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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission
File Number
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Exact Name of Registrant as
Specified in its Charter, Principal Executive
Office Address, Zip Code and
Telephone Number, Including Area Code
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State of
Incorporation
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I.R.S. Employer
Identification No.
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001-06033
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United Continental Holdings, Inc. 233 South Wacker Drive Chicago, Illinois 60606 (872) 825-4000
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Delaware
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36-2675207
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001-10323
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United Airlines, Inc. 233 South Wacker Drive Chicago, Illinois 60606 (872) 825-4000
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Delaware
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74-2099724
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Title of Each Class
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Name of Each Exchange on Which Registered
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United Continental Holdings, Inc.
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Common Stock, $0.01 par value
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The Nasdaq Stock Market LLC
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United Airlines, Inc.
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None
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None
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United Continental Holdings, Inc.
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None
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United Airlines, Inc.
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None
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United Continental Holdings, Inc.
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266,727,577 shares of common stock ($0.01 par value)
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United Airlines, Inc.
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1,000 shares of common stock ($0.01 par value) (100% owned by United Continental Holdings, Inc.)
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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Year
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Gallons Consumed
(in millions)
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Fuel Expense
(in millions)
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Average Price Per Gallon
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Percentage of Total Operating Expense
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Available Seat Miles per Fuel Gallon
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||||||
2018
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4,137
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$
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9,307
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$
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2.25
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24
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%
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67
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2017
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3,978
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$
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6,913
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$
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1.74
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20
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%
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66
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2016
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3,904
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$
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5,813
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$
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1.49
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18
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%
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65
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Employee
Group
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Number of
Employees
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Union
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Agreement Open for
Amendment
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Flight Attendants
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23,193
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Association of Flight Attendants (the "AFA")
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August 2021
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Fleet Service
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13,077
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International Association of Machinists and Aerospace Workers (the "IAM")
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December 2021
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Passenger Service
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11,932
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IAM
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December 2021
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Pilots
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11,742
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Air Line Pilots Association, International
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January 2019
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Technicians and Related & Flight Simulator Technicians
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9,236
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International Brotherhood of Teamsters (the "IBT")
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December 2022
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Passenger Service - United Ground Express, Inc.
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2,923
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IAM
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March 2025
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Catering Operations
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2,668
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UNITE HERE
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(a)
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Storekeeper Employees
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1,012
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IAM
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December 2021
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Dispatchers
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399
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Professional Airline Flight Control Association
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December 2021
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Fleet Tech Instructors
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131
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IAM
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December 2021
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Load Planners
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64
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IAM
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December 2021
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Security Officers
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48
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IAM
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December 2021
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Maintenance Instructors
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41
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IAM
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December 2021
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ITEM 1A.
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RISK FACTORS.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS.
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ITEM 2.
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PROPERTIES.
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Aircraft Type
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Total
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Owned
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Leased
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Seats in Standard Configuration
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Average Age (In Years)
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|||||||
Mainline:
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777-300ER
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18
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18
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—
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350-366
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1.5
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777-200ER
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55
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46
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9
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269-274
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18.8
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777-200
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19
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19
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—
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364
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21.5
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787-10
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3
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|
3
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—
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318
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0.1
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787-9
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25
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25
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—
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252
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2.8
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787-8
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12
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12
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—
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219
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5.5
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767-400ER
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16
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14
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2
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242
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17.3
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767-300ER
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38
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25
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13
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167-214
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22.9
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757-300
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21
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9
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12
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213-234
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16.3
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757-200
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56
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50
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6
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142-169
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22.8
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737 MAX 9
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9
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9
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—
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179
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0.4
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737-900ER
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136
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136
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—
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179
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6.0
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737-900
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12
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8
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4
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179
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17.3
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737-800
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141
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90
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51
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166
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14.8
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737-700
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40
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25
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15
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126
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19.8
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A320-200
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99
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70
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29
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150
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20.3
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A319-100
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70
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55
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15
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128
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17.6
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||
Total mainline
|
|
770
|
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614
|
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156
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15.1
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||
Aircraft Type
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Capacity Purchase Agreement Total
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Owned
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Leased
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Owned or Leased by Regional Carrier
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Regional Carrier Operator and Number of Aircraft
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Seats in Standard Configuration
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|||||||
Regional:
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Embraer E175
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153
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54
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—
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99
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SkyWest:
Mesa:
Republic:
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65
60
28
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76
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Embraer 170
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38
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—
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—
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38
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Republic:
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38
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70
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CRJ700
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64
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—
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|
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—
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64
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SkyWest:
GoJet:
Mesa:
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19
25
20
|
|
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70
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CRJ200
|
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128
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|
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—
|
|
|
—
|
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128
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|
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SkyWest:
Air Wisconsin:
ExpressJet:
|
60
56
12
|
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|
50
|
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Embraer ERJ 145 (XR/LR/ER)
|
|
176
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|
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82
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90
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|
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4
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|
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ExpressJet:
Trans States:
CommutAir:
|
105
40
31
|
|
|
50
|
|
Total regional
|
|
559
|
|
|
136
|
|
|
90
|
|
|
333
|
|
|
|
|
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||
Total
|
|
1,329
|
|
|
750
|
|
|
246
|
|
|
333
|
|
|
|
|
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|
•
|
One Boeing 737 MAX 9 and one Airbus 319-100, which were delivered in December 2018 but were awaiting operating certificates as of December 31, 2018;
|
•
|
One Boeing 767-200, which is being subleased to another airline;
|
•
|
Nine Boeing 747s, which are permanently grounded; and
|
•
|
Three Embraer ERJ 145s, which are temporarily grounded.
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Aircraft Type
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Number of Firm
Commitments (a) |
Airbus A350
|
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45
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Boeing 737 MAX
|
|
175
|
Boeing 777-300ER
|
|
4
|
Boeing 787
|
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24
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Embraer E175
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|
25
|
(a) United also has options and purchase rights for additional aircraft.
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ITEM 3.
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LEGAL PROCEEDINGS.
|
ITEM 4.
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MINE SAFETY DISCLOSURES.
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ITEM 5.
|
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
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Period
|
|
Total number of shares purchased (a) (b)
|
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Average price paid per share (b)(c)
|
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Total number of shares purchased as part of publicly announced plans or programs (a)
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Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) (a)
|
||||||
October 2018
|
|
572,349
|
|
|
$
|
85.76
|
|
|
572,349
|
|
|
$
|
1,941
|
|
November 2018
|
|
927,969
|
|
|
91.76
|
|
|
927,969
|
|
|
1,856
|
|
||
December 2018
|
|
1,228,339
|
|
|
85.87
|
|
|
1,228,339
|
|
|
1,750
|
|
||
Total
|
|
2,728,657
|
|
|
|
|
2,728,657
|
|
|
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ITEM 6.
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SELECTED FINANCIAL DATA.
|
|
|
Year Ended December 31,
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||||||||||||||||||
|
|
2018
|
|
2017 (a)
|
|
2016 (a)
|
|
2015
|
|
2014
|
||||||||||
Income Statement Data (in millions, except per share amounts):
|
|
|
|
|
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|
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|
||||||||||
Operating revenue
|
|
$
|
41,303
|
|
|
$
|
37,784
|
|
|
$
|
36,558
|
|
|
$
|
37,864
|
|
|
$
|
38,901
|
|
Operating expense
|
|
38,011
|
|
|
34,113
|
|
|
32,214
|
|
|
32,698
|
|
|
36,528
|
|
|||||
Operating income
|
|
3,292
|
|
|
3,671
|
|
|
4,344
|
|
|
5,166
|
|
|
2,373
|
|
|||||
Net income
|
|
2,129
|
|
|
2,144
|
|
|
2,234
|
|
|
7,340
|
|
|
1,132
|
|
|||||
Basic earnings per share
|
|
7.73
|
|
|
7.08
|
|
|
6.77
|
|
|
19.52
|
|
|
3.05
|
|
|||||
Diluted earnings per share
|
|
7.70
|
|
|
7.06
|
|
|
6.76
|
|
|
19.47
|
|
|
2.93
|
|
|||||
|
|
|
|
|
|
|
|
|
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|
||||||||||
Balance Sheet Data at December 31 (in millions):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrestricted cash, cash equivalents and short-term investments
|
|
$
|
3,950
|
|
|
$
|
3,798
|
|
|
$
|
4,428
|
|
|
$
|
5,196
|
|
|
$
|
4,384
|
|
Total assets
|
|
44,792
|
|
|
42,346
|
|
|
40,208
|
|
|
40,861
|
|
|
36,595
|
|
|||||
Debt and capital lease obligations
|
|
14,728
|
|
|
14,392
|
|
|
11,705
|
|
|
11,759
|
|
|
11,947
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017 (a)
|
|
2016 (a)
|
|
2015
|
|
2014
|
||||||||||
Consolidated (b)
|
|
|
|
|
|
|
|
|
|
||||||||||
Passengers (thousands) (c)
|
158,330
|
|
|
148,067
|
|
|
143,177
|
|
|
140,369
|
|
|
138,029
|
|
|||||
Revenue passenger miles ("RPMs") (millions) (d)
|
230,155
|
|
|
216,261
|
|
|
210,309
|
|
|
208,611
|
|
|
205,559
|
|
|||||
Available seat miles ("ASMs") (millions) (e)
|
275,262
|
|
|
262,386
|
|
|
253,590
|
|
|
250,003
|
|
|
246,021
|
|
|||||
Cargo revenue ton miles (millions) (f)
|
3,425
|
|
|
3,316
|
|
|
2,805
|
|
|
2,614
|
|
|
2,487
|
|
|||||
Passenger load factor (g)
|
83.6
|
%
|
|
82.4
|
%
|
|
82.9
|
%
|
|
83.4
|
%
|
|
83.6
|
%
|
|||||
Passenger revenue per available seat mile ("PRASM") (cents)
|
13.70
|
|
|
13.13
|
|
|
13.18
|
|
|
13.11
|
|
|
13.72
|
|
|||||
Total revenue per available seat mile ("TRASM") (cents)
|
15.00
|
|
|
14.40
|
|
|
14.42
|
|
|
15.15
|
|
|
15.81
|
|
|||||
Average yield per revenue passenger mile ("Yield") (cents) (h)
|
16.38
|
|
|
15.93
|
|
|
15.90
|
|
|
15.72
|
|
|
16.42
|
|
|||||
Cost per available seat mile ("CASM") (cents)
|
13.81
|
|
|
13.00
|
|
|
12.70
|
|
|
13.08
|
|
|
14.85
|
|
|||||
Average price per gallon of fuel, including fuel taxes
|
$
|
2.25
|
|
|
$
|
1.74
|
|
|
$
|
1.49
|
|
|
$
|
1.94
|
|
|
$
|
2.99
|
|
Fuel gallons consumed (millions)
|
4,137
|
|
|
3,978
|
|
|
3,904
|
|
|
3,886
|
|
|
3,905
|
|
|||||
Average stage length (miles) (i)
|
1,446
|
|
|
1,460
|
|
|
1,473
|
|
|
1,487
|
|
|
1,480
|
|
|||||
Average daily utilization of each mainline aircraft (hours:minutes) (j)
|
10:45
|
|
|
10:27
|
|
|
10:06
|
|
|
10:24
|
|
|
10:26
|
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
•
|
2018
net income was
$2.1 billion
, or
$7.70
diluted earnings per share, as compared to
$2.1 billion
, or
$7.06
diluted earnings per share, in 2017.
|
•
|
Revenue for 2018 increased $3.5 billion over 2017 due to a
4.9%
growth in ASMs and a PRASM increase of
4.3%
in
2018
compared to
2017
.
|
•
|
Aircraft fuel cost for
2018
increased
34.6%
over
2017
mainly due to higher fuel prices.
|
•
|
In
2018
, UAL repurchased approximately 17.5 million shares of its common stock for $1.2 billion. As of
December 31, 2018
, the Company had approximately
$1.8 billion
remaining to purchase shares under its share repurchase program.
|
•
|
UAL ended
2018
with
$6.0 billion
in unrestricted liquidity, which consisted of unrestricted cash, cash equivalents, short-term investments and available capacity under the revolving credit facility of its Amended and Restated Credit and Guaranty Agreement (as amended, the "Credit Agreement").
|
•
|
RPMs for
2018
increased
6.4%
as compared to
2017
, and ASMs increased
4.9%
from the prior year, resulting in a load factor of
83.6%
in
2018
versus 82.4% in 2017.
|
•
|
For
2018
and
2017
, the Company recorded U.S. Department of Transportation on-time arrival rates of 79.8% and 81.9%, respectively, and mainline completion factors of 99.2% and 99.0%, respectively.
|
|
2018
|
|
2017
|
|
Increase (Decrease)
|
|
% Change
|
||||||
Passenger revenue
|
$
|
37,706
|
|
|
$
|
34,460
|
|
|
$
|
3,246
|
|
|
9.4
|
Cargo
|
1,237
|
|
|
1,114
|
|
|
123
|
|
|
11.0
|
|||
Other operating revenue
|
2,360
|
|
|
2,210
|
|
|
150
|
|
|
6.8
|
|||
Total operating revenue
|
$
|
41,303
|
|
|
$
|
37,784
|
|
|
$
|
3,519
|
|
|
9.3
|
|
2018
|
|
2017
|
|
Increase (Decrease)
|
|
% Change
|
|||||||
Salaries and related costs
|
$
|
11,458
|
|
|
$
|
10,941
|
|
|
$
|
517
|
|
|
4.7
|
|
Aircraft fuel
|
9,307
|
|
|
6,913
|
|
|
2,394
|
|
|
34.6
|
|
|||
Regional capacity purchase
|
2,601
|
|
|
2,232
|
|
|
369
|
|
|
16.5
|
|
|||
Landing fees and other rent
|
2,359
|
|
|
2,240
|
|
|
119
|
|
|
5.3
|
|
|||
Depreciation and amortization
|
2,240
|
|
|
2,149
|
|
|
91
|
|
|
4.2
|
|
|||
Aircraft maintenance materials and outside repairs
|
1,767
|
|
|
1,856
|
|
|
(89
|
)
|
|
(4.8
|
)
|
|||
Distribution expenses
|
1,558
|
|
|
1,435
|
|
|
123
|
|
|
8.6
|
|
|||
Aircraft rent
|
433
|
|
|
621
|
|
|
(188
|
)
|
|
(30.3
|
)
|
|||
Special charges
|
487
|
|
|
176
|
|
|
311
|
|
|
NM
|
|
|||
Other operating expenses
|
5,801
|
|
|
5,550
|
|
|
251
|
|
|
4.5
|
|
|||
Total operating expenses
|
$
|
38,011
|
|
|
$
|
34,113
|
|
|
$
|
3,898
|
|
|
11.4
|
|
|
|
2018
|
|
2017
|
|
%
Change
|
||||
Fuel expense
|
|
$
|
9,307
|
|
|
$
|
6,913
|
|
|
34.6
|
Total fuel consumption (gallons)
|
|
4,137
|
|
|
3,978
|
|
|
4.0
|
||
Average price per gallon
|
|
$
|
2.25
|
|
|
$
|
1.74
|
|
|
29.3
|
|
2018
|
|
2017
|
||||
Impairment of assets
|
$
|
377
|
|
|
$
|
25
|
|
Termination of an engine maintenance service agreement
|
64
|
|
|
—
|
|
||
Severance and benefit costs
|
41
|
|
|
116
|
|
||
(Gains) losses on sale of assets and other special charges
|
5
|
|
|
35
|
|
||
Total special charges
|
$
|
487
|
|
|
$
|
176
|
|
|
2018
|
|
2017
|
|
Increase (Decrease)
|
|
% Change
|
|||||||
Interest expense
|
$
|
(729
|
)
|
|
$
|
(671
|
)
|
|
$
|
58
|
|
|
8.6
|
|
Interest capitalized
|
70
|
|
|
84
|
|
|
(14
|
)
|
|
(16.7
|
)
|
|||
Interest income
|
101
|
|
|
57
|
|
|
44
|
|
|
77.2
|
|
|||
Miscellaneous, net
|
(76
|
)
|
|
(101
|
)
|
|
(25
|
)
|
|
(24.8
|
)
|
|||
Total nonoperating expense, net
|
$
|
(634
|
)
|
|
$
|
(631
|
)
|
|
$
|
3
|
|
|
0.5
|
|
|
2017
|
|
2016
|
|
Increase (Decrease)
|
|
% Change
|
|||||||
Passenger revenue
|
$
|
34,460
|
|
|
$
|
33,429
|
|
|
$
|
1,031
|
|
|
3.1
|
|
Cargo
|
1,114
|
|
|
934
|
|
|
180
|
|
|
19.3
|
|
|||
Other operating revenue
|
2,210
|
|
|
2,195
|
|
|
15
|
|
|
0.7
|
|
|||
Total operating revenue
|
$
|
37,784
|
|
|
$
|
36,558
|
|
|
$
|
1,226
|
|
|
3.4
|
|
|
2017
|
|
2016
|
|
Increase (Decrease)
|
|
% Change
|
|||||||
Salaries and related costs
|
$
|
10,941
|
|
|
$
|
10,176
|
|
|
$
|
765
|
|
|
7.5
|
|
Aircraft fuel
|
6,913
|
|
|
5,813
|
|
|
1,100
|
|
|
18.9
|
|
|||
Landing fees and other rent
|
2,240
|
|
|
2,165
|
|
|
75
|
|
|
3.5
|
|
|||
Regional capacity purchase
|
2,232
|
|
|
2,197
|
|
|
35
|
|
|
1.6
|
|
|||
Depreciation and amortization
|
2,149
|
|
|
1,977
|
|
|
172
|
|
|
8.7
|
|
|||
Aircraft maintenance materials and outside repairs
|
1,856
|
|
|
1,749
|
|
|
107
|
|
|
6.1
|
|
|||
Distribution expenses
|
1,435
|
|
|
1,395
|
|
|
40
|
|
|
2.9
|
|
|||
Aircraft rent
|
621
|
|
|
680
|
|
|
(59
|
)
|
|
(8.7
|
)
|
|||
Special charges
|
176
|
|
|
745
|
|
|
(569
|
)
|
|
NM
|
|
|||
Other operating expenses
|
5,550
|
|
|
5,317
|
|
|
233
|
|
|
4.4
|
|
|||
Total operating expenses
|
$
|
34,113
|
|
|
$
|
32,214
|
|
|
$
|
1,899
|
|
|
5.9
|
|
|
(In millions)
|
|
|
|
Average price per gallon
|
||||||||||||||
|
2017
|
|
2016
|
|
%
Change
|
|
2017
|
|
2016
|
|
%
Change
|
||||||||
Total aircraft fuel purchase cost excluding fuel hedge impacts
|
$
|
6,911
|
|
|
$
|
5,596
|
|
|
23.5
|
|
$
|
1.74
|
|
|
$
|
1.43
|
|
|
21.7
|
Hedge losses reported in fuel expense
|
2
|
|
|
217
|
|
|
NM
|
|
—
|
|
|
0.06
|
|
|
NM
|
||||
Fuel expense
|
$
|
6,913
|
|
|
$
|
5,813
|
|
|
18.9
|
|
$
|
1.74
|
|
|
$
|
1.49
|
|
|
16.8
|
Total fuel consumption (gallons)
|
3,978
|
|
|
3,904
|
|
|
1.9
|
|
|
|
|
|
|
|
2017
|
|
2016
|
||||
Severance and benefit costs
|
$
|
116
|
|
|
$
|
37
|
|
Impairment of assets
|
25
|
|
|
412
|
|
||
Cleveland airport lease restructuring
|
—
|
|
|
74
|
|
||
Labor agreement costs
|
—
|
|
|
171
|
|
||
(Gains) losses on sale of assets and other special charges
|
35
|
|
|
51
|
|
||
Total special charges
|
$
|
176
|
|
|
$
|
745
|
|
|
2017
|
|
2016
|
|
Increase (Decrease)
|
|
% Change
|
|||||||
Interest expense
|
$
|
(671
|
)
|
|
$
|
(674
|
)
|
|
$
|
(3
|
)
|
|
(0.4
|
)
|
Interest capitalized
|
84
|
|
|
72
|
|
|
12
|
|
|
16.7
|
|
|||
Interest income
|
57
|
|
|
42
|
|
|
15
|
|
|
35.7
|
|
|||
Miscellaneous, net
|
(101
|
)
|
|
(11
|
)
|
|
90
|
|
|
NM
|
|
|||
Total nonoperating expense, net
|
$
|
(631
|
)
|
|
$
|
(571
|
)
|
|
$
|
60
|
|
|
10.5
|
|
•
|
MileagePlus sales.
