Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - United Airlines Holdings, Inc. | d514659d8k.htm |
| EX-4.1 - EX-4.1 - United Airlines Holdings, Inc. | d514659dex41.htm |
| EX-2.1 - EX-2.1 - United Airlines Holdings, Inc. | d514659dex21.htm |
| EX-3.2 - EX-3.2 - United Airlines Holdings, Inc. | d514659dex32.htm |
| EX-3.1 - EX-3.1 - United Airlines Holdings, Inc. | d514659dex31.htm |
| EX-4.2 - EX-4.2 - United Airlines Holdings, Inc. | d514659dex42.htm |
| EX-99.1 - EX-99.1 - United Airlines Holdings, Inc. | d514659dex991.htm |
Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT
OF OPERATIONS OF UNITED AND CONTINENTAL
Year ended December 31, 2012
In millions
| Historical | Pro Forma | Condensed Combined |
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| Continental | United | Adjustments | Pro Forma | |||||||||||||
| Operating revenue: |
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| Passenger-Mainline |
$ | 12,081 | $ | 13,723 | $ | — | $ | 25,804 | ||||||||
| Passenger-Regional |
2,910 | 3,869 | — | 6,779 | ||||||||||||
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| Total passenger revenue |
14,991 | 17,592 | — | 32,583 | ||||||||||||
| Cargo |
353 | 665 | — | 1,018 | ||||||||||||
| Other operating revenue |
1,631 | 2,704 | (776 | ) | 3,559 | |||||||||||
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| 16,975 | 20,961 | (776 | ) | 37,160 | ||||||||||||
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| Operating expenses: |
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| Aircraft fuel |
5,709 | 7,430 | (1 | ) | 13,138 | |||||||||||
| Salaries and related costs |
3,559 | 4,234 | 152 | 7,945 | ||||||||||||
| Regional capacity purchase |
963 | 1,507 | — | 2,470 | ||||||||||||
| Landing fees and other rent |
902 | 1,030 | (3 | ) | 1,929 | |||||||||||
| Aircraft maintenance materials and outside repairs |
654 | 1,163 | (57 | ) | 1,760 | |||||||||||
| Depreciation and amortization |
592 | 930 | — | 1,522 | ||||||||||||
| Distribution expenses |
668 | 684 | — | 1,352 | ||||||||||||
| Aircraft rent |
680 | 313 | — | 993 | ||||||||||||
| Special charges |
339 | 984 | — | 1,323 | ||||||||||||
| Other operating expenses |
2,155 | 3,390 | (868 | ) | 4,677 | |||||||||||
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| 16,221 | 21,665 | (777 | ) | 37,109 | ||||||||||||
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| Operating income (loss) |
754 | (704 | ) | 1 | 51 | |||||||||||
| Nonoperating income (expense): |
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| Interest expense |
(326 | ) | (496 | ) | (1 | ) | (823 | ) | ||||||||
| Interest capitalized |
22 | 15 | — | 37 | ||||||||||||
| Interest income |
15 | 8 | — | 23 | ||||||||||||
| Miscellaneous, net |
57 | (2 | ) | — | 55 | |||||||||||
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| (232 | ) | (475 | ) | (1 | ) | (708 | ) | |||||||||
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| Income (loss) before income taxes |
522 | (1,179 | ) | — | (657 | ) | ||||||||||
| Income tax expense (benefit) |
(5 | ) | 9 | — | 4 | |||||||||||
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| Net income (loss) |
$ | 527 | $ | (1,188 | ) | $ | — | $ | (661 | ) | ||||||
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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT
OF OPERATIONS OF UNITED AND CONTINENTAL
Year ended December 31, 2011
In millions
| Historical | Pro Forma | Condensed Combined |
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| Continental | United | Adjustments | Pro Forma | |||||||||||||
| Operating revenue: |
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| Passenger-Mainline |
$ | 11,816 | $ | 14,153 | $ | 6 | $ | 25,975 | ||||||||
| Passenger-Regional |
2,601 | 3,935 | — | 6,536 | ||||||||||||
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| Total passenger revenue |
14,417 | 18,088 | 6 | 32,511 | ||||||||||||
| Cargo |
448 | 718 | 1 | 1,167 | ||||||||||||
| Special revenue item |
19 | 88 | — | 107 | ||||||||||||
| Other operating revenue |
1,291 | 2,261 | (218 | ) | 3,334 | |||||||||||
