UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
FORM 8-K |
CURRENT REPORT PURSUANT |
TO SECTION 13 OR 15(d) OF THE |
SECURITIES EXCHANGE ACT OF 1934 |
Date of Report (Date of earliest event reported): September 8, 2006 |
CONTINENTAL AIRLINES, INC. |
(Exact Name of Registrant as Specified in Its Charter) |
DELAWARE |
(State or Other Jurisdiction of Incorporation) |
1-10323 |
74-2099724 |
(Commission File Number) |
(IRS Employer Identification No.) |
1600 Smith Street, Dept. HQSEO, Houston, Texas |
77002 |
(Address of Principal Executive Offices) |
(Zip Code) |
(713) 324-2950 |
(Registrant's Telephone Number, Including Area Code) |
______________________________________ |
(Former Name or Former Address, if Changed Since Last Report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
|
(17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act |
|
(17 CFR 240.13e-4(c)) |
Item 7.01. Regulation FD Disclosure.
On September 8, 2006, we provided an update for investors presenting information relating to our financial and operational outlook for the third quarter and full year 2006. The letter is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
99.1 |
Investor Update |
|
SIGNATURE |
Pursuant to the requirements of the Securities Exchange Act of 1934, Continental Airlines, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CONTINENTAL AIRLINES, INC. |
September 8, 2006 |
By /s/ Lori A. Gobillot
Lori A. Gobillot
Staff Vice President &
Assistant General Counsel
|
EXHIBIT INDEX |
99.1 |
Investor Update |
Exhibit 99.1 |
Investor Update |
Issue Date: September 8, 2006 |
2006 Estimated |
||
ASMs (Available Seat Miles) |
3rd Qtr.(E) |
Full Year(E) |
Domestic |
6.0% |
5.0% |
2006 Estimate |
||
Load Factor |
3rd Qtr.(E) |
Full Year(E) |
Continental |
82 - 83% |
80 - 81% |
2006 Estimate (cents) |
||
Mainline Operating Statistics* |
3rd Qtr.(E) |
Full Year(E) |
CASM |
10.56 - 10.61 |
10.62 - 10.67 |
2006 Estimate (cents) |
||
Consolidated Operating Statistics * |
3rd Qtr.(E) |
Full Year(E) |
CASM |
11.40 - 11.45 |
11.48 - 11.53 |
*Based on current conditions, the Company's most recently prepared internal forecast for the full year 2006 contains an accrual for profit sharing which is reflected in the cost estimates above. There can be no assurance that the Company's forecast will approximate actual results or that the Company will earn a profit for 2006. Generally, the profit sharing plan provides for a profit sharing pool for eligible employees of 30% of the first $250 million of pre-tax income (as defined in the profit sharing plan), 25% of the next $250 million and 20% thereafter. Profit sharing expense is recorded each quarter based on the actual cumulative profits earned to date. Reductions in cumulative profits from a previous quarter could result in the reversal of a portion or all of the previously recorded profit sharing expense.
|
2006 Estimate |
|
Fuel Gallons Consumed |
3rd Qtr.(E) |
Full Year(E) |
Mainline |
386 Million |
1,466 Million |
2006 Estimated Amounts ($Millions) |
||
Selected Expense Amounts |
3rd Qtr.(E) |
Full Year(E) |
Aircraft Rent |
$249 |
$990 |
|
2006 Estimate |
|
Fleet Related |
180 |
EPS Estimated Share Count
Quarterly |
Number of Shares |
||
Earnings Level |
Basic |
Diluted |
Interest Addback (net of profit sharing impact) |
Over $64 |
89.6 |
112.2 |
$5.8 |
Full Year 2006 (Millions)
Year-to-date |
Number of Shares |
||
Earnings Level |
Basic |
Diluted |
Interest Addback (net of profit sharing impact) |
Over $251 |
88.8 |
111.1 |
$23.0 |
Reconciliation of GAAP to Non-GAAP Financial Information
(millions except CASM data)
Mainline |
3rd Qtr. Range(E) |
Full Year Range(E) |
|||
Operating Expenses - GAAP |
$ 2,716 |
$ 2,728 |
$ 10,349 |
$ 10,397 |
|
Special Items (a) |
- |
- |
(3) |
(3) |
|
Operating Expenses Excluding Special |
$ 2,716 |
$ 2,728 |
$ 10,346 |
$ 10,394 |
|
Aircraft Fuel & Related Taxes |
(853) |
(853) |
(3,108) |
(3,108) |
|
Operating Expenses Excluding Special Items and Aircraft Fuel & Related Taxes - Non-GAAP (b) |
$ 1,863 |
$ 1,875 |
$ 7,238 |
$ 7,286 |
|
ASMs (millions) |
25,715 |
25,715 |
97,444 |
97,444 |
|
Mainline CASM (cents) |
|||||
CASM-GAAP |
10.56 |
10.61 |
10.62 |
10.67 |
|
Special Items (a) |
- |
- |
(0.01) |
(0.01) |
|
CASM Excluding Special Items - |
10.56 |
10.61 |
10.61 |
10.66 |
|
Aircraft Fuel & Related Taxes per ASM |
3.32 |
3.32 |
3.18 |
3.18 |
|
CASM Excluding Special Items and Aircraft Fuel & Related Taxes - Non-GAAP (c) |
7.24 |
7.29 |
7.43 |
7.48 |
|
Consolidated (Mainline plus Regional) |
3rd Qtr. Range(E) |
Full Year Range(E) |
|||
Operating Expenses - GAAP |
$ 3,330 |
$ 3,345 |
$ 12,710 |
$ 12,765 |
|
Special Items (a) |
- |
- |
(3) |
(3) |
|
Operating Expenses Excluding Special |
$ 3,330 |
$ 3,345 |
$ 12,707 |
$ 12,762 |
|
Aircraft Fuel & Related Taxes |
(1,039) |
(1,039) |
(3,788) |
(3,788) |
|
Operating Expenses Excluding Special Items and Aircraft Fuel & Related Taxes - Non-GAAP (b) |
$ 2,291 |
$ 2,306 |
$ 8,919 |
$ 8,974 |
|
ASMs (millions) |
29,212 |
29,212 |
110,713 |
110,713 |
|
Consolidated CASM (cents) |
|||||
CASM-GAAP |
11.40 |
11.45 |
11.48 |
11.53 |
|
Special Items (a) |
- |
- |
(0.01) |
(0.01) |
|
CASM Excluding Special Items - |
11.40 |
11.45 |
11.47 |
11.52 |
|
Aircraft Fuel & Related Taxes per ASM |
3.56 |
3.56 |
3.42 |
3.42 |
|
CASM Excluding Special Items and Aircraft Fuel & Related Taxes - Non-GAAP (c) |
7.84 |
7.89 |
8.05 |
8.10 |
(a) Operating special items for the full year 2006 include a $14 million credit reversal associated with all officers surrendering their restricted stock units that otherwise would have been paid out in the first quarter, $29 million of settlement charges related to lump-sum pension payments to retiring pilots and the remainder of the charge is attributable to a reduction of reserves related primarily to negotiated settlements on leased MD-80 grounded aircraft.
(b) These financial measures provide management and investors the ability to measure and monitor Continental's performance on a consistent basis.
(c) Cost per available seat mile excluding fuel, related taxes and special items is computed by multiplying fuel price per gallon, including fuel taxes, by fuel gallons consumed and subtracting that amount from operating expenses excluding special items then dividing by available seat miles. This statistic provides management and investors the ability to measure and monitor Continental's cost performance absent special items and fuel price volatility. Both the cost and availability of fuel are subject to many economic and political factors and therefore are beyond our control.