1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
0-9781
(Commission File Number)
CONTINENTAL AIRLINES, INC.
(Exact name of registrant as specified in its charter)
Delaware 74-2099724
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
2929 Allen Parkway, Suite 2010, Houston, Texas 77019
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: 713-834-2950
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- -------------------
Class A Common Stock, New York Stock Exchange, Inc.
par value $.01 per share
Class B Common Stock, New York Stock Exchange, Inc.
par value $.01 per share
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
------- ------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant was $784 million as of February 16, 1996.
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes X No
------- -------
_______________
As of February 16, 1996, 6,301,056 shares of Class A Common Stock and
21,484,074 shares of Class B Common Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Proxy Statement for Annual Meeting
of Stockholders to be held on May 17, 1996: PART III
2
Item 8. The consolidated balance sheets are amended and restated in their
entirety as follows:
CONTINENTAL AIRLINES, INC.
CONSOLIDATED BALANCE SHEETS
(In millions of dollars, except for share data)
December 31, December 31,
ASSETS 1995 1994
------------ ------------
Current Assets:
Cash and cash equivalents, including restricted cash
and cash equivalents of $144 and $119, respectively . . . . . . . . . $ 747 $ 396
Accounts receivable, net of allowance for doubtful
receivables of $44 and $38, respectively . . . . . . . . . . . . . . 351 376
Spare parts and supplies, net of allowance for
obsolescence of $36 and $36, respectively . . . . . . . . . . . . . . 127 142
Prepayments and other . . . . . . . . . . . . . . . . . . . . . . . . 90 76
------ ------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . 1,315 990
------ ------
Property and Equipment:
Owned property and equipment:
Flight equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 1,107 1,004
Other . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . 288 282
------ ------
1,395 1,286
Less: Accumulated depreciation . . . . . . . . . . . . . . . . . . . 285 207
------ ------
1,110 1,079
------ ------
Purchase deposits for flight equipment . . . . . . . . . . . . . . . . 48 166
------ ------
Capital leases:
Flight equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 394 400
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 17
------ ------
422 417
Less: Accumulated amortization . . . . . . . . . . . . . . . . . . . 119 69
------ ------
303 348
------ ------
Total property and equipment . . . . . . . . . . . . . . . . . . . . 1,461 1,593
------ ------
Other Assets:
Routes, gates and slots, net of accumulated amortization
of $154 and $97, respectively . . . . . . . . . . . . . . . . . . . . 1,531 1,591
Reorganization value in excess of amounts allocable to
identifiable assets, net of accumulated amortization of $46
and $31, respectively . . . . . . . . . . . . . . . . . . . . . . . 251 318
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 17
Other assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . 100 92
------ ------
Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . 2,045 2,018
------ ------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,821 $4,601
====== ======
(continued on next page)
3
CONTINENTAL AIRLINES, INC.
