United Airlines 2014 Annual Report Download - page 75
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Table of Contents
The following table presents information about the Company’s goodwill and other intangible assets at December 31 (in millions):
Goodwill $ 4,523 $ 4,523
Finite-lived intangible assets
Airport slots and gates 8 $ 97 $ 97 $ 98 $ 88
Hubs 20 145 67 145 59
Patents and tradenames 3 108 108 108 108
Frequent flyer database (b) 22 1,177 624 1,177 536
Contracts 12 155 86 167 86
Other 25 109 67 109 56
Total $ 1,791 $ 1,049 $ 1,804 $ 933
Indefinite-lived intangible assets
Airport slots and gates $ 956 $ 963
Route authorities 1,589 1,605
Tradenames and logos 593 593
Alliances 404 404
Total $ 3,542 $ 3,565
(a) Weighted average life expressed in years.
(b) The frequent flyer database is amortized based on an accelerated amortization schedule to reflect utilization of the assets. Estimated cash flows correlating to the expected attrition rate of customers in the
frequent flyer database is considered in the determination of the amortization schedules.
Amortization expense in 2014, 2013 and 2012 was $128 million, $142 million and $121 million, respectively. Projected amortization expense in 2015,
2016, 2017, 2018 and 2019 is $105 million, $92 million, $81 million, $72 million and $66 million, respectively.
See Note 17 of this report for additional information related to impairment of intangible assets.
During 2014, United used $62 million of cash to purchase and retire $28 million aggregate principal amount of United’s 4.5% Convertible Notes due 2015
(the “4.5% Convertible Notes”) in market transactions. UAL and United recorded reductions of additional paid-in capital of $34 million and $62 million,
respectively, to record the transactions. At December 31, 2014, the remaining balance of these notes was $202 million. In January 2015, the holders of
substantially all of the remaining $202 million principal amount of the 4.5% Convertible Notes exercised their conversion option resulting in the issuance of
11 million shares of UAL common stock.
United paid a dividend of $212 million to UAL in 2014. United recorded the dividend as a reduction of additional paid-in capital.
At December 31, 2013, United had receivables from two affiliates, which were wholly-owned subsidiaries of UAL, of $232 million that were classified against
stockholder’s equity. UAL transferred all of its equity interest in each of the two subsidiaries to United in 2014, and United reflected the transfers as
reductions in additional paid-in capital.
In 2014, UAL issued approximately 12 million shares of UAL common stock in exchange for, or upon conversion of, $104 million in aggregate principal
amount of its 6% Convertible Senior Notes due 2029 (the “6% Convertible Senior Notes”) held by the holders of these notes.
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