United Airlines 2008 Annual Report Download - page 93

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December 31, 2006 and the one month period ended January 31, 2006 is shown in the table
below:
(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 flows provided (used) from operating activities.... $(1,239) $ 2,134 $1,401 $ 161
Adjustment for (increase) decrease in restricted cash . . . 484 91 313 (203)
Pro-forma cash flows provided (used) from operating
activities .................................... $ (755) $ 2,225 $1,714 $ (42)
Cash flows provided (used) from investing activities .... $2,721 $(2,560) $ (12) $(238)
Adjustment for increase (decrease) in restricted cash . . . (484) (91) (313) 203
Pro-forma cash flows provided (used) from investing
activities .................................... $2,237 $(2,651) $ (325) $ (35)
See Note 20, “Investments,” for information related to the Company’s investments in
noncurrent debt securities.
(e) Aircraft Fuel, Spare Parts and Supplies—The Company records fuel, maintenance, operating
supplies and aircraft spare parts at cost when acquired and provides an obsolescence allowance
for aircraft spare parts.
(f) Operating 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. Owned operating property and equipment, and equipment under
capital leases, were stated at fair value as of February 1, 2006 upon the adoption of fresh-start
reporting.
Depreciation and amortization of owned depreciable assets is based on the straight-line method
over the assets’ estimated service lives. Leasehold improvements are amortized over the
remaining term of the lease, including estimated facility renewal options when renewal is
reasonably assured at key airports, or the estimated service life of the related asset, whichever is
less. Properties under capital leases are amortized on the straight-line method over the life of
the lease or, in the case of certain aircraft, over their estimated service lives. Amortization of
capital leases is included in depreciation and amortization expense. The estimated useful lives of
our property and equipment are as follows:
Estimated Useful Life (in years)
Aircraft ......................... 27to30
Buildings ........................ 25to45
Other property and equipment ....... 4to15
Software (a) ...................... 5
Aircraft lease terms ................ 3to17
Building lease terms ............... 40
(a) The carrying amount of computer software, which is classified as noncurrent other assets in our Statements of Consolidated
Financial Position, was $182 million and $157 million at December 31, 2008 and 2007, respectively.
Maintenance and repairs, including the cost of minor replacements, are charged to maintenance
expense as incurred, except for costs incurred under our power-by-the-hour engine maintenance
agreements, which are expensed based upon the number of hours flown. Costs of additions to
and renewals of units of property are capitalized as property and equipment additions.
93