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): March 12, 2008 |
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 |
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(17 CFR 240.13e-4(c)) |
Item 7.01. Regulation FD Disclosure.
On March 12, 2008, we will provide an update for investors presenting information relating to our financial and operational outlook for the first quarter and full year 2008, as well as other information. 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 |
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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. |
March 12, 2008 |
By /s/ Lori A. Gobillot |
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Lori A. Gobillot |
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Staff Vice President and Assistant General Counsel |
EXHIBIT INDEX |
99.1 |
Investor Update |
Exhibit 99.1 |
Investor Update |
Issue Date: March 12, 2008 |
|
2008 Estimate |
|
1st Qtr.(E) |
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Mainline |
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For the full year 2008, Continental currently expects to grow its mainline capacity (ASMs) by approximately 2% - 3% year-over-year (yoy) with mainline domestic capacity expected to be down slightly yoy.
Load Factor |
2008 Estimate |
|
1st Qtr.(E) |
Full Year (E) |
|
Domestic |
82 - 83% |
84 - 85% |
Continental's month-to-date Consolidated load factor is updated daily and can be found on the Financial and Traffic News Releases page at continental.com in the Investor Relations section under the About Continental menu.
Pension Expense and Contributions
In January, the Company contributed $60 million to its defined benefit pension plans. The Company plans to contribute $257 million to these benefit plans during 2008, but the Company has the flexibility to fund only the minimum requirement of $140 million during the year.
Continental estimates that its non-cash pension expense will be approximately $90 million for the year.
Mainline Operating Statistics |
2008 Estimate (cents) |
|
1st Qtr.(E) |
Full Year(E) |
|
CASM |
11.88 - 11.93 |
11.74 - 11.79 |
Consolidated Operating Statistics |
2008 Estimate (cents) |
|
1st Qtr.(E) |
Full Year (E) |
|
CASM |
12.83 - 12.88 |
12.72 - 12.77 |
Stock Based Compensation
Continental expects to record stock option expense of approximately $4 million for the first quarter 2008 and $13 million for the full year 2008.
Continental has granted profit based restricted stock unit ("RSU") awards pursuant to its Long-Term Incentive and RSU Program. Expense for these awards is recognized ratably over the required service period, with changes in the price of the Company's common stock and the payment percentage (which is tied to varying levels of cumulative profit sharing), resulting in a corresponding increase or decrease in "Wages, Salaries, and Related Costs" in the Company's consolidated statements of operations. The closing stock price of $24.18 on February 29, 2008 was used in estimating the expense impact of the awards for the Company's 2008 cost estimates included herein. Based on the Company's current assumptions regarding payment percentages and the cumulative profit sharing targets to be achieved pursuant to the awards, the Company estimates that a $1 increase or decrease in the price of its common stock from February 29, 2008 will result in an increase or decrease of approximately $2 million in Wages, Sal
aries, and Related Costs attributable to the awards to be recognized in the first quarter 2008. For more information regarding these awards, including performance periods and how the Company accrues for the awards, please see the Company's 2007 Form 10-K.
Fuel Gallons Consumed |
2008 Estimate |
|
1st Qtr.(E) |
Full Year (E) |
|
Mainline |
374 Million |
1,561 Million |
Fuel Price per Gallon (including fuel taxes and impact of hedges) |
$2.76 |
$2.89 |
Fuel Hedges as of March 11, 2008
Selected Expense Amounts |
2008 Estimated Amounts ($Millions) |
|
1st Qtr.(E) |
Full Year (E) |
|
Aircraft Rent |
$247 |
$971 |
2008 Estimate |
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1st Qtr.(E) |
Full Year(E) |
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Taxes on Profit/(Loss) |
Tax Rate of 36.9% |
Tax Rate of 36.9% |
Expense/(Benefit) |
Permanent tax differences are primarily related to non-deductible per diems, meals and entertainment.
Debt and Capital Leases
Scheduled debt and capital lease principal payments for the full year 2008 are estimated to be $657 million with first quarter 2008 payments estimated to be approximately $155 million. However, there is approximately $200 million of aircraft debt maturing this year that the Company expects to refinance.
Cash Capital Expenditures (in millions) |
2008(E) |
Fleet Related |
$145 - 170 |
EPS Estimated Share Count
Quarterly |
Number of Shares |
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Earnings Level |
Basic |
Diluted |
Interest addback (net of profit sharing and income taxes impact) |
Over $48 |
98 |
114 |
$3 |
Full Year 2008 (Millions)
Year-to-date |
Number of Shares |
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Earnings Level |
Basic |
Diluted |
Interest addback (net of profit sharing and income taxes impact) |
Over $198 |
99 |
114 |
$12 |