United Airlines 2007 Annual Report Download - page 116

UAL Corporation and Subsidiary Companies
Combined Notes to Consolidated Financial Statements (Continued)
(8) Intangibles (Continued)
The following table presents information about the intangible assets of the Successor and Predecessor Companies, including goodwill, at December 31,
2007 and 2006, respectively:
Weighted
Average Life of
Assets
(in years)
Gross Carrying
Amount
Accumulated
Amortization
Gross Carrying
Amount
Accumulated
Amortization
(Dollars in millions) 2007 2006
Amortized intangible assets
Airport slots and gates 9 $ 72 $ 22 $ 72 $ 14
Hubs 20 145 14 145 7
Patents 3 70 45 70 21
Mileage Plus database 7 521 137 521 77
Contracts 13 216 101 216 48
Other 7 18 5 18 2
10 $ 1,042 $ 324 $ 1,042 $ 169
Unamortized intangible assets
Goodwill $ 2,280 $ 2,703
Airport slots and gates 255 255
Route authorities 1,146 1,146
Trade-name 752 754
$ 4,433 $ 4,858
The Company initially recorded goodwill of $2,756 million upon its exit from bankruptcy. During the year ended December 31, 2007, goodwill decreased
by $423 million due to a $414 million reduction of the valuation allowance for the deferred tax assets established at fresh-start, $6 million due to the adoption of
FIN 48 and $3 million due to a change in estimate of tax accruals existing at the Effective Date. During the eleven month period ended December 31, 2006,
goodwill was decreased by $62 million due to Successor Company tax activity that impacted the deferred tax asset valuation allowance, and increased by
$9 million due to net adjustments to the fair values of certain assets and liabilities. Total amortization expense recognized was $155 million for the year ended
December 31, 2007, $1 million for the one month period ended January 31, 2006 and $169 million for the eleven month period ended December 31, 2006. The
Company expects to record amortization expense of $92 million, $70 million, $64 million, $59 million and $56 million for 2008, 2009, 2010, 2011 and 2012,
respectively.
Open Skies. On April 30, 2007, the U.S. government and the European Union ("EU") signed a transatlantic aviation agreement to replace the existing
bilateral arrangements between the U.S. Government and the 27 EU member states. The agreement is expected to become effective at the end of March 2008.
The agreement is based on the U.S. open skies model and authorizes U.S. airlines to operate between the United States and any point in the EU and beyond,
free from government restrictions on capacity, frequencies and scheduling and provides EU carriers with reciprocal rights in these U.S./EU markets. The
agreement also authorizes all U.S. and EU carriers to operate services between the
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Source: UNITED AIR LINES INC, 10-K, February 29, 2008