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| 16,175 | 21,155 | (211 | ) | 37,119 | ||||||||||||
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| Operating expenses: |
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| Aircraft fuel |
5,294 | 7,080 | 1 | 12,375 | ||||||||||||
| Salaries and related costs |
3,405 | 4,172 | 75 | 7,652 | ||||||||||||
| Regional capacity purchase |
830 | 1,574 | (1 | ) | 2,403 | |||||||||||
| 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 | — | 1,547 | ||||||||||||
| Distribution expenses |
688 | 748 | (1 | ) | 1,435 | |||||||||||
| Aircraft rent |
686 | 323 | — | 1,009 | ||||||||||||
| Special charges |
159 | 433 | — | 592 | ||||||||||||
| Other operating expenses |
2,042 | 2,829 | (274 | ) | 4,597 | |||||||||||
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| 15,225 | 20,268 | (211 | ) | 35,282 | ||||||||||||
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| Operating income |
950 | 887 | — | 1,837 | ||||||||||||
| Nonoperating income (expense): |
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| Interest expense |
(342 | ) | (595 | ) | — | (937 | ) | |||||||||
| Interest capitalized |
17 | 15 | — | 32 | ||||||||||||
| Interest income |
10 | 10 | — | 20 | ||||||||||||
| Miscellaneous, net |
(72 | ) | (33 | ) | 1 | (104 | ) | |||||||||
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| (387 | ) | (603 | ) | 1 | (989 | ) | ||||||||||
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| Income before income taxes |
563 | 284 | 1 | 848 | ||||||||||||
| Income tax expense (benefit) |
(6 | ) | 3 | 1 | (2 | ) | ||||||||||
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| Net income |
$ | 569 | $ | 281 | $ | — | $ | 850 | ||||||||
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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT
OF OPERATIONS OF UNITED AND CONTINENTAL
Year ended December 31, 2010
In millions
| Historical | Pro Forma | Condensed Combined |
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| Continental | United | Adjustments | Pro Forma | |||||||||||||
| Operating revenue: |
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| Passenger-Mainline |
$ | 2,605 | $ | 13,412 | $ | 2 | $ | 16,019 | ||||||||
| Passenger-Regional |
560 | 3,658 | (1 | ) | 4,217 | |||||||||||
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| Total passenger revenue |
3,165 | 17,070 | 1 | 20,236 | ||||||||||||
| Cargo |
119 | 714 | (1 | ) | 832 | |||||||||||
| Other operating revenue |
279 | 1,994 | (7 | ) | 2,266 | |||||||||||
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| 3,563 | 19,778 | (7 | ) | 23,334 | ||||||||||||
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| Operating expenses: |
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| Aircraft fuel |
986 | 5,700 | 1 | 6,687 | ||||||||||||
| Salaries and related costs |
786 | 4,212 | 4 | 5,002 | ||||||||||||
| Regional capacity purchase |
202 | 1,610 | — | 1,812 | ||||||||||||
| Landing fees and other rent |
231 | 1,077 | (1 | ) | 1,307 | |||||||||||
| Aircraft maintenance materials and outside repairs |
135 | 980 | — | 1,115 | ||||||||||||
| Depreciation and amortization |
177 | 903 | (1 | ) | 1,079 | |||||||||||
| Distribution expenses |
156 | 756 | — | 912 | ||||||||||||
| Aircraft rent |
174 | 326 | — | 500 | ||||||||||||
| Special charges |
201 | 468 | — | 669 | ||||||||||||
| Other operating expenses |
537 | 2,728 | (8 | ) | 3,257 | |||||||||||
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| 3,585 | 18,760 | (5 | ) | 22,340 | ||||||||||||
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| Operating income (loss) |
(22 | ) | 1,018 | (2 | ) | 994 | ||||||||||
| Nonoperating income (expense): |
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| Interest expense |
(86 | ) | (695 | ) | 1 | (780 | ) | |||||||||
| Interest capitalized |
4 | 11 | — | 15 | ||||||||||||
| Interest income |
3 | 11 | 1 | 15 | ||||||||||||
| Miscellaneous, net |
2 | 42 | (2 | ) | 42 | |||||||||||
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| (77 | ) | (631 | ) | — | (708 | ) | ||||||||||
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| Income (loss) before income taxes |
