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):
January 18, 2001
CONTINENTAL AIRLINES, INC.
(Exact name of registrant as specified in its charter)
|
Delaware |
0-09781 |
74-2099724 |
|
(State or other jurisdiction |
(Commission File Number) |
(IRS Employer |
|
of incorporation) |
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)
Item 7. Financial Statements and Exhibits.
(c) Exhibits
- Projected Data.
Item 9. Regulation FD Disclosure.
The Company is furnishing herewith a letter being provided to certain investors and financial analysts which updates certain fleet and share count information and contains data regarding cost and growth projections for future periods. The letter is attached as Exhibit 99.1 which is included herein.
The information presented contains forward looking statements, and certain assumptions upon which such forward looking statements are in part based. Numerous important factors, including those factors identified as Risk Factors in Exhibit 99.2 to the Company's Current Report on Form 8-K furnished to the Securities and Exchange Commission on November 14, 2000, which factors are incorporated herein by reference, and the fact that the assumptions contained in such information could prove incorrect, could cause actual results to differ materially from those contained in such forward looking statements.
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.
By /s/ Jeffery A. Smisek
Jeffery A. Smisek
Executive Vice President
and General Counsel
January 18, 2001
EXHIBIT INDEX
- Projected Data.
EXHIBIT 99.1
CONTINENTAL AIRLINES [LOGO]
Diane Dayhoff
Staff Vice President Finance
1600 Smith Street, HSQII
Houston, Texas 77002
January 18, 2001
Dear Investor:
Continental reported its 6th consecutive profitable year and 23rd consecutive profitable quarter. For the fourth quarter Continental reported pre-tax earnings of $65 million and net income of $38 million (excluding a pre-tax gain of $9 million from the sale of our investment in America West). This resulted in diluted earnings per share of $0.61, a 45% increase over fourth quarter 1999. Attachment A shows Continental's EPS calculation for the quarter.
At the end of the fourth quarter, Continental had 371 jet aircraft (excluding regional jets) in service, a net increase of 4 aircraft since September 30, 2000. The net increase includes the addition of two B767-400s, three B767-200s, and five B737-800s. During the quarter, Continental retired six DC-10-30 aircraft. Our five-year flexible fleet plan is attached (Attachment B). The top chart reflects the number of aircraft commitments less planned retirements. The second chart reduces the fleet by planned retirements and other potential lease expirations.
We have updated guidance on selected operating and financial statistics as follows:
Estimate Estimate
Operating Statistics 1st Qtr 2001 vs. 1st Qtr 2000 2001 vs. 2000
CASM 4.0 - 4.5% 0 - 1.0%
CASM Holding Fuel Price Constant 3.5 - 4.0% 2.0 - 2.5%
Fuel Price 86 - 88 cents 80 - 85 cents
Fuel Gallons Consumed (1.0)% 3.0%
Financial 2001 Estimate
Aircraft Rent $900 Million
Net Interest Income/(Expense) $174 Million
Dividends on Preferred Stock of Trust $10 Million
(net of tax)
ASMs 2001 (Year-over-Year Percentage Change)
1Q01E 2Q01E 3Q01E 4Q01E FY01E
Domestic 4% 6% 7% 5% 5%
Latin America 1% 2% 0% 5% 2%
Europe (6)% 0% (5)% 4% (2)%
Pacific 6% 34% 32% 26% 24%
System 2% 7% 6% 7% 5%
EPS Estimated Share Count - First Quarter 2001 (Millions)
Share count used for calculating basic and diluted earnings per share at different income levels for first quarter 2001 is as follows:
Quarterly Number of Shares Diluted
Earnings Level Basic Diluted Interest Addback
Over $28.1 55 61 $2.1
Between $0 - $28.1 55 57 --
Below $0 55 55 --
Please note that this chart is based upon several assumptions including market stock price and number of shares outstanding. The number of shares used in the actual EPS calculation will likely be different from those set forth above.
As previously announced, we expect to repurchase 6.7 million Class A shares from Northwest Airlines and to recapitalize all remaining Class A shares into 1.32 shares of Class B on January 22, 2001. After the close of this transaction the company will have $87 million remaining in its stock repurchase program.
We anticipate commencing our share repurchase program at the beginning of the second quarter. We estimate share count for diluted EPS calculation to be approximately 1.5 million shares less per quarter after the first quarter. For the full year 2001 we are estimating an average diluted share count of approximately 59 million.
If you should have any questions, please do not hesitate to call.
Sincerely,
Diane Dayhoff
CONTINENTAL AIRLINES, INC.
