Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Operating Revenue by Principal Geographic Region

The Company's operating revenue by principal geographic region (as defined by the U.S. Department of Transportation) for the years ended December 31 is presented in the table below (in millions):

	2018		2017¹		2016¹
Domestic (U.S. and Canada)	$	25,552	$	23,114	$	22,151
Atlantic	7,103		6,340		6,194
Pacific	5,188		4,914		4,984
Latin America	3,460		3,416		3,229
Total	$	41,303	$	37,784	$	36,558

(1) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See (u) below for additional information.

Roll Forward of Frequent Flyer Deferred Revenue

The table below presents a roll forward of Frequent flyer deferred revenue (in millions):

	Twelve Months Ended December 31,
	2018			2017
Total Frequent flyer deferred revenue - beginning balance	$	4,783		$	4,889
Total miles awarded	2,451			2,077
Travel miles redeemed (Passenger revenue)	(2,068		)	(2,004		)
Non-travel miles redeemed (Other operating revenue)	(161		)	(179		)
Total Frequent flyer deferred revenue - ending balance	$	5,005		$	4,783

Impact of the Adoption of the New Revenue Standard and the New Retirement Standard and the Expected Impact of the Adoption of the New Lease Standard

The adoption of the New Lease Standard is expected to impact our reported results as shown in the tables below (in millions, except per share amounts):

Consolidated Balance Sheets as of December 31,
	As Reported						New Lease Standard Adjustments						As Adjusted
	2018			2017			2018			2017			2018			2017
Current assets:
Receivables, less allowance for doubtful accounts	$	1,346		$	1,340		$	80		$	126		$	1,426		$	1,466
Prepaid expenses and other	913			1,071			(180		)	(208		)	733			863
Operating property and equipment:
Other property and equipment (owned)	7,919			6,946			(1,041		)	(922		)	6,878			6,024
Less-Accumulated depreciation and amortization (owned)	(12,760		)	(11,159		)	140			92			(12,620		)	(11,067		)
Flight equipment (finance leases) (a)	1,029			1,151			(37		)	(211		)	992			940
Less-Accumulated amortization	(654		)	(777		)	8			169			(646		)	(608		)
Operating lease assets
Flight equipment	—			—			2,380			3,102			2,380			3,102
Other property and equipment	—			—			2,882			2,975			2,882			2,975
Current liabilities:
Current maturities of finance leases (a)	149			128			(26		)	(50		)	123			78
Current maturities of operating leases	—			—			719			949			719			949
Other	619			576			(66		)	(58		)	553			518
Long-term obligations under finance leases (a)	1,134			996			(910		)	(766		)	224			230
Long-term obligations under operating leases	—			—			5,276			5,789			5,276			5,789
Other liabilities and deferred credits:
Deferred income taxes	814			204			14			16			828			220
Other	1,832			1,832			(822		)	(811		)	1,010			1,021
Stockholders' equity:
Retained earnings	6,668			4,549			47			54			6,715			4,603

(a) Finance leases, under the New Lease Standard, are the equivalent of capital leases under Topic 840.

The tables below present the impact of the adoption of the New Revenue Standard and the New Retirement Standard on select accounts and captions of UAL's statements of consolidated operations for the twelve months ended December 31, 2017 and 2016 (in millions, except per share amounts) and the impact on UAL's balance sheet accounts and captions as of December 31, 2017 (in millions):

Statements of Consolidated Operations for the Years Ended December 31,
	As Previously Reported						New Revenue Standard Adjustments						New Retirement Standard Adjustments						As Adjusted
	2017			2016			2017			2016			2017			2016			2017			2016
Operating revenue:
Passenger revenue	$	32,404		$	31,457		$	2,056		$	1,972		$	—		$	—		$	34,460		$	33,429
Cargo	1,035			876			79			58			—			—			1,114			934
Other operating revenue	4,297			4,223			(2,087		)	(2,028		)	—			—			2,210			2,195
Total operating revenue	37,736			36,556			48			2			—			—			37,784			36,558
Operating expenses	34,238			32,218			(21		)	(12		)	(104		)	8			34,113			32,214
Operating income	3,498			4,338			69			14			104			(8		)	3,671			4,344
Nonoperating expense, net	(499		)	(519		)	(28		)	(60		)	(104		)	8			(631		)	(571		)
Income before income taxes	2,999			3,819			41			(46		)	—			—			3,040			3,773
Income tax expense	868			1,556			28			(17		)	—			—			896			1,539
Net income	$	2,131		$	2,263		$	13		$	(29	)	$	—		$	—		$	2,144		$	2,234
Earnings per share, basic	$	7.04		$	6.86		$	0.04		$	(0.09	)	$	—		$	—		$	7.08		$	6.77
Earnings per share, diluted	$	7.02		$	6.85		$	0.04		$	(0.09	)	$	—		$	—		$	7.06		$	6.76