In 2018, we received $1.3 billion more for MileagePlus miles sales to our partners as compared to
2017
, mainly due to our domestic co-branded credit card partner fully utilizing the $0.9 billion remaining balance in its pre-purchased miles in 2017.
|
•
|
Advance ticket sales and deferred revenue.
Our 2018 traffic growth and yield improvements contributed to a $0.7 billion increase in advance ticket sales and frequent flyer deferred revenue.
|
•
|
$0.9 billion decrease in advanced purchase of miles due to increased utilization of pre-purchased miles.
|
•
|
$0.4 billion increase in prepayments for maintenance contracts.
|
Pension and other postretirement plans
|
Note 8
|
Long-term debt and debt covenants
|
Note 10
|
Leases and capacity purchase agreements
|
Note 11
|
Commitments and contingencies
|
Note 13
|
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
After 2023
|
|
Total
|
||||||||||||||
Long-term debt (a)
|
|
$
|
1.2
|
|
|
$
|
1.3
|
|
|
$
|
1.3
|
|
|
$
|
1.7
|
|
|
$
|
0.7
|
|
|
$
|
7.4
|
|
|
$
|
13.6
|
|
Capital lease obligations—principal portion
|
|
0.2
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
0.9
|
|
|
1.3
|
|
|||||||
Total debt and capital lease obligations
|
|
1.4
|
|
|
1.4
|
|
|
1.4
|
|
|
1.8
|
|
|
0.7
|
|
|
8.3
|
|
|
14.9
|
|
|||||||
Interest on debt and capital lease obligations (b)
|
|
0.7
|
|
|
0.6
|
|
|
0.5
|
|
|
0.4
|
|
|
0.4
|
|
|
1.1
|
|
|
3.6
|
|
|||||||
Aircraft operating lease obligations
|
|
0.8
|
|
|
0.7
|
|
|
0.6
|
|
|
0.4
|
|
|
0.4
|
|
|
1.2
|
|
|
4.1
|
|
|||||||
Regional CPAs (c)
|
|
2.2
|
|
|
2.0
|
|
|
1.8
|
|
|
1.4
|
|
|
0.8
|
|
|
3.1
|
|
|
11.3
|
|
|||||||
Other operating lease obligations
|
|
1.3
|
|
|
1.4
|
|
|
1.1
|
|
|
1.0
|
|
|
1.0
|
|
|
7.0
|
|
|
12.8
|
|
|||||||
Postretirement obligations (d)
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.5
|
|
|
1.0
|
|
|||||||
Pension obligations (e)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.2
|
|
|
0.5
|
|
|
1.0
|
|
|||||||
Capital purchase obligations (f)
|
|
4.2
|
|
|
5.3
|
|
|
3.5
|
|
|
2.8
|
|
|
1.9
|
|
|
7.0
|
|
|
24.7
|
|
|||||||
Total contractual obligations
|
|
$
|
10.7
|
|
|
$
|
11.5
|
|
|
$
|
9.0
|
|
|
$
|
8.2
|
|
|
$
|
5.5
|
|
|
$
|
28.7
|
|
|
$
|
73.4
|
|
•
|
MileagePlus miles awarded – United has a performance obligation to provide MileagePlus cardholders with miles to be used for air travel and non-travel award redemptions. The Company records Passenger revenue related to the travel awards when the transportation is provided and records Other revenue related to the non-travel awards when the goods or services are delivered. The Company records the cost associated with non-travel awards in Other operating revenue.
|
•
|
Marketing – United has a performance obligation to provide Chase access to its customer list and the use of its brand. Marketing revenue is recorded to Other operating revenue as miles are delivered to Chase.
|
•
|
Advertising – United has a performance obligation to provide advertising in support of the MileagePlus card in various customer contact points such as United's website, email promotions, direct mail campaigns, airport advertising and in-flight advertising. Advertising revenue is recorded to Other operating revenue as miles are delivered to Chase.
|
•
|
Other travel-related benefits – United's performance obligations are comprised of various items such as waived bag fees, seat upgrades and lounge passes. Lounge passes are recorded to Other operating revenue as customers use the lounge passes. Bag fees and seat upgrades are recorded to Passenger revenue at the time of the associated travel.
|
Frequent flyer deferred revenue at December 31, 2018 (in millions)
|
|
$
|
5,005
|
|
Percentage of miles earned expected to expire
|
|
14.5
|
%
|
|
Impact of 1% change in outstanding miles expected to be redeemed or weighted average ticket value on deferred revenue (in millions)
|
|
$
|
50
|
|
|
Percent of Total
|
|
Expected Long-Term
Rate of Return
|
||
Equity securities
|
36
|
%
|
|
9.5
|
%
|
Fixed-income securities
|
37
|
|
|
5.8
|
|
Alternatives
|
16
|
|
|
7.3
|
|
Other
|
11
|
|
|
7.8
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
|
2018
|
|
2017
|
||||
Variable rate debt
|
|
|
|
||||
Carrying value of variable rate debt at December 31
|
$
|
3,500
|
|
|
$
|
3,342
|
|
Impact of 100 basis point increase on projected interest expense for the following year
|
35
|
|
|
33
|
|
||
Fixed rate debt
|
|
|
|
||||
Carrying value of fixed rate debt at December 31
|
9,945
|
|
|
9,926
|
|
||
Fair value of fixed rate debt at December 31
|
9,901
|
|
|
10,349
|
|
||
Impact of 100 basis point increase in market rates on fair value
|
(378
|
)
|
|
(403
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017 (a)
|
|
2016 (a)
|
||||||
Operating revenue:
|
|
|
|
|
|
||||||
Passenger revenue
|
$
|
37,706
|
|
|
$
|
34,460
|
|
|
$
|
33,429
|
|
Cargo
|
1,237
|
|
|
1,114
|
|
|
934
|
|
|||
Other operating revenue
|
2,360
|
|
|
2,210
|
|
|
2,195
|
|
|||
Total operating revenue
|
41,303
|
|
|
37,784
|
|
|
36,558
|
|
|||
Operating expense:
|
|
|
|
|
|
||||||
Salaries and related costs
|
11,458
|
|
|
10,941
|
|
|
10,176
|
|
|||
Aircraft fuel
|
9,307
|
|
|
6,913
|
|
|
5,813
|
|
|||
Regional capacity purchase
|
2,601
|
|
|
2,232
|
|
|
2,197
|
|
|||
Landing fees and other rent
|
2,359
|
|
|
2,240
|
|
|
2,165
|
|
|||
Depreciation and amortization
|
2,240
|
|
|
2,149
|
|
|
1,977
|
|
|||
Aircraft maintenance materials and outside repairs
|
1,767
|
|
|
1,856
|
|
|
1,749
|
|
|||
Distribution expenses
|
1,558
|
|
|
1,435
|
|
|
1,395
|
|
|||
Aircraft rent
|
433
|
|
|
621
|
|
|
680
|
|
|||
Special charges
|
487
|
|
|
176
|
|
|
745
|
|
|||
Other operating expenses
|
5,801
|
|
|
5,550
|
|
|
5,317
|
|
|||
Total operating expense
|
38,011
|
|
|
34,113
|
|
|
32,214
|
|
|||
Operating income
|
3,292
|
|
|
3,671
|
|
|
4,344
|
|
|||
|
|
|
|
|
|
||||||
Nonoperating income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(729
|
)
|
|
(671
|
)
|
|
(674
|
)
|
|||
Interest capitalized
|
70
|
|
|
84
|
|
|
72
|
|
|||
Interest income
|
101
|
|
|
57
|
|
|
42
|
|
|||
Miscellaneous, net
|
(76
|
)
|
|
(101
|
)
|
|
(11
|
)
|
|||
Total nonoperating expense, net
|
(634
|
)
|
|
(631
|
)
|
|
(571
|
)
|
|||
Income before income taxes
|
2,658
|
|
|
3,040
|
|
|
3,773
|
|
|||
Income tax expense
|
529
|
|
|
896
|
|
|
1,539
|
|
|||
Net income
|
$
|
2,129
|
|
|
$
|
2,144
|
|
|
$
|
2,234
|
|
Earnings per share, basic
|
$
|
7.73
|
|
|
$
|
7.08
|
|
|
$
|
6.77
|
|
Earnings per share, diluted
|
$
|
7.70
|
|
|
$
|
7.06
|
|
|
$
|
6.76
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017 (a)
|
|
2016 (a)
|
||||||
|
|
|
|
|
|
||||||
Net income
|
$
|
2,129
|
|
|
$
|
2,144
|
|
|
$
|
2,234
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net change related to:
|
|
|
|
|
|
||||||
Employee benefit plans, net of taxes
|
342
|
|
|
(195
|
)
|
|
(313
|
)
|
|||
Fuel derivative financial instruments, net of taxes
|
—
|
|
|
1
|
|
|
316
|
|
|||
Investments and other, net of taxes
|
(4
|
)
|
|
(6
|
)
|
|
(1
|
)
|
|||
Total other comprehensive income (loss), net
|
338
|
|
|
(200
|
)
|
|
2
|
|
|||
Total comprehensive income, net
|
$
|
2,467
|
|
|
$
|
1,944
|
|
|
$
|
2,236
|
|
|
At December 31,
|
||||||
ASSETS
|
2018
|
|
2017 (a)
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,694
|
|
|
$
|
1,482
|
|
Short-term investments
|
2,256
|
|
|
2,316
|
|
||
Receivables, less allowance for doubtful accounts (2018—$8; 2017—$7)
|
1,346
|
|
|
1,340
|
|
||
Aircraft fuel, spare parts and supplies, less obsolescence allowance (2018—$412; 2017—$354)
|
985
|
|
|
924
|
|
||
Prepaid expenses and other
|
913
|
|
|
1,071
|
|
||
Total current assets
|
7,194
|
|
|
7,133
|
|
||
Operating property and equipment:
|
|
|
|
||||
Owned—
|
|
|
|
||||
Flight equipment
|
31,607
|
|
|
28,692
|
|
||
Other property and equipment
|
7,919
|
|
|
6,946
|
|
||
Total owned property and equipment
|
39,526
|
|
|
35,638
|
|
||
Less—Accumulated depreciation and amortization
|
(12,760
|
)
|
|
(11,159
|
)
|
||
Total owned property and equipment, net
|
26,766
|
|
|
24,479
|
|
||
|
|
|
|
||||
Purchase deposits for flight equipment
|
1,177
|
|
|
1,344
|
|
||
|
|
|
|
||||
Capital leases—
|
|
|
|
||||
Flight equipment
|
1,029
|
|
|
1,151
|
|
||
Other property and equipment
|
11
|
|
|
11
|
|
||
Total capital leases
|
1,040
|
|
|
1,162
|
|
||
Less—Accumulated amortization
|
(654
|
)
|
|
(777
|
)
|
||
Total capital leases, net
|
386
|
|
|
385
|
|
||
Total operating property and equipment, net
|
28,329
|
|
|
26,208
|
|
||
Other assets:
|
|
|
|
||||
Goodwill
|
4,523
|
|
|
4,523
|
|
||
Intangibles, less accumulated amortization (2018—$1,380; 2017—$1,313)
|
3,159
|
|
|
3,539
|
|
||
Restricted cash
|
105
|
|
|
91
|
|
||
Notes receivable, net
|
516
|
|
|
46
|
|
||
Investments in affiliates and other, net
|
966
|
|
|
806
|
|
||
Total other assets
|
9,269
|
|
|
9,005
|
|
||
Total assets
|
$
|
44,792
|
|
|
$
|
42,346
|
|
|
At December 31,
|
||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
2018
|
|
2017 (a)
|
||||
Current liabilities:
|
|
|
|
||||
Advance ticket sales
|
$
|
4,381
|
|
|
$
|
3,940
|
|
Frequent flyer deferred revenue
|
2,286
|
|
|
2,192
|
|
||
Accounts payable
|
2,363
|
|
|
2,196
|
|
||
Accrued salaries and benefits
|
2,184
|
|
|
2,166
|
|
||
Current maturities of long-term debt
|
1,230
|
|
|
1,565
|
|
||
Current maturities of capital leases
|
149
|
|
|
128
|
|
||
Other
|
619
|
|
|
576
|
|
||
Total current liabilities
|
13,212
|
|
|
12,763
|
|
||
|
|
|
|
||||
Long-term debt
|
12,215
|
|
|
11,703
|
|
||
Long-term obligations under capital leases
|
1,134
|
|
|
996
|
|
||
|
|
|
|
||||
Other liabilities and deferred credits:
|
|
|
|
||||
Frequent flyer deferred revenue
|
2,719
|
|
|
2,591
|
|
||
Postretirement benefit liability
|
1,295
|
|
|
1,602
|
|
||
Pension liability
|
1,576
|
|
|
1,921
|
|
||
Deferred income taxes
|
814
|
|
|
204
|
|
||
Other
|
1,832
|
|
|
1,832
|
|
||
Total other liabilities and deferred credits
|
8,236
|
|
|
8,150
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Preferred stock
|
—
|
|
|
—
|
|
||
Common stock at par, $0.01 par value; authorized 1,000,000,000 shares; outstanding 269,914,769 and 286,973,195 shares at December 31, 2018 and 2017, respectively
|
3
|
|
|
3
|
|
||
Additional capital invested
|
6,120
|
|
|
6,098
|
|
||
Retained earnings
|
6,668
|
|
|
4,549
|
|
||
Stock held in treasury, at cost
|
(1,993
|
)
|
|
(769
|
)
|
||
Accumulated other comprehensive loss
|
(803
|
)
|
|
(1,147
|
)
|
||
Total stockholders' equity
|
9,995
|
|
|
8,734
|
|
||
Total liabilities and stockholders' equity
|
$
|
44,792
|
|
|
$
|
42,346
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017 (a)
|
|
2016 (a)
|
||||||
Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
2,129
|
|
|
$
|
2,144
|
|
|
$
|
2,234
|
|
Adjustments to reconcile net income to net cash provided by operating activities -
|
|
|
|
|
|
||||||
Deferred income taxes
|
515
|
|
|
973
|
|
|
1,631
|
|
|||
Depreciation and amortization
|
2,240
|
|
|
2,149
|
|
|
1,977
|
|
|||
Special charges, non-cash portion
|
416
|
|
|
35
|
|
|
391
|
|
|||
Other operating activities
|
170
|
|
|
141
|
|
|
109
|
|
|||
Changes in operating assets and liabilities -
|
|
|
|
|
|
||||||
Increase in receivables
|
(29
|
)
|
|
(183
|
)
|
|
(16
|
)
|
|||
(Increase) decrease in other assets
|
29
|
|
|
(533
|
)
|
|
(296
|
)
|
|||
Increase (decrease) in advance ticket sales
|
441
|
|
|
145
|
|
|
(28
|
)
|
|||
Increase (decrease) in frequent flyer deferred revenue
|
222
|
|
|
(107
|
)
|
|
(55
|
)
|
|||
Increase in accounts payable
|
130
|
|
|
66
|
|
|
239
|
|
|||
Decrease in advanced purchase of miles
|
—
|
|
|
(942
|
)
|
|
(206
|
)
|
|||
Decrease in other liabilities
|
(82
|
)
|
|
(475
|
)
|
|
(438
|
)
|
|||
Net cash provided by operating activities
|
6,181
|
|
|
3,413
|
|
|
5,542
|
|
|||
Investing Activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(4,177
|
)
|
|
(3,998
|
)
|
|
(3,223
|
)
|
|||
Purchases of short-term and other investments
|
(2,552
|
)
|
|
(3,241
|
)
|
|
(2,768
|
)
|
|||
Proceeds from sale of short-term and other investments
|
2,616
|
|
|
3,177
|
|
|
2,712
|
|
|||
Loans made to others
|
(466
|
)
|
|
(30
|
)
|
|
(56
|
)
|
|||
Investment in affiliates
|
(139
|
)
|
|
(2
|
)
|
|
(14
|
)
|
|||
Other, net
|
155
|
|
|
164
|
|
|
111
|
|
|||
Net cash used in investing activities
|
(4,563
|
)
|
|
(3,930
|
)
|
|
(3,238
|
)
|
|||
Financing Activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of long-term debt and airport construction financing
|
1,740
|
|
|
2,765
|
|
|
808
|
|
|||
Payments of long-term debt
|
(1,727
|
)
|
|
(901
|
)
|
|
(1,215
|
)
|
|||
Repurchases of common stock
|
(1,235
|
)
|
|
(1,844
|
)
|
|
(2,614
|
)
|
|||
Principal payments under capital leases
|
(134
|
)
|
|
(124
|
)
|
|
(136
|
)
|
|||
Capitalized financing costs
|
(37
|
)
|
|
(80
|
)
|
|
(64
|
)
|
|||
Other, net
|
(17
|
)
|
|
(11
|
)
|
|
8
|
|
|||
Net cash used in financing activities
|
(1,410
|
)
|
|
(195
|
)
|
|
(3,213
|
)
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
208
|
|
|
(712
|
)
|
|
(909
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
1,591
|
|
|
2,303
|
|
|
3,212
|
|
|||
Cash, cash equivalents and restricted cash at end of year
|
$
|
1,799
|
|
|
$
|
1,591
|
|
|
$
|
2,303
|
|
|
|
|
|
|
|
||||||
Investing and Financing Activities Not Affecting Cash:
|
|
|
|
|
|
||||||
Property and equipment acquired through the issuance of debt and capital leases
|
$
|
174
|
|
|
$
|
935
|
|
|
$
|
386
|
|
Debt associated with termination of a maintenance service agreement
|
163
|
|
|
—
|
|
|
—
|
|
|||
Investment in Republic Airways Holdings, Inc. received from bankruptcy claims
|
—
|
|
|
92
|
|
|
—
|
|
|||
Airport construction financing
|
12
|
|
|
42
|
|
|
91
|
|
|||
Operating lease conversions to capital lease
|
52
|
|
|
—
|
|
|
12
|
|
|||
|
|
|
|
|
|
||||||
Cash Paid During the Period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
651
|
|
|
$
|
571
|
|
|
$
|
584
|
|
Income taxes
|
19
|
|
|
20
|
|
|
14
|
|
|
Common
Stock
|
|
Additional
Capital Invested
|
|
Treasury Stock
|
|
Retained Earnings (Accumulated Deficit)
|
|
Accumulated
Other Comprehensive Income (Loss)
|
|
Total
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
Balance at December 31, 2015
|
364.6
|
|
|
$
|
4
|
|
|
$
|
7,946
|
|
|
$
|
(1,610
|
)
|
|
$
|
3,457
|
|
|
$
|
(831
|
)
|
|
$
|
8,966
|
|
Net income (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,234
|
|
|
—
|
|
|
2,234
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||
Stock-settled share-based compensation
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
||||||
Proceeds from exercise of stock options
|
0.3
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||
Repurchases of common stock
|
(50.3
|
)
|
|
—
|
|
|
—
|
|
|
(2,607
|
)
|
|
—
|
|
|
—
|
|
|
(2,607
|
)
|
||||||
Treasury stock retired
|
—
|
|
|
(1
|
)
|
|
(1,415
|
)
|
|
3,709
|
|
|
(2,293
|
)
|
|
—
|
|
|
—
|
|
||||||
Other (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(56
|
)
|
|
—
|
|
|
(59
|
)
|
||||||
Balance at December 31, 2016
|
314.6
|
|
|
3
|
|
|
6,569
|
|
|
(511
|
)
|
|
3,342
|
|
|
(829
|
)
|
|
8,574
|
|
||||||
Net income (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,144
|
|
|
—
|
|
|
2,144
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(200
|
)
|
|
(200
|
)
|
||||||
Stock-settled share-based compensation
|
—
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56
|
|
||||||
Proceeds from exercise of stock options
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Repurchases of common stock
|
(27.8
|
)
|
|
—
|
|
|
—
|
|
|
(1,844
|
)
|
|
—
|
|
|
—
|
|
|
(1,844
|
)
|
||||||
Treasury stock retired
|
—
|
|
|
—
|
|
|
(508
|
)
|
|
1,576
|
|
|
(1,068
|
)
|
|
—
|
|
|
—
|
|
||||||
Net treasury stock issued for share-based awards
|
0.2
|
|
|
—
|
|
|
(21
|
)
|
|
10
|
|
|
(1
|
)
|
|
—
|
|
|
(12
|
)
|
||||||
Excess tax benefits from share-based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
||||||
Reclassification of stranded tax effects
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
118
|
|
|
(118
|
)
|
|
—
|
|
||||||
Balance at December 31, 2017
|
287.0
|
|
|
3
|
|
|
6,098
|
|
|
(769
|
)
|
|
4,549
|
|
|
(1,147
|
)
|
|
8,734
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,129
|
|
|
—
|
|
|
2,129