Attachment A
CALCULATION OF BASIC AND DILUTED EARNINGS PER SHARE
FOR THE QUARTER ENDED 12-31-00
EXCLUDING AMERICA WEST GAIN
|
BASIC |
DILUTED |
|||||||||||
|
# of |
# of |
Exercise |
||||||||||
|
Shares O/S |
Shares O/S |
Price |
Proceeds |
|||||||||
|
(1) |
(1) |
|||||||||||
|
Stock options |
0 |
6,550,579 |
various $'s |
257,982,513 |
(2) |
|||||||
|
Assumed proceeds used to repurchase shares |
(5,432,950) |
(257,982,513) |
|
|||||||||
|
|
||||||||||||
|
Weighted average # Class A & B shares |
||||||||||||
|
O/S during quarter |
58,236,461 |
58,236,461 |
||||||||||
|
$250 Convert Pref Notes @6.00% |
0 |
2,355,072 |
||||||||||
|
Potentially Dilutive Shares (NW Repurch) @$48 (11/15-12/31) |
0 |
1,449,027 |
||||||||||
|
Contingently Issuable Shares (Recapitalization) |
684,522 |
684,522 |
||||||||||
|
Total Adjusted Shares |
58,920,983 |
(A) |
63,842,749 |
(C) |
||||||||
|
Net income applicable to Common Shares |
$ 37,847,000 |
$ 37,847,000 |
||||||||||
|
Net Interest Add Back for TIDES |
$ - |
$ 1,172,943 |
||||||||||
|
Adjusted Net Income |
$ 37,847,000 |
(B) |
$ 39,019,943 |
(B) |
||||||||
|
|
|
|||||||||||
|
Earnings per share (B) / (A) |
$0.64 |
(B) / (C) |
$0.61 |
|||||||||
|
(1) weighted average # of shares outstanding during period |
||||||||||||
|
(2) weighted proceeds which includes additional proceeds due to tax benefit |
||||||||||||
Attachment B
Continental Airlines Flexible Fleet Plan
Committed Fleet
Includes Continental, Continental Micronesia and Continental Express Regional Jets
December 31, 2000
Firm Commitments Less Planned Retirements
|
Total @ |
Net Inductions and Exits |
Total @ |
|||||
|
YE 2000 |
2001E |
2002E |
2003E |
2004E |
2005E |
YE 2005E |
|
|
777-200ER |
16 |
- |
2 |
- |
- |
- |
18 |
|
DC10-30 |
17 |
(8) |
(4) |
(5) |
- |
- |
- |
|
767-400ER |
4 |
2 |
10 |
4 |
2 |
2 |
24 |
|
767-200ER |
3 |
7 |
- |
- |
- |
- |
10 |
|
757-300 |
- |
2 |
6 |
7 |
- |
- |
15 |
|
757-200 |
41 |
- |
- |
- |
- |
- |
41 |
|
737-900 |
- |
10 |
5 |
- |
- |
- |
15 |
|
737-800 |
58 |
14 |
13 |
- |
- |
- |
85 |
|
MD-80 |
65 |
- |
- |
- |
- |
- |
65 |
|
737-700 |
36 |
- |
- |
- |
- |
- |
36 |
|
737-300 |
65 |
- |
- |
- |
- |
- |
65 |
|
737-500 |
66 |
- |
- |
- |
- |
- |
66 |
|
Total CAL & CMI Fleet |
371 |
27 |
32 |
6 |
2 |
2 |
440 |
|
ERJ-145XR |
- |
- |
6 |
31 |
36 |
2 |
75 |
|
ERJ-145 |
78 |
29 |
33 |
9 |
- |
- |
149 |
|
ERJ-135 |
18 |
12 |
12 |
8 |
- |
- |
50 |
|
Total Regional Jet Fleet |
96 |
41 |
51 |
48 |
36 |
2 |
274 |
|
Total Jet Fleet |
467 |
68 |
83 |
54 |
38 |
4 |
714 |
Firm Commitments Less Planned Retirements and Other Lease Expirations
|
Total @ |
Net Inductions and Exits |
Total @ |
|||||
|
YE 2000 |
2001E |
2002E |
2003E |
2004E |
2005E |
YE 2005E |
|
|
777-200ER |
16 |
- |
2 |
- |
- |
- |
18 |
|
DC10-30 |
17 |
(8) |
(4) |
(5) |
- |
- |
- |
|
767-400ER |
4 |
2 |
10 |
4 |
2 |
2 |
24 |
|
767-200ER |
3 |
7 |
- |
- |
- |
- |
10 |
|
757-300 |
- |
2 |
6 |
7 |
- |
- |
15 |
|
757-200 |
41 |
- |
- |
- |
- |
- |
41 |
|
737-900 |
- |
10 |
5 |
- |
- |
- |
15 |
|
737-800 |
58 |
14 |
13 |
- |
- |
- |
85 |
|
MD-80 |
65 |
(5) |
(15) |
(6) |
(3) |
(9) |
27 |
|
737-700 |
36 |
- |
- |
- |
- |
- |
36 |
|
737-300 |
65 |
(1) |
(6) |
(15) |
(12) |
- |
31 |
|
737-500 |
66 |
- |
(1) |
(2) |
- |
- |
63 |
|
Total CAL & CMI Fleet |
371 |
21 |
10 |
(17) |
(13) |
(7) |
365 |
|
ERJ-145XR |
- |
- |
6 |
31 |
36 |
2 |
75 |
|
ERJ-145 |
78 |
29 |
33 |
9 |
- |
- |
149 |
|
ERJ-135 |
18 |
12 |
12 |
8 |
- |
- |
50 |
|
Total Regional Jet Fleet |
96 |
41 |
51 |
48 |
36 |
2 |
274 |
|
Total Jet Fleet |
467 |
62 |
61 |
31 |
23 |
(5) |
639 |