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UNITED
STATES
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SECURITIES
AND EXCHANGE COMMISSION
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Washington,
D.C. 20549
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FORM
8-K
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CURRENT
REPORT PURSUANT
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TO
SECTION 13 OR 15(d) OF THE
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SECURITIES
EXCHANGE ACT OF 1934
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Date
of Report (Date of earliest event reported): July 14,
2009
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CONTINENTAL
AIRLINES, INC.
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(Exact
Name of Registrant as Specified in Its
Charter)
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DELAWARE
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(State
or Other Jurisdiction of
Incorporation)
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1-10323
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74-2099724
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(Commission
File Number)
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(IRS
Employer Identification No.)
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1600
Smith Street, Dept. HQSEO, Houston, Texas
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77002
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(713)
324-2950
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(Registrant's
Telephone Number, Including Area
Code)
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______________________________________
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(Former
Name or Former Address, if Changed Since Last
Report)
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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):
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange
Act
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(17
CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange
Act
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(17
CFR 240.13e-4(c))
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Item
2.02.
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Results of Operations
and Financial Condition.
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On July 14, 2009, Continental Airlines,
Inc. (the “Company”) issued a press release announcing the webcast for its
second quarter 2009 financial results conference call and detailing certain
second quarter 2009 special charges. This press release is furnished
herewith as Exhibit 99.1 and incorporated in this Item 2.02 by
reference.
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Item
2.05.
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Costs Associated with
Exit or Disposal Activities.
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On June
5, 2008, the Company announced capacity reductions and related initiatives to
respond to unprecedented high fuel costs and other challenges facing the airline
industry. In connection with the capacity reductions, the Company announced that
it expected to record accounting charges, including severance and other employee
termination costs, contract termination costs and other associated costs in the
second and third quarters of 2008 and beyond.
For the
quarter ended June 30, 2009, the Company expects to record $44 million of
special charges, which includes $31 million of non-cash impairment charges on
owned Boeing 737-300 and 737-500 aircraft and related assets. These
impairment charges relate to the Company’s decision in June 2008 to retire all
of its Boeing 737-300 aircraft and a significant portion of its Boeing 737-500
aircraft in connection with the capacity reductions referenced
above. The Company recorded an initial impairment charge in the
second quarter of 2008 for each of these fleet types. The additional
write down in the second quarter of 2009 reflects further reduction in the fair
value of these fleet types in the current economic environment. In
both periods, the Company determined that indicators of impairment were present
for these fleets. Fleet assets include owned aircraft, improvements
on leased aircraft, rotable spare parts, spare engines and
simulators. Based on the Company’s evaluations, it determined that
the carrying amounts of these fleets were impaired and wrote them down to their
estimated fair values. The Company estimated the fair values based on
current market quotes and its expected proceeds from the sale of the
assets.
The
Company may incur additional accounting charges in future quarters associated
with the 737-300 and 737-500 fleet types discussed above, as well as the thirty
EMB 135 aircraft that the Company has temporarily grounded. The
Company is not able at this time to estimate the amount and timing of these
future charges.
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Item
2.06.
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Material
Impairments.
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The
information set forth in Item 2.05 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.06.
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Item
9.01.
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Financial Statements
and Exhibits.
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(d)
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Exhibits
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99.1
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Press
Release
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SIGNATURE
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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.
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CONTINENTAL
AIRLINES, INC.
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July
17, 2009
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By
/s/ Chris
Kenny
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Chris
Kenny
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Vice
President and Controller
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EXHIBIT
INDEX
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99.1
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Press
Release
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News
Release
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Exhibit
99.1
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Contact:
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Corporate
Communications
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Houston:
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713.324.5080
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Email:
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corpcomm@coair.com
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News
archive:
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continental.com/company/news/
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Address:
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P.O.
Box 4607, Houston,
TX 77210-4607
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CONTINENTAL
AIRLINES TO HOLD LIVE WEBCAST OF
SECOND QUARTER 2009
FINANCIAL RESULTS
Summarizes
special charges for the second quarter 2009
HOUSTON,
July 14, 2009 -- Continental Airlines (NYSE: CAL) will hold its second quarter
2009 financial results conference call on Tuesday, July 21 at 9:30 a.m. CT/10:30
a.m. ET. A live, listen-only webcast of the conference call will be available at
continental.com in the “Investor Relations” section under the “About
Continental” menu.
The
webcast will be available for replay within 24 hours of the conference call and
then archived on the Web site for approximately three months.
Second
Quarter Special Charges
Continental
expects to record special charges during the second quarter of 2009 totaling $44
million of expense of which $43 million consists of non-cash items. A
summary of these charges is as follows (in millions):
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Three
Months Ended
June 30,
2009
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Aircraft-related
charges
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$43
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Other
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1
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Total
special
charges
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$ 44
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Aircraft-related charges in the second
quarter of 2009 include $31 million of non-cash impairments on owned Boeing
737-300 and 737-500 aircraft and related assets, an $8 million non-cash charge
related to the disposition of three 737-300 aircraft and a $4 million non-cash
charge to write off certain obsolete spare parts.
The impairment charges on the Boeing
737-300 and 737-500 fleets relate to Continental’s decision in June 2008 to
retire all of its Boeing 737-300 aircraft and a significant portion of its
Boeing 737-500 aircraft by early January 2010. The company recorded
an initial impairment charge in the second quarter of 2008 for each of these
fleet types. The additional write down in the second quarter of 2009
reflects further reduction in the fair value of these fleet types in the current
economic environment. In both periods, Continental determined that
indicators of impairment were present for these fleets. Fleet assets
include owned aircraft, improvements on leased aircraft, rotable spare parts,
spare engines and simulators. Based on Continental’s evaluations, the
company determined that the carrying amounts of these fleets were impaired and
wrote them down to their estimated fair values. The company estimated
the fair values based on current market quotes and our expected proceeds from
the sale of the assets.
Corporate
Background
Continental
Airlines is the world’s fifth largest airline. Continental, together
with Continental Express and Continental Connection, has more than 2,750 daily
departures throughout the Americas, Europe and Asia, serving 133 domestic and
132 international destinations. More than 750 additional points are served via
current alliance partners. With more than 43,000 employees,
Continental has hubs serving New York, Houston, Cleveland and Guam, and together
with its regional partners, carries approximately 67 million passengers per
year.
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