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
338
|
|
|
338
|
|
||||||
Stock-settled share-based compensation
|
—
|
|
|
—
|
|
|
60
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60
|
|
||||||
Repurchases of common stock
|
(17.5
|
)
|
|
—
|
|
|
—
|
|
|
(1,250
|
)
|
|
—
|
|
|
—
|
|
|
(1,250
|
)
|
||||||
Net treasury stock issued for share-based awards
|
0.4
|
|
|
—
|
|
|
(38
|
)
|
|
26
|
|
|
(4
|
)
|
|
—
|
|
|
(16
|
)
|
||||||
Adoption of accounting standard related to equity investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
6
|
|
|
—
|
|
||||||
Balance at December 31, 2018
|
269.9
|
|
|
$
|
3
|
|
|
$
|
6,120
|
|
|
$
|
(1,993
|
)
|
|
$
|
6,668
|
|
|
$
|
(803
|
)
|
|
$
|
9,995
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017 (a)
|
|
2016 (a)
|
||||||
Operating revenue:
|
|
|
|
|
|
||||||
Passenger revenue
|
$
|
37,706
|
|
|
$
|
34,460
|
|
|
$
|
33,429
|
|
Cargo
|
1,237
|
|
|
1,114
|
|
|
934
|
|
|||
Other operating revenue
|
2,360
|
|
|
2,210
|
|
|
2,195
|
|
|||
Total operating revenue
|
41,303
|
|
|
37,784
|
|
|
36,558
|
|
|||
Operating expense:
|
|
|
|
|
|
||||||
Salaries and related costs
|
11,458
|
|
|
10,941
|
|
|
10,176
|
|
|||
Aircraft fuel
|
9,307
|
|
|
6,913
|
|
|
5,813
|
|
|||
Regional capacity purchase
|
2,601
|
|
|
2,232
|
|
|
2,197
|
|
|||
Landing fees and other rent
|
2,359
|
|
|
2,240
|
|
|
2,165
|
|
|||
Depreciation and amortization
|
2,240
|
|
|
2,149
|
|
|
1,977
|
|
|||
Aircraft maintenance materials and outside repairs
|
1,767
|
|
|
1,856
|
|
|
1,749
|
|
|||
Distribution expenses
|
1,558
|
|
|
1,435
|
|
|
1,395
|
|
|||
Aircraft rent
|
433
|
|
|
621
|
|
|
680
|
|
|||
Special charges
|
487
|
|
|
176
|
|
|
745
|
|
|||
Other operating expenses
|
5,799
|
|
|
5,548
|
|
|
5,315
|
|
|||
Total operating expense
|
38,009
|
|
|
34,111
|
|
|
32,212
|
|
|||
Operating income
|
3,294
|
|
|
3,673
|
|
|
4,346
|
|
|||
|
|
|
|
|
|
||||||
Nonoperating income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(729
|
)
|
|
(671
|
)
|
|
(674
|
)
|
|||
Interest capitalized
|
70
|
|
|
84
|
|
|
72
|
|
|||
Interest income
|
101
|
|
|
57
|
|
|
42
|
|
|||
Miscellaneous, net
|
(76
|
)
|
|
(101
|
)
|
|
(11
|
)
|
|||
Total nonoperating expense, net
|
(634
|
)
|
|
(631
|
)
|
|
(571
|
)
|
|||
Income before income taxes
|
2,660
|
|
|
3,042
|
|
|
3,775
|
|
|||
Income tax expense
|
529
|
|
|
879
|
|
|
1,541
|
|
|||
Net income
|
$
|
2,131
|
|
|
$
|
2,163
|
|
|
$
|
2,234
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017 (a)
|
|
2016 (a)
|
||||||
|
|
|
|
|
|
||||||
Net income
|
$
|
2,131
|
|
|
$
|
2,163
|
|
|
$
|
2,234
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net change related to:
|
|
|
|
|
|
||||||
Employee benefit plans, net of taxes
|
342
|
|
|
(195
|
)
|
|
(313
|
)
|
|||
Fuel derivative financial instruments, net of taxes
|
—
|
|
|
1
|
|
|
316
|
|
|||
Investments and other, net of taxes
|
(4
|
)
|
|
(6
|
)
|
|
(1
|
)
|
|||
Total other comprehensive income (loss), net
|
338
|
|
|
(200
|
)
|
|
2
|
|
|||
Total comprehensive income, net
|
$
|
2,469
|
|
|
$
|
1,963
|
|
|
$
|
2,236
|
|
|
At December 31,
|
||||||
ASSETS
|
2018
|
|
2017 (a)
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,688
|
|
|
$
|
1,476
|
|
Short-term investments
|
2,256
|
|
|
2,316
|
|
||
Receivables, less allowance for doubtful accounts (2018—$8; 2017—$7)
|
1,346
|
|
|
1,340
|
|
||
Aircraft fuel, spare parts and supplies, less obsolescence allowance (2018—$412; 2017—$354)
|
985
|
|
|
924
|
|
||
Prepaid expenses and other
|
913
|
|
|
1,071
|
|
||
Total current assets
|
7,188
|
|
|
7,127
|
|
||
Operating property and equipment:
|
|
|
|
||||
Owned—
|
|
|
|
||||
Flight equipment
|
31,607
|
|
|
28,692
|
|
||
Other property and equipment
|
7,919
|
|
|
6,946
|
|
||
Total owned property and equipment
|
39,526
|
|
|
35,638
|
|
||
Less—Accumulated depreciation and amortization
|
(12,760
|
)
|
|
(11,159
|
)
|
||
Total owned property and equipment, net
|
26,766
|
|
|
24,479
|
|
||
|
|
|
|
||||
Purchase deposits for flight equipment
|
1,177
|
|
|
1,344
|
|
||
|
|
|
|
||||
Capital leases—
|
|
|
|
||||
Flight equipment
|
1,029
|
|
|
1,151
|
|
||
Other property and equipment
|
11
|
|
|
11
|
|
||
Total capital leases
|
1,040
|
|
|
1,162
|
|
||
Less—Accumulated amortization
|
(654
|
)
|
|
(777
|
)
|
||
Total capital leases, net
|
386
|
|
|
385
|
|
||
Total operating property and equipment, net
|
28,329
|
|
|
26,208
|
|
||
Other assets:
|
|
|
|
||||
Goodwill
|
4,523
|
|
|
4,523
|
|
||
Intangibles, less accumulated amortization (2018—$1,380; 2017—$1,313)
|
3,159
|
|
|
3,539
|
|
||
Restricted cash
|
105
|
|
|
91
|
|
||
Notes receivable, net
|
516
|
|
|
46
|
|
||
Investments in affiliates and other, net
|
966
|
|
|
806
|
|
||
Total other assets
|
9,269
|
|
|
9,005
|
|
||
Total assets
|
$
|
44,786
|
|
|
$
|
42,340
|
|
|
At December 31,
|
||||||
LIABILITIES AND STOCKHOLDER'S EQUITY
|
2018
|
|
2017 (a)
|
||||
Current liabilities:
|
|
|
|
||||
Advance ticket sales
|
$
|
4,381
|
|
|
$
|
3,940
|
|
Frequent flyer deferred revenue
|
2,286
|
|
|
2,192
|
|
||
Accounts payable
|
2,363
|
|
|
2,196
|
|
||
Accrued salaries and benefits
|
2,184
|
|
|
2,166
|
|
||
Current maturities of long-term debt
|
1,230
|
|
|
1,565
|
|
||
Current maturities of capital leases
|
149
|
|
|
128
|
|
||
Other
|
624
|
|
|
581
|
|
||
Total current liabilities
|
13,217
|
|
|
12,768
|
|
||
|
|
|
|
||||
Long-term debt
|
12,215
|
|
|
11,703
|
|
||
Long-term obligations under capital leases
|
1,134
|
|
|
996
|
|
||
|
|
|
|
||||
Other liabilities and deferred credits:
|
|
|
|
||||
Frequent flyer deferred revenue
|
2,719
|
|
|
2,591
|
|
||
Postretirement benefit liability
|
1,295
|
|
|
1,602
|
|
||
Pension liability
|
1,576
|
|
|
1,921
|
|
||
Deferred income taxes
|
842
|
|
|
231
|
|
||
Other
|
1,831
|
|
|
1,832
|
|
||
Total other liabilities and deferred credits
|
8,263
|
|
|
8,177
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholder's equity:
|
|
|
|
||||
Common stock at par, $0.01 par value; authorized 1,000 shares; issued and outstanding 1,000 shares at December 31, 2018 and 2017
|
—
|
|
|
—
|
|
||
Additional capital invested
|
598
|
|
|
1,787
|
|
||
Retained earnings
|
10,272
|
|
|
8,146
|
|
||
Accumulated other comprehensive loss
|
(803
|
)
|
|
(1,147
|
)
|
||
Receivable from related parties
|
(110
|
)
|
|
(90
|
)
|
||
Total stockholder's equity
|
9,957
|
|
|
8,696
|
|
||
Total liabilities and stockholder's equity
|
$
|
44,786
|
|
|
$
|
42,340
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017 (a)
|
|
2016 (a)
|
||||||
Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
2,131
|
|
|
$
|
2,163
|
|
|
$
|
2,234
|
|
Adjustments to reconcile net income to net cash provided by operating activities -
|
|
|
|
|
|
||||||
Deferred income taxes
|
515
|
|
|
956
|
|
|
1,633
|
|
|||
Depreciation and amortization
|
2,240
|
|
|
2,149
|
|
|
1,977
|
|
|||
Special charges, non-cash portion
|
416
|
|
|
35
|
|
|
391
|
|
|||
Other operating activities
|
170
|
|
|
140
|
|
|
109
|
|
|||
Changes in operating assets and liabilities -
|
|
|
|
|
|
||||||
Increase in receivables
|
(29
|
)
|
|
(183
|
)
|
|
(16
|
)
|
|||
Increase in intercompany receivables
|
(20
|
)
|
|
(15
|
)
|
|
(57
|
)
|
|||
(Increase) decrease in other assets
|
29
|
|
|
(533
|
)
|
|
(250
|
)
|
|||
Increase (decrease) in advance ticket sales
|
441
|
|
|
145
|
|
|
(28
|
)
|
|||
Increase (decrease) in frequent flyer deferred revenue
|
222
|
|
|
(107
|
)
|
|
(55
|
)
|
|||
Increase in accounts payable
|
130
|
|
|
66
|
|
|
239
|
|
|||
Decrease in advanced purchase of miles
|
—
|
|
|
(942
|
)
|
|
(206
|
)
|
|||
Decrease in other liabilities
|
(82
|
)
|
|
(475
|
)
|
|
(436
|
)
|
|||
Net cash provided by operating activities
|
6,163
|
|
|
3,399
|
|
|
5,535
|
|
|||
Investing Activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(4,177
|
)
|
|
(3,998
|
)
|
|
(3,223
|
)
|
|||
Purchases of short-term and other investments
|
(2,552
|
)
|
|
(3,241
|
)
|
|
(2,768
|
)
|
|||
Proceeds from sale of short-term and other investments
|
2,616
|
|
|
3,177
|
|
|
2,712
|
|
|||
Loans made to others
|
(466
|
)
|
|
(30
|
)
|
|
(56
|
)
|
|||
Investment in affiliates
|
(139
|
)
|
|
(2
|
)
|
|
(14
|
)
|
|||
Other, net
|
155
|
|
|
164
|
|
|
111
|
|
|||
Net cash used in investing activities
|
(4,563
|
)
|
|
(3,930
|
)
|
|
(3,238
|
)
|
|||
Financing Activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of long-term debt and airport construction financing
|
1,740
|
|
|
2,765
|
|
|
808
|
|
|||
Payments of long-term debt
|
(1,727
|
)
|
|
(901
|
)
|
|
(1,215
|
)
|
|||
Dividend to UAL
|
(1,235
|
)
|
|
(1,844
|
)
|
|
(2,614
|
)
|
|||
Principal payments under capital leases
|
(134
|
)
|
|
(124
|
)
|
|
(136
|
)
|
|||
Capitalized financing costs
|
(37
|
)
|
|
(80
|
)
|
|
(64
|
)
|
|||
Other, net
|
1
|
|
|
3
|
|
|
15
|
|
|||
Net cash used in financing activities
|
(1,392
|
)
|
|
(181
|
)
|
|
(3,206
|
)
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
208
|
|
|
(712
|
)
|
|
(909
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
1,585
|
|
|
2,297
|
|
|
3,206
|
|
|||
Cash, cash equivalents and restricted cash at end of year
|
$
|
1,793
|
|
|
$
|
1,585
|
|
|
$
|
2,297
|
|
|
|
|
|
|
|
||||||
Investing and Financing Activities Not Affecting Cash:
|
|
|
|
|
|
||||||
Property and equipment acquired through the issuance of debt and capital leases
|
$
|
174
|
|
|
$
|
935
|
|
|
$
|
386
|
|
Debt associated with termination of a maintenance service agreement
|
163
|
|
|
—
|
|
|
—
|
|
|||
Investment in Republic Airways Holdings, Inc. received from bankruptcy claims
|
—
|
|
|
92
|
|
|
—
|
|
|||
Airport construction financing
|
12
|
|
|
42
|
|
|
91
|
|
|||
Operating lease conversions to capital lease
|
52
|
|
|
—
|
|
|
12
|
|
|||
|
|
|
|
|
|
||||||
Cash Paid During the Period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
651
|
|
|
$
|
571
|
|
|
$
|
584
|
|
Income taxes
|
19
|
|
|
20
|
|
|
14
|
|
|
Additional
Capital
Invested
|
|
Retained Earnings (Accumulated
Deficit)
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Receivable from Related Parties, Net
|
|
Total
|
||||||||||
Balance at December 31, 2015
|
$
|
6,138
|
|
|
$
|
3,673
|
|
|
$
|
(831
|
)
|
|
$
|
(17
|
)
|
|
$
|
8,963
|
|
Net income (a)
|
—
|
|
|
2,234
|
|
|
—
|
|
|
—
|
|
|
2,234
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Dividend to UAL
|
(2,603
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,603
|
)
|
|||||
Stock-settled share-based compensation
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|||||
UAL contribution related to stock plans
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Other (a)
|
—
|
|
|
(56
|
)
|
|
—
|
|
|
(58
|
)
|
|
(114
|
)
|
|||||
Balance at December 31, 2016
|
3,573
|
|
|
5,851
|
|
|
(829
|
)
|
|
(75
|
)
|
|
8,520
|
|
|||||
Net income (a)
|
—
|
|
|
2,163
|
|
|
—
|
|
|
—
|
|
|
2,163
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(200
|
)
|
|
—
|
|
|
(200
|
)
|
|||||
Dividend to UAL
|
(1,844
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,844
|
)
|
|||||
Stock-settled share-based compensation
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|||||
UAL contribution related to stock plans
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Excess tax benefits from share-based awards
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|||||
Reclassification of stranded tax effects
|
—
|
|
|
118
|
|
|
(118
|
)
|
|
—
|
|
|
—
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
|||||
Balance at December 31, 2017
|
1,787
|
|
|
8,146
|
|
|
(1,147
|
)
|
|
(90
|
)
|
|
8,696
|
|
|||||
Net income
|
—
|
|
|
2,131
|
|
|
—
|
|
|
—
|
|
|
2,131
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
338
|
|
|
—
|
|
|
338
|
|
|||||
Dividend to UAL
|
(1,249
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,249
|
)
|
|||||
Stock-settled share-based compensation
|
60
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|||||
Other
|
—
|
|
|
(5
|
)
|
|
6
|
|
|
(20
|
)
|
|
(19
|
)
|
|||||
Balance at December 31, 2018
|
$
|
598
|
|
|
$
|
10,272
|
|
|
$
|
(803
|
)
|
|
$
|
(110
|
)
|
|
$
|
9,957
|
|
(a)
|
Use of Estimates—
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates.
|
(b)
|
Revenue Recognition—
The Company presents Passenger revenue, Cargo revenue and Other operating revenue on its income statement. Passenger revenue is recognized when transportation is provided and Cargo revenue is recognized when shipments arrive at their destination. Other operating revenue is recognized as the related performance obligations are satisfied.
|
|
Revenue by Geography.
The Company further disaggregates revenue by geographic regions. Operating segments are defined as components of an enterprise with separate financial information, which are evaluated regularly by the chief operating decision maker and are used in resource allocation and performance assessments.
|
|
|
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
|
|
(c)
|
Frequent Flyer Accounting—
United's MileagePlus loyalty program builds customer loyalty by offering awards, benefits and services to program participants. Members in this program earn miles for travel on United, United Express, Star Alliance members and certain other airlines that participate in the program. Members can also earn miles by purchasing the goods and services of our network of non-airline partners. We have contracts to sell miles to these partners with the terms extending from one to eight years. These partners include domestic and international credit card issuers, retail merchants, hotels, car rental companies and our participating airline partners. Miles can be redeemed for free (other than taxes and government imposed fees), discounted or upgraded air travel and non-travel awards. Miles expire after 18 months of member account inactivity.
|
•
|
MileagePlus miles awarded – United has a performance obligation to provide MileagePlus cardholders with miles to be used for air travel and non-travel award redemptions. The Company records Passenger revenue related to the travel awards when the transportation is provided and records Other revenue related to the non-travel awards when the goods or services are delivered. The Company records the cost associated with non-travel awards in Other operating revenue.
|
•
|
Marketing – United has a performance obligation to provide Chase access to its customer list and the use of its brand. Marketing revenue is recorded to Other operating revenue as miles are delivered to Chase.
|
•
|
Advertising – United has a performance obligation to provide advertising in support of the MileagePlus card in various customer contact points such as United's website, email promotions, direct mail campaigns, airport advertising and in-flight advertising. Advertising revenue is recorded to Other operating revenue as miles are delivered to Chase.
|
•
|
Other travel-related benefits – United's performance obligations are comprised of various items such as waived bag fees, seat upgrades and lounge passes. Lounge passes are recorded to Other operating revenue as customers use the lounge passes. Bag fees and seat upgrades are recorded to Passenger revenue at the time of the associated travel.
|
|
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
|
|
(d)
|
Cash and Cash Equivalents and Restricted Cash—
Highly liquid investments with a maturity of three months or less on their acquisition date are classified as cash and cash equivalents.
|
|
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
|
|
(e)
|
Short-term Investments—
Debt investments are classified as available-for-sale and are stated at fair value. Realized gains and losses on sales of these investments are reflected in Miscellaneous, net in the consolidated statements of operations. Unrealized gains and losses on available-for-sale securities are reflected as a component of accumulated other comprehensive income (loss). Equity investments with readily determinable fair values are measured at fair value. Equity investments without readily determinable fair values are measured using the equity method, or measured at cost with adjustments for observable changes in price or impairments (referred to as the measurement alternative). Changes in fair value are recorded in Miscellaneous, net in the consolidated statements of operations.
|
(f)
|
Accounts Receivable.
