Attached files
| file | filename |
|---|---|
| 8-K - 8-K - UNITED AIRLINES, INC. | d312486d8k.htm |
| EX-23.2 - EX-23.2 - UNITED AIRLINES, INC. | d312486dex232.htm |
| EX-12.1 - EX-12.1 - UNITED AIRLINES, INC. | d312486dex121.htm |
| EX-99.2 - EX-99.2 - UNITED AIRLINES, INC. | d312486dex992.htm |
| EX-23.1 - EX-23.1 - UNITED AIRLINES, INC. | d312486dex231.htm |
| EX-99.3 - EX-99.3 - UNITED AIRLINES, INC. | d312486dex993.htm |
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION OF UNITED
On May 2, 2010, UAL Corporation, Continental Airlines, Inc. (“Continental”), and JT Merger Sub Inc., a wholly-owned subsidiary of UAL Corporation, entered into an Agreement and Plan of Merger providing for a “merger of equals” business combination. On October 1, 2010, JT Merger Sub Inc. merged with and into Continental, with Continental surviving as a wholly-owned subsidiary of UAL Corporation (the “Merger”). Upon closing of the Merger, UAL Corporation became the parent company of both United Air Lines, Inc. (“United”) and Continental and UAL Corporation’s name was changed to United Continental Holdings, Inc. (“UAL” or the “Company”).
The Company also expects in the future that it will merge Continental and United into one legal entity (the “Airlines Merger”). Once the Airlines Merger occurs, the financial statements of United and Continental will be combined for all periods presented from the date of the Merger at their historical cost, and there will no longer be a requirement to separately report the historical financial statements of Continental.
The Unaudited Pro Forma Condensed Combined Balance Sheet of United combines the historical consolidated balance sheet of Continental and United as of December 31, 2011. The Unaudited Pro Forma Condensed Combined Statement of Operations of United for the year ended December 31, 2011 combines the historical consolidated statement of operations of Continental and United, for the year ended December 31, 2011.
The Unaudited Pro Forma Condensed Combined Financial Statements of United were prepared by combining the historical financial information of both Continental and United. Pro forma statements that give effect to a business combination to be accounted for as a reorganization of entities under common control combine the historical financial statements of combining entities.
These Unaudited Pro Forma Condensed Combined Financial Statements have been developed from and should be read in conjunction with the consolidated financial statements of Continental and United contained in their respective Annual Reports on Form 10-K for the fiscal year ended December 31, 2011. The Unaudited Pro Forma Condensed Combined Financial Statements of United are provided for illustrative purposes only and do not purport to represent what the actual consolidated results of operations or the consolidated financial position of Continental or United would have been had the Airlines Merger occurred on the dates assumed, nor are they necessarily indicative of future consolidated results of operations or consolidated financial position.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET OF UNITED
December 31, 2011
In millions
| Historical | ||||||||||||||||
| Continental | United | Pro Forma Adjustments |
Condensed Combined Pro Forma |
|||||||||||||
| ASSETS |
||||||||||||||||
| Current assets: |
||||||||||||||||
| Cash and cash equivalents |
$ | 2,782 | $ | 3,458 | $ | 6,240 | ||||||||||
| Short-term investments |
1,241 | 275 | 1,516 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total unrestricted cash, cash equivalents and short-term investments |
4,023 | 3,733 | — | 7,756 | ||||||||||||
| Restricted cash |
— | 40 | 40 | |||||||||||||
| Receivables, less allowance for doubtful accounts |
595 | 763 | 1,358 | |||||||||||||
| Aircraft fuel, spare parts and supplies, less obsolescence allowance |
275 | 340 | 615 | |||||||||||||
| Deferred income taxes |
267 | 348 | 615 | |||||||||||||
| Receivables from related parties |
— | 228 | (11 | ) | 217 | |||||||||||
| Prepaid expenses and other |
165 | 447 | (10 | ) | 602 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 5,325 | 5,899 | (21 | ) | 11,203 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Property and equipment, net |
7,348 | 9,070 | 16,418 | |||||||||||||
| Other assets: |
||||||||||||||||
| Goodwill |
4,523 | — | 4,523 | |||||||||||||
| Intangibles, less accumulated amortization |
2,469 | 2,283 | (2 | ) | 4,750 | |||||||||||
| Restricted cash, cash equivalents and investments |
135 | 393 | 528 | |||||||||||||
| Other, net |
364 | 600 | 964 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 7,491 | 3,276 | (2 | ) | 10,765 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 20,164 | $ | 18,245 | $ | (23 | ) | $ | 38,386 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| LIABILITIES AND STOCKHOLDER’S EQUITY |
||||||||||||||||
| Current liabilities: |
||||||||||||||||
| Advance ticket sales |
$ | 1,462 | $ | 1,652 | $ | 3,114 | ||||||||||
| Frequent flyer deferred revenue |
921 | 1,484 | 2,405 | |||||||||||||
| Accounts payable |
894 | 1,109 | 2,003 | |||||||||||||
| Accrued salaries and benefits |
521 | 988 | 1,509 | |||||||||||||
| Current maturities of long-term debt |
571 | 615 | 1,186 | |||||||||||||
| Current maturities of capital leases |
3 | 122 | 125 | |||||||||||||
| Payables to related parties |
11 | 104 | (11 | ) | 104 | |||||||||||
| Other |
279 | 853 | (10 | ) | 1,122 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 4,662 | 6,927 | (21 | ) | 11,568 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Long-term debt |
4,957 | 5,130 | 10,087 | |||||||||||||
| Long-term obligations under capital leases |
193 | 735 | 928 | |||||||||||||
| Other liabilities and deferred credits: |
||||||||||||||||
| Frequent flyer deferred revenue |
