The Wall Street Journal-20080117-Continental Delays Net Results Due to Charge
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Continental Delays Net Results Due to Charge
Continental Airlines Inc. said it won't report full fourth-quarter and 2007 results as planned today, instead reporting pretax results as it works to finalize a special tax charge of up to $140 million, which will affect its bottom line.
The company said the noncash charge will range from $70 million to $140 million and stems from the need to increase its tax-valuation allowance.
The need to boost the allowance, a reserve for the company, is related to a Congressional ruling last month that pilots don't have to retire until they are 65, which decreases the airline's pension liabilities.
The Houston-based carrier expects to finalize the figure by mid- February.
The drop in pension liability comes as Continental assumes most of its pilots will now work beyond age 60.
Continental will also record a $47 million fourth-quarter net gain resulting from several items, including a $28 million net gain from aircraft sales and aircraft-related charges; a $30 million gain on the sale of Arinc Inc.; a $7 million charge from pension-plan settlements; and a $4 million charge related to long-term pilot disability.
In its briefing today on results for the fourth quarter, Continental will discuss only pretax results. The airline will report net results at a later date, it said.