CONSOLIDATED BALANCE SHEETS
(In millions of dollars, except for share data)
December 31, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994
------------ ------------
Current Liabilities:
Debt and capital lease obligations in default . . . . . . . . . . . . . . $ - $ 490
Current maturities of long-term debt . . . . . . . . . . . . . . . . . . . 163 126
Current maturities of capital leases . . . . . . . . . . . . . . . . . . . 58 26
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 617 630
Air traffic liability . . . . . . . . . . . . . . . . . . . . . . . . . . 579 584
Accrued payroll and pensions . . . . . . . . . . . . . . . . . . . . . . . 181 179
Accrued other liabilities . . . . . . . . . . . . . . . . . . . . . . . . 386 373
-------- -------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . 1,984 2,408
-------- -------
Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,352 1,038
-------- -------
Capital Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 306 164
-------- -------
Deferred Credits and Other Long-Term Liabilities:
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 46 28
Deferred credit - aircraft operating leases . . . . . . . . . . . . . . . 97 138
Accruals for aircraft retirements and excess facilities . . . . . . . . . 175 392
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246 251
-------- -------
Total deferred credits and other long-term liabilities . . . . . . . . . 564 809
-------- -------
Commitments and Contingencies
Minority Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 26
-------- -------
Continental-Obligated Mandatorily Redeemable Preferred
Securities of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . 242 -
-------- -------
Redeemable Preferred Stock (aggregate redemption value -
$41 and $56, respectively) . . . . . . . . . . . . . . . . . . . . . . . . 41 53
-------- -------
Common Stockholders' Equity:
Class A common stock - $.01 par, 50,000,000 shares
authorized; 6,301,056 shares issued and outstanding at
December 31, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . - -
Class B common stock - $.01 par, 100,000,000 shares
authorized; 21,428,274 shares issued and outstanding at
December 31, 1995; 20,403,512 shares issued and
20,373,512 shares outstanding at December 31, 1994 . . . . . . . . . . . - -
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . 733 778
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . (428) (652)
Unvested portion of restricted stock . . . . . . . . . . . . . . . . . . . (10) (14)
Additional minimum pension liability . . . . . . . . . . . . . . . . . . . (8) (7)
Unrealized gain (loss) on marketable equity securities . . . . . . . . . . 18 (2)
Treasury stock - 30,000 shares in 1994 . . . . . . . . . . . . . . . . . . - -
-------- -------
Total common stockholders' equity . . . . . . . . . . . . . . . . . . . 305 103
-------- -------
Total Liabilities and Stockholders' Equity . . . . . . . . . . . . . . . $ 4,821 $ 4,601
======== =======
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
F-6
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Item 8. The consolidated statements of cash flows are amended and restated in
their entirety as follows:
CONTINENTAL AIRLINES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of dollars)
Predecessor
Reorganized Company Company
-------------------------------------------- -------------
Period from
Reorganization Period from
(April 28, January 1,
Year Ended December 31, 1993 through 1993 through
------------------------- December 31, April 27,
1995 1994 1993) 1993
------- ------ ---------------- -------------
Cash Flows From Operating
Activities:
Net income (loss) . . . . . . . . . . $224 $(613) $(39) $2,640
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization . . . 253 258 162 77
Provision for aircraft and
facilities . . . . . . . . . . . . 14 447 - -
Extraordinary credit - gain on
discharge of debt, net - - - (3,619)
Reorganization items, net - - - 779
Gain on System One transactions (108) - - -
Other, net . . . . . . . . . . . . . 103 (52) (38) (20)
Changes in operating assets and
liabilities:
(Increase) decrease in accounts