Accounts receivable primarily consist of amounts due from credit card companies, non-airline partners, and cargo transportation customers. We provide an allowance for uncollectible accounts equal to the estimated losses expected to be incurred based on historical write-offs and other specific analyses. Bad debt expense and write-offs were not material for the year ended December 31,
2018
and
2017
.
|
(g)
|
Aircraft Fuel, Spare Parts and Supplies—
The Company accounts for aircraft fuel, spare parts and supplies at average cost and provides an obsolescence allowance for aircraft spare parts with an assumed residual value of
10%
of original cost.
|
(h)
|
Property and Equipment—
The Company records additions to owned operating property and equipment at cost when acquired. Property under capital leases and the related obligation for future lease payments are recorded at an amount equal to the initial present value of those lease payments. Modifications that enhance the operating performance or extend the useful lives of airframes or engines are capitalized as property and equipment. It is the Company's policy to record compensation from delays in delivery of aircraft as a reduction of the cost of the related aircraft.
|
|
|
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
|
(i)
|
Maintenance and Repairs—
The cost of maintenance and repairs, including the cost of minor replacements, is charged to expense as incurred, except for costs incurred under our power-by-the-hour ("PBTH") engine maintenance agreements. PBTH contracts transfer certain risk to third-party service providers and fix the amount we pay per flight hour or per cycle to the service provider in exchange for maintenance and repairs under a predefined maintenance program. Under PBTH agreements, the Company recognizes expense at a level rate per engine hour, unless the level of service effort and the related payments during the period are substantially consistent, in which case the Company recognizes expense based on the amounts paid.
|
(j)
|
Lease Fair Value Adjustments—
Lease fair value adjustments, which arose from recording operating leases at fair value under fresh start or business combination accounting, are amortized on a straight-line basis over the related lease term.
|
(k)
|
Regional Capacity Purchase—
Payments made to regional carriers under capacity purchase agreements ("CPAs") are reported in Regional capacity purchase in our consolidated statements of operations.
|
(l)
|
Advertising—
Advertising costs, which are included in Other operating expenses, are expensed as incurred. Advertising expenses were
$211 million
,
$217 million
and
$220 million
for the years ended December 31,
2018
,
2017
and
2016
respectively.
|
(m)
|
Intangibles—
The Company has finite-lived and indefinite-lived intangible assets, including goodwill. Finite-lived intangible assets are amortized over their estimated useful lives. Goodwill and indefinite-lived intangible assets are not amortized but are reviewed for impairment annually or more frequently if events or circumstances indicate that the asset may be impaired. Goodwill and indefinite-lived assets are reviewed for impairment on an annual basis as of October 1, or on an interim basis whenever a triggering event occurs. See Note 2 of this report for additional information related to intangibles.
|
(n)
|
Long-Lived Asset Impairments—
The Company evaluates the carrying value of long-lived assets subject to amortization whenever events or changes in circumstances indicate that an impairment may exist. For purposes of this testing, the Company has generally identified the aircraft fleet type as the lowest level of identifiable cash flows.
An impairment charge is recognized when the asset's carrying value exceeds its net undiscounted future cash flows and its fair market value. The amount of the charge is the difference between the asset's carrying value and fair market value.
See Note 14 of this report for additional information related to asset impairments.
|
(o)
|
Share-Based Compensation—
The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. The resulting cost is recognized over the period during which an employee is required to provide service in exchange for the award, usually the vesting period. Obligations for cash-settled restricted stock units ("RSUs") are remeasured at fair value throughout the requisite service period at the close of the reporting period based upon UAL's stock price. In addition to the service requirement, certain RSUs have performance metrics that must be achieved prior to vesting. These awards are accrued based on the expected level of achievement at each reporting period. An adjustment is recorded each reporting period to adjust compensation expense based on both UAL's stock price and the then current level of
|
(p)
|
Ticket Taxes—
Certain governmental taxes are imposed on the Company's ticket sales through a fee included in ticket prices. The Company collects these fees and remits them to the appropriate government agency. These fees are recorded on a net basis and, as a result, are excluded from revenue.
|
(q)
|
Retirement of Leased Aircraft—
The Company accrues for estimated lease costs over the remaining term of the lease at the present value of future minimum lease payments, net of estimated sublease rentals (if any), in the period that aircraft are permanently removed from service. When reasonably estimable and probable, the Company estimates maintenance lease return condition obligations for items such as minimum aircraft and engine conditions specified in leases and accrues these amounts over the lease term while the aircraft are operating, and any remaining unrecognized estimated obligations are accrued in the period that an aircraft is removed from service.
|
(r)
|
Uncertain Income Tax Positions—
The Company has recorded reserves for income taxes and associated interest that may become payable in future years. Although management believes that its positions taken on income tax matters are reasonable, the Company nevertheless has established tax and interest reserves in recognition that various taxing authorities may challenge certain of the positions taken by the Company, potentially resulting in additional liabilities for taxes and interest. The Company's uncertain tax position reserves are reviewed periodically and are adjusted as events occur that affect its estimates, such as the availability of new information, the lapsing of applicable statutes of limitation, the conclusion of tax audits, the measurement of additional estimated liability, the identification of new tax matters, the release of administrative tax guidance affecting its estimates of tax liabilities, or the rendering of relevant court decisions. The Company records penalties and interest relating to uncertain tax positions as part of income tax expense in its consolidated statements of operations. See Note 7 of this report for additional information on UAL's uncertain tax positions.
|
(s)
|
Labor Costs—
The Company records expenses associated with amendable labor agreements when the amounts are probable and estimable. These include costs associated with lump sum cash payments that would be made in conjunction with the ratification of labor agreements. To the extent these upfront costs are in lieu of future pay increases, they would be capitalized and amortized over the term of the labor agreements. If not, these amounts would be expensed.
|
(t)
|
Third-Party Business—
The Company has third-party business revenue that includes fuel sales, catering, ground handling, maintenance services and frequent flyer award non-air redemptions. Third-party business revenue is recorded in Other operating revenue. The Company also incurs third-party business expenses, such as maintenance, ground handling and catering services for third parties, fuel sales and non-air mileage redemptions. The third-party business expenses are recorded in Other operating expenses, except for non-air mileage redemption. Non-air mileage redemption expenses are recorded to Other operating revenue.
|
(u)
|
Recently Issued Accounting Standards—
The Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 606,
Revenue from Contracts with Customers
(the "New Revenue Standard"), effective January 1, 2018 using the full-retrospective method. Topic 606 prescribes that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For the Company, the most significant impact of the standard was the reclassification of certain ancillary fees from other operating revenue into passenger revenue on the statement of consolidated operations. These ancillary fees are directly related to passenger travel, such as ticket change fees and baggage fees, and are no longer considered distinct performance obligations separate from the passenger travel component. In addition, the ticket change fees, which were previously recognized when received, are now recognized when transportation is provided. Adoption of the standard had no impact on the Company's consolidated cash flows statements.
|
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
|
|
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
|
|
|
|
2018
|
|
2017
|
||||||||||||
Item
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Goodwill
|
|
$
|
4,523
|
|
|
|
|
$
|
4,523
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Finite-lived intangible assets
|
|
|
|
|
|
|
|
|
||||||||
Frequent flyer database
|
|
$
|
1,177
|
|
|
$
|
884
|
|
|
$
|
1,177
|
|
|
$
|
832
|
|
Hubs
|
|
145
|
|
|
97
|
|
|
145
|
|
|
89
|
|
||||
Contracts
|
|
120
|
|
|
106
|
|
|
121
|
|
|
103
|
|
||||
Patents and tradenames
|
|
108
|
|
|
108
|
|
|
108
|
|
|
108
|
|
||||
Airport slots and gates
|
|
97
|
|
|
97
|
|
|
97
|
|
|
97
|
|
||||
Other
|
|
109
|
|
|
88
|
|
|
109
|
|
|
84
|
|
||||
Total
|
|
$
|
1,756
|
|
|
$
|
1,380
|
|
|
$
|
1,757
|
|
|
$
|
1,313
|
|
Indefinite-lived intangible assets
|
|
|
|
|
|
|
|
|
||||||||
Route authorities
|
|
$
|
1,240
|
|
|
|
|
$
|
1,562
|
|
|
|
||||
Airport slots and gates
|
|
546
|
|
|
|
|
536
|
|
|
|
||||||
Tradenames and logos
|
|
593
|
|
|
|
|
593
|
|
|
|
||||||
Alliances
|
|
404
|
|
|
|
|
404
|
|
|
|
||||||
Total
|
|
$
|
2,783
|
|
|
|
|
$
|
3,095
|
|
|
|
|
|
2018
|
|
2017 (a)
|
|
2016 (a)
|
||||||
Earnings available to common stockholders
|
|
$
|
2,129
|
|
|
$
|
2,144
|
|
|
$
|
2,234
|
|
|
|
|
|
|
|
|
||||||
Basic weighted-average shares outstanding
|
|
275.5
|
|
|
302.7
|
|
|
329.9
|
|
|||
Effect of employee stock awards
|
|
1.2
|
|
|
0.9
|
|
|
0.4
|
|
|||
Diluted weighted-average shares outstanding
|
|
276.7
|
|
|
303.6
|
|
|
330.3
|
|
|||
|
|
|
|
|
|
|
||||||
Earnings per share, basic
|
|
$
|
7.73
|
|
|
$
|
7.08
|
|
|
$
|
6.77
|
|
Earnings per share, diluted
|
|
$
|
7.70
|
|
|
$
|
7.06
|
|
|
$
|
6.76
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Compensation cost:
|
|
|
|
|
|
|
||||||
RSUs
|
|
$
|
98
|
|
|
$
|
63
|
|
|
$
|
58
|
|
Restricted stock
|
|
2
|
|
|
8
|
|
|
11
|
|
|||
Stock options
|
|
1
|
|
|
2
|
|
|
1
|
|
|||
Total
|
|
$
|
101
|
|
|
$
|
73
|
|
|
$
|
70
|
|
|
|
Unearned Compensation
|
|
Weighted-
Average
Remaining Period
(in years)
|
||
RSUs
|
|
$
|
66
|
|
|
1.6
|
Stock options
|
|
2
|
|
|
2.6
|
|
Total
|
|
$
|
68
|
|
|
|
|
|
Liability Awards
|
|
Equity Awards
|
|||||||||||||
|
|
RSUs
|
|
RSUs
|
|
Weighted-
Average
Grant Price
|
|
Restricted
Stock
|
|
Weighted-
Average
Grant Price
|
|||||||
Outstanding at December 31, 2015
|
|
2.6
|
|
|
—
|
|
|
$
|
—
|
|
|
0.3
|
|
|
$
|
48.68
|
|
Granted
|
|
1.0
|
|
|
0.9
|
|
|
51.60
|
|
|
0.4
|
|
|
50.63
|
|
||
Vested
|
|
(1.4
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
41.47
|
|
||
Forfeited
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
50.57
|
|
|
(0.1
|
)
|
|
53.42
|
|
||
Outstanding at December 31, 2016
|
|
2.1
|
|
|
0.8
|
|
|
51.67
|
|
|
0.5
|
|
|
52.00
|
|
||
Granted
|
|
0.6
|
|
|
1.0
|
|
|
71.68
|
|
|
—
|
|
|
—
|
|
||
Vested
|
|
(0.7
|
)
|
|
(0.3
|
)
|
|
51.81
|
|
|
(0.2
|
)
|
|
51.60
|
|
||
Forfeited
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
57.49
|
|
|
—
|
|
|
—
|
|
||
Outstanding at December 31, 2017
|
|
1.8
|
|
|
1.4
|
|
|
63.99
|
|
|
0.3
|
|
|
52.30
|
|
||
Granted
|
|
0.7
|
|
|
1.1
|
|
|
67.74
|
|
|
—
|
|
|
—
|
|
||
Vested
|
|
(0.5
|
)
|
|
(0.5
|
)
|
|
63.02
|
|
|
(0.2
|
)
|
|
53.24
|
|
||
Forfeited
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
67.34
|
|
|
—
|
|
|
—
|
|
||
Outstanding at December 31, 2018
|
|
1.9
|
|
|
1.8
|
|
|
66.29
|
|
|
0.1
|
|
|
51.17
|
|
|
Pension and
Other
Postretirement
Liabilities
|
|
Fuel Derivatives Contracts
|
|
Investments and Other
|
|
Deferred Taxes
|
|
Total
|
||||||||||
Balance at December 31, 2015
|
$
|
(363
|
)
|
|
$
|
(215
|
)
|
|
$
|
3
|
|
|
$
|
(256
|
)
|
|
$
|
(831
|
)
|
Other comprehensive income (loss) before reclassifications
|
(517
|
)
|
(a)
|
(4
|
)
|
|
—
|
|
|
187
|
|
|
(334
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income
|
26
|
|
|
217
|
|
|
(2
|
)
|
|
95
|
|
|
336
|
|
|||||
Balance at December 31, 2016
|
(854
|
)
|
|
(2
|
)
|
|
1
|
|
|
26
|
|
|
(829
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
(306
|
)
|
(a)
|
—
|
|
|
(7
|
)
|
|
74
|
|
|
(239
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income
|
58
|
|
|
2
|
|
|
—
|
|
|
(21
|
)
|
|
39
|
|
|||||
Reclassification of stranded tax effects
|
—
|
|
|
—
|
|
|
—
|
|
|
(118
|
)
|
(b)
|
(118
|
)
|
|||||
Balance at December 31, 2017
|
(1,102
|
)
|
|
—
|
|
|
(6
|
)
|
|
(39
|
)
|
|
(1,147
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
377
|
|
(a)
|
—
|
|
|
(5
|
)
|
|
(83
|
)
|
|
289
|
|
|||||
Amounts reclassified from accumulated other comprehensive income
|
62
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
49
|
|
|||||
Amounts reclassified to retained earnings
|
—
|
|
|
—
|
|
|
7
|
|
|
(1
|
)
|
|
6
|
|
|||||
Balance at December 31, 2018
|
$
|
(663
|
)
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
(136
|
)
|
|
$
|
(803
|
)
|
Details about AOCI Components
|
|
Amount Reclassified from AOCI to Income
|
|
Affected Line Item in the Statement Where Net Income is Presented
|
||||||||||
|
|
Year Ended December 31,
|
|
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
|
||||||
Fuel derivative contracts
|
|
|
|
|
|
|
|
|
||||||
Fuel contracts-reclassifications of losses into earnings
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
217
|
|
|
Aircraft fuel
|
Pension and Postretirement liabilities and other
|
|
|
|
|
|
|
|
|
||||||
Amortization of unrecognized (gains) losses and prior service cost (c)
|
|
62
|
|
|
58
|
|
|
26
|
|
|
Miscellaneous, net
|
|||
Investments and other
|
|
|
|
|
|
|
|
|
||||||
Available-for-sale securities - reclassifications of gains into earnings
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
Miscellaneous, net
|
UAL
|
|
2018
|
|
2017 (a)
|
|
2016 (a)
|
||||||
Income tax provision at statutory rate
|
|
$
|
558
|
|
|
$
|
1,064
|
|
|
$
|
1,320
|
|
State income taxes, net of federal income tax benefit
|
|
29
|
|
|
30
|
|
|
38
|
|
|||
Foreign tax rate differential
|
|
(84
|
)
|
|
(43
|
)
|
|
—
|
|
|||
Global intangible low-taxed income
|
|
4
|
|
|
—
|
|
|
—
|
|
|||
Foreign income taxes
|
|
2
|
|
|
3
|
|
|
3
|
|
|||
Nondeductible employee meals
|
|
12
|
|
|
17
|
|
|
16
|
|
|||
Impact of Tax Act
|
|
(5
|
)
|
|
(179
|
)
|
|
—
|
|
|||
Income tax adjustment from AOCI (b)
|
|
—
|
|
|
—
|
|
|
180
|
|
|||
State rate change
|
|
3
|
|
|
12
|
|
|
(12
|
)
|
|||
Valuation allowance
|
|
(3
|
)
|
|
(16
|
)
|
|
20
|
|
|||
Other, net
|
|
13
|
|
|
8
|
|
|
(26
|
)
|
|||
|
|
$
|
529
|
|
|
$
|
896
|
|
|
$
|
1,539
|
|
|
|
|
|
|
|
|
||||||
Current
|
|
$
|
14
|
|
|
$
|
(77
|
)
|
|
$
|
(92
|
)
|
Deferred
|
|
515
|
|
|
973
|
|
|
1,631
|
|
|||
|
|
$
|
529
|
|
|
$
|
896
|
|
|
$
|
1,539
|
|
|
|
|
|
|
|
|
||||||
United
|
|
2018
|
|
2017 (a)
|
|
2016 (a)
|
||||||
Income tax provision at statutory rate
|
|
$
|
559
|
|
|
$
|
1,065
|
|
|
$
|
1,321
|
|
State income taxes, net of federal income tax
|
|
29
|
|
|
30
|
|
|
38
|
|
|||
Foreign tax rate differential
|
|
(84
|
)
|
|
(43
|
)
|
|
—
|
|
|||
Global intangible low-taxed income
|
|
4
|
|
|
—
|
|
|
—
|
|
|||
Foreign income taxes
|
|
2
|
|
|
3
|
|
|
3
|
|
|||
Nondeductible employee meals
|
|
12
|
|
|
17
|
|
|
16
|
|
|||
Impact of Tax Act
|
|
(5
|
)
|
|
(196
|
)
|
|
—
|
|
|||
Income tax adjustment from AOCI (b)
|
|
—
|
|
|
—
|
|
|
180
|
|
|||