Consolidated Balance Sheet as of December 31, 2017
	As Previously Reported		New Revenue Standard Adjustments			As Adjusted
Current assets:
Prepaid expenses and other	$	1,051	$	20		$	1,071
Current liabilities:
Advance ticket sales	3,876		64			3,940
Frequent flyer deferred revenue	2,176		16			2,192
Other	569		7			576
Other liabilities and deferred credits:
Frequent flyer deferred revenue	2,565		26			2,591
Deferred income taxes	225		(21		)	204
Stockholders' equity:
Retained earnings	$	4,621	$	(72	)	$	4,549

Statements of Consolidated Operations for the Years Ended December 31,
	As Reported						New Lease Standard Adjustments						As Adjusted
	2018			2017			2018			2017			2018			2017
Operating expense:
Regional capacity purchase	$	2,601		$	2,232		$	48		$	36		$	2,649		$	2,268
Landing fees and other rent	2,359			2,240			90			70			2,449			2,310
Depreciation and amortization	2,240			2,149			(75		)	(53		)	2,165			2,096
Total operating expenses	38,011			34,113			63			53			38,074			34,166
Operating income	3,292			3,671			(63		)	(53		)	3,229			3,618
Nonoperating income (expense):
Interest expense	(729		)	(671		)	59			45			(670		)	(626		)
Interest capitalized	70			84			(5		)	(10		)	65			74
Total nonoperating expense, net	(634		)	(631		)	53			36			(581		)	(595		)
Income before income taxes	2,658			3,040			(10		)	(17		)	2,648			3,023
Income tax expense	529			896			(3		)	(16		)	526			880
Net income	$	2,129		$	2,144		$	(7	)	$	(1	)	$	2,122		$	2,143
Earnings per share, basic	$	7.73		$	7.08		$	(0.03	)	$	—		$	7.70		$	7.08
Earnings per share, diluted	$	7.70		$	7.06		$	(0.03	)	$	—		$	7.67		$	7.06

Reconciliation of Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the statements of consolidated cash flows (in millions):

	UAL						United
	At December 31,						At December 31,
	2018		2017		2016		2018		2017		2016
Current assets:
Cash and cash equivalents	$	1,694	$	1,482	$	2,179	$	1,688	$	1,476	$	2,173
Restricted cash included in Prepaid expenses and other	—		18		—		—		18		—
Other assets:
Restricted cash	105		91		124		105		91		124
Total cash, cash equivalents and restricted cash shown in the statement of consolidated cash flows	$	1,799	$	1,591	$	2,303	$	1,793	$	1,585	$	2,297

Reconciliation of Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the statements of consolidated cash flows (in millions):

	UAL						United
	At December 31,						At December 31,
	2018		2017		2016		2018		2017		2016
Current assets:
Cash and cash equivalents	$	1,694	$	1,482	$	2,179	$	1,688	$	1,476	$	2,173
Restricted cash included in Prepaid expenses and other	—		18		—		—		18		—
Other assets:
Restricted cash	105		91		124		105		91		124
Total cash, cash equivalents and restricted cash shown in the statement of consolidated cash flows	$	1,799	$	1,591	$	2,303	$	1,793	$	1,585	$	2,297

Estimated Useful Lives of Property and Equipment

The estimated useful lives of property and equipment are as follows:

	Estimated Useful Life (in years)
Aircraft and related rotable parts	25 to 30
Aircraft seats	10 to 15
Buildings	25 to 45
Other property and equipment	3 to 15
Computer software	5 to 15
Building improvements	1 to 40