receivable . . . . . . . . . . . . (21) (64) 113 (133)
(Increase) decrease in spare
parts and supplies . . . . . . . . (8) (10) 3 -
(Increase) decrease in
prepayments and other assets . . . (59) (12) 14 34
Increase in accounts payable . . . 48 89 15 75
Increase (decrease) in air
traffic liability . . . . . . . . (5) (7) (96) 110
Increase (decrease) in accrued
liabilities, deferred credits
and other . . . . . . . . . . . . (92) 7 (69) 130
---- ----- ---- ------
Net cash provided by operating
activities . . . . . . . . . . . . . 349 43 65 73
---- ----- ---- ------
(continued on next page)
F-7
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CONTINENTAL AIRLINES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of dollars)
Predecessor
Reorganized Company Company
----------------------------------------------- ------------
Period from
Reorganization Period from
(April 28, January 1,
Year Ended December 31, 1993 through 1993 through
----------------------------- December 31, April 27,
1995 1994 1993) 1993
---------- ---------- ---------------- ------------
Cash Flows from Investing Activities:
Proceeds from disposition of
property, equipment and
other assets . . . . . . . . . . . . $ 60 $ 29 $ 4 $ 36
Capital expenditures, net of
returned purchase deposits . . . . . (82) (227) (236) (67)
Purchase deposits refunded in
connection with aircraft delivered. . 97 96 - -
Investment in America West . . . . . . - (19) - -
----- ----- ----- -----
Net cash provided (used)
by investing activities . . . . . . . 75 (121) (232) (31)
----- ----- ----- -----
Cash Flows from Financing Activities:
Net proceeds from issuance of
long-term debt. . . . . . . . . . . . 9 33 90 308
Payments on long-term debt and
capital lease obligations . . . . . . (323) (280) (121) (106)
Net proceeds from issuance of
preferred and common stock 13 - 153 122
Net proceeds from issuance of
preferred securities of trust . . . . 242 - - -
Purchase of warrants . . . . . . . . . (14) - - -
----- ----- ----- -----
Net cash provided (used) by
financing activities . . . . . . . . (73) (247) 122 324
----- ----- ----- -----
Net Increase (Decrease) in
Cash and Cash Equivalents . . . . . . 351 (325) (45) 366
Cash and Cash Equivalents
Beginning of Period . . . . . . . . . 396 721 766 400
----- ----- ----- -----
Cash and Cash Equivalents
End of Period . . . . . . . . . . . . $ 747 $ 396 $ 721 $ 766
===== ===== ===== =====
(continued on next page)
F-8
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CONTINENTAL AIRLINES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of dollars)
Predecessor
Reorganized Company Company
--------------------------------------------------- ------------
Period from
Reorganization Period from
(April 28, January 1,
Year Ended December 31, 1993 through 1993 through
--------------------------------- December 31, April 27,
1995 1994 1993) 1993
-------------- -------------- ---------------- ------------
Supplemental Cash Flows Information:
Interest paid . . . . . . . . . . . . $ 179 $ 202 $ 93 $ 31
Income taxes paid . . . . . . . . . . $ 11 $ - $ - $ -
Financing and Investing Activities
Not Affecting Cash:
Reclassification of accrued rent,
capital leases and interest to
long-term debt . . . . . . . . . . . $ 65 $ 28 $ 73 $ 113
Capitalization of operating leases
due to renegotiated terms . . . . . . $ - $ - $ 137 $ -
Property and equipment acquired
through the issuance of debt . . . . $ 92 $ 10 $ 2 $ -
Investment in AMADEUS
acquired in connection with
System One transactions . . . . . . . $ 120 $ - $ - $ -
Reduction of debt in connection
with System One transactions . . . . $ 42 $ - $ - $ -
Issuance of debt in connection
with purchase of Air Canada
warrants. . . . . . . . . . . . . . . $ 42 $ - $ - $ -
Issuance of convertible secured
debentures in connection with
the aircraft settlements . . . . . . $ 158 $ - $ - $ -
Exchange of preferred stock
for long-term debt . . . . . . . . . $ 21 $ - $ - $ -
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
F-9
7
Item 14.(b) Schedule I. Condensed Balance Sheet is amended and restated in
its entirety as follows;
CONTINENTAL AIRLINES, INC.