State rate change
|
|
3
|
|
|
12
|
|
|
(12
|
)
|
|||
Valuation allowance
|
|
(3
|
)
|
|
(16
|
)
|
|
20
|
|
|||
Other, net
|
|
12
|
|
|
7
|
|
|
(25
|
)
|
|||
|
|
$
|
529
|
|
|
$
|
879
|
|
|
$
|
1,541
|
|
|
|
|
|
|
|
|
||||||
Current
|
|
$
|
14
|
|
|
$
|
(77
|
)
|
|
$
|
(92
|
)
|
Deferred
|
|
515
|
|
|
956
|
|
|
1,633
|
|
|||
|
|
$
|
529
|
|
|
$
|
879
|
|
|
$
|
1,541
|
|
|
|
UAL
|
|
United
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Deferred income tax asset (liability):
|
|
|
|
|
|
|
|
|
||||||||
Federal and state net operating loss ("NOL") carryforwards
|
|
$
|
398
|
|
|
$
|
601
|
|
|
$
|
372
|
|
|
$
|
574
|
|
Deferred revenue
|
|
1,232
|
|
|
1,090
|
|
|
1,232
|
|
|
1,090
|
|
||||
Employee benefits, including pension, postretirement and medical
|
|
885
|
|
|
1,051
|
|
|
885
|
|
|
1,051
|
|
||||
Other
|
|
408
|
|
|
351
|
|
|
406
|
|
|
351
|
|
||||
Less: Valuation allowance
|
|
(59
|
)
|
|
(63
|
)
|
|
(59
|
)
|
|
(63
|
)
|
||||
Total deferred tax assets
|
|
$
|
2,864
|
|
|
$
|
3,030
|
|
|
$
|
2,836
|
|
|
$
|
3,003
|
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation
|
|
$
|
(2,929
|
)
|
|
$
|
(2,431
|
)
|
|
$
|
(2,929
|
)
|
|
$
|
(2,431
|
)
|
Intangibles
|
|
(749
|
)
|
|
(803
|
)
|
|
(749
|
)
|
|
(803
|
)
|
||||
Total deferred tax liabilities
|
|
$
|
(3,678
|
)
|
|
$
|
(3,234
|
)
|
|
$
|
(3,678
|
)
|
|
$
|
(3,234
|
)
|
Net deferred tax liability
|
|
$
|
(814
|
)
|
|
$
|
(204
|
)
|
|
$
|
(842
|
)
|
|
$
|
(231
|
)
|
|
Pension Benefits
|
||||||
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||
Accumulated benefit obligation:
|
$
|
4,448
|
|
|
$
|
4,739
|
|
|
|
|
|
||||
Change in projected benefit obligation:
|
|
|
|
||||
Projected benefit obligation at beginning of year
|
$
|
5,852
|
|
|
$
|
5,253
|
|
Service cost
|
228
|
|
|
195
|
|
||
Interest cost
|
217
|
|
|
220
|
|
||
Actuarial (gain) loss
|
(601
|
)
|
|
525
|
|
||
Gross benefits paid and settlements
|
(292
|
)
|
|
(366
|
)
|
||
Other
|
(8
|
)
|
|
25
|
|
||
Projected benefit obligation at end of year
|
$
|
5,396
|
|
|
$
|
5,852
|
|
|
|
|
|
||||
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
3,932
|
|
|
$
|
3,355
|
|
Actual (loss) return on plan assets
|
(215
|
)
|
|
510
|
|
||
Employer contributions
|
413
|
|
|
419
|
|
||
Gross benefits paid and settlements
|
(292
|
)
|
|
(366
|
)
|
||
Other
|
(11
|
)
|
|
14
|
|
||
Fair value of plan assets at end of year
|
$
|
3,827
|
|
|
$
|
3,932
|
|
Funded status—Net amount recognized
|
$
|
(1,569
|
)
|
|
$
|
(1,920
|
)
|
|
Pension Benefits
|
||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||
Amounts recognized in the consolidated balance sheets consist of:
|
|
|
|
||||
Noncurrent asset
|
$
|
13
|
|
|
$
|
9
|
|
Current liability
|
(6
|
)
|
|
(8
|
)
|
||
Noncurrent liability
|
(1,576
|
)
|
|
(1,921
|
)
|
||
Total liability
|
$
|
(1,569
|
)
|
|
$
|
(1,920
|
)
|
|
|
|
|
||||
Amounts recognized in accumulated other comprehensive loss consist of:
|
|
|
|
||||
Net actuarial loss
|
$
|
(1,382
|
)
|
|
$
|
(1,610
|
)
|
Prior service cost
|
(5
|
)
|
|
(1
|
)
|
||
Total accumulated other comprehensive loss
|
$
|
(1,387
|
)
|
|
$
|
(1,611
|
)
|
|
|
|
|
||||
|
Other Postretirement Benefits
|
||||||
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||
Change in benefit obligation:
|
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
1,710
|
|
|
$
|
1,687
|
|
Service cost
|
12
|
|
|
13
|
|
||
Interest cost
|
61
|
|
|
66
|
|
||
Plan participants' contributions
|
68
|
|
|
68
|
|
||
Benefits paid
|
(181
|
)
|
|
(178
|
)
|
||
Actuarial loss (gain)
|
(285
|
)
|
|
40
|
|
||
Other
|
6
|
|
|
14
|
|
||
Benefit obligation at end of year
|
$
|
1,391
|
|
|
$
|
1,710
|
|
|
|
|
|
||||
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
54
|
|
|
$
|
55
|
|
Actual return on plan assets
|
1
|
|
|
1
|
|
||
Employer contributions
|
111
|
|
|
108
|
|
||
Plan participants' contributions
|
68
|
|
|
68
|
|
||
Benefits paid
|
(181
|
)
|
|
(178
|
)
|
||
Fair value of plan assets at end of year
|
53
|
|
|
54
|
|
||
Funded status—Net amount recognized
|
$
|
(1,338
|
)
|
|
$
|
(1,656
|
)
|
|
Other Postretirement Benefits
|
||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||
Amounts recognized in the consolidated balance sheets consist of:
|
|
|
|
||||
Current liability
|
$
|
(43
|
)
|
|
$
|
(54
|
)
|
Noncurrent liability
|
(1,295
|
)
|
|
(1,602
|
)
|
||
Total liability
|
$
|
(1,338
|
)
|
|
$
|
(1,656
|
)
|
Amounts recognized in accumulated other comprehensive income consist of:
|
|
|
|
||||
Net actuarial gain
|
$
|
554
|
|
|
$
|
301
|
|
Prior service credit
|
170
|
|
|
208
|
|
||
Total accumulated other comprehensive income
|
$
|
724
|
|
|
$
|
509
|
|
|
2018
|
|
2017
|
||||
Projected benefit obligation
|
$
|
5,196
|
|
|
$
|
5,637
|
|
Accumulated benefit obligation
|
4,286
|
|
|
4,567
|
|
||
Fair value of plan assets
|
3,614
|
|
|
3,709
|
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
|
Pension Benefits
|
|
Other Postretirement Benefits
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
Service cost
|
$
|
228
|
|
|
$
|
12
|
|
|
$
|
195
|
|
|
$
|
13
|
|
|
$
|
112
|
|
|
$
|
19
|
|
Interest cost
|
217
|
|
|
61
|
|
|
220
|
|
|
66
|
|
|
200
|
|
|
86
|
|
||||||
Expected return on plan assets
|
(292
|
)
|
|
(2
|
)
|
|
(243
|
)
|
|
(2
|
)
|
|
(216
|
)
|
|
(2
|
)
|
||||||
Curtailment gain
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(107
|
)
|
||||||
Amortization of unrecognized actuarial (gain) loss
|
130
|
|
|
(32
|
)
|
|
128
|
|
|
(33
|
)
|
|
76
|
|
|
(19
|
)
|
||||||
Amortization of prior service credits
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
(31
|
)
|
||||||
Other
|
1
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||||
Net periodic benefit cost (credit)
|
$
|
284
|
|
|
$
|
2
|
|
|
$
|
305
|
|
|
$
|
7
|
|
|
$
|
177
|
|
|
$
|
(54
|
)
|
|
|
Pension Benefits
|
||||
Assumptions used to determine benefit obligations
|
|
2018
|
|
2017
|
||
Discount rate
|
|
4.20
|
%
|
|
3.65
|
%
|
Rate of compensation increase
|
|
3.89
|
%
|
|
3.89
|
%
|
|
|
|
|
|
||
Assumptions used to determine net expense
|
|
|
||||
Discount rate
|
|
3.65
|
%
|
|
4.19
|
%
|
Expected return on plan assets
|
|
7.31
|
%
|
|
7.02
|
%
|
Rate of compensation increase
|
|
3.89
|
%
|
|
3.54
|
%
|
|
||||||
|
|
Other Postretirement Benefits
|
||||
Assumptions used to determine benefit obligations
|
|
2018
|
|
2017
|
||
Discount rate
|
|
4.30
|
%
|
|
3.63
|
%
|
|
|
|
|
|
||
Assumptions used to determine net expense
|
|
|
|
|
||
Discount rate
|
|
3.63
|
%
|
|
4.07
|
%
|
Expected return on plan assets
|
|
3.00
|
%
|
|
3.00
|
%
|
Health care cost trend rate assumed for next year
|
|
6.00
|
%
|
|
6.25
|
%
|
Rate to which the cost trend rate is assumed to decline (ultimate trend rate in 2023)
|
|
5.00
|
%
|
|
5.00
|
%
|
|
Percent of Total
|
|
Expected Long-Term
Rate of Return
|
||
Equity securities
|
30-45
|
%
|
|
9.5
|
%
|
Fixed-income securities
|
30-40
|
|
|
5.8
|
|
Alternatives
|
10-25
|
|
|
7.3
|
|
Other
|
0-10
|
|
|
7.8
|
|
Level 1
|
Unadjusted quoted prices in active markets for assets or liabilities identical to those to be reported at fair value
|
||||||
Level 2
|
Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputs
|
||||||
Level 3
|
Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants would price the assets or liabilities
|
|
|
2018
|
|
|
2017
|
||||||||||||||||||||||||||||||||||||
Pension Plan Assets:
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets Measured at NAV(a)
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets Measured at NAV(a)
|
||||||||||||||||||||
Equity securities funds
|
|
$
|
1,394
|
|
|
$
|
254
|
|
|
$
|
106
|
|
|
$
|
—
|
|
|
$
|
1,034
|
|
|
|
$
|
1,406
|
|
|
$
|
269
|
|
|
$
|
133
|
|
|
$
|
—
|
|
|
$
|
1,004
|
|
Fixed-income securities
|
|
1,431
|
|
|
—
|
|
|
605
|
|
|
21
|
|
|
805
|
|
|
|
1,470
|
|
|
—
|
|
|
834
|
|
|
18
|
|
|
618
|
|
||||||||||
Alternatives
|
|
596
|
|
|
—
|
|
|
—
|
|
|
134
|
|
|
462
|
|
|
|
637
|
|
|
—
|
|
|
—
|
|
|
139
|
|
|
498
|
|
||||||||||
Other investments
|
|
406
|
|
|
224
|
|
|
40
|
|
|
142
|
|
|
—
|
|
|
|
419
|
|
|
32
|
|
|
124
|
|
|
172
|
|
|
91
|
|
||||||||||
Total
|
|
$
|
3,827
|
|
|
$
|
478
|
|
|
$
|
751
|
|
|
$
|
297
|
|
|
$
|
2,301
|
|
|
|
$
|
3,932
|
|
|
$
|
301
|
|
|
$
|
1,091
|
|
|
$
|
329
|
|
|
$
|
2,211
|
|
Other Postretirement Benefit Plan Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Deposit administration fund
|
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
53
|
|
|
$
|
—
|
|
|
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54
|
|
|
$
|
—
|
|
|
2018
|
|
2017
|
||||
Balance at beginning of year
|
$
|
383
|
|
|
$
|
287
|
|
Actual return (loss) on plan assets:
|
|
|
|
||||
Sold during the year
|
10
|
|
|
7
|
|
||
Held at year end
|
(21
|
)
|
|
16
|
|
||
Purchases, sales, issuances and settlements (net)
|
(22
|
)
|
|
73
|
|
||
Balance at end of year
|
$
|
350
|
|
|
$
|
383
|
|
|
Pension
|
|
Other
Postretirement |
|
Other Postretirement—
subsidy receipts |
||||||
2019
|
$
|
329
|
|
|
$
|
100
|
|
|
$
|
5
|
|
2020
|
327
|
|
|
104
|
|
|
6
|
|
|||
2021
|
353
|
|
|
108
|
|
|
6
|
|
|||
2022
|
367
|
|
|
111
|
|
|
6
|
|
|||
2023
|
379
|
|
|
113
|
|
|
7
|
|
|||
Years 2024 – 2028
|
2,022
|
|
|
575
|
|
|
38
|
|
Pension Fund
|
IAM National Pension Fund
|
EIN/ Pension Plan Number
|
51-6031295 - 002
|
Pension Protection Act Zone Status (2018 and 2017)
|
Green Zone. Plans in the green zone are at least 80 percent funded.
|
FIP/RP Status Pending/Implemented
|
No
|
United's Contributions
|
$52 million, $50 million and $41 million in the years ended December 31, 2018, 2017 and 2016, respectively
|
Surcharge Imposed
|
No
|
Expiration Date of Collective Bargaining Agreement
|
N/A
|
|
2018
|
|
2017
|
||||||||||||||||||||||||||||
|
Total
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
||||||||||
Cash and cash equivalents
|
$
|
1,694
|
|
|
$
|
1,694
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,482
|
|
|
$
|
1,482
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
1,023
|
|
|
—
|
|
|
1,023
|
|
|
—
|
|
|
958
|
|
|
—
|
|
|
958
|
|
|
—
|
|
||||||||
Asset-backed securities
|
746
|
|
|
—
|
|
|
746
|
|
|
—
|
|
|
753
|
|
|
—
|
|
|
753
|
|
|
—
|
|
||||||||
U.S. government and agency notes
|
108
|
|
|
—
|
|
|
108
|
|
|
—
|
|
|
113
|
|
|
—
|
|
|
113
|
|
|
—
|
|
||||||||
Certificates of deposit placed through an account registry service ("CDARS")
|
75
|
|
|
—
|
|
|
75
|
|
|
—
|
|
|
120
|
|
|
—
|
|
|
120
|
|
|
—
|
|
||||||||
Other fixed-income securities
|
116
|
|
|
—
|
|
|
116
|
|
|
—
|
|
|
188
|
|
|
—
|
|
|
188
|
|
|
—
|
|
||||||||
Other investments measured at NAV
|
188
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
184
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Restricted cash
|
105
|
|
|
105
|
|
|
—
|
|
|
—
|
|
|
109
|
|
|
109
|
|
|
—
|
|
|
—
|
|
||||||||
Long-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Equity securities
|
249
|
|
|
249
|
|
|
—
|
|
|
—
|
|
|
99
|
|
|
99
|
|
|
—
|
|
|
—
|
|
||||||||
Enhanced equipment trust certificates ("EETC")
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||||||
Avianca Holdings S.A. ("AVH") Derivative Assets
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2018
|
|
2017
|
||||||||||||||||||||||||||||||||||||
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||||||||||||||||||||||||||
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||||||
Long-term debt
|
$
|
13,445
|
|
|
$
|
13,450
|
|
|
$
|
—
|
|
|
$
|
9,525
|
|
|
$
|
3,925
|
|
|
$
|
13,268
|
|
|
$
|
13,787
|
|
|
$
|
—
|
|
|
$
|
10,115
|
|
|
$
|
3,672
|
|
Synergy Term Loan
|
478
|
|
|
422
|
|
|
—
|
|
|
—
|
|
|
422
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Description
|
Fair Value Methodology
|
Cash and cash equivalents
|
The carrying amounts approximate fair value because of the short-term maturity of these assets.
|
Short-term investments,
Equity securities, EETC and
Restricted cash
|
Fair value is based on (a) the trading prices of the investment or similar instruments, (b) an income approach, which uses valuation techniques to convert future amounts into a single present amount based on current market expectations about those future amounts when observable trading prices are not available, or (c) broker quotes obtained by third-party valuation services.
|
Other investments measured at NAV
|
In accordance with the relevant accounting standards, certain investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the table above are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. The investments measured using NAV are shares of mutual funds that invest in fixed-income instruments including bonds, debt securities, and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities. The Company can redeem its shares at any time at NAV subject to a three-day settlement period.
|
Long-term debt
|
Fair values were based on either market prices or the discounted amount of future cash flows using our current incremental rate of borrowing for similar liabilities or assets.
|
Synergy Term Loan and AVH Derivative Assets
|
Fair values are calculated using a Monte Carlo simulation approach. Unobservable inputs include expected volatility, expected dividend yield and control and acquisition premiums.
|
•
|
Republic Airways Holdings Inc. ("Republic"). United holds a
19%
minority interest in Republic which the Company received in 2017 in consideration for its unsecured claim in Republic's bankruptcy case. Republic does business as Republic Airways.
|
•
|
ManaAir, LLC ("ManaAir"). In a series of transactions completed in January 2019, United obtained a
49.9%
minority ownership stake in ManaAir, LLC ("ManaAir") and ManaAir purchased
100%
of the equity of ExpressJet Airlines, Inc.
|
•
|
Champlain Enterprises LLC ("Champlain"). United owns a
40%
minority ownership stake in Champlain. Champlain does business as CommutAir.
|
(In millions)
|
|
At December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Secured
|
|
|
|
|
||||
Notes payable, fixed interest rates of 0.0% to 9.52% (weighted average rate of 4.18% as of December 31, 2018), payable through 2030
|
|
$
|
8,811
|
|
|
$
|
8,661
|
|
Notes payable, floating interest rates of the London interbank offered rate ("LIBOR") plus 1.05% to 1.75%, payable through 2030
|
|
2,051
|
|
|
1,880
|
|
||
Term loan, LIBOR plus 1.75%, or alternative rate based on certain market rates plus 0.75%, due 2024
|
|
1,474
|
|
|
1,489
|
|
||
Unsecured
|
|
|
|
|
||||
6.375% Senior Notes due 2018 (a)
|
|
—
|
|
|
300
|
|
||
6% Senior Notes due 2020 (a)
|
|
300
|
|
|
300
|
|
||
4.25% Senior Notes due 2022 (a)
|
|
400
|
|
|
400
|
|
||
5% Senior Notes due 2024 (a)
|
|
300
|
|
|
300
|
|
||
Other
|
|
300
|
|
|
101
|
|
||
|
|
13,636
|
|
|
13,431
|
|
||
Less: unamortized debt discount, premiums and debt issuance costs
|
|
(191
|
)
|
|
(163
|
)
|
||
Less: current portion of long-term debt
|
|
(1,230
|
)
|
|
(1,565
|
)
|
||
Long-term debt, net
|
|
$
|
12,215
|
|
|
$
|
11,703
|
|
2019
|
|
$
|
1,230
|
|
2020
|
|
1,310
|
|
|
2021
|
|
1,300
|
|
|
2022
|
|
1,653
|
|
|
2023
|
|
703
|
|
|
After 2023
|
|
7,440
|
|
|
|
|
$
|
13,636
|
|
EETC Date
|
|
Class
|
|
Principal
|
|
Final expected distribution date
|
|
Stated interest rate
|
|
Total debt recorded
as of December 31, 2018 |
|
Proceeds received from issuance of debt during 2018
|
|
Remaining proceeds from issuance of debt to be received in future periods
|
|||||||||
February 2019
|
|
AA
|
|
$
|
717
|
|
|
August 2031
|
|
4.15
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
717
|
|
February 2019
|
|
A
|
|
296
|
|
|
August 2031
|
|
4.55
|
%
|
|
—
|
|
|
—
|
|
|
296
|
|
||||
May 2018
|
|
B
|
|
226
|
|
|
March 2026
|
|
4.60
|
%
|
|
226
|
|
|
226
|
|
|
—
|
|
||||
February 2018
|
|
AA
|
|
677
|
|
|
March 2030
|
|
3.50
|
%
|
|
677
|
|
|
677
|
|
|
—
|
|
||||
February 2018
|
|
A
|
|
258
|
|
|
March 2030
|
|
3.70
|
%
|
|
258
|
|
|
258
|
|
|
—
|
|
||||
|
|
|
|
$
|
2,174
|
|
|
|
|
|
|
$
|
1,161
|
|
|
$
|
1,161
|
|
|
$
|
1,013
|
|
Debt Instrument
|
Collateral, Covenants and Cross Default Provisions
|
Various equipment notes and other notes payable
|
Secured by certain aircraft. The indentures contain events of default that are customary for aircraft financing, including in certain cases cross default to other related aircraft.
|
Credit Agreement
|
Secured by certain of United's international route authorities, specified take-off and landing slots at certain airports and certain other assets.
