XML 32 R8.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Recently Issued Accounting Standards | 6 Months Ended
--- | ---
Jun. 30, 2018
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] |
Recently Issued Accounting Standards | 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 is 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. The Company adopted Accounting Standards Update No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (the "New Retirement Standard"), effective January 1, 2018 using the full-retrospective method. The New Retirement Standard requires employers to present the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs arising from services rendered during the period. The other components of net benefit cost, including interest cost, expected return on plan assets, amortization of prior service cost/credit and actuarial gain/loss, and settlement and curtailment effects, are to be presented outside of any subtotal of operating income. The Company elected to apply the practical expedient and use the amounts disclosed in Note 5 to the financial statements included in Part I, Item 1 of the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017 as the estimation basis for applying the retrospective presentation requirements of the standard. The new standards had the same impact on the financial statements of United as they had on the financial statements of UAL. The table below presents the impact of the adoption of the New Revenue Standard and the New Retirement Standard on select accounts and captions of the statement of consolidated operations for the three months ended June 30, 2017 (in millions, except per share amounts):
|  | Three Months Ended June 30, 2017
|  | As Previously Reported |  | New Revenue Standard Adjustments |  | New Retirement Standard Adjustments |  | As Adjusted
Passenger revenue |  | $ | 8,622 |  |  | $ | 529 |  |  | $ | — |  |  | $ | 9,151 |
Cargo |  | 254 |  |  | 19 |  |  | — |  |  | 273 |
Other operating revenue |  | 1,124 |  |  | (540 | ) |  | — |  |  | 584 |
Total operating revenue |  | 10,000 |  |  | 8 |  |  | — |  |  | 10,008 |
Salaries and related costs |  | 2,868 |  |  | — |  |  | (26 | ) |  | 2,842 |
Distribution expenses |  | 362 |  |  | 23 |  |  | — |  |  | 385 |
Other operating expenses |  | 1,408 |  |  | (27 | ) |  | — |  |  | 1,381 |
Total operating expenses |  | 8,601 |  |  | (4 | ) |  | (26 | ) |  | 8,571 |
Operating income |  | 1,399 |  |  | 12 |  |  | 26 |  |  | 1,437 |
Interest expense |  | (158 | ) |  | (9 | ) |  | — |  |  | (167 | )
Miscellaneous, net |  | (1 | ) |  | — |  |  | (26 | ) |  | (27 | )
Total nonoperating expense, net |  | (125 | ) |  | (9 | ) |  | (26 | ) |  | (160 | )
Income before income taxes |  | 1,274 |  |  | 3 |  |  | — |  |  | 1,277 |
Income tax expense |  | 456 |  |  | — |  |  | — |  |  | 456 |
Net income |  | 818 |  |  | 3 |  |  | — |  |  | 821 |
Earnings per share, basic |  | 2.67 |  |  | — |  |  | — |  |  | 2.67 |
Earnings per share, diluted |  | 2.66 |  |  | 0.01 |  |  | — |  |  | 2.67 |
The table below presents the impact of the adoption of the New Revenue Standard and the New Retirement Standard on select accounts and captions of the statement of consolidated operations for the six months ended June 30, 2017 (in millions, except per share amounts):
|  | Six Months Ended June 30, 2017
|  | As Previously Reported |  | New Revenue Standard Adjustments |  | New Retirement Standard Adjustments |  | As Adjusted
Passenger revenue |  | $ | 15,796 |  |  | $ | 1,008 |  |  | $ | — |  |  | $ | 16,804 |
Cargo |  | 474 |  |  | 37 |  |  | — |  |  | 511 |
Other operating revenue |  | 2,150 |  |  | (1,031 | ) |  | — |  |  | 1,119 |
Total operating revenue |  | 18,420 |  |  | 14 |  |  | — |  |  | 18,434 |
Salaries and related costs |  | 5,529 |  |  | — |  |  | (51 | ) |  | 5,478 |
Distribution expenses |  | 669 |  |  | 35 |  |  | — |  |  | 704 |