(Parent Company Only)
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED BALANCE SHEET (a)(b)
(In millions of dollars, except for share data)
December 31, December 31,
ASSETS 1995 1994
------------ ------------
Current Assets:
Cash and cash equivalents, including restricted cash and cash
equivalents of $144 and $119, respectively . . . . . . . . . . . . . . $ 675 $ 326
Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . 282 282
Accounts receivable from subsidiaries, net . . . . . . . . . . . . . . . 18 64
Notes receivable from subsidiaries . . . . . . . . . . . . . . . . . . . 79 98
Spare parts and supplies, net . . . . . . . . . . . . . . . . . . . . . . 107 120
Prepayments and other . . . . . . . . . . . . . . . . . . . . . . . . . . 85 70
------ ------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . 1,246 960
------ ------
Property and Equipment:
Owned property and equipment, net of accumulated
depreciation of $263 and $180, respectively . . . . . . . . . . . . . . 984 1,017
Purchase deposits for flight equipment . . . . . . . . . . . . . . . . . 47 166
Capital leases, net of accumulated amortization
of $102 and $58, respectively . . . . . . . . . . . . . . . . . . . . . 272 311
------ ------
Total property and equipment . . . . . . . . . . . . . . . . . . . . 1,303 1,494
------ ------
Other Assets:
Routes, gates and slots, net of accumulated amortization
of $116 and $73, respectively . . . . . . . . . . . . . . . . . . . . . 1,005 1,051
Reorganization value in excess of amounts allocable to
identifiable assets, net of accumulated amortization
of $35 and $23, respectively . . . . . . . . . . . . . . . . . . . . . 196 208
Investment in subsidiaries (g) . . . . . . . . . . . . . . . . . . . . . 276 261
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 17
Other assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 49
------ ------
Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . 1,604 1,586
------ ------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,153 $4,040
====== ======
These Statements should be read in conjunction with the Consolidated Financial
Statements and Notes thereto and Notes to Schedule I.
48
8
CONTINENTAL AIRLINES, INC.
(Parent Company Only)
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED BALANCE SHEET (a)(b)
(In millions of dollars, except for share data)
December 31, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994
--------------- ---------------
Current Liabilities:
Debt and capital lease obligations in default . . . . . . . . . . . . . . . $ - $ 490
Current maturities of long-term debt (c) . . . . . . . . . . . . . . . . . 156 108
Current maturities of capital leases . . . . . . . . . . . . . . . . . . . 50 18
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 564 548
Air traffic liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 541 552
Accrued other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 537 493
------- ------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . 1,848 2,209
------- ------
Long-Term Debt (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,118 860
------- ------
Capital Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269 120
------- ------
Deferred Credits and Other Long-Term Liabilities . . . . . . . . . . . . . . 330 695
------- ------
Commitments and Contingencies (d)
Continental-Obligated Mandatorily Redeemable Preferred Securities
of Trust (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242 -
------- ------
Redeemable Preferred Stock (aggregate liquidation
value - $41 and $56, respectively) (f) . . . . . . . . . . . . . . . . . . 41 53
------- ------
Common Stockholders' Equity:
Class A common stock - $.01 par, 50,000,000 shares authorized;
6,301,056 shares issued and outstanding at December 31, 1995
and 1994, respectively (f) . . . . . . . . . . . . . . . . . . . . . . . - -
Class B common stock - $.01 par, 100,000,000 shares authorized;
21,428,274 shares issued and outstanding at December 31, 1995;
20,403,512 shares issued and 20,373,512 shares outstanding at
December 31, 1994, (f) . . . . . . . . . . . . . . . . . . . . . . . . . - -
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . 733 778
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . (428) (652)
Unvested portion of restricted stock . . . . . . . . . . . . . . . . . . . (10) (14)
Additional minimum pension liability . . . . . . . . . . . . . . . . . . . (8) (7)
Unrealized gain (loss) on marketable equity securities . . . . . . . . . . 18 (2)
Treasury stock - 30,000 shares in 1994 . . . . . . . . . . . . . . . . . . - -
------- ------
Total common stockholders' equity . . . . . . . . . . . . . . . . . . . . 305 103
------- ------
Total Liabilities and Stockholders' Equity . . . . . . . . . . . . . . $ 4,153 $4,040
======= ======
These Statements should be read in conjunction with the Consolidated Financial
Statements and Notes thereto and Notes to Schedule I.
49
9
SIGNATURES
Pursuant to the requirements of the Secuirties Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CONTINENTAL AIRLINES, INC.
------------------------------------
(Registrant)
Date: March 7, 1996 by: /s/ MICHAEL P. BONDS
--------------------- ------------------------------------
Michael P. Bonds
Staff Vice President
and Controller
(On behalf of Registrant)