The Credit Agreement requires the Company to maintain at least $2.0 billion of unrestricted liquidity at all times, which includes unrestricted cash, short-term investments and any undrawn amounts under any revolving credit facility, and to maintain a minimum ratio of appraised value of collateral to the outstanding obligations under the Credit Agreement of 1.6 to 1.0 at all times. The Credit Agreement contains covenants that, among other things, restrict the ability of UAL and its restricted subsidiaries (as defined in the Credit Agreement) to incur additional indebtedness and to pay dividends on or repurchase stock, although, as of December 31, 2018, the Company had ample ability under these restrictions to repurchase stock under the Company's share repurchase program. The Credit Agreement contains events of default customary for this type of financing, including a cross default and cross acceleration provision to certain other material indebtedness of the Company. |
6% Senior Notes due 2020
4.25% Senior Notes due 2022
5% Senior Notes due 2024
|
The indentures for these notes contain covenants that, among other things, restrict the ability of the Company and its restricted subsidiaries (as defined in the indentures) to incur additional indebtedness and pay dividends on or repurchase stock, although the Company currently has ample ability under these restrictions to repurchase stock under the Company's share repurchase program.
|
|
|
Capital Leases (b)
|
|
Facility and Other Operating Leases
|
|
Aircraft Operating Leases
|
||||||
2019
|
|
$
|
308
|
|
|
$
|
1,330
|
|
|
$
|
845
|
|
2020
|
|
170
|
|
|
1,351
|
|
|
682
|
|
|||
2021
|
|
147
|
|
|
1,107
|
|
|
583
|
|
|||
2022
|
|
123
|
|
|
970
|
|
|
407
|
|
|||
2023
|
|
104
|
|
|
953
|
|
|
379
|
|
|||
After 2023
|
|
1,268
|
|
|
7,029
|
|
|
1,160
|
|
|||
Minimum lease payments (a)
|
|
$
|
2,120
|
|
|
$
|
12,740
|
|
|
$
|
4,056
|
|
Imputed interest
|
|
(837
|
)
|
|
|
|
|
|||||
Present value of minimum lease payments
|
|
1,283
|
|
|
|
|
|
|||||
Current portion
|
|
(149
|
)
|
|
|
|
|
|||||
Long-term obligations under capital leases
|
|
$
|
1,134
|
|
|
|
|
|
2019
|
$
|
2.2
|
|
2020
|
2.0
|
|
|
2021
|
1.8
|
|
|
2022
|
1.4
|
|
|
2023
|
0.8
|
|
|
After 2023
|
3.1
|
|
|
|
$
|
11.3
|
|
•
|
BRW Aviation LLC ("BRW"): Synergy's wholly-owned affiliate, BRW, is a special purpose entity created to be the borrower of the Synergy Term Loan. BRW is also the owner of the collateral that secures the Synergy Term Loan, including Synergy's shares of AVH. BRW is a VIE and United holds variable interests in BRW including the Synergy Term Loan. However, United is not the primary beneficiary of BRW because it does not hold BRW equity and does not have management rights at BRW and therefore does not have the power to direct the activities that most significantly impact BRW's economic performance.
|
•
|
AVH: United concluded that AVH is a VIE and that United holds a variable interest through its call option on Synergy's AVH shares. However, United is not the primary beneficiary because it does not hold a material number of shares of AVH and does not have the power through any other agreements to direct the activities that most significantly impact AVH's economic performance.
|
Aircraft Type
|
|
Number of Firm
Commitments (a) |
|
Airbus A350
|
|
45
|
|
Boeing 737 MAX
|
|
175
|
|
Boeing 777-300ER
|
|
4
|
|
Boeing 787
|
|
24
|
|
Embraer E175
|
|
25
|
|
(a) United also has options and purchase rights for additional aircraft.
|
2019
|
$
|
4.2
|
|
2020
|
5.3
|
|
|
2021
|
3.5
|
|
|
2022
|
2.8
|
|
|
2023
|
1.9
|
|
|
After 2023
|
7.0
|
|
|
|
$
|
24.7
|
|
Operating:
|
|
2018
|
|
2017 (a)
|
|
2016 (a)
|
||||||
Impairment of assets
|
|
$
|
377
|
|
|
$
|
25
|
|
|
$
|
412
|
|
Termination of an engine maintenance service agreement
|
|
64
|
|
|
—
|
|
|
—
|
|
|||
Severance and benefit costs
|
|
41
|
|
|
116
|
|
|
37
|
|
|||
Cleveland airport lease restructuring
|
|
—
|
|
|
—
|
|
|
74
|
|
|||
Labor agreement costs
|
|
—
|
|
|
—
|
|
|
171
|
|
|||
(Gains) losses on sale of assets and other special charges
|
|
5
|
|
|
35
|
|
|
51
|
|
|||
Total operating special charges
|
|
487
|
|
|
176
|
|
|
745
|
|
|||
Nonoperating:
|
|
|
|
|
|
|
||||||
Postretirement curtailment gain
|
|
—
|
|
|
—
|
|
|
(107
|
)
|
|||
Gains on extinguishment of debt and other
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Total operating and nonoperating special charges before income taxes
|
|
487
|
|
|
176
|
|
|
637
|
|
|||
Nonoperating mark-to-market ("MTM") losses on financial instruments
|
|
5
|
|
|
—
|
|
|
—
|
|
|||
Total special charges and MTM losses on financial instruments
|
|
492
|
|
|
176
|
|
|
637
|
|
|||
Income tax benefit
|
|
(110
|
)
|
|
(63
|
)
|
|
(229
|
)
|
|||
Income tax adjustments (Note 7)
|
|
(5
|
)
|
|
(179
|
)
|
|
180
|
|
|||
Total special charges and MTM losses on financial instruments, net of income taxes and income tax adjustments
|
|
$
|
377
|
|
|
$
|
(66
|
)
|
|
$
|
588
|
|
|
Severance/ Benefit Costs
|
|
Permanently Grounded Aircraft
|
||||
Balance at December 31, 2015
|
$
|
27
|
|
|
$
|
78
|
|
Accrual and related adjustments
|
37
|
|
|
(17
|
)
|
||
Payments
|
(50
|
)
|
|
(20
|
)
|
||
Balance at December 31, 2016
|
14
|
|
|
41
|
|
||
Accrual
|
116
|
|
|
(4
|
)
|
||
Payments
|
(93
|
)
|
|
(15
|
)
|
||
Balance at December 31, 2017
|
37
|
|
|
22
|
|
||
Accrual
|
41
|
|
|
(7
|
)
|
||
Payments
|
(53
|
)
|
|
(3
|
)
|
||
Balance at December 31, 2018
|
$
|
25
|
|
|
$
|
12
|
|
UAL
|
|
Quarter Ended
|
||||||||||||||
(In millions, except per share amounts)
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
2018
|
|
|
|
|
|
|
|
|
||||||||
Operating revenue
|
|
$
|
9,032
|
|
|
$
|
10,777
|
|
|
$
|
11,003
|
|
|
$
|
10,491
|
|
Income from operations
|
|
276
|
|
|
1,161
|
|
|
1,203
|
|
|
652
|
|
||||
Net income
|
|
147
|
|
|
684
|
|
|
836
|
|
|
462
|
|
||||
Basic earnings per share
|
|
0.52
|
|
|
2.49
|
|
|
3.07
|
|
|
1.71
|
|
||||
Diluted earnings per share
|
|
0.52
|
|
|
2.48
|
|
|
3.06
|
|
|
1.70
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
2017 (a)
|
|
|
|
|
|
|
|
|
||||||||
Operating revenue
|
|
$
|
8,426
|
|
|
$
|
10,008
|
|
|
$
|
9,899
|
|
|
$
|
9,451
|
|
Income from operations
|
|
320
|
|
|
1,437
|
|
|
1,138
|
|
|
776
|
|
||||
Net income
|
|
99
|
|
|
821
|
|
|
645
|
|
|
579
|
|
||||
Basic earnings per share
|
|
0.32
|
|
|
2.67
|
|
|
2.15
|
|
|
1.99
|
|
||||
Diluted earnings per share
|
|
0.32
|
|
|
2.67
|
|
|
2.15
|
|
|
1.98
|
|
|
|
Quarter Ended
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
2018
|
|
|
|
|
|
|
|
|
||||||||
Operating:
|
|
|
|
|
|
|
|
|
||||||||
Impairment of assets
|
|
$
|
23
|
|
|
$
|
111
|
|
|
$
|
11
|
|
|
$
|
232
|
|
Termination of an engine maintenance service agreement
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
||||
Severance and benefit costs
|
|
14
|
|
|
11
|
|
|
9
|
|
|
7
|
|
||||
(Gains) losses on sale of assets and other special charges
|
|
3
|
|
|
7
|
|
|
(3
|
)
|
|
(2
|
)
|
||||
Total operating special charges
|
|
40
|
|
|
129
|
|
|
17
|
|
|
301
|
|
||||
Nonoperating:
|
|
|
|
|
|
|
|
|
||||||||
Nonoperating mark-to-market ("MTM") (gains) losses on financial instruments
|
|
(45
|
)
|
|
135
|
|
|
(29
|
)
|
|
(56
|
)
|
||||
Total special charges and MTM (gains) losses on financial instruments
|
|
(5
|
)
|
|
264
|
|
|
(12
|
)
|
|
245
|
|
||||
Income taxes:
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense (benefit) related to special charges and MTM gains and losses on financial instruments
|
|
1
|
|
|
(59
|
)
|
|
3
|
|
|
(55
|
)
|
||||
Income tax adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||
Total special charges and MTM (gains) losses on financial instruments, net of tax
|
|
$
|
(4
|
)
|
|
$
|
205
|
|
|
$
|
(9
|
)
|
|
$
|
185
|
|
|
|
|
|
|
|
|
|
|
||||||||
2017 (a)
|
|
|
|
|
|
|
|
|
||||||||
Operating:
|
|
|
|
|
|
|
|
|
||||||||
Severance and benefit costs
|
|
$
|
37
|
|
|
$
|
41
|
|
|
$
|
23
|
|
|
$
|
15
|
|
Impairment of assets
|
|
—
|
|
|
—
|
|
|
15
|
|
|
10
|
|
||||
(Gains) losses on sale of assets and other special charges
|
|
14
|
|
|
3
|
|
|
12
|
|
|
6
|
|
||||
Total operating special charges
|
|
51
|
|
|
44
|
|
|
50
|
|
|
31
|
|
||||
Income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax benefit related to special charges
|
|
(18
|
)
|
|
(16
|
)
|
|
(18
|
)
|
|
(11
|
)
|
||||
Income tax adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(179
|
)
|
||||
Total operating special charges, net of income taxes and income tax adjustments
|
|
$
|
33
|
|
|
$
|
28
|
|
|
$
|
32
|
|
|
$
|
(159
|
)
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION.
|
ITEM 11.
|
EXECUTIVE COMPENSATION.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES.
|
Service
|
|
2018
|
|
2017
|
||||
Audit Fees
|
|
$
|
3,992
|
|
|
$
|
4,548
|
|
Audit Related Fees
|
|
375
|
|
|
565
|
|
||
Tax Fees
|
|
166
|
|
|
584
|
|
||
All Other Fees
|
|
2
|
|
|
2
|
|
||
Total Fees
|
|
$
|
4,535
|
|
|
$
|
5,699
|
|
Note: UAL and United amounts are the same.
|
|
|
|
|
(a)
|
|
List of documents filed as part of this report:
|
|
|
|
(1)
|
|
Financial Statements
. The financial statements required by this item are listed in Part II, Item 8,
Financial Statements and Supplementary Data
herein.
|
|
|
|
(2)
|
|
Financial Statement Schedules.
The financial statement schedule required by this item is listed below and included in this report after the signature page hereto.
|
|
|
All other schedules are omitted because they are not applicable, not required or the required information is shown in the consolidated financial statements or notes thereto.
|
|
|
|
(b)
|
|
Exhibits.
The exhibits required by this item are provided in the Exhibit Index.
|
Exhibit No.
|
Registrant
|
Exhibit
|
|
|
|
|
|
Articles of Incorporation and Bylaws
|
|
|
|
3.1
|
UAL
|
|
|
|
|
3.2
|
UAL
|
|
|
|
|
3.3
|
United
|
|
|
|
|
3.4
|
United
|
|
|
|
|
|
|
Instruments Defining Rights of Security Holders, Including Indentures
|
|
|
|
4.1
|
UAL
United
|
|
|
|
|
4.2
|
UAL
United
|
|
|
|
|
4.3
|
UAL
United
|
|
|
|
|
4.4
|
UAL
United
|
|
|
|
|
4.5
|
UAL
United
|
|
|
|
|
4.6
|
UAL
United
|
|
|
|
|
4.7
|
UAL
United
|
|
|
|
|
4.8
|
UAL
United
|
|
|
|
|
4.9
|
UAL
United
|
|
|
|
|
4.10
|
UAL
United
|
|
|
|
|
4.11
|
UAL
United |
|
|
|
|
4.12
|
UAL
United |
|
|
|
|
4.13
|
UAL
United |
|
|
|
|
4.14
|
UAL
United |
|
|
|
|
4.15
|
UAL
United |
|
|
|
|
4.16
|
UAL
United |
|
|
|
Material Contracts
|
|
|
|
†10.1
|
UAL
|
|
|
|
|
†10.2
|
UAL
|
|
|
|
|
†10.3
|
UAL
|
|
|
|
|
†10.4
|
UAL
United |
|
|
|
|
†10.5
|
UAL
United |
|
|
|
|
†10.6
|
UAL
United |
|
|
|
|
†10.7
|
UAL
United |
|
|
|
|
†10.8
|
UAL
United |
|
|
|
|
†10.9
|
UAL
|
|
|
|
|
†10.10
|
UAL
|
|
|
|
|
†10.11
|
UAL
United |
|
|
|
|
†10.12
|
UAL
|
|
|
|
|
†10.13
|
UAL
|
|
|
|
|
†10.14
|
UAL
|
|
|
|
|
†10.15
|
UAL
|
|
|
|
|
†10.16
|
UAL
|
|
|
|
|
†10.17
|
UAL
|
|
|
|
|
†10.18
|
UAL
|
|
|
|
†10.19
|
UAL
|
|
|
|
|
†10.20
|
UAL
|
|
|
|
|
†10.21
|
UAL
|
|
|
|
|
†10.22
|
UAL
|
|
|
|
|
†10.23
|
UAL
|
|
|
|
|
†10.24
|
UAL
|
|
|
|
|
†10.25
|
UAL
|
|
|
|
|
†10.26
|
UAL
|
|
|
|
|
†10.27
|
UAL
|
|
|
|
|
†10.28
|
UAL
|
|
|
|
|
†10.29
|
UAL
|
|
|
|
|
†10.30
|
UAL
|
|
|
|
|
†10.31
|
UAL
|
|
|
|
|
†10.32
|
UAL
|
|
|
|
|
†10.33
|
UAL
|
|
|
|
|
^10.50
|
UAL
United |
|
|
|
|
^10.51
|
UAL
United |
|
|
|
|
^10.52
|
UAL
United |
|
|
|
|
^10.53
|
UAL
United |
|
|
|
|
^10.54
|
UAL
United |
|
|
|
|
^10.55
|
UAL
United |
|
|
|
|
^10.56
|
UAL
United |
|
|
|
|
^10.57
|
UAL
United |
|
|
|
|
^10.58
|
UAL
United |
|
|
|
|
^10.59
|
UAL
United |
|
|
|
|
^10.60
|
UAL
United |
|
|
|
|
^10.61
|
UAL
United |
|
|
|
|
^10.62
|
UAL
United |
|
|
|
|
^10.63
|
UAL
United |
|
|
|
|
^10.64
|
UAL
United |
|
|
|
|
^10.65
|
UAL
United |
|
|
|
|
^10.66
|
UAL
United |
|
|
|
|
^10.67
|
UAL
United |
|
|
|
|
^10.68
|
UAL
United |
|
|
|
|
^10.69
|
UAL
United |
|
|
|
|
^10.70
|
UAL
United |
|
|
|
|
^10.71
|
UAL
United |
|
|
|
|
^10.72
|
UAL
United |
|
|
|
|
^10.73
|
UAL
United |
|
|
|
|
^10.74
|
UAL
United |
|
|
|
|
^10.75
|
UAL
United |
|
|
|
|
^10.76
|
UAL
United |
|
|
|
|
^10.77
|
UAL
United |
|
|
|
|
^10.78
|
UAL
United |
|
|
|
|
^10.79
|
UAL
United |
|
|
|
|
^10.80
|
UAL
United |
|
|
|
|
^10.81
|
UAL
United |
|
|
|
|
^10.82
|
UAL
United |
|
|
|
|
^10.83
|
UAL
United |
|
|
|
|
^10.84
|
UAL
United |
|
|
|
|
^10.85
|
UAL
United |
|
|
|
|
^10.86
|
UAL
United |
|
|
|
|
^10.87
|
UAL
United |
|
|
|
|
^10.88
|
UAL
United |
|
|
|
|
^10.89
|
UAL
United |
|
|
|
|
^10.90
|
UAL
United |
|
|
|
|
^10.91
|
UAL
United |
|
|
|
|
^10.92
|
UAL
United |
|
|
|
|
^10.93
|
UAL
United |
|
|
|
|
^10.94
|
UAL
United |
|
|
|
|
^10.95
|
UAL
United |
|
|
|
|
^10.96
|
UAL
United |
|
|
|
|
^10.97
|
UAL
United |
|
|
|
|
^10.98
|
UAL
United |
|
|
|
|
^10.99
|
UAL
United |
|
|
|
|
^10.100
|
UAL
United |
|
|
|
|
^10.101
|
UAL
United |
|
|
|
|
^10.102
|
UAL
United |
|
|
|
^10.103
|
UAL
United |
|
|
|
|
^10.104
|
UAL
United |
|
|
|
|
^10.105
|
UAL
United |
|
|
|
|
^10.106
|
UAL
United |
|
|
|
|
^10.107
|
UAL
United |
|
|
|
|
^10.108
|
UAL
United |
|
|
|
|
^10.109
|
UAL
United |
|
|
|
|
^10.110
|
UAL
United |
|
|
|
|
^10.111
|
UAL
United |
|
|
|
|
^10.112
|
UAL
United |
|
|
|
|
^10.113
|
UAL
United |
|
|
|
|
^10.114
|
UAL
United |
|
|
|
|
^10.115
|
UAL
United |
|
|
|
|
^10.116
|
UAL
United |
|
|
|
|
^10.117
|
UAL
United |
|
|
|
|
^10.118
|
UAL
United |
|
|
|
|
^10.119
|
UAL
United |
|
|
|
|
^10.120
|
UAL
United |
|
|
|
|
^10.121
|
UAL
United |
|
|
|
|
^10.122
|
UAL
United |
|
|
|
|
^10.123
|
UAL
United |
|
|
|
|
^10.124
|
UAL
United |
|
|
|
|
^10.125
|
UAL
United |
|
|
|
|
^10.126
|
UAL
United |
|
|
|
|
^10.127
|
UAL
United |
|
|
|
|
^10.128
|
UAL
United |
|
|
|
|
^10.129
|
UAL
United |
|
|
|
|
^10.130
|
UAL
United |
|
|
|
|
^10.131
|
UAL
United |
|
|
|
|
^10.132
|
UAL
United |
|
|
|
|
^10.133
|
UAL
United |
|
|
|
|
^10.134
|
UAL
United |
|
|
|
|
^10.135
|
UAL
United |
|
|
|
|
^10.136
|
UAL
United |
|
|
|
^10.137
|
UAL
United |
|
|
|
|
^10.138
|
UAL
United |
|
|
|
|
^10.139
|
UAL
United |
|
|
|
|
^10.140
|
UAL
United |
|
|
|
|
^10.141
|
UAL
United |
|
|
|
|
^10.142
|
UAL
United |
|
|
|
|
^10.143
|
UAL
United |
|
|
|
|
^10.144
|
UAL
United |
|
|
|
|
^10.145
|
UAL
United |
|
|
|
|
^10.146
|
UAL
United |
|
|
|
|
^10.147
|
UAL
United |
|
|
|
|
^10.148
|
UAL
United |
|
|
|
|
^10.149
|
UAL
United |
|
|
|
|
^10.150
|
UAL
United |
|
|
|
|
^10.151
|
UAL
United |
|
|
|
|
^10.152
|
UAL
United |
|
|
|
|
^10.153
|
UAL
United |
|
|
|
|
^10.154
|
UAL
United |
|
|
|
|
^10.155
|
UAL
United |
|
|
|
|
^10.156
|
UAL
United |
|
|
|
|
^10.157
|
UAL
United |
|
|
|
|
^10.158
|
UAL
United |
|
|
|
|
^10.159
|
UAL
United |
|
|
|
|
^10.160
|
UAL
United |
|
|
|
|
^10.161
|
UAL
United |
|
|
|
|
^10.162
|
UAL
United |
|
|
|
|
^10.163
|
UAL
United |
|
|
|
|
^10.164
|
UAL
United |
|
|
|
|
^10.165
|
UAL
United |
|
|
|
|
^10.166
|
UAL
United |
|
|
|
|
^10.167
|
UAL
United |
|
|
|
|
10.168
|
UAL
United |
|
|
|
|
10.169
|
UAL
United |
|
|
|
|
10.170
|
UAL
United |
|
|
|
|
|
|
List of Subsidiaries
|
|
|
|
21
|
UAL
United
|
|
|
|
|
|
|
Consents of Experts and Counsel
|
|
|
|
23.1
|
UAL
|
|
|
|
|
23.2
|
United
|
|
|
|
|
|
|
Rule 13a-14(a)/15d-14(a) Certifications
|
|
|
|
31.1
|
UAL
|
|
|
|
|
31.2
|
UAL
|
|
|
|
|
31.3
|
United
|
|
|
|
|
31.4
|
United
|
|
|
|
|
|
|
Section 1350 Certifications
|
|
|
|
32.1
|
UAL
|
|
|
|
|
32.2
|
United
|
|
|
|
|
|
|
Interactive Data File
|
|
|
|
101
|
UAL
United
|
The following materials from each of United Continental Holdings, Inc.'s and United Airlines, Inc.'s Annual Reports on Form 10-K for the year ended December 31, 2018, formatted in XBRL (Extensible Business Reporting Language): (i) the Statements of Consolidated Operations, (ii) the Statements of Consolidated Comprehensive Income (Loss), (iii) the Consolidated Balance Sheets, (iv) the Statements of Consolidated Cash Flows, (v) the Statements of Consolidated Stockholders' Equity (Deficit) and (vi) the Combined Notes to Consolidated Financial Statements.
|
†
|
Indicates management contract or compensatory plan or arrangement. Pursuant to Item 601(b)(10), United is permitted to omit certain compensation-related exhibits from this report and therefore only UAL is identified as the registrant for purposes of those items.
|
^
|
Confidential portion of this exhibit has been omitted and filed separately with the SEC pursuant to a request for confidential treatment.
|
|
|
|
|
|
UNITED CONTINENTAL HOLDINGS, INC.
