United Airlines 2011 Annual Report Download - page 100

Table of Contents
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
 
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Aircraft fuel $4,204 $3,405
Salaries and related costs 3,919 3,773
Regional capacity purchase 1,523 2,939
Landing fees and other rent 1,011 905
Depreciation and amortization 917 902
Distribution expenses 670 534
Other operating expenses 2,567 956
Purchased services — 1,167
Cost of third party sales — 230
$14,811 $14,811
There are no significant differences in the impact of the United reclassifications as compared to the UAL reclassifications above.
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The following summarizes Continental Predecessor accounting policies that materially differ from the Company’s accounting policies, described above.
Continental Predecessor recognized passenger revenue for ticket breakage when the ticket expired unused.
Property and equipment was recorded at cost and was depreciated to estimated residual value over its estimated useful life using
the straight-line method. Jet aircraft and rotable spare parts were assumed to have residual values of 15% and 10%, respectively, of original cost; other
categories of property and equipment were assumed to have no residual value. The estimated useful lives of Continental property and equipment were as
follows:

Jet aircraft and simulators 25 to 30 years
Rotable spare parts Average lease term or
useful life for related aircraft
Buildings and improvements 10 to 30 years
Vehicles and equipment 5 to 10 years
Computer software 3 to 5 years
Continental accounted for mileage credits earned by flying on Continental under an incremental cost model, rather than a
deferred revenue model. For those frequent flyer accounts that had sufficient mileage credits to claim the lowest level of free travel, Continental recorded a
liability for either the estimated incremental cost of providing travel awards that were expected to be redeemed for travel on Continental or the contractual rate of
expected redemption on alliance carriers. Incremental cost included the cost of fuel, meals, insurance and miscellaneous supplies, less any fees charged to the
passenger for redeeming the rewards, but did not include any costs for aircraft ownership, maintenance, labor or overhead allocation. The liability was
adjusted periodically based on awards earned, awards redeemed, changes in the incremental costs and changes in the frequent flyer program. Changes in the
liability were recognized as passenger revenue in the period of change.
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