Annual Report of DELTA AIR LINES, INC\.  for year 2019

DELTA AIR LINES, INC\.

Consolidated Statements of Cash Flows

|                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------:|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------:|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------:|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------:|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------:|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------:|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------:|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------:|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------:|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------:|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------:|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------:|:- |:- |:- |:- |:- |:- |:- |:- |:- |:- |:- |:- |:- |:- |:- |
|                                                                                |                                                                                |                                                                                |                                                                                Year Ended December 31,                                                                                |                                                                                Year Ended December 31,                                                                                |                                                                                Year Ended December 31,                                                                                |                                                                                Year Ended December 31,                                                                                |                                                                                Year Ended December 31,                                                                                |                                                                                Year Ended December 31,                                                                                |                                                                                Year Ended December 31,                                                                                |                                                                                Year Ended December 31,                                                                                |                                                                                Year Ended December 31,                                                                                |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                (in millions)                                                                                |                                                                                (in millions)                                                                                |                                                                                (in millions)                                                                                |                                                                                2019                                                                                |                                                                                |                                                                                |                                                                                |                                                                                2018                                                                                |                                                                                |                                                                                |                                                                                |                                                                                2017                                                                                |
|                                                                             Cash Flows From Operating Activities:                                                                              |                                                                             Cash Flows From Operating Activities:                                                                              |                                                                             Cash Flows From Operating Activities:                                                                              |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |
|                                                                                Net income                                                                                |                                                                                Net income                                                                                |                                                                                Net income                                                                                |                                                                                $ 4,767                                                                                |                                                                                |                                                                                |                                                                                |                                                                                $ 3,935                                                                                |                                                                                |                                                                                |                                                                                |                                                                                $ 3,205                                                                                |
|                                                       Adjustments to reconcile net income to net cash provided by operating activities:                                                        |                                                       Adjustments to reconcile net income to net cash provided by operating activities:                                                        |                                                       Adjustments to reconcile net income to net cash provided by operating activities:                                                        |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |
|                                                                                Depreciation and amortization                                                                                |                                                                                Depreciation and amortization                                                                                |                                                                                Depreciation and amortization                                                                                |                                                                                2,581                                                                                |                                                                                |                                                                                |                                                                                |                                                                                2,329                                                                                |                                                                                |                                                                                |                                                                                |                                                                                2,222                                                                                |
|                                                                                Deferred income taxes                                                                                |                                                                                Deferred income taxes                                                                                |                                                                                Deferred income taxes                                                                                |                                                                                1,473                                                                                |                                                                                |                                                                                |                                                                                |                                                                                1,364                                                                                |                                                                                |                                                                                |                                                                                |                                                                                2,242                                                                                |
|                                                            Pension, postretirement and postemployment payments greater than expense                                                            |                                                            Pension, postretirement and postemployment payments greater than expense                                                            |                                                            Pension, postretirement and postemployment payments greater than expense                                                            |                                                                                (922)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (790)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (3,302)                                                                                |
|                                                                           Changes in certain assets and liabilities:                                                                           |                                                                           Changes in certain assets and liabilities:                                                                           |                                                                           Changes in certain assets and liabilities:                                                                           |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |
|                                                                                Receivables                                                                                |                                                                                Receivables                                                                                |                                                                                Receivables                                                                                |                                                                                (775)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                108                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (428)                                                                                |
|                                                                                Fuel inventory                                                                                |                                                                                Fuel inventory                                                                                |                                                                                Fuel inventory                                                                                |                                                                                (139)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                324                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (397)                                                                                |
|                                                                           Prepaid expenses and other current assets                                                                            |                                                                           Prepaid expenses and other current assets                                                                            |                                                                           Prepaid expenses and other current assets                                                                            |                                                                                94                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (440)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (57)                                                                                |
|                                                                                Air traffic liability                                                                                |                                                                                Air traffic liability                                                                                |                                                                                Air traffic liability                                                                                |                                                                                454                                                                                |                                                                                |                                                                                |                                                                                |                                                                                297                                                                                |                                                                                |                                                                                |                                                                                |                                                                                284                                                                                |
|                                                                                Loyalty program deferred revenue                                                                                |                                                                                Loyalty program deferred revenue                                                                                |                                                                                Loyalty program deferred revenue                                                                                |                                                                                87                                                                                |                                                                                |                                                                                |                                                                                |                                                                                319                                                                                |                                                                                |                                                                                |                                                                                |                                                                                399                                                                                |