UNITED AIRLINES, INC.
(Registrants)
|
|
|
|
|
By:
|
/s/ Gerald Laderman
|
|
|
Gerald Laderman
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
Signature
|
Capacity
|
|
|
/s/ Oscar Munoz
|
Chief Executive Officer, Director
|
Oscar Munoz
|
(Principal Executive Officer)
|
|
|
/s/ Gerald Laderman
|
Executive Vice President and Chief Financial Officer
|
Gerald Laderman
|
(Principal Financial Officer)
|
|
|
/s/ Chris Kenny
|
Vice President and Controller
|
Chris Kenny
|
(Principal Accounting Officer)
|
|
|
/s/ Carolyn Corvi
|
Director
|
Carolyn Corvi
|
|
|
|
/s/ Jane C. Garvey
|
Director
|
Jane C. Garvey
|
|
|
|
/s/ Barney Harford
|
Director
|
Barney Harford
|
|
|
|
/s/ Michele J. Hooper
|
Director
|
Michele J. Hooper
|
|
|
|
/s/ Todd M. Insler
|
Director
|
Todd M. Insler
|
|
/s/ Walter Isaacson
|
Director
|
Walter Isaacson
|
|
|
|
/s/ James A.C. Kennedy
|
Director
|
James A.C. Kennedy
|
|
|
|
|
Director
|
William R. Nuti
|
|
|
|
/s/ Sito Pantoja
|
Director
|
Sito Pantoja
|
|
|
|
/s/ Edward M. Philip
|
Director
|
Edward M. Philip
|
|
|
|
/s/ Edward L. Shapiro
|
Director
|
Edward L. Shapiro
|
|
|
|
/s/ David J. Vitale
|
Director
|
David J. Vitale
|
|
|
|
/s/ James M. Whitehurst
|
Director
|
James M. Whitehurst
|
|
Date:
|
February 28, 2019
|
Signature
|
Capacity
|
|
|
/s/ Oscar Munoz
|
Chief Executive Officer, Director
|
Oscar Munoz
|
(Principal Executive Officer)
|
|
|
/s/ Gerald Laderman
|
Executive Vice President and Chief Financial Officer, Director
|
Gerald Laderman
|
(Principal Financial Officer)
|
|
|
/s/ Chris Kenny
|
Vice President and Controller
|
Chris Kenny
|
(Principal Accounting Officer)
|
|
|
/s/ Gregory L. Hart
|
Director
|
Gregory L. Hart
|
|
|
|
/s/ J. Scott Kirby
|
Director
|
J. Scott Kirby
|
|
|
|
(In millions)
Description
|
Balance at
Beginning of
Period
|
|
Additions
Charged to
Costs and
Expenses
|
|
Deductions (a)
|
|
Other
|
|
Balance at
End of
Period
|
||||||||||
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
|
|
||||||||||
2018
|
$
|
7
|
|
|
$
|
17
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
8
|
|
2017
|
10
|
|
|
20
|
|
|
23
|
|
|
—
|
|
|
7
|
|
|||||
2016
|
18
|
|
|
18
|
|
|
26
|
|
|
—
|
|
|
10
|
|
|||||
Obsolescence allowance—spare parts:
|
|
|
|
|
|
|
|
|
|
||||||||||
2018
|
$
|
354
|
|
|
$
|
73
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
412
|
|
2017
|
295
|
|
|
75
|
|
|
17
|
|
|
1
|
|
|
354
|
|
|||||
2016
|
235
|
|
|
61
|
|
|
16
|
|
|
15
|
|
|
295
|
|
|||||
Valuation allowance for deferred tax assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
2018
|
$
|
63
|
|
|
$
|
2
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
59
|
|
2017
|
68
|
|
|
11
|
|
|
27
|
|
|
11
|
|
|
63
|
|
|||||
2016
|
48
|
|
|
47
|
|
|
27
|
|
|
—
|
|
|
68
|
|
Cash Match
|
The Cash Match portion of the Program defines how Company matching contributions determined in accordance with the formula under the 401(k) Plan are paid once IRS limits on 401(k) contributions are met. Matching contributions to the 401(k) Plan are based upon eligible year-to-date compensation that you defer to your 401(k) account, up to a maximum of 4% of eligible earnings as determined under the 401(k) Plan.
|
|
The Company will cease making matching contributions to the 401(k) Plan and instead pay them to you in cash if the following occurs:
|
||
●
|
Your earnings as a Management co-worker for the year exceed the IRS total annual compensation limit (e.g., $265,000 in 2016; $270,000 in 2017) under Section 401(a)(17) of the Internal Revenue Code
and
you have made pre-tax and/or Roth contributions totaling the elective deferral limit (e.g., $18,000 in 2016 and 2017) under Section 402(g) of the Internal Revenue Code, or
|
|
●
|
Contributions for the year to your 401(k) account (the total of your contributions and the Company’s) reach the IRS total annual contribution limit (e.g., $53,000 in 2016; $54,000 in 2017) under Section 415(c) of the Internal Revenue Code.
|
|
Your “earnings” are determined in accordance with the 401(k) Plan and only include amounts earned while a Management Employee. Please note that if you are eligible to make Catch-up Contributions to the 401(k) Plan, you are not required to make such contributions in order to qualify for Cash Match payments under the Program.
|
||
EXAMPLE: Using the 2016 limits for example purposes only, assume that your 2016 earnings were $300,000
and that you have made pre-tax and/or Roth contributions totaling the elective deferral limit of $18,000 to the 401(k) Plan. $300,000 minus $265,000 is $35,000. $35,000 is multiplied by your matching contribution percentage under the 401(k) Plan, which is 4%. Thus, you would receive a Cash Match payment of $1,400.
|
||
Additional Rules
|
1.
|
The timing of Cash Direct and Cash Match payments is determined by the Company, provided that they shall be made no later than March 15
th
of the year following the calendar year earned. You do not have the option to accelerate or defer payment, and these amounts are taxable in the year paid.
|
2.
|
If you cease employment during the calendar year (other than termination for cause), you are eligible for Cash Direct and/or Cash Match payments based upon your actual earnings for the calendar year, and your payment will be made at the same time that other Management Employees receive their payments. If you are terminated for cause, you are not eligible for Cash Direct or Cash Match payments. You are considered to be terminated for cause for purposes of this Program if you are determined to be ineligible for severance benefits due to termination for cause under the applicable severance plan in which you participate (or, if applicable, your individual employment agreement).
|
|
3.
|
No interest accrues between the time a Cash Direct or Cash Match payment is earned and the time it is paid by the Company.
|
|
4.
|
Cash Direct and Cash Match payments count as earnings under the 401(k) Plan for purposes of calculating your Section 415 limitation (the maximum amount that can be contributed per plan year) but not for any other purposes.
|
|
How to Request
Payment
|
It is not necessary to file a claim in order to receive payments under the Program. They are paid automatically. The Company has the sole discretion to determine whether any amount is payable under the terms of the Program, and the Company’s determination is final. If you believe that the Company has failed to pay you an amount owed under the Program (or miscalculated your payment), please contact Rainier Villatuya, Managing Director -Benefits.
|
|
i.
|
Entry Level Pre-tax Margin generally means [(A)] the percentage determined by dividing the cumulative Pre-tax Income of all companies in the Industry Group (currently [
]) for the Performance Period by all such companies’ cumulative revenues over such period [(B) minus the percentage determined by dividing the cumulative Pre-tax Income of the Industry Group for calendar year [
] by the cumulative revenues of the Industry Group for such year (as more specifically defined in the Program, the “Industry Pre-Tax Margin”) [[
plus][minus]
[
] Basis Points)];
|
|
ii.
|
Target Level Pre-tax Margin is equal to Industry Pre-tax Margin
plus
[
] Basis Points; and
|
|
iii.
|
Stretch Level Pre-tax Margin is equal to Industry Pre-tax Margin
plus
[
] Basis Points.
|
|
|
|
Level of Pre-tax Margin Achieved
|
|
Vested Percentage
|
Entry
|
|
% (Entry Level RSU Percentage)
|
|
|
|
Target
|
|
% (Target Level RSU Percentage)
|
|
|
|
Stretch (or higher)
|
|
% (Stretch Level RSU Percentage)
|
1.
|
Table of Contents
.
|
2.
|
Tables.
|
3.
|
Letter Agreements
.
|
4.
|
Miscellaneous
.
|
THE BOEING COMPANY
|
|
UNITED AIRLINES, INC.
|
/s/ Irma L. Krueger
|
|
/s/ Gerald Laderman
|
Signature
|
|
Signature
|
|
|
|
Irma L. Krueger
|
|
Gerald Laderman
|
Printed Name
|
|
Printed Name
|
|
|
|
Attorney-in-Fact |
|
Executive Vice President and
Chief Financial Officer |
Title
|
|
Title
|
ARTICLES
|
SA
NUMBER
|
|
Article 1.
|
Quantity, Model and Description
|
|
Article 2.
|
Delivery Schedule
|
|
Article 3.
|
Price
|
|
Article 4.
|
Payment
|
|
Article 5.
|
Additional Terms
|
|
TABLE
|
|
|
1.
|
737-*** Aircraft Delivery, Description, Price and ***
|
SA-9
|
1.1
|
*** 737-*** Aircraft Delivery, Description, Price and ***
|
SA-10
|
1A.
|
737-*** Aircraft Delivery, Description, Price and ***
|
SA-12
|
EXHIBITS
|
|
|
A-1
|
737-*** & *** 737-*** Aircraft Configuration
|
SA-8
|
A-2
|
737-*** Aircraft Configuration
|
|
A-3
|
737-*** Aircraft Configuration
|
|
A-4
|
737-*** Aircraft Configuration
|
SA-9
|
B.
|
Aircraft Delivery Requirements and Responsibilities
|
|
SUPPLEMENTAL EXHIBITS
|
|
|
AE1.
|
*** Adjustment/Airframe and ***
|
|
AE2.
|
*** Adjustment/Airframe and *** for the 737-*** Aircraft
|
SA-9
|
BFE1.
|
BFE Variables 737-*** Aircraft
|
SA-7
|
BFE2.
|
BFE Variables 737-*** Aircraft
|
SA-9
|
CS1.
|
Customer Support Variables
|
SA-9
|
EE1.
|
Engine Warranty and ***
|
|
SLP1.
|
Service Life Policy Components
|
|
TABLE OF CONTENTS, CONTINUED
|
|
|
LETTER AGREEMENTS
|
SA
NUMBER
|
|
UAL-PA-03776-LA-1207637R1
|
*** Matters
|
SA-8
|
UAL-PA-03776-LA-1207638R2
|
***
|
SA-10
|
UAL-PA-03776-LA-1207640
|
Demonstration Flight Waiver
|
|
UAL-PA-03776-LA-1207643R1
|
Open Matters 737-*** Aircraft
|
SA-9
|
UAL-PA-03776-LA-1207646R3
|
Promotional Support
|
SA-12
|
UAL-PA-03776-LA-1207647
|
Seller Purchased Equipment
|
|
UAL-PA-03776-LA-1207649
|
Spare Parts Initial Provisioning
|
|
UAL-PA-03776-LA-1207650R4
|
Special Matters
|
SA-10
|
UAL-PA-03776-LA-1208055R1
|
***
|
SA-7
|
UAL-PA-03776-LA-1208122
|
***
|
SA-10
|
UAL-PA-03776-LA-1208123R1
|
*** Matters for 737-*** Aircraft
|
SA-9
|
UAL-PA-03776-LA-1208157R2
|
***
|
SA-9
|
UAL-PA-03776-LA-1208234
|
Privileged and Confidential Matters
|
|
UAL-PA-03776-LA-1208596R1
|
AGTA Matters
|
SA-10
|
UAL-PA-03776-LA-1208238
|
Assignment Matters
|
|
UAL-PA-03776-LA-1208869
|
Delivery *** Matters
|
|
UAL-PA-03784-LA-1207869
|
737 Production Adjustments
|
|
UAL-PA-03776-LA-1606848R2
|
*** Special *** Aircraft
|
SA-9
|
UAL-PA-03776-LA-1703685
|
737-*** Aircraft ***
|
SA-9
|
UAL-PA-03776-LA-1703743
|
2017 ***
|
SA-9
|
UAL-PA-03776-LA-1703858R1
|
*** Program for the 737-*** Aircraft
|
SA-10
|
|
*** Commitment for the 737‑*** Aircraft
|
§5.1.2 of SA‑9
|
UAL-PA-3776-LA-1801367
|
Loading of Customer Software
|
SA-10
|
UAL-PA-3776-LA-1801619
|
Installation of Cabin Systems Equipment
|
SA-10
|
UAL-PA-3776-LA-1807469
|
*** From *** for 737-*** Aircraft
|
SA-11
|
SUPPLEMENTAL AGREEMENTS
|
DATED AS OF
|
Supplemental Agreement No. 1
|
June 17, 2013
|
Supplemental Agreement No. 2
|
January 14, 2015
|
Supplemental Agreement No. 3
|
May 26, 2015
|
Supplemental Agreement No. 4
|
June 12, 2015
|
Supplemental Agreement No. 5
|
January 20, 2016
|
Supplemental Agreement No. 6
|
February 8, 2016
|
Supplemental Agreement No. 7
|
December 27, 2016
|
Supplemental Agreement No. 8
|
June 7, 2017
|
Supplemental Agreement No. 9
|
June 15, 2017
|
Supplemental Agreement No. 10
|
May 15, 2018
|
Supplemental Agreement No. 11
|
September 25, 2018
|
Supplemental Agreement No. 12
|
December 12, 2018
|
Airframe Model/MTOW:
|
737-***
|
**** pounds
|
|
|
Detail Specification:
|
|
***
|
|
||
Engine Model/Thrust:
|
***
|
**** pounds
|
|
|
Airframe Price Base Year/*** Formula:
|
***
|
***
|
|||
Airframe Price:
|
|
$***
|
|
|
Engine Price Base Year/*** Formula:
|
***
|
***
|
|||
*** Features:
|
|
$***
|
|
|
|
|
|
|
|
|
Sub-Total of Airframe and Features:
|
$***
|
|
|
Airframe *** Data:
|
|
|
|
|||
Engine Price (Per Aircraft):
|
|
$***
|
|
|
Base Year Index (ECI):
|
|
***
|
|
||
Aircraft Basic Price (Excluding BFE/SPE):
|
$***
|
|
|
Base Year Index (CPI):
|
|
***
|
|
|||
Buyer Furnished Equipment (BFE) Estimate:
|
$***
|
|
|
|
|
|
|
|
||
Seller Purchased Equipment (SPE) Estimate:
|
$***
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
Deposit per Aircraft:
|
|
$***
|
|
|
|
|
|
|
|
# of
Aircraft
|
Delivery Date
|
|
***
|
Manufacturer Serial Number
|
Actual or Nominal Delivery ****
|
*** Estimate
|
*** Per Aircraft (Amts. Due/*** Prior to Delivery):
|
|||
Number of
|
Factor
|
*** Base
|
***
|
***
|
***
|
***
|
||||
Aircraft
|
(Airframe)
|
Price Per A/P
|
***
|
***
|
***
|
***
|
||||
***
|
***
|
***
|
***
|
***
|
***
|
$***
|
$***
|
$***
|
$***
|
$***
|
|
Total:
|
***
|
|
|
|
|
|
|
|
|
|
* Nominal delivery *** pursuant to Letter Agreement number UAL-PA-03776-LA-1207643
entitled "Open Matters 737-*** Aircraft"
, including successors thereof.
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Note: Serial Numbers are provided as guidance only and are subject to change.
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
***
|
|
|
|
|
|
|
|
|
|
UAL-PA-03776 APR: 105568.TXT
|
Boeing / United Airlines, Inc. Proprietary
|
Table 1A per SA-12, Page 1
|
|
|
The Boeing Company
P.O. Box 3707
Seattle, WA 98124‑2207
|
Subject:
|
Promotional Support
|
Reference:
|
Purchase Agreement No. 03776 (
Purchase Agreement
) between The Boeing Company (
Boeing
) and United Airlines, Inc. (as assignee of United Continental Holdings, Inc.) (
Customer
) relating to Model 737 *** aircraft (
Aircraft
)
|
UAL-PA-03776-LA-1207646R3
Promotional Support
|
|
SA-12
Page
1
|
BOEING / UNITED AIRLINES, INC. PROPRIETARY
|
UAL-PA-03776-LA-1207646R3
Promotional Support
|
|
SA-12
Page
2
|
BOEING / UNITED AIRLINES, INC. PROPRIETARY
|
THE BOEING COMPANY
|
|
|
|
By:
|
/s/ Irma L. Krueger
|
|
|
Its:
|
Attorney-in-Fact
|
|
UAL-PA-03776-LA-1207646R3
Promotional Support
|
|
SA-12
Page
3
|
BOEING / UNITED AIRLINES, INC. PROPRIETARY
|
ACCEPTED AND AGREED TO this
|
||
|
||
Date:
|
December 12, 2018
|
|
|
||
UNITED AIRLINES, INC.
|
||
|
||
By:
|
/s/ Gerald Laderman
|
|
|
||
Its:
|
Executive Vice President and Chief Financial Officer
|
UAL-PA-03776-LA-1207646R3
Promotional Support
|
|
SA-12
Page
4
|
BOEING / UNITED AIRLINES, INC. PROPRIETARY
|
UAL-PA-3860
|
SA-10
|
Page
1
|
BOEING / UNITED AIRLINES, INC. PROPRIETARY
|
1.
|
Table of Contents
.
|
2.
|
Tables.
|
3.
|
Miscellaneous
.
|
UAL-PA-3860
|
SA-10
|
Page
2
|
BOEING / UNITED AIRLINES, INC. PROPRIETARY
|
UAL-PA-3860
|
SA-10
|
Page
3
|
BOEING / UNITED AIRLINES, INC. PROPRIETARY
|
ARTICLES
|
SA
NUMBER
|
|
Article 1.
|
Quantity, Model and Description
|
SA-1
|
Article 2.
|
Delivery Schedule
|
SA-1
|
Article 3.
|
Price
|
SA-1
|
Article 4.
|
Payment
|
SA-1
|
Article 5.
|
Additional Terms
|
SA-1
|
TABLE
|
|
|
1
|
787-*** Aircraft Delivery, Description, Price and ***
|
SA-7
|
1A.
|
787-*** with GENX-1B*** Engines Aircraft Information Table
|
SA-10
|
EXHIBITS
|
|
|
|
|
|
A2*
|
787-*** Aircraft Configuration
|
SA-9
|
A3.
|
787-*** Aircraft Configuration
|
SA-9
|
B.
|
Aircraft Delivery Requirements and Responsibilities
|
|
* - Note: There is no Exhibit A1 in this Purchase Agreement
|
|
|
SUPPLEMENTAL EXHIBITS
|
|
|
AE1.
|
*** Adjustment/Airframe and *** Features
|
|
BFE1.
|
BFE Variables for the 787-*** Aircraft
|
SA-7
|
CS1.
|
Customer Support Document
|
|
EE1.
|
Engine ***/Engine Warranty ***
|
|
SLP1.