(99 | ) | 387 | (2 | ) | 286 | ||||||||||
| Income tax expense (benefit) |
(4 | ) | (12 | ) | — | (16 | ) | |||||||||
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| Net income (loss) |
$ | (95 | ) | $ | 399 | $ | (2 | ) | $ | 302 | ||||||
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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET OF UNITED AND CONTINENTAL
December 31, 2012
In millions
| Historical | Pro Forma | Condensed Combined |
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| Continental | United | Adjustments | Pro Forma | |||||||||||||
| ASSETS |
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| Current assets: |
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| Cash and cash equivalents |
$ | 1,999 | $ | 2,766 | $ | — | $ | 4,765 | ||||||||
| Short-term investments |
1,447 | 326 | — | 1,773 | ||||||||||||
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| Total unrestricted cash, cash equivalents and short-term investments |
3,446 | 3,092 | — | 6,538 | ||||||||||||
| Restricted cash |
— | 65 | — | 65 | ||||||||||||
| Receivables, less allowance for doubtful accounts |
144 | 1,194 | — | 1,338 | ||||||||||||
| Aircraft fuel, spare parts and supplies, less obsolescence allowance |
293 | 402 | — | 695 | ||||||||||||
| Deferred income taxes |
274 | 272 | — | 546 | ||||||||||||
| Receivables from related parties |
1 | 2,767 | (2,542 | ) | 226 | |||||||||||
| Prepaid expenses and other |
147 | 700 | (5 | ) | 842 | |||||||||||
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| 4,305 | 8,492 | (2,547 | ) | 10,250 | ||||||||||||
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| Property and equipment, net |
8,346 | 8,946 | — | 17,292 | ||||||||||||
| Other assets: |
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| Goodwill |
4,523 | — | — | 4,523 | ||||||||||||
| Intangibles, less accumulated amortization |
2,371 | 2,228 | (2 | ) | 4,597 | |||||||||||
| Receivables from related parties |
— | 270 | (270 | ) | — | |||||||||||
| Restricted cash |
110 | 272 | — | 382 | ||||||||||||
| Other, net |
458 | 594 | (1 | ) | 1,051 | |||||||||||
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| 7,462 | 3,364 | (273 | ) | 10,553 | ||||||||||||
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| $ | 20,113 | $ | 20,802 | $ | (2,820 | ) | $ | 38,095 | ||||||||
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(continued on the next page)
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET OF UNITED AND CONTINENTAL
December 31, 2012
In millions
| Historical | Pro Forma | Condensed Combined |
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| Continental | United | Adjustments | Pro Forma | |||||||||||||
| LIABILITIES AND STOCKHOLDER’S EQUITY |
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| Current liabilities: |
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| Advance ticket sales |
$ | 39 | $ | 3,321 | $ | — | $ | 3,360 | ||||||||
| Frequent flyer deferred revenue |
— | 2,364 | — | 2,364 | ||||||||||||
| Accounts payable |
798 | 1,518 | — | 2,316 | ||||||||||||
| Accrued salaries and benefits |
559 | 1,204 | — | 1,763 | ||||||||||||
| Current maturities of long-term debt |
722 | 1,090 | — | 1,812 | ||||||||||||
| Current maturities of capital leases |
3 | 119 | — | 122 | ||||||||||||
| Payables to related parties |
2,542 | 75 | (2,542 | ) | 75 | |||||||||||
| Other |
210 | 935 | (5 | ) | 1,140 | |||||||||||
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| 4,873 | 10,626 | (2,547 | ) | 12,952 | ||||||||||||
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| Long-term debt |
5,753 | 4,285 | — | 10,038 | ||||||||||||
| Long-term obligations under capital leases |
174 | 618 | — | 792 | ||||||||||||
| Other liabilities and deferred credits: |
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| Frequent flyer deferred revenue |
— | 2,756 | — | 2,756 | ||||||||||||
| Postretirement benefit liability |
230 | 2,384 | — | 2,614 | ||||||||||||
| Pension liability |
2,303 | 97 | — | 2,400 | ||||||||||||
| Advanced purchase of miles |
— | 1,537 | — | 1,537 | ||||||||||||