|                                                                                Profit sharing                                                                                |                                                                                Profit sharing                                                                                |                                                                                Profit sharing                                                                                |                                                                                354                                                                                |                                                                                |                                                                                |                                                                                |                                                                                233                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (51)                                                                                |
|                                                                            Accounts payable and accrued liabilities                                                                            |                                                                            Accounts payable and accrued liabilities                                                                            |                                                                            Accounts payable and accrued liabilities                                                                            |                                                                                144                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (418)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                955                                                                                |
|                                                                                Other, net                                                                                |                                                                                Other, net                                                                                |                                                                                Other, net                                                                                |                                                                                307                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (247)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (49)                                                                                |
|                                                                           Net cash provided by operating activities                                                                            |                                                                           Net cash provided by operating activities                                                                            |                                                                           Net cash provided by operating activities                                                                            |                                                                                8,425                                                                                |                                                                                |                                                                                |                                                                                |                                                                                7,014                                                                                |                                                                                |                                                                                |                                                                                |                                                                                5,023                                                                                |
|                                                                             Cash Flows From Investing Activities:                                                                              |                                                                             Cash Flows From Investing Activities:                                                                              |                                                                             Cash Flows From Investing Activities:                                                                              |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |
|                                                                               Property and equipment additions:                                                                                |                                                                               Property and equipment additions:                                                                                |                                                                               Property and equipment additions:                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |
|                                                                          Flight equipment, including advance payments                                                                          |                                                                          Flight equipment, including advance payments                                                                          |                                                                          Flight equipment, including advance payments                                                                          |                                                                                (3,344)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (3,704)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (2,704)                                                                                |
|                                                                      Ground property and equipment, including technology                                                                       |                                                                      Ground property and equipment, including technology                                                                       |                                                                      Ground property and equipment, including technology                                                                       |                                                                                (1,592)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (1,464)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (1,187)                                                                                |
|                                                                                Purchase of equity investments                                                                                |                                                                                Purchase of equity investments                                                                                |                                                                                Purchase of equity investments                                                                                |                                                                                (170)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                —                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (1,245)                                                                                |
|                                                                                Sale of equity investments                                                                                |                                                                                Sale of equity investments                                                                                |                                                                                Sale of equity investments                                                                                |                                                                                279                                                                                |                                                                                |                                                                                |                                                                                |                                                                                28                                                                                |                                                                                |                                                                                |                                                                                |                                                                                —                                                                                |
|                                                                              Purchase of short\-term investments                                                                               |                                                                              Purchase of short\-term investments                                                                               |                                                                              Purchase of short\-term investments                                                                               |                                                                                —                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (145)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (925)                                                                                |
|                                                                             Redemption of short\-term investments                                                                              |                                                                             Redemption of short\-term investments                                                                              |                                                                             Redemption of short\-term investments                                                                              |                                                                                206                                                                                |                                                                                |                                                                                |                                                                                |                                                                                766                                                                                |                                                                                |                                                                                |                                                                                |                                                                                584                                                                                |
|                                                                                Other, net                                                                                |                                                                                Other, net                                                                                |                                                                                Other, net                                                                                |                                                                                58                                                                                |                                                                                |                                                                                |                                                                                |                                                                                126                                                                                |                                                                                |                                                                                |                                                                                |                                                                                211                                                                                |
|                                                                             Net cash used in investing activities                                                                              |                                                                             Net cash used in investing activities                                                                              |                                                                             Net cash used in investing activities                                                                              |                                                                                (4,563)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (4,393)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (5,266)                                                                                |
|                                                                             Cash Flows From Financing Activities:                                                                              |                                                                             Cash Flows From Financing Activities:                                                                              |                                                                             Cash Flows From Financing Activities:                                                                              |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |
|                                                                         Payments on debt and finance lease obligations                                                                         |                                                                         Payments on debt and finance lease obligations                                                                         |                                                                         Payments on debt and finance lease obligations                                                                         |                                                                                (3,320)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (3,052)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (1,258)                                                                                |
|                                                                                Repurchase of common stock                                                                                |                                                                                Repurchase of common stock                                                                                |                                                                                Repurchase of common stock                                                                                |                                                                                (2,027)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (1,575)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (1,677)                                                                                |