|
Service Life Policy Components
|
|
P.A. 3860
|
TABLE OF CONTENTS, Page
1
of 4
|
SA-10
|
BOEING/UNITED AIRLINES, INC. PROPRIETARY
|
TABLE OF CONTENTS, CONTINUED
|
||
LETTER AGREEMENTS
|
SA
NUMBER
|
|
UAL-PA-03860-LA-1209247
|
787 e-Enabling
|
|
UAL-PA-03860-LA-1209264
|
Open Configuration Matters
Completed: No longer applicable |
SA-9
|
UAL-PA-03860-LA-1209409
|
Spare Parts Initial Provisioning
|
|
UAL-PA-03860-LA-1209410
|
Special Matters Relating to COTS Software and End User License Agreements
|
|
UAL-PA-03860-LA-1209411
|
Special Terms – Seats and In-flight Entertainment
|
|
UAL-PA-03860-LA-1209417
|
Model 787 Post-Delivery Software & Data Loading
|
|
CONFIDENTIAL LETTER AGREEMENTS
|
|
|
UAL-PA-03860-LA-1209236R1
|
Model ***
|
SA-1
|
|
Attachment A, 787-*** Airframe Pricing of *** Aircraft with General Electric GEnx-1B***
|
SA-1
|
|
Attachment B, 787-*** with General Electric GEnx-1B***
|
SA-1
|
|
Attachment C, 787-***with General Electric GEnx-1B***
|
SA-1
|
UAL-PA-03860-LA-1209412
|
Spare Parts Commitment
|
|
UAL-PA-03860-LA-1209413R3
|
Special Matters
|
SA-9
|
UAL-PA-03860-LA-1209413A1R3
|
Special Matters – Amendment 1
|
SA-7
|
UAL-PA-03860-LA-1209414
|
Other Special Matters
|
|
UAL-PA-03860-LA-1209413A1
|
Other Special Matters - Amendment 1
|
SA-1
|
UAL-PA-03860-LA-1209416R1
|
Promotional Support
|
SA-2
|
UAL-PA-03860-LA-1209430
|
***
|
|
UAL-PA-03860-LA-1209429
|
***
|
|
P.A. 3860
|
TABLE OF CONTENTS, Page
2
of 4
|
SA-10
|
BOEING/UNITED AIRLINES, INC. PROPRIETARY
|
TABLE OF CONTENTS, CONTINUED
|
||
CONFIDENTIAL LETTER AGREEMENTS, continued
|
SA
NUMBER
|
|
6-1162-ELP-0794
|
*** Program- ***
|
|
6-1162-ELP-0795
|
*** Program- ***
|
|
UAL-PA-03860-LA-1301368
|
*** (787-***)
|
SA-1
|
UAL-PA-03860-LA-1301373
|
787-*** Aircraft Open Configuration and Other Matters
|
SA-1
|
UAL-PA-03860-LA-1301375R1
|
Provisions Relating to Customer’s *** for 787‑*** Aircraft
|
SA-7
|
UAL-PA-03860-LA-1301377
|
787-***
|
SA-1
|
UAL-PA-03860-LA-1301377A1
|
787- *** – Amendment 1
|
SA-4
|
UAL-PA-03860-LA-1301380
|
787-*** Program Launch
|
SA-1
|
UAL-PA-03860-LA-1500017
|
***
|
SA-4
|
UAL-PA-03860-LA-1500059
|
Installation of Cabin Systems Equipment
|
SA-4
|
UAL-PA-03860-LA-1703319
|
Privileged and Confidential Matters
|
SA-8
|
UAL-PA-03860-LA-1802899
|
Assignment Matters
|
SA-9
|
UAL-PA-03860-LA-1802900
|
*** Rights for Certain 787 Aircraft
|
SA-9
|
P.A. 3860
|
TABLE OF CONTENTS, Page
3
of 4
|
SA-10
|
BOEING/UNITED AIRLINES, INC. PROPRIETARY
|
SUPPLEMENTAL AGREEMENTS
|
DATED AS OF
|
Supplemental Agreement No. 1 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . June 17, 2013
|
Supplemental Agreement No. 2 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . December 16, 2013
|
Supplemental Agreement No. 3 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . July 22, 2014
|
Supplemental Agreement No. 4 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . January 14, 2015
|
Supplemental Agreement No. 5 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . May 12, 2015
|
Supplemental Agreement No. 6 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . December 31, 2015
|
Supplemental Agreement No. 7 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . March 7, 2016
|
Supplemental Agreement No. 8 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . June 7, 2017
|
Supplemental Agreement No. 9 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . May 31, 2018
|
Supplemental Agreement No. 10 . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . November 1, 2018
|
P.A. 3860
|
TABLE OF CONTENTS, Page
4
of 4
|
SA-10
|
BOEING/UNITED AIRLINES, INC. PROPRIETARY
|
Airframe Model/MTOW:
|
787-***
|
*** pounds
|
#
|
|
Detail Specification:
|
|
***
|
||||
Engine Model/Thrust:
|
GENX-1B***
1
|
*** pounds
|
|
|
Airframe Price Base Year/*** Formula:
|
|
***
|
***
|
|||
Airframe Price:
|
|
$***
|
|
|
Engine Price Base Year/*** Formula:
|
|
***
|
***
|
|||
*** Features:
|
|
$***
|
|
|
Airframe *** Data:
|
|
|
|
|||
Sub-Total of Airframe and Features:
|
|
$***
|
|
|
Base Year Index (ECI):
|
|
***
|
||||
Engine Price (Per Aircraft) :
|
|
$***
|
1
|
|
Base Year Index (CPI):
|
|
***
|
||||
Aircraft Basic Price (Excluding BFE/SPE):
|
|
$***
|
|
|
Engine *** Data:
|
|
|
|
|||
Buyer Furnished Equipment (BFE) Estimate:
|
|
$***
|
|
|
Base Year Index (ECI):
|
|
***
|
||||
In-Flight Entertainment (IFE) Estimate:
|
|
$***
|
|
|
Base Year Index (CPI):
|
|
***
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
# of Aircraft
|
Delivery Date
|
Number of
Aircraft
|
***
Factor
(Airframe)
|
***
Factor
(Engine)
|
See footnote for *** forecast being used
|
Serial
Number +
|
*** Estimate ***
Base Price Per
A/P
|
*** Per Aircraft (Amts. Due/*** Prior to Delivery):
|
|||
***
|
***
|
***
|
***
|
||||||||
***
|
***
|
***
|
***
|
||||||||
***
|
***
|
***
|
***
|
***
|
***
|
***
|
$***
|
$***
|
$***
|
$***
|
$***
|
|
Total:
|
***
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Pursuant to GE agreement: GEnx-1B***.
|
|
|
|
|||||||
|
* ** *** Factors ***
|
|
|
|
|||||||
|
# ***. Aircraft are eligible for the provisions of Letter Agreement UAL-PA-03860- LA-1301375R1
entitled "Provisions Relating to Customer's *** for 787-*** Aircaft" |
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
+ Serial Numbers Identified are for informational purposes only and subject to change
|
|
|
APR-111650
|
BOEING / UNITED AIRLINES PROPRIETARY
|
787-*** with GE Engines Table 1A (SA-10) Page 1
|
UAL-PA-3860
|
SA-11
|
Page
1
|
BOEING / UNITED AIRLINES, INC. PROPRIETARY
|
1.
|
Table of Contents
.
|
2.
|
Tables.
|
3.
|
Miscellaneous
.
|
UAL-PA-3860
|
SA-11
|
Page
2
|
BOEING / UNITED AIRLINES, INC. PROPRIETARY
|
UAL-PA-3860
|
SA-11
|
Page
3
|
BOEING / UNITED AIRLINES, INC. PROPRIETARY
|
ARTICLES
|
SA
NUMBER
|
|
Article 1.
|
Quantity, Model and Description
|
SA-1
|
Article 2.
|
Delivery Schedule
|
SA-1
|
Article 3.
|
Price
|
SA-1
|
Article 4.
|
Payment
|
SA-1
|
Article 5.
|
Additional Terms
|
SA-1
|
TABLE
|
|
|
1
|
787-*** Aircraft Delivery, Description, Price and ***
|
SA-7
|
1A.
|
787-*** with GENX-1B*** Engines Aircraft Information Table
|
SA-11
|
EXHIBITS
|
|
|
|
|
|
A2*
|
787-*** Aircraft Configuration
|
SA-9
|
A3.
|
787-*** Aircraft Configuration
|
SA-9
|
B.
|
Aircraft Delivery Requirements and Responsibilities
|
|
* - Note: There is no Exhibit A1 in this Purchase Agreement
|
|
|
SUPPLEMENTAL EXHIBITS
|
|
|
AE1.
|
***/Airframe and *** Features
|
|
BFE1.
|
BFE Variables for the 787-*** Aircraft
|
SA-7
|
CS1.
|
Customer Support Document
|
|
EE1.
|
Engine ***/Engine Warranty ***
|
|
SLP1.
|
Service Life Policy Components
|
|
TABLE OF CONTENTS, CONTINUED
|
||
LETTER AGREEMENTS
|
SA
NUMBER
|
|
UAL-PA-03860-LA-1209247
|
787 e-Enabling
|
|
UAL-PA-03860-LA-1209264
|
Open Configuration Matters
Completed: No longer applicable |
SA-9
|
UAL-PA-03860-LA-1209409
|
Spare Parts Initial Provisioning
|
|
UAL-PA-03860-LA-1209410
|
Special Matters Relating to COTS Software and End User License Agreements
|
|
UAL-PA-03860-LA-1209411
|
Special Terms – Seats and In-flight Entertainment
|
|
UAL-PA-03860-LA-1209417
|
Model 787 Post-Delivery Software & Data Loading
|
|
CONFIDENTIAL LETTER AGREEMENTS
|
|
|
UAL-PA-03860-LA-1209236R1
|
Model ***
|
SA-1
|
|
Attachment A, 787-*** Airframe Pricing of *** Aircraft with General Electric GEnx-1B***
|
SA-1
|
|
Attachment B, 787-*** with General Electric GEnx-1B***
|
SA-1
|
|
Attachment C, 787-*** with General Electric GEnx-1B***
|
SA-1
|
UAL-PA-03860-LA-1209412
|
Spare Parts Commitment
|
|
UAL-PA-03860-LA-1209413R3
|
Special Matters
|
SA-9
|
UAL-PA-03860-LA-1209413A1R3
|
Special Matters – Amendment 1
|
SA-7
|
UAL-PA-03860-LA-1209414
|
Other Special Matters
|
|
UAL-PA-03860-LA-1209413A1
|
Other Special Matters - Amendment 1
|
SA-1
|
UAL-PA-03860-LA-1209416R1
|
Promotional Support
|
SA-2
|
UAL-PA-03860-LA-1209430
|
***
|
|
UAL-PA-03860-LA-1209429
|
***
|
|
TABLE OF CONTENTS, CONTINUED
|
||
CONFIDENTIAL LETTER AGREEMENTS, continued
|
SA
NUMBER
|
|
6-1162-ELP-0794
|
*** Program- ***
|
|
6-1162-ELP-0795
|
*** Program- Boeing ***
|
|
UAL-PA-03860-LA-1301368
|
*** (787-***)
|
SA-1
|
UAL-PA-03860-LA-1301373
|
787-*** Aircraft Open Configuration and Other Matters
|
SA-1
|
UAL-PA-03860-LA-1301375R1
|
Provisions Relating to Customer’s *** for 787‑*** Aircraft
|
SA-7
|
UAL-PA-03860-LA-1301377
|
787-***
|
SA-1
|
UAL-PA-03860-LA-1301377A1
|
787-*** – Amendment 1
|
SA-4
|
UAL-PA-03860-LA-1301380
|
787-*** Program Launch
|
SA-1
|
UAL-PA-03860-LA-1500017
|
***
|
SA-4
|
UAL-PA-03860-LA-1500059
|
Installation of Cabin Systems Equipment
|
SA-4
|
UAL-PA-03860-LA-1703319
|
Privileged and Confidential Matters
|
SA-8
|
UAL-PA-03860-LA-1802899
|
Assignment Matters
|
SA-9
|
UAL-PA-03860-LA-1802900
|
*** Rights for Certain 787 Aircraft
|
SA-9
|
SUPPLEMENTAL AGREEMENTS
|
DATED AS OF
|
Supplemental Agreement No. 1 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . . . . June 17, 2013
|
Supplemental Agreement No. 2 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . . . . December 16, 2013
|
Supplemental Agreement No. 3 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . . . . July 22, 2014
|
Supplemental Agreement No. 4 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . . . . January 14, 2015
|
Supplemental Agreement No. 5 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . . . . May 12, 2015
|
Supplemental Agreement No. 6 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . . . . December 31, 2015
|
Supplemental Agreement No. 7 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . . . . March 7, 2016
|
Supplemental Agreement No. 8 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . . . . June 7, 2017
|
Supplemental Agreement No. 9 . . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . . . . May 31, 2018
|
Supplemental Agreement No. 10 . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . . . . November 1, 2018
|
Supplemental Agreement No. 11 . . . . . . . . . . . .
|
. . . . . . . . . . . . . . . . . . . . . . December 12, 2018
|
Airframe Model/MTOW:
|
787-***
|
*** pounds
|
#
|
|
Detail Specification:
|
|
***
|
||||
Engine Model/Thrust:
|
GENX-1B***
1
|
*** pounds
|
|
|
Airframe Price Base Year/*** Formula:
|
|
***
|
***
|
|||
Airframe Price:
|
|
$***
|
|
|
Engine Price Base Year/*** Formula:
|
|
***
|
***
|
|||
*** Features:
|
|
$***
|
|
|
Airframe *** Data:
|
|
|
|
|||
Sub-Total of Airframe and Features:
|
|
$***
|
|
|
Base Year Index (ECI):
|
|
***
|
||||
Engine Price (Per Aircraft) :
|
|
$***
|
1
|
|
Base Year Index (CPI):
|
|
***
|
||||
Aircraft Basic Price (Excluding BFE/SPE):
|
|
$***
|
|
|
Engine *** Data:
|
|
|
|
|||
Buyer Furnished Equipment (BFE) Estimate:
|
|
$***
|
|
|
Base Year Index (ECI):
|
|
***
|
||||
In-Flight Entertainment (IFE) Estimate:
|
|
$***
|
|
|
Base Year Index (CPI):
|
|
***
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
# of Aircraft
|
Delivery Date
|
Number of
Aircraft
|
***
Factor
(Airframe)
|
***
Factor
(Engine)
|
See footnote for *** forecast being used
|
Serial
Number +
|
*** Estimate ***
Base Price Per
A/P
|
*** Per Aircraft (Amts. Due/*** Prior to Delivery):
|
|||
***
|
***
|
***
|
***
|
||||||||
***
|
***
|
***
|
***
|
||||||||
***
|
***
|
***
|
***
|
***
|
***
|
***
|
$***
|
$***
|
$***
|
$***
|
$***
|
|
Total:
|
***
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Pursuant to GE agreement: GEnx-1B***.
|
|
|
|
|||||||
|
* ** *** Factors ***
|
|
|
|
|||||||
|
# ***. Aircraft are eligible for the provisions of Letter Agreement UAL-PA-03860- LA-1301375R1
entitled "Provisions Relating to Customer's *** for 787-*** Aircaft" |
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
+ Serial Numbers Identified are for informational purposes only and subject to change
|
|
|
APR-109147
|
BOEING / UNITED AIRLINES PROPRIETARY
|
787-*** with GE Engine Table 1A (SA-11), Page 1
|
Entity
|
Jurisdiction of Incorporation
|
||||
|
|
|
|
|
|
United Continental Holdings, Inc.
|
Delaware
|
||||
|
|
|
|
|
|
Wholly-owned subsidiaries
*
:
|
|
||||
|
|
|
|
|
|
United Airlines, Inc.
|
Delaware
|
||||
|
●
Air Wis Services, Inc.
|
Wisconsin
|
|||
|
|
●
Air Wisconsin, Inc.
|
Delaware
|
||
|
|
●
Domicile Management Services, Inc. **
|
Delaware
|
||
|
●
Air Micronesia, LLC.
|
Delaware
|
|||
|
●
CAL Cargo, S.A. de C.V.**
|
Mexico
|
|||
|
●
CALFINCO Inc.
|
Delaware
|
|||
|
●
Century Casualty Company
|
Vermont
|
|||
|
●
Continental Airlines de Mexico, S.A.**
|
Mexico
|
|||
|
●
Continental Airlines Domain Name Limited
|
England
|
|||
|
●
Continental Airlines Finance Trust II
|
Delaware
|
|||
|
●
Continental Airlines Fuel Purchasing Group, LLC
|
Delaware
|
|||
|
●
Continental Airlines, Inc. Supplemental Retirement Plan for Pilots Trust Agreement
|
Delaware
|
|||
|
●
Continental Airlines Purchasing Holdings LLC
|
Delaware
|
|||
|
|
●
Continental Airlines Purchasing Services LLC**
|
Delaware
|
||
|
●
Continental Express, Inc.
|
Delaware
|
|||
|
●
Covia LLC
|
Delaware
|
|||
|
●
Mileage Plus Holdings, LLC
|
Delaware
|
|||
|
|
●
MPH I, Inc.
|
Delaware
|
||
|
|
|
●
Mileage Plus Marketing, Inc.
|
Delaware
|
|
|
|
●
Mileage Plus, Inc.
|
Delaware
|
||
|
●
Presidents Club of Guam, Inc.
|
Delaware
|
|||
|
●
UABSPL Holdings, Inc.
|
Delaware
|
|||
|
●
UAL Benefits Management, Inc.**
|
Delaware
|
|||
|
●
United Atlantic LP**
|
Delaware
|
|||
|
|
●
United Atlantic Services C.V.**
|
Netherlands
|
||
|
|
|
●
United Atlantic Corporate LLC
|
Delaware
|
|
|
|
|
●
United Atlantic Corporate Center C.V.**
|
Netherlands
|
|
|
|
|
|
●
United Atlantic Finance
|
Cayman Islands
|
|
●
United Atlantic B.V.
|
Netherlands
|
|||
|
●
United Atlantic Services LLC
|
Delaware
|
|||
|
●
United Aviation Fuels Corporation
|
Delaware
|
|||
|
●
United Airlines Business Services Private Limited**
|
India
|
|||
|
●
United Ground Express, Inc.
|
Delaware
|
|||
|
●
United Travel Services, LLC
|
Delaware
|
|||
|
●
United Vacations, Inc.
|
Delaware
|
(1)
|
Registration Statement (Form S-3 No. 333-221865),
|
(2)
|
Registration Statement (Form S-4 No. 333-167801),
|
(3)
|
Registration Statement (Form S-8 No. 333-197815),
|
(4)
|
Registration Statement (Form S-8 No. 333-151778),
|
(5)
|
Registration Statement (Form S-8 No. 333-131434), and
|
(6)
|
Registration Statement (Form S-8 No. 333-218637);
|
(1)
|
I have reviewed this annual report on Form 10-K for the period ended
December 31, 2018
of United Continental Holdings, Inc. (the "Company");
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
|
(4)
|
The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
|
(5)
|
The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
|
|
/s/ Oscar Munoz
|
Oscar Munoz
Chief Executive Officer |
(1)
|
I have reviewed this annual report on Form 10-K for the period ended
December 31, 2018
of United Continental Holdings, Inc. (the "Company");
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
|
(4)
|
The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
|
(5)
|
The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
|
|
/s/ Gerald Laderman
|
Gerald Laderman
Executive Vice President and Chief Financial Officer |
(1)
|
I have reviewed this annual report on Form 10-K for the period ended
December 31, 2018
of United Airlines, Inc. (the "Company");
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
|
(4)
|
The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
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(5)
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The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
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(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
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(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
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/s/ Oscar Munoz
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Oscar Munoz
Chief Executive Officer |
(1)
|
I have reviewed this annual report on Form 10-K for the period ended
December 31, 2018
of United Airlines, Inc. (the "Company");
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
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(4)
|
The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
|
Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
|
Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
|
(5)
|
The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
|
|
/s/ Gerald Laderman
|
Gerald Laderman
Executive Vice President and Chief Financial Officer |
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of United Continental Holdings, Inc.
|
|
/s/ Oscar Munoz
|
Oscar Munoz
|
Chief Executive Officer
|
|
/s/ Gerald Laderman
|
Gerald Laderman
|
Executive Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of United Airlines, Inc.
|
|
/s/ Oscar Munoz
|
Oscar Munoz
|
Chief Executive Officer
|
|
/s/ Gerald Laderman
|
Gerald Laderman
|
Executive Vice President and Chief Financial Officer
|