| Deferred income taxes |
822 | 648 | — | 1,470 | ||||||||||||
| Payables to related parties |
270 | — | (270 | ) | — | |||||||||||
| Lease fair value adjustment, net |
881 | — | — | 881 | ||||||||||||
| Other |
460 | 1,035 | 1 | 1,496 | ||||||||||||
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| 4,966 | 8,457 | (269 | ) | 13,154 | ||||||||||||
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| Stockholder’s equity: |
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| Common stock |
— | — | — | — | ||||||||||||
| Additional capital invested |
4,167 | 3,444 | (2 | ) | 7,609 | |||||||||||
| Retained earnings (deficit) |
1,001 | (6,396 | ) | (2 | ) | (5,397 | ) | |||||||||
| Accumulated other comprehensive loss |
(821 | ) | (232 | ) | — | (1,053 | ) | |||||||||
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| 4,347 | (3,184 | ) | (4 | ) | 1,159 | |||||||||||
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| $ | 20,113 | $ | 20,802 | $ | (2,820 | ) | $ | 38,095 | ||||||||
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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS OF UNITED AND CONTINENTAL
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. 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. and Continental and UAL Corporation’s name was changed to United Continental Holdings, Inc. (“UAL” or the “Company”).
On March 31, 2013, the Company merged its former subsidiaries, United Air Lines, Inc. and Continental, into a single legal entity, which was subsequently renamed United Airlines, Inc. (“United”). The merger of the United Air Lines, Inc. and Continental subsidiaries into a single legal entity represents a transaction between entities under common control and United Air Lines, Inc. is considered the predecessor entity for accounting purposes. Transactions between entities under common control are accounted for as if the transaction occurred at the beginning of the earliest period presented under which the entities were under common control, and prior years are retrospectively adjusted to furnish comparative information similar to the pooling method. The pro forma financial statements have been combined with United Air Lines, Inc. as the predecessor entity because it was the first of the two subsidiaries that was controlled by UAL, the parent entity. The pro forma financial statements have been presented for the most recent balance sheet and statements of operations in periods in which United Air Lines, Inc. and Continental were under common control. The year-ended December 31, 2010 historical information presented for Continental is for the period from October 1, 2010 to December 31, 2010, the period under which the entities were under common control. There will no longer be a requirement to separately report the historical financial statements of Continental for periods prior to October 1, 2010 separate and distinct from the financial statements of United as the surviving legal entity of the merger of the two subsidiary airlines.
The Unaudited Pro Forma Condensed Combined Balance Sheet of United combines the historical consolidated balance sheet of Continental and United Air Lines, Inc. as of December 31, 2012. The Unaudited Pro Forma Condensed Combined Statements of Operations of United for the years ended December 31, 2012, 2011 and 2010 combine the historical consolidated statements of operations of Continental and United Air Lines, Inc.
The Unaudited Pro Forma Condensed Combined Financial Statements of United were prepared by combining the historical financial information of both Continental and United Air Lines, Inc. 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 the 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 Air Lines, Inc. contained in their respective Annual Reports on Form 10-K for the fiscal year ended December 31, 2012.
Note 2. Pro Forma Adjustments
The pro forma adjustments reflected in the following Unaudited Pro Forma Condensed Combined Financial Statements of United primarily reflect the elimination of transactions and account balances between Continental and United Air Lines, Inc.