Continental reports $579 million reduction in 2007 scheduled debt and lease payments

By Jennifer Lanning Drey

Portland, Ore., Jan. 18 - Continental Airlines, Inc. has reduced its 2007 scheduled debt and capital lease payments to $358 million, assuming the conversion of $200 million of convertible notes that mature Feb. 1, from $937 million at Dec. 31, 2005, according to a company news release.

"If you look back a year ago, a lot of people were concerned about our 2007 maturities because we had a pretty good number. We worked throughout this year to move ahead of those," Jeff Misner, Continental's chief financial officer, said Thursday during the company's quarterly earnings conference call.

Continental ended the fourth quarter with $2.48 billion in unrestricted cash and short-term investments, while restricted cash at the end of the period totaled $265 million, he said.

During the quarter, Continental issued $200 million of 8¾% unsecured notes due 2011 - a move the company said was made with its upcoming debt maturities in mind.

Continental expects to end the current quarter with a cash and short-term investment balance between $2.4 billion and $2.5 billion, according to Misner in the news release.

Looking further into the current year, company executives said increased competition in Continental's network, including within regional markets, is likely to put pressure on yields.

However, Continental chief executive officer Larry Kellner addressed that pressure saying, "Even so, with the plan that we have in place, we believe that we are well-positioned to return to sustained profitability."

"We think based on current market conditions, 2007 will be another good year for us, and we're excited about our prospects."

Continental reported a fourth-quarter net loss of $26 million, or $0.29 per diluted share, but net income of $343.0 million, or $3.30 per diluted share, for the full-year 2006. The company reported a net loss of $68 million for the full-year 2005.

The net income reported in 2006 was driven by strong revenue growth, which was up 17.1% year over year, and continued cost reductions, according to the release.

During 2007, Continental will look for ways to drive fuel efficiency and lower variable costs, while continuing to invest in hubs that are strategically located for international growth, Kellner said.

Houston-based Continental Airlines is the world's fifth largest airline.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.