1,235 | 2,018 | 3,253 | |||||||||||||
| Postretirement benefit liability |
292 | 2,115 | 2,407 | |||||||||||||
| Pension liability |
1,770 | 92 | 1,862 | |||||||||||||
| Advanced purchase of miles |
270 | 1,442 | 1,712 | |||||||||||||
| Deferred income taxes |
820 | 707 | 1,527 | |||||||||||||
| Lease fair value adjustment, net |
1,133 | — | 1,133 | |||||||||||||
| Other |
507 | 983 | 1,490 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 6,027 | 7,357 | — | 13,384 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Stockholder’s equity: |
||||||||||||||||
| Common stock |
— | — | — | |||||||||||||
| Additional capital invested |
4,148 | 3,432 | 7,580 | |||||||||||||
| Retained earnings (deficit) |
474 | (5,208 | ) | (2 | ) | (4,736 | ) | |||||||||
| Accumulated other comprehensive loss |
(297 | ) | (128 | ) | (425 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 4,325 | (1,904 | ) | (2 | ) | 2,419 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 20,164 | $ | 18,245 | $ | (23 | ) | $ | 38,386 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
The accompanying notes are an integral part of the Unaudited Pro Forma Condensed Combined Financial Statements.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS OF UNITED
Year ended December 31, 2011
In millions
| Historical | ||||||||||||||||
| Continental | United | Pro Forma Adjustments |
Condensed Combined Pro Forma |
|||||||||||||
| Operating revenue: |
||||||||||||||||
| Passenger—Mainline |
$ | 11,816 | $ | 14,153 | $ | 6 | $ | 25,975 | ||||||||
| Passenger—Regional |
2,601 | 3,935 | 6,536 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total passenger revenue |
14,417 | 18,088 | 6 | 32,511 | ||||||||||||
| Cargo |
448 | 718 | 1,166 | |||||||||||||
| Special revenue item |
19 | 88 | 107 | |||||||||||||
| Other operating revenue |
1,291 | 2,261 | (217 | ) | 3,335 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 16,175 | 21,155 | (211 | ) | 37,119 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating expenses: |
||||||||||||||||
| Aircraft fuel |
5,294 | 7,080 | 12,374 | |||||||||||||
| Salaries and related costs |
3,405 | 4,172 | 74 | 7,651 | ||||||||||||
| Regional capacity purchase |
830 | 1,574 | 2,404 | |||||||||||||
| Landing fees and other rent |
900 | 1,028 | 1,928 | |||||||||||||
| Aircraft maintenance materials and outside repairs |
595 | 1,160 | (11 | ) | 1,744 | |||||||||||
| Depreciation and amortization |
626 | 921 | (1 | ) | 1,546 | |||||||||||
| Distribution expenses |
688 | 748 | 1,436 | |||||||||||||
| Aircraft rent |
686 | 323 | 1,009 | |||||||||||||
| Special charges |
159 | 433 | 592 | |||||||||||||
| Other operating expenses |
2,042 | 2,829 | (273 | ) | 4,598 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 15,225 | 20,268 | (211 | ) | 35,282 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating income |
950 | 887 | — | 1,837 | ||||||||||||
| Nonoperating income (expense): |
||||||||||||||||
| Interest expense |
(342 | ) | (595 | ) | (937 | ) | ||||||||||
| Interest capitalized |
17 | 15 | 32 | |||||||||||||
| Interest income |
10 | 10 | 20 | |||||||||||||
| Miscellaneous, net |
(72 | ) | (33 | ) | (105 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (387 | ) | (603 | ) | — | (990 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before income taxes |
563 | 284 | — | 847 | ||||||||||||
| Income tax expense (benefit) |
(6 | ) | 3 | (3 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 569 | $ | 281 | $ | — | $ | 850 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
The accompanying notes are an integral part of the Unaudited Pro Forma Condensed Combined Financial Statements.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS OF UNITED
Note 1. Basis of Presentation
On May 2, 2010, UAL Corporation, Continental Airlines, Inc. (“Continental”), and JT Merger Sub Inc., a wholly-owned subsidiary of UAL Corporation, entered into an Agreement and Plan of Merger providing for a “merger of equals” business combination. On October 1, 2010, JT Merger Sub Inc. merged with and into Continental, with Continental surviving as a wholly-owned subsidiary of UAL Corporation (the “Merger”). Upon closing of the Merger, UAL Corporation became the parent company of both United Air Lines, Inc. (“United”) and Continental and UAL Corporation’s name was changed to United Continental Holdings, Inc. (“UAL” or the “Company”).
The Company also expects in the future that it will merge Continental and United into one legal entity (the “Airlines Merger”). Once the Airlines Merger occurs, the financial statements of United and Continental will be combined for all periods presented from the date of the Merger at their historical cost, and there will no longer be a requirement to separately report the historical financial statements of Continental, and United will be considered the predecessor.
The Unaudited Pro Forma Condensed Combined Balance Sheet of United combines the historical consolidated balance sheet of Continental and United on December 31, 2011. The Unaudited Pro Forma Condensed Combined Statement of Operations of United for the year ended December 31, 2011 combines the historical consolidated statement of operations of Continental and United for the year ended December 31, 2011.
The Unaudited Pro Forma Condensed Combined Financial Statements were prepared by combining the historical financial information of both Continental and United. Pro forma statements that give effect to a business combination to be accounted for as a reorganization of entities under common control generally only combine the historical financial statements of combining entities.
Note 2. Pro Forma Adjustments
The Unaudited Pro Forma Condensed Combined Financial Statements of United primarily reflect the elimination of transactions and account balances between Continental and United.