|                                                                                Cash dividends                                                                                |                                                                                Cash dividends                                                                                |                                                                                Cash dividends                                                                                |                                                                                (980)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (909)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (731)                                                                                |
|                                                                                Fuel card obligation                                                                                |                                                                                Fuel card obligation                                                                                |                                                                                Fuel card obligation                                                                                |                                                                                (339)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                7                                                                                |                                                                                |                                                                                |                                                                                |                                                                                636                                                                                |
|                                                                             Proceeds from short\-term obligations                                                                              |                                                                             Proceeds from short\-term obligations                                                                              |                                                                             Proceeds from short\-term obligations                                                                              |                                                                                1,750                                                                                |                                                                                |                                                                                |                                                                                |                                                                                —                                                                                |                                                                                |                                                                                |                                                                                |                                                                                —                                                                                |
|                                                                              Proceeds from long\-term obligations                                                                              |                                                                              Proceeds from long\-term obligations                                                                              |                                                                              Proceeds from long\-term obligations                                                                              |                                                                                2,057                                                                                |                                                                                |                                                                                |                                                                                |                                                                                3,745                                                                                |                                                                                |                                                                                |                                                                                |                                                                                2,454                                                                                |
|                                                                                Other, net                                                                                |                                                                                Other, net                                                                                |                                                                                Other, net                                                                                |                                                                                (21)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                58                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (154)                                                                                |
|                                                                             Net cash used in financing activities                                                                              |                                                                             Net cash used in financing activities                                                                              |                                                                             Net cash used in financing activities                                                                              |                                                                                (2,880)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (1,726)                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (730)                                                                                |
|                                                             Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash                                                              |                                                             Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash                                                              |                                                             Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash                                                              |                                                                                982                                                                                |                                                                                |                                                                                |                                                                                |                                                                                895                                                                                |                                                                                |                                                                                |                                                                                |                                                                                (973)                                                                                |
|                                                               Cash, cash equivalents and restricted cash at beginning of period                                                                |                                                               Cash, cash equivalents and restricted cash at beginning of period                                                                |                                                               Cash, cash equivalents and restricted cash at beginning of period                                                                |                                                                                2,748                                                                                |                                                                                |                                                                                |                                                                                |                                                                                1,853                                                                                |                                                                                |                                                                                |                                                                                |                                                                                2,826                                                                                |
|                                                                  Cash, cash equivalents and restricted cash at end of period                                                                   |                                                                  Cash, cash equivalents and restricted cash at end of period                                                                   |                                                                  Cash, cash equivalents and restricted cash at end of period                                                                   |                                                                                $ 3,730                                                                                |                                                                                |                                                                                |                                                                                |                                                                                $ 2,748                                                                                |                                                                                |                                                                                |                                                                                |                                                                                $ 1,853                                                                                |
|                                                                       Supplemental Disclosure of Cash Paid for Interest                                                                        |                                                                       Supplemental Disclosure of Cash Paid for Interest                                                                        |                                                                       Supplemental Disclosure of Cash Paid for Interest                                                                        |                                                                                $ 481                                                                                |                                                                                |                                                                                |                                                                                |                                                                                $ 376                                                                                |                                                                                |                                                                                |                                                                                |                                                                                $ 390                                                                                |
|                                                                                Non\-Cash Transactions:                                                                                |                                                                                Non\-Cash Transactions:                                                                                |                                                                                Non\-Cash Transactions:                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |
|                                                           Treasury stock contributed to our qualified defined benefit pension plans                                                            |                                                           Treasury stock contributed to our qualified defined benefit pension plans                                                            |                                                           Treasury stock contributed to our qualified defined benefit pension plans                                                            |                                                                                $ —                                                                                |                                                                                |                                                                                |                                                                                |                                                                                $ —                                                                                |                                                                                |                                                                                |                                                                                |                                                                                $ 350                                                                                |
|                                                                     Right\-of\-use assets acquired under operating leases                                                                      |                                                                     Right\-of\-use assets acquired under operating leases                                                                      |                                                                     Right\-of\-use assets acquired under operating leases                                                                      |                                                                                464                                                                                |                                                                                |                                                                                |                                                                                |                                                                                1,041                                                                                |                                                                                |                                                                                |                                                                                |                                                                                —                                                                                |