Other operating expenses |  | 2,740 |  |  | (50 | ) |  | — |  |  | 2,690 |
Total operating expenses |  | 16,743 |  |  | (15 | ) |  | (51 | ) |  | 16,677 |
Operating income |  | 1,677 |  |  | 29 |  |  | 51 |  |  | 1,757 |
Interest expense |  | (308 | ) |  | (21 | ) |  | — |  |  | (329 | )
Miscellaneous, net |  | (18 | ) |  | — |  |  | (51 | ) |  | (69 | )
Total nonoperating expense, net |  | (258 | ) |  | (21 | ) |  | (51 | ) |  | (330 | )
Income before income taxes |  | 1,419 |  |  | 8 |  |  | — |  |  | 1,427 |
Income tax expense |  | 505 |  |  | 2 |  |  | — |  |  | 507 |
Net income |  | 914 |  |  | 6 |  |  | — |  |  | 920 |
Earnings per share, basic |  | 2.95 |  |  | 0.01 |  |  | — |  |  | 2.96 |
Earnings per share, diluted |  | 2.94 |  |  | 0.02 |  |  | — |  |  | 2.96 |
The table below presents the impact of the adoption of the New Revenue Standard on UAL's balance sheet accounts and captions as of December 31, 2017 (in millions):
|  | At December 31, 2017
|  | As Previously Reported |  | New Revenue Standard Adjustments |  | As Adjusted
Prepaid expenses and other |  | $ | 1,051 |  |  | $ | 20 |  |  | $ | 1,071 |
Total current assets |  | 7,113 |  |  | 20 |  |  | 7,133 |
Total assets |  | 42,326 |  |  | 20 |  |  | 42,346 |
Advance ticket sales |  | 3,876 |  |  | 64 |  |  | 3,940 |
Frequent flyer deferred revenue |  | 2,176 |  |  | 16 |  |  | 2,192 |
Other |  | 569 |  |  | 7 |  |  | 576 |
Total current liabilities |  | 12,676 |  |  | 87 |  |  | 12,763 |
Frequent flyer deferred revenue - long-term |  | 2,565 |  |  | 26 |  |  | 2,591 |
Deferred income taxes |  | 225 |  |  | (21 | ) |  | 204 |
Total other liabilities and deferred credits |  | 8,145 |  |  | 5 |  |  | 8,150 |
Retained earnings |  | 4,621 |  |  | (72 | ) |  | 4,549 |
Total stockholders' equity |  | 8,806 |  |  | (72 | ) |  | 8,734 |
Total liabilities and stockholders' equity |  | 42,326 |  |  | 20 |  |  | 42,346 |
The Company adopted Accounting Standards Update No. 2016-01, Financial Instruments—Overall (Subtopic 825-10) effective January 1, 2018. This standard makes several changes, including the elimination of the available-for-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in earnings. The Company reclassified to retained earnings $7 million of unrealized loss on the Company's investment in Azul, S.A. ("Azul") which was previously classified as an available-for-sale security. See Notes 4 and 7 to the financial statements included in this Part I, Item 1 for additional information. Accounting for Leases. In February 2016, the FASB amended the FASB Accounting Standards Codification and created a new Topic 842, Leases. The guidance requires lessees to recognize a right-of-use asset and a lease liability for all leases (with the exception of short-term leases) at the commencement date and recognize expenses on their income statements similar to the current Topic 840, Leases. The new lease standard is effective for fiscal years and interim periods beginning after December 15, 2018, and early adoption is permitted. Lessees and lessors are required to adopt the new lease standard using a modified retrospective approach for all leases existing at or commencing after the date of initial application with an option to use certain practical expedients. We have not finalized our assessment but believe this standard will have a significant impact on our consolidated balance sheets. The standard is not expected to have a material impact on the Company's results of operations or cash flows. The primary effect of adopting the new standard will be to record assets and obligations for our operating leases.

X
- References No definition available. + Details
Name: | us-gaap_NewAccountingPronouncementsAndChangesInAccountingPrinciplesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 + Details
Name: | us-gaap_NewAccountingPronouncementsAndChangesInAccountingPrinciplesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration