United Airlines 2011 Annual Report Download - page 96

Table of Contents
In 2011, the Company announced that MileagePlus will be the loyalty program for the Company beginning in 2012. Moving to a single loyalty program
will be a significant milestone in the integration of the two airlines. Continental’s loyalty program will formally end in the first quarter of 2012 at which
point United will automatically enroll OnePass members in MileagePlus and deposit into those MileagePlus accounts award miles equal to their OnePass
award miles balance. The Company currently does not expect a material impact in redemptions when moving to a single loyalty program.
Also, effective January 1, 2012, United updated its estimated selling price for miles to the contractual rate at which we sell miles to our Star Alliance
partners participating in reciprocal frequent flyer programs, as the estimated selling price for miles. Management believes this change is a change in
estimate, and as such, the change will be applied prospectively effective January 1, 2012.
The following table provides additional information related to amounts recorded related to UAL’s frequent flyer programs (in millions):



















2011 United $ 1,823 $ 376 $1,249 $198
2011 Continental Successor 1,348 190 1,158 —
2011 UAL (a) $ 3,171 $566 $2,407 $198
2010 United $1,863 $300 $ 1,477 $86
2010 Continental Successor 293 31 262 —
2010 UAL (a) $2,156 $331 $1,739 $86
2009 UAL / United $1,703 $256 $ 1,377 $70
(a) Continental’s results are included in UAL’s results from October 1, 2010 to December 31, 2011.
(b) This amount represents other revenue recognized during the period from the sale of miles to third parties, representing the marketing services component of the sale.
(c) This amount represents the increase to frequent flyer deferred revenue during the period.
(d) This amount represents the net increase in the advance purchase of miles obligation due to cash payments for the sale of miles in excess of miles awarded to customers.
See Note 19 for additional information related to the Company’s frequent flyer program. Continental frequent flyer program accounting changed
significantly as a result of the Merger. See , below, for the Continental Predecessor policy.
(d)  Cash in excess of operating requirements is invested in short-term, highly liquid investments.
Investments with a maturity of three months or less on their acquisition date are classified as cash and cash equivalents. Investments in debt securities
classified as available-for-sale are stated at fair value. The gains or losses from changes in the fair value of available-for-sale securities are included in
other comprehensive income.
Restricted cash primarily includes cash collateral associated with workers’ compensation obligations, reserves for institutions that process credit card
ticket sales and cash collateral received from fuel hedge counterparties. Restricted cash, cash equivalents and investments are classified as short-term or
long-term in the consolidated balance sheet based on the expected timing of return of the assets to the Company. Airline industry practice includes
classification of restricted cash flows as either investing cash flows or operating cash flows. Cash flows related to restricted cash activity are classified
as investing activities because the Company considers restricted cash arising from these activities similar to an investment. UAL’s cash inflows
(outflows) associated with its restricted cash balances for the years ended December 31, 2011, 2010 and 2009 were $(185) million, $68 million and
$(19) million, respectively.
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