XML 72 R9.htm IDEA: XBRL DOCUMENT
v3.19.3

Recently Issued Accounting Standards | 9 Months Ended
--- | ---
Sep. 30, 2019
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 842, Leases (the "New Lease Standard"), effective January 1, 2019. The Company used the modified retrospective approach for all leases existing at or commencing after January 1, 2017 and elected the package of transition practical expedients for expired or existing contracts, which does not require reassessment of: (1) whether any of our contracts are or contain leases, (2) lease classification and (3) initial direct costs. The New Lease Standard prescribes that an entity should recognize a right-of-use asset and a lease liability for all leases at the commencement date of each lease and recognize expenses on their income statements similar to the prior FASB Accounting Standards Codification Topic 840, Leases ("Topic 840"). The adoption of the New Lease Standard had the same impact on the financial statements of United as it had on the financial statements of UAL. The table below presents the impact of the adoption of the New Lease Standard on select accounts and captions of UAL's statement of consolidated operations (in millions, except per share amounts):
| Three Months Ended September 30, 2018 |  | Nine Months Ended September 30, 2018
| As Reported |  | New Lease Standard Adjustments |  | As Adjusted |  | As Reported |  | New Lease Standard Adjustments |  | As Adjusted
Regional capacity purchase | $ | 663 |  |  | $ | 13 |  |  | $ | 676 |  |  | $ | 1,963 |  |  | $ | 36 |  |  | $ | 1,999 |
Landing fees and other rent | 596 |  |  | 22 |  |  | 618 |  |  | 1,757 |  |  | 65 |  |  | 1,822 |
Depreciation and amortization | 564 |  |  | (19 | ) |  | 545 |  |  | 1,662 |  |  | (55 | ) |  | 1,607 |
Interest expense | (187 | ) |  | 15 |  |  | (172 | ) |  | (540 | ) |  | 43 |  |  | (497 | )
Interest capitalized | 18 |  |  | (2 | ) |  | 16 |  |  | 51 |  |  | (5 | ) |  | 46 |
Net income | 836 |  |  | (3 | ) |  | 833 |  |  | 1,667 |  |  | (6 | ) |  | 1,661 |
Earnings per share, basic | 3.07 |  |  | (0.01 | ) |  | 3.06 |  |  | 6.02 |  |  | (0.02 | ) |  | 6.00 |
Earnings per share, diluted | 3.06 |  |  | (0.01 | ) |  | 3.05 |  |  | 5.99 |  |  | (0.01 | ) |  | 5.98 |
The expense for leases under the New Lease Standard will continue to be classified in their historical income statement captions (primarily in Aircraft rent, Landing fees and other rent and Regional capacity purchase in our statements of consolidated operations). The adoption of the New Lease Standard resulted in the recharacterization of certain leases from capital leases under Topic 840 to operating leases under the New Lease Standard. This change resulted in less depreciation and amortization and interest expense associated with capital leases offset by higher lease expense associated with operating leases. The recharacterization is associated with leases of certain airport facilities that were derecognized as part of the build-to-suit transition guidance under the New Lease Standard. The reduction in capitalized interest is also associated with the same airport facilities leases. The table below presents the impact of the adoption of the New Lease Standard on UAL's balance sheet accounts and captions (in millions):
| December 31, 2018
| As Reported |  | New Lease Standard Adjustments |  | As Adjusted
Receivables, less allowance for doubtful accounts | $ | 1,346 |  |  | $ | 80 |  |  | $ | 1,426 |
Prepaid expenses and other | 913 |  |  | (180 | ) |  | 733 |
Flight equipment, owned and finance leases (a) | 32,636 |  |  | (37 | ) |  | 32,599 |
Other property and equipment, owned and finance leases (a) | 7,930 |  |  | (1,041 | ) |  | 6,889 |
Accumulated depreciation and amortization, owned and finance leases (a) | (13,414 | ) |  | 148 |  |  | (13,266 | )
Operating lease right-of-use assets | — |  |  | 5,262 |  |  | 5,262 |
Current maturities of finance leases (a) | 149 |  |  | (26 | ) |  | 123 |
Current maturities of operating leases | — |  |  | 719 |  |  | 719 |
Other current liabilities | 619 |  |  | (66 | ) |  | 553 |
Long-term obligations under finance leases (a) | 1,134 |  |  | (910 | ) |  | 224 |
Long-term obligations under operating leases | — |  |  | 5,276 |  |  | 5,276 |
Deferred income taxes | 814 |  |  | 14 |  |  | 828 |
Other long-term liabilities | 1,832 |  |  | (822 | ) |  | 1,010 |
Retained earnings | 6,668 |  |  | 47 |  |  | 6,715 |
(a) Finance leases, under the New Lease Standard, are the equivalent of capital leases under Topic 840. The table below presents the impact of the adoption of the New Lease Standard on select line items of UAL's statement of consolidated cash flows (in millions):
| Nine Months Ended September 30, 2018
| As Reported |  | New Lease Standard Adjustments |  | As Adjusted
Cash Flows from Operating Activities: |  |  |  |  |
Net cash provided by operating activities | $ | 5,080 |  |  | $ | (45 | ) |  | $ | 5,035 |
Cash Flows from Investing Activities: |  |  |  |  |
Capital expenditures | (2,592 | ) |  | 96 |  |  | (2,496 | )
Cash Flows from Financing Activities: |  |  |  |  |
Proceeds from issuance of long-term debt | 1,332 |  |  | (91 | ) |  | 1,241 |
Principal payments under finance leases | (98 | ) |  | 41 |  |  | (57 | )
The adoption of the New Lease Standard primarily resulted in the recording of assets and liabilities of our operating leases on our consolidated balance sheets. Certain amounts recorded for prepaid and accrued rent associated with historical operating leases were reclassified to the newly captioned Operating lease right-of-use assets in the consolidated balance sheets. Also, certain leases designated under Topic 840 as owned assets and capital leases are not considered to be assets under the New Lease Standard and have been removed from the consolidated balance sheets, along with the related capital lease liability, due to the leases having variable lease payments. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses ("ASU 2016-13"). The main objective is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The new accounting replaces the incurred loss methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. For trade receivables, loans and held-to-maturity debt securities, entities will be required to estimate lifetime expected credit losses. For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than a reduction to the carrying value of the asset. The new accounting is effective for fiscal years and interim periods beginning after December 15, 2019 and early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company does not expect the adoption of ASU 2016-13 to have a material impact on its consolidated financial statements.

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://fasb.org/us-gaap/role/ref/legacyRef -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