 billion of which $5.7 billion was debt.

As of January 28, 2009, scheduled debt and capital lease payments for the full year 2009 are estimated to be $536 million, with approximately $93 million, $46 million, $339 million and $58 million to be paid in the first, second, third and fourth quarters of 2009, respectively. "

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Old 12-18-2012, 07:59 AM
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What you are doing is the online equivalent of pi$$ing into the wind.
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Old 12-18-2012, 08:06 AM
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Default Tit for tat. We could do this all day.

How about we focus on our current failed management instead of past ones.

Chicago Business, July 2009, United Airlines will be part of industry consolidation one way or another

United Airlines continues to be a troubled company. The Chicago-based airline stock is trading at levels indicating bankruptcy may once again be likely. With air travel down due to the economic recession United Airlines finds itself in danger of running out of cash. Cash is exactly what United needs right now with reports of more than $1.5 billion in debt due early next year. According to analyst Bill Warlick of Fitch Ratings Inc., "They could be in a position where they are in danger of running out of cash." Some experts are publicly stating that United Airlines can survive until the middle of next year [that would be just about when the merger was announced] unless the economy drastically improves.

So United Airlines is on a trek to failure unless dramatic changes are made. If the economy takes off and business travel rises to previous levels and fuel prices do not rise substantially United will be okay. If this does not happen as described they won’t be okay. So with the economic situation of today, United needs a strategy to solve their core issues assuming there will be no economic recovery. The drastic changes that are required for United Airlines to move beyond their current woes is to bring in new leadership that is capable of orchestrating a merger and relieving the company from its excessive debt burden.

United Airlines needs to face the reality that Tilton is not the right CEO for the company. In fact, he may have been the right leader to be at the helm during 2007 when oil prices surged and jet fuel reached historic levels, but when his level of expertise was most crucially needed he failed the company. Being a former oil man, Tilton should have better handled the commodity issues of 2007. He should have had a strategy to hedge oil futures to protect the company from the dynamic shifts in the market. This was Tilton’s initial strategic failure and it is still hindering the company today.

According to Mo Garfinkile, CEO of Virginia-based GCW Consulting LLC, who has advised Mr.Tilton and United "the game plan now is to survive." Now the company is possibly headed once again into bankruptcy and seems to be a prime candidate for being liquidated. With the drop in air traffic and strong competitors like Southwest Airlines expanding into the traditional business route and offering lower-priced options, the airline industry will squeeze the weaker players out. The industry is in need of consolidation and if business leaders don’t do it through mergers the market will do it through bankruptcy and liquidation. United Airlines will be part of the industry consolidation but they may not survive it [career expectations?].

For more info: Read "Tilton's Troubles"by John Pletz at [url]http://www.chicagobusiness.com/cgi-bin/article.pl?articleId=32164[/url
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Old 12-18-2012, 08:18 AM
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cgull, Why start threads with the crush-you-in-the-SLI message. Both SLI committees have all the economic info and will do their best to destroy the career expectations arguments of the other side. Then the arbitrators will sort it all out. We don't have to. Let's learn the new contract fly the contract as it's the first thing we can do in unity.
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Old 12-18-2012, 08:32 AM
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Yawn, Ignored.
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Old 12-18-2012, 07:12 PM
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Originally Posted by johnso29
You guys are wasting your time. It's likely going to arbitration, and posting articles covering the past isn't going to influence the arbitrator(s).
Originally Posted by HSLD
Exactly, posting an opinion piece won't affect arbitration outcomes and otherwise just serves as flamebait.

Thread closed.
And how about this one, too?
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Old 12-19-2012, 07:56 AM
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Originally Posted by APC225 View Post
And how about this one, too?
I agree. Closed.
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