United Airlines 2012 Annual Report Download - page 87

Table of Contents
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United Continental Holdings, Inc. (together with its consolidated subsidiaries, “UAL”) is a holding company and its principal, wholly-owned subsidiaries are
United Air Lines, Inc. (together with its consolidated subsidiaries, “United”) and Continental Airlines, Inc. (together with its consolidated subsidiaries,
“Continental”). All significant intercompany transactions are eliminated.
We sometimes use the words “we,” “our,” “us,” and the “Company” in this Form 10-K for disclosures that relate to all of UAL, United and Continental. As
UAL consolidated United and Continental beginning October 1, 2010 for financial statement purposes, disclosures that relate to United or Continental
activities also apply to UAL, unless otherwise noted. When appropriate, UAL, United and Continental are named specifically for their related activities and
disclosures.
Continental
As a result of the application of the acquisition method of accounting, the Continental financial statements prior to October 1, 2010 are not comparable with
the financial statements for periods on or after October 1, 2010. References to “Continental Successor” refer to Continental on or after October 1, 2010, after
giving effect to the application of acquisition accounting. References to “Continental Predecessor” refer to Continental prior to October 1, 2010.
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On May 2, 2010, UAL Corporation, Continental and JT Merger Sub Inc., a wholly-owned subsidiary of UAL Corporation, entered into an Agreement and
Plan of Merger (the “Merger agreement”). On October 1, 2010, JT Merger Sub Inc. merged with and into Continental, with Continental surviving as a wholly-
owned subsidiary of UAL Corporation (the “Merger”). Upon closing of the Merger, UAL Corporation became the parent company of both United and
Continental and UAL Corporation’s name was changed to United Continental Holdings, Inc.
Pursuant to the terms of the Merger agreement, each outstanding share of Continental common stock was converted into and became exchangeable for 1.05
fully paid and nonassessable shares of UAL common stock with any fractional shares paid in cash. UAL issued approximately 148 million shares of UAL
common stock to former holders of Continental Class B common stock (“Continental common stock”). Based on the closing price of $23.66 per share of
UAL common stock on September 30, 2010, the last trading day before the closing of the Merger, the aggregate value of the consideration paid in connection
with the Merger was approximately $3.7 billion.
The Merger was accounted for as a business combination using the acquisition method of accounting with Continental considered the acquiree. The
acquisition method of accounting requires, among other things, that assets acquired and liabilities assumed be recognized on the balance sheet at their fair
values as of the acquisition date. The acquisition values have been pushed down to Continental for its separate-entity financial statements as of October 1,
2010. The excess of the purchase price over the net fair value of assets and liabilities acquired was recorded as goodwill. Goodwill will not be amortized, but
will be tested for impairment at least annually.
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The following policies are applicable to UAL, United and Continental, except as noted below under  for
accounting policies followed by Continental Predecessor that are materially different than the Company’s accounting policies.
(a) The preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in these financial statements and
accompanying notes. Actual results could differ from those estimates.
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