United Airlines
Annual Report 2018

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549 FORM 10-K xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2018ORoTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to CommissionFile Number Exact Name of Registrant asSpecified in its Charter, Principal ExecutiveOffice Address, Zip Code andTelephone Number, Including Area Code State ofIncorporation I.R.S. EmployerIdentification No.001-06033 United Continental Holdings, Inc. 233 South WackerDrive Chicago, Illinois 60606 (872) 825-4000 Delaware 36-2675207001-10323 United Airlines, Inc. 233 South Wacker Drive Chicago,Illinois 60606 (872) 825-4000 Delaware 74-2099724 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which RegisteredUnited Continental Holdings, Inc. Common Stock, $0.01 par value The Nasdaq Stock Market LLCUnited Airlines, Inc. None NoneSecurities registered pursuant to Section 12(g) of the Act: United Continental Holdings, Inc. None United Airlines, Inc. None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. United Continental Holdings, Inc. Yes x No o United Airlines, Inc. Yes x No o Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act United Continental Holdings, Inc. Yes o No x United Airlines, Inc. Yes o No x Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period thatthe Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.United Continental Holdings, Inc. Yes x No o United Airlines, Inc. Yes x No o Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding12 months (or for such shorter period that the registrant was required to submit such files).United Continental Holdings, Inc. Yes x No o United Airlines, Inc. Yes x No o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant's knowledge, indefinitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.United Continental Holdings, Inc. x United Airlines, Inc. x Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large acceleratedfiler," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.United Continental Holdings, Inc. Large accelerated filer x Accelerated filer o Non-accelerated filer o Smaller reporting company o Emerging growth company oUnited Airlines, Inc. Large accelerated filer o Accelerated filer o Non-accelerated filer x Smaller reporting company o Emerging growth company oIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant toSection 13(a) of the Exchange Act.United Continental Holdings, Inc. o United Airlines, Inc. o Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). United Continental Holdings, Inc. Yes o No x United Airlines, Inc. Yes o No x The aggregate market value of common stock held by non-affiliates of United Continental Holdings, Inc. was $17,844,650,113 as of June 29, 2018, based on the closing sale price of $69.73 on that date. There is no marketfor United Airlines, Inc. common stock.Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of February 22, 2019.United Continental Holdings, Inc. 266,727,577 shares of common stock ($0.01 par value)United Airlines, Inc. 1,000 shares of common stock ($0.01 par value) (100% owned by United Continental Holdings, Inc.)This combined Form 10-K is separately filed by United Continental Holdings, Inc. and United Airlines, Inc.OMISSION OF CERTAIN INFORMATIONUnited Airlines, Inc. meets the conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K and is therefore filing this form with the reduced disclosure format allowed under that General Instruction.DOCUMENTS INCORPORATED BY REFERENCECertain information required by Items 10, 11, 12 and 13 of Part III of this Form 10-K is incorporated by reference for United Continental Holdings, Inc. from its definitive proxy statement for its 2019 Annual Meeting ofStockholders.Table of ContentsUnited Continental Holdings, Inc. and Subsidiary CompaniesUnited Airlines, Inc. and Subsidiary CompaniesAnnual Report on Form 10-KFor the Year Ended December 31, 2018 Page PART I Item 1. Business3Item 1A. Risk Factors8Item 1B. Unresolved Staff Comments18Item 2. Properties19Item 3. Legal Proceedings20Item 4. Mine Safety Disclosures21 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities21Item 6. Selected Financial Data22Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations24Item 7A. Quantitative and Qualitative Disclosures About Market Risk39Item 8. Financial Statements and Supplementary Data40 Combined Notes to Consolidated Financial Statements54Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure90Item 9A. Controls and Procedures90Item 9B. Other Information93 PART III Item 10. Directors, Executive Officers and Corporate Governance93Item 11. Executive Compensation94Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters94Item 13. Certain Relationships and Related Transactions, and Director Independence94Item 14. Principal Accountant Fees and Services94 PART IV Item 15. Exhibits and Financial Statement Schedules96Item 16. Form 10-K Summary96Table of ContentsThis Annual Report on Form 10-K ("Form 10-K") contains various "forward-looking statements" within the meaning of Section 27A of the Securities Act of1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-lookingstatements represent our expectations and beliefs concerning future events, based on information available to us on the date of the filing of this Form 10-K,and are subject to various risks and uncertainties. Factors that could cause actual results to differ materially from those referenced in the forward-lookingstatements are listed in Part I, Item 1A, Risk Factors and in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results ofOperations. We disclaim any intent or obligation to update or revise any of the forward-looking statements, whether in response to new information,unforeseen events, changed circumstances or otherwise, except as required by applicable law.PART IITEM 1. BUSINESS.OverviewUnited Continental Holdings, Inc. (together with its consolidated subsidiaries, "UAL" or the "Company") is a holding company and its principal, wholly-owned subsidiary is United Airlines, Inc. (together with its consolidated subsidiaries, "United"). As UAL consolidates United for financial statement purposes,disclosures that relate to activities of United also apply to UAL, unless otherwise noted. United's operating revenues and operating expenses comprise nearly100% of UAL's revenues and operating expenses. In addition, United comprises approximately the entire balance of UAL's assets, liabilities and operatingcash flows. When appropriate, UAL and United are named specifically for their individual contractual obligations and related disclosures and any significantdifferences between the operations and results of UAL and United are separately disclosed and explained. We sometimes use the words "we," "our," "us," andthe "Company" in this report for disclosures that relate to all of UAL and United.UAL was incorporated under the laws of the State of Delaware on December 30, 1968. Our principal executive office is located at 233 South Wacker Drive,Chicago, Illinois 60606 (telephone number (872) 825-4000).The Company's website is located at www.united.com and its investor relations website is located at ir.united.com. The information contained on orconnected to the Company's websites is not incorporated by reference into this Annual Report on Form 10-K and should not be considered part of this or anyother report filed with the U.S. Securities and Exchange Commission ("SEC"). The Company's filings with the SEC, including annual reports on Form 10-K,quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports, as well as UAL's proxy statement for its annual meeting ofstockholders, are accessible without charge on the Company's investor relations website, as soon as reasonably practicable, after such material iselectronically filed with, or furnished to, the SEC. Such filings are also available on the SEC's website at www.sec.gov.OperationsThe Company transports people and cargo throughout North America and to destinations in Asia, Europe, the Middle East and Latin America. UAL, throughUnited and its regional carriers, operates more than 4,800 flights a day to 353 airports across five continents, with hubs at Newark Liberty InternationalAirport ("Newark"), Chicago O'Hare International Airport ("Chicago O'Hare"), Denver International Airport ("Denver"), George Bush Intercontinental Airport("Houston Bush"), Los Angeles International Airport ("LAX"), A.B. Won Pat International Airport ("Guam"), San Francisco International Airport ("SFO") andWashington Dulles International Airport ("Washington Dulles").All of the Company's domestic hubs are located in large business and population centers, contributing to a large amount of "origin and destination"traffic. The hub and spoke system allows us to transport passengers between a large number of destinations with substantially more frequent service than ifeach route were served directly. The hub system also allows us to add service to a new destination from a large number of cities using only one or a limitednumber of aircraft. As discussed under Alliances below, United is a member of Star Alliance, the world's largest alliance network.Regional. The Company has contractual relationships with various regional carriers to provide regional aircraft service branded as United Express. Thisregional service complements our operations by carrying traffic that connects to our hubs and allows flights to smaller cities that cannot be providedeconomically with mainline aircraft. Republic Airlines ("Republic"), Champlain Enterprises, LLC d/b/a CommutAir ("CommutAir"), ExpressJet Airlines("ExpressJet"), GoJet Airlines ("GoJet"), Mesa Airlines ("Mesa"), SkyWest Airlines ("SkyWest"), Air Wisconsin Airlines ("Air Wisconsin"), and Trans StatesAirlines ("Trans States") are all regional carriers that operate with capacity contracted to United under capacity purchase agreements ("CPAs"). Under theseCPAs, the Company pays the regional carriers contractually agreed fees (carrier costs) for operating these flights plus a variable reimbursement (incentivepayment for operational performance) based on agreed performance metrics, subject3Table of Contentsto annual adjustments. The fees for carrier costs are based on specific rates for various operating expenses of the regional carriers, such as crew expenses,maintenance and aircraft ownership, some of which are multiplied by specific operating statistics (e.g., block hours, departures), while others are fixedmonthly amounts. Under these CPAs, the Company is responsible for all fuel costs incurred, as well as landing fees and other costs, which are either passedthrough by the regional carrier to the Company without any markup or directly incurred by the Company, and, in some cases, the Company owns or leasessome or all of the aircraft subject to the CPA, and leases or subleases, as applicable, such aircraft to the regional carrier. In return, the regional carriers operatethe capacity of the aircraft included within the scope of such CPA exclusively for United, on schedules determined by the Company. The Company alsodetermines pricing and revenue management, assumes the inventory and distribution risk for the available seats and permits mileage accrual and redemptionfor regional flights through its MileagePlus® loyalty program.Alliances. United is a member of Star Alliance, a global integrated airline network and the largest and most comprehensive airline alliance in the world. As ofJanuary 1, 2019, Star Alliance carriers served over 1,300 airports in 193 countries with 18,800 daily departures. Star Alliance members, in addition to United,are Adria Airways, Aegean Airlines, Air Canada, Air China, Air India, Air New Zealand, All Nippon Airways ("ANA"), Asiana Airlines, Austrian Airlines,Aerovías del Continente Americano S.A. ("Avianca"), Avianca Brasil, Brussels Airlines, Copa Airlines, Croatia Airlines, EGYPTAIR, Ethiopian Airlines, EVAAir, LOT Polish Airlines, Lufthansa, SAS Scandinavian Airlines, Shenzhen Airlines, Singapore Airlines, South African Airways, SWISS, TAP Air Portugal,THAI Airways International and Turkish Airlines. In addition to its members, Star Alliance includes Shanghai-based Juneyao Airlines as a connecting partner.United has a variety of bilateral commercial alliance agreements and obligations with Star Alliance members, addressing, among other things, reciprocalearning and redemption of frequent flyer miles, access to airport lounges and, with certain Star Alliance members, codesharing of flight operations (wherebyone carrier's selected flights can be marketed under the brand name of another carrier). In addition to the alliance agreements with Star Alliance members,United currently maintains independent marketing alliance agreements with other air carriers, including Aeromar, Aer Lingus, Air Dolomiti, Azul LinhasAéreas Brasileiras S.A. ("Azul"), Boutique Air, Cape Air, Eurowings, Hawaiian Airlines, and Silver Airways. In addition to the marketing alliance agreementswith air partners, United also offers a train-to-plane codeshare and frequent flyer alliance with Amtrak from Newark on select city pairs in the northeasternUnited States.United also participates in four passenger joint business arrangements ("JBAs"): one with Air Canada and the Lufthansa Group (which includes Lufthansa andits affiliates Austrian Airlines, Brussels Airlines, Eurowings and SWISS) covering transatlantic routes, one with ANA covering certain transpacific routes, onewith Air New Zealand covering certain routes between the United States and New Zealand and one with Avianca and Copa Airlines, which, upon receipt ofregulatory approvals will cover routes between the United States and Central and South America, excluding Brazil. These passenger JBAs enable theparticipating carriers to integrate the services they provide in the respective regions, capturing revenue synergies and delivering enhanced customer benefits,such as highly competitive flight schedules, fares and services. United also participates in cargo JBAs with ANA for transpacific cargo services and withLufthansa for transatlantic cargo services. These cargo JBAs offer expanded and more seamless access to cargo space across the carriers' respective combinednetworks.Loyalty Program. United's MileagePlus loyalty program builds customer loyalty by offering awards, benefits and services to program participants. Membersin this program earn miles for flights on United, United Express, Star Alliance members and certain other airlines that participate in the program. Members canalso earn miles by purchasing the goods and services of our network of non-airline partners, such as domestic and international credit card issuers, retailmerchants, hotels and car rental companies. Members can redeem miles for free (other than taxes and government imposed fees), discounted or upgradedtravel and non-travel awards.United has an agreement with Chase Bank USA, N.A. ("Chase"), pursuant to which members of United's MileagePlus loyalty program who are residents of theUnited States can earn miles for making purchases using a MileagePlus credit card issued by Chase (the "Co-Brand Agreement"). The Co-Brand Agreementalso provides for joint marketing and other support for the MileagePlus credit card and provides Chase with other benefits such as permission to market to theCompany's customer database.Approximately 5.6 million and 5.4 million MileagePlus flight awards were used on United in 2018 and 2017, respectively. These awards represented 7.1%and 7.5% of United's total revenue passenger miles in 2018 and 2017, respectively. Total miles redeemed for flights on United in 2018, including class-of-service upgrades, represented approximately 86% of the total miles redeemed. In addition, excluding miles redeemed for flights on United, MileagePlusmembers redeemed miles for approximately 2.4 million other awards in 2018 as compared to 2.3 million other awards in 2017. These awards include UnitedClub memberships, car and hotel awards, merchandise and flights on other air carriers.4Table of ContentsAircraft Fuel. The table below summarizes UAL's aircraft fuel consumption and expense during the last three years.Year GallonsConsumed(in millions) Fuel Expense(in millions) Average Price PerGallon Percentage of TotalOperating Expense Available Seat Miles perFuel Gallon2018 4,137 $9,307 $2.25 24% 672017 3,978 $6,913 $1.74 20% 662016 3,904 $5,813 $1.49 18% 65Our operational and financial results can be significantly impacted by changes in the price and availability of aircraft fuel. To provide adequate supplies offuel, the Company routinely enters into purchase contracts that are customarily indexed to market prices for aircraft fuel, and the Company generally hassome ability to cover short-term fuel supply and infrastructure disruptions at certain major demand locations. The price of aircraft fuel has fluctuatedsubstantially in the past several years. The Company's current strategy is to not enter into transactions to hedge its fuel consumption, although the Companyregularly reviews its strategy based on market conditions and other factors.Third-Party Business. United generates third-party business revenue that includes frequent flyer award non-air redemptions, maintenance services, cateringand ground handling. Third-party business revenue is recorded in Other operating revenue. Expenses associated with third-party business, except non-airredemptions, are recorded in Other operating expenses. Non-air redemptions expenses are recorded to Other operating revenue.Distribution Channels. The Company's airline seat inventory and fares are distributed through the Company's direct channels, traditional travel agencies andon-line travel agencies. The use of the Company's direct sales website, www.united.com, the Company's mobile applications and alternative distributionsystems provides the Company with an opportunity to de-commoditize its services, better present its content, make more targeted offerings, better retain itscustomers, enhance its brand and lower its ticket distribution costs. Agency sales are primarily sold using global distribution systems ("GDS"). United hasdeveloped and expects to continue to develop capabilities to sell certain ancillary products through the GDS channel to provide an enhanced buyingexperience for customers who purchase in that channel.Industry ConditionsDomestic Competition. The domestic airline industry is highly competitive and dynamic. The Company's competitors consist primarily of other airlines and,to a certain extent, other forms of transportation. Currently, any U.S. carrier deemed fit by the U.S. Department of Transportation (the "DOT") is largely free tooperate scheduled passenger service between any two points within the United States. Competition can be direct, in the form of another carrier flying theexact non-stop route, or indirect, where a carrier serves the same two cities non-stop from an alternative airport in that city or via an itinerary requiring aconnection at another airport. Air carriers' cost structures are not uniform and there are numerous factors influencing cost structure. Carriers with lower costsmay offer lower fares to passengers, which could have a potential negative impact on the Company's revenues. Decisions on domestic pricing are based onintense competitive pressure exerted on the Company by other U.S. airlines. In order to remain competitive and maintain passenger traffic levels, we oftenfind it necessary to match competitors' discounted fares. Since we compete in a dynamic marketplace, attempts to generate additional revenue throughincreased fares oftentimes fail.International Competition. Internationally, the Company competes not only with U.S. airlines, but also with foreign carriers. International competition hasincreased and may continue to increase in the future as a result of airline mergers and acquisitions, JBAs, alliances, restructurings, liberalization of aviationbilateral agreements and new or increased service by competitors, including government subsidized competitors from certain Middle East countries.Competition on international routes is subject to varying degrees of governmental regulation. The Company's ability to compete successfully with non-U.S.carriers on international routes depends in part on its ability to generate traffic to and from the entire United States via its integrated domestic route networkand its ability to overcome business and operational challenges across its network worldwide. Foreign carriers currently are prohibited