|                                                                   Flight and ground equipment acquired under finance leases                                                                    |                                                                   Flight and ground equipment acquired under finance leases                                                                    |                                                                   Flight and ground equipment acquired under finance leases                                                                    |                                                                                650                                                                                |                                                                                |                                                                                |                                                                                |                                                                                93                                                                                |                                                                                |                                                                                |                                                                                |                                                                                261                                                                                |
|                                                                          Operating leases converted to finance leases                                                                          |                                                                          Operating leases converted to finance leases                                                                          |                                                                          Operating leases converted to finance leases                                                                          |                                                                                190                                                                                |                                                                                |                                                                                |                                                                                |                                                                                7                                                                                |                                                                                |                                                                                |                                                                                |                                                                                —                                                                                |
| The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total of the same such amounts shown above: | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total of the same such amounts shown above: | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total of the same such amounts shown above: | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total of the same such amounts shown above: | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total of the same such amounts shown above: | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total of the same such amounts shown above: | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total of the same such amounts shown above: | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total of the same such amounts shown above: | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total of the same such amounts shown above: | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total of the same such amounts shown above: | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total of the same such amounts shown above: | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total of the same such amounts shown above: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                |                                                                                |                                                                                |                                                                                Year Ended December 31,                                                                                |                                                                                Year Ended December 31,                                                                                |                                                                                Year Ended December 31,                                                                                |                                                                                Year Ended December 31,                                                                                |                                                                                Year Ended December 31,                                                                                |                                                                                Year Ended December 31,                                                                                |                                                                                Year Ended December 31,                                                                                |                                                                                Year Ended December 31,                                                                                |                                                                                Year Ended December 31,                                                                                |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                (in millions)                                                                                |                                                                                (in millions)                                                                                |                                                                                (in millions)                                                                                |                                                                                2019                                                                                |                                                                                |                                                                                |                                                                                |                                                                                2018                                                                                |                                                                                |                                                                                |                                                                                |                                                                                2017                                                                                |
|                                                                                Current assets:                                                                                |                                                                                Current assets:                                                                                |                                                                                Current assets:                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |
|                                                                                Cash and cash equivalents                                                                                |                                                                                Cash and cash equivalents                                                                                |                                                                                Cash and cash equivalents                                                                                |                                                                                $ 2,882                                                                                |                                                                                |                                                                                |                                                                                |                                                                                $ 1,565                                                                                |                                                                                |                                                                                |                                                                                |                                                                                $ 1,814                                                                                |
|                                                                     Restricted cash included in prepaid expenses and other                                                                     |                                                                     Restricted cash included in prepaid expenses and other                                                                     |                                                                     Restricted cash included in prepaid expenses and other                                                                     |                                                                                212                                                                                |                                                                                |                                                                                |                                                                                |                                                                                47                                                                                |                                                                                |                                                                                |                                                                                |                                                                                39                                                                                |
|                                                                                Noncurrent assets:                                                                                |                                                                                Noncurrent assets:                                                                                |                                                                                Noncurrent assets:                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |                                                                                |
|                                                                            Cash restricted for airport construction                                                                            |                                                                            Cash restricted for airport construction                                                                            |                                                                            Cash restricted for airport construction                                                                            |                                                                                636                                                                                |                                                                                |                                                                                |                                                                                |                                                                                1,136                                                                                |                                                                                |                                                                                |                                                                                |                                                                                —                                                                                |
|                                                                        Total cash, cash equivalents and restricted cash                                                                        |                                                                        Total cash, cash equivalents and restricted cash                                                                        |                                                                        Total cash, cash equivalents and restricted cash                                                                        |                                                                                $ 3,730                                                                                |                                                                                |                                                                                |                                                                                |                                                                                $ 2,748                                                                                |                                                                                |                                                                                |                                                                                |                                                                                $ 1,853                                                                                |
|                                                    The accompanying notes are an integral part of these Consolidated Financial Statements\.                                                    |                                                    The accompanying notes are an integral part of these Consolidated Financial Statements\.                                                    |                                                    The accompanying notes are an integral part of these Consolidated Financial Statements\.                                                    |                                                    The accompanying notes are an integral part of these Consolidated Financial Statements\.                                                    |                                                    The accompanying notes are an integral part of these Consolidated Financial Statements\.                                                    |                                                    The accompanying notes are an integral part of these Consolidated Financial Statements\.                                                    |                                                    The accompanying notes are an integral part of these Consolidated Financial Statements\.                                                    |                                                    The accompanying notes are an integral part of these Consolidated Financial Statements\.                                                    |                                                    The accompanying notes are an integral part of these Consolidated Financial Statements\.                                                    |                                                    The accompanying notes are an integral part of these Consolidated Financial Statements\.                                                    |                                                    The accompanying notes are an integral part of these Consolidated Financial Statements\.                                                    |                                                    The accompanying notes are an integral part of these Consolidated Financial Statements\.                                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

56


Annual Report of United Continental Holdings, Inc\. and United Airlines, Inc\. for year 2018

[Table of Contents](https://www.example.com#sCFFD9DA26B5659A3A528A4B51B718F87)

taking into consideration such factors as redemption pattern, cabin class, loyalty status and geographic region\. The estimated selling price of miles is adjusted by breakage that considers a number of factors, including redemption patterns of various customer groups\. The Company reviews its breakage estimates annually based upon the latest available information regarding redemption and expiration patterns\. The Company's estimate of the expected expiration of miles requires significant management judgment\. Current and future changes to expiration assumptions or to the expiration policy, or to program rules and program redemption opportunities, may result in material changes to the deferred revenue balance as well as recognized revenues from the program\. For the portion of the outstanding miles that we estimate will not be redeemed, we recognize the associated value proportionally as the remaining miles are redeemed\.

*Co\-Brand Agreement*\. United has a significant contract (the "Co\-Brand Agreement") to sell MileagePlus miles to its co\-branded credit card partner Chase Bank USA, N\.A\. ("Chase")\. Chase awards miles to MileagePlus members based on their credit card activity\. United identified the following significant separately identifiable performance obligations in the Co\-Brand Agreement:

|   |                                                                                |
| - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| • | MileagePlus miles awarded – United has a performance obligation to provide MileagePlus cardholders with miles to be used for air travel and non\-travel award redemptions\. The Company records Passenger revenue related to the travel awards when the transportation is provided and records Other revenue related to the non\-travel awards when the goods or services are delivered\. The Company records the cost associated with non\-travel awards in Other operating revenue\.  |

|   |                                                                                |
| - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| • | Marketing – United has a performance obligation to provide Chase access to its customer list and the use of its brand\. Marketing revenue is recorded to Other operating revenue as miles are delivered to Chase\.  |

|   |                                                                                |
| - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| • | Advertising – United has a performance obligation to provide advertising in support of the MileagePlus card in various customer contact points such as United's website, email promotions, direct mail campaigns, airport advertising and in\-flight advertising\. Advertising revenue is recorded to Other operating revenue as miles are delivered to Chase\.  |

|   |                                                                                |
| - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| • | Other travel\-related benefits – United's performance obligations are comprised of various items such as waived bag fees, seat upgrades and lounge passes\. Lounge passes are recorded to Other operating revenue as customers use the lounge passes\. Bag fees and seat upgrades are recorded to Passenger revenue at the time of the associated travel\.  |

We account for all the payments received (including monthly and one\-time payments) under the Co\-Brand Agreement by allocating them to the separately identifiable performance obligations\. The fair value of the separately identifiable performance obligations is determined using management's estimated selling price of each component\. The objective of using the estimated selling price based methodology is to determine the price at which we would transact a sale if the product or service were sold on a stand\-alone basis\. Accordingly, we determine our best estimate of selling price by considering multiple inputs and methods including, but not limited to, discounted cash flows, brand value, volume discounts, published selling prices, number of miles awarded and number of miles redeemed\. The Company estimated the selling prices and volumes over the term of the Co\-Brand Agreement in order to determine the allocation of proceeds to each of the components to be delivered\. We also evaluate volumes on an annual basis, which may result in a change in the allocation of the estimated consideration from the Co\-Brand Agreement on a prospective basis\.

*Frequent flyer deferred revenue\.*Miles in MileagePlus members' accounts are combined into one homogeneous pool and are thus not separately identifiable, for award redemption purposes, between miles earned in the current period and those in their beginning balance\. Of the miles expected to be redeemed, the Company expects the majority of these miles to be redeemed within two years\.

The following table summarizes information related to the Company's Frequent flyer deferred revenue liability:

|                                                                                |        |
| ----------------------------------------------------------------------------------------------------------------------------------- | ------ |
| Frequent flyer deferred revenue at December 31, 2018 (in millions)                                                                  | $5,005 |
| Percentage of miles earned expected to expire                                                                                | 14\.5% |
| Impact of 1% change in outstanding miles expected to be redeemed or weighted average ticket value on deferred revenue (in millions) | $50    |

***Revenue Recognition\.***The Company presents Passenger revenue, Cargo revenue and Other operating revenue on its income statement\. Passenger revenue is recognized when transportation is provided and Cargo revenue is recognized when shipments arrive at their destination\. Other operating revenue is recognized as the related performance obligations are satisfied\.

Passenger tickets and related ancillary services sold by the Company for mainline and regional flights are purchased primarily via credit card transactions, with payments collected by the Company in advance of the performance of related services\. The Company initially records ticket sales in its Advance ticket sales liability, deferring revenue recognition until the travel occurs\. For travel that has more than one flight segment, the Company deems each segment as a separate performance obligation and recognizes revenue for each segment as travel occurs\. Tickets sold by other airlines where the Company provides the

35