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Table of Contents




United Continental Holdings, Inc. (together with its consolidated subsidiaries, “UAL” or the “Company”) is a holding company and its principal, wholly-
owned subsidiary is United Airlines, Inc. (together with its consolidated subsidiaries, “United”). On March 31, 2013, the Company merged United Air Lines,
Inc., a wholly owned subsidiary of United Continental Holdings, Inc., with and into Continental Airlines, Inc. (“Continental”), a wholly owned subsidiary of
United Continental Holdings, Inc., to form one legal entity with Continental continuing as the surviving corporation. Continental’s name was subsequently
changed to United Airlines, Inc. As UAL consolidates United for financial statement purposes, disclosures that relate to activities of United also apply to
UAL, unless otherwise noted. United’s operating revenues and operating expenses comprise nearly 100% of UAL’s revenues and operating expenses. In
addition, United comprises approximately the entire balance of UAL’s assets, liabilities and operating cash flows. When appropriate, UAL and United are
named specifically for their individual contractual obligations and related disclosures and any significant differences between the operations and results of
UAL and United are separately disclosed and explained. We sometimes use the words “we,” “our,” “us,” and the “Company” in this report for disclosures that
relate to all of UAL and United.

(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.
Certain prior years’ cash flows from operating, investing and financing activities have been reclassified to conform to the current year
presentation. Within the investing activities section, the change in the short-term and other investments category was further separated between
purchases and redemptions. The net effect of this presentation remains unchanged for prior years.
(b) The value of unused passenger tickets is included in current liabilities as advance ticket sales. The Company records
passenger ticket sales and tickets sold by other airlines for use on United as passenger revenue when the transportation is provided or upon
estimated breakage. Tickets sold by other airlines are recorded at the estimated values to be billed to the other airlines. Differences between
amounts billed and the actual amounts may be rejected and rebilled or written off if the amount recorded was different from the original estimate.
When necessary, the Company records a reserve against our interline billings and payables if historical experience indicates that these amounts are
different. Non-refundable tickets generally expire on the date of the intended flight, unless the date is extended by notification from the customer
on or before the intended flight date.
Fees charged in association with changes or extensions to non-refundable tickets are recorded as other revenue at the time the fee is incurred. The
fare on the changed ticket, including any additional collection of fare, is deferred and recognized in accordance with our transportation revenue
recognition policy at the time the transportation is provided. Change fees related to non-refundable tickets are considered a separate transaction
from the air transportation because they represent a charge for the Company’s additional service to modify a previous sale. Therefore, the pricing
of the change fee and the initial customer order are separately determined and represent distinct earnings processes.
The Company records an estimate of breakage revenue on the flight date for tickets that will expire unused. These estimates are based on the
evaluation of actual historical results and forecasted trends. Refundable tickets expire after one year from the date of issuance.
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