United Airlines 2008 Annual Report Download - page 139

(16) Statement of Consolidated Cash Flows—Supplemental Disclosures
Supplemental disclosures of cash flow information and non-cash investing and financing activities
for both UAL and United, except as noted, are as follows:
(In millions) 2008 2007
Period from
February 1 to
December 31,
2006
Period from
January 1 to
January 31,
2006
Year Ended
December 31,
Successor Predecessor
Cash paid during the period for:
Interest (net of amounts capitalized) .................. $412 $614 $703 $35
Income taxes ..................................... 3 10 — —
Non-cash transactions:
Long-term debt incurred to acquire assets .............. $ — $ — $242 $—
Capital lease obligations incurred to acquire assets ....... 281 — 155 —
Pension and other postretirement changes recorded in
other comprehensive income (loss) .................. (11) — 87 (4)
Accrued special distribution on UAL common stock (UAL
only) ......................................... — 257 — —
Interest paid in kind on 6% senior notes ............... 31 15 — —
Net unrealized gain (loss) on financial instruments
recorded in other comprehensive income (loss) ........ (37) 5 (5) 24
Receivable from unsettled stock sales as of December 31,
2008 .......................................... 15 — — —
In addition to the above non-cash transactions, see Note 4, “Voluntary Reorganization Under
Chapter 11,” Note 5, “Common Stockholders’ Equity and Preferred Securities,” Note 12, “Debt
Obligations and Card Processing Agreements,” and Note 15, “Lease Obligations.”
(17) Advanced Purchase of Miles
In September 2008, the Company amended certain terms of its agreement with its co-branded credit
card partner (the “Amendment”). In connection with the Amendment, the Company sold an additional
$500 million of pre-purchased miles to its co-branded credit card partner and extended the term of the
agreement to December 31, 2017. Prior to the Amendment, our Advanced purchase of miles obligation
to our co-branded credit card partner was approximately $600 million, which represented pre-purchased
miles purchased by our co-branded credit card partner. As a result of the additional $500 million
purchase of miles, our co-branded credit card partner has a remaining pre-purchase miles balance of
approximately $1.1 billion as of December 31, 2008. As part of the Amendment, our co-branded credit
card partner cannot use the pre-purchased miles for issuance to its cardholders prior to 2011;
accordingly, the $1.1 billion of deferred revenue at December 31, 2008 for the pre-purchased miles is
classified as “Advanced purchase of miles” in the non-current liabilities section of the Company’s
Statements of Consolidated Financial Position. The Amendment specifies the maximum amount of the
pre-purchased miles that our co-branded credit card partner can award to its cardholders each year from
2011 to 2017.
Prior to the Amendment, the pre-purchased miles were reflected as a current liability because the
miles pre-purchased by our co-branded credit card partner were generally awarded to cardholders within
one year of purchase. As of December 31, 2007, the total Advanced purchase of miles was $694 million.
United has the right, but is not required, to repurchase the pre-purchased miles from its co-branded
credit card partner during the term of the agreement. The Amendment contains termination penalties
that may require United to make certain payments and repurchase outstanding pre-purchased miles in
cases such as the Company’s insolvency, bankruptcy false representations or other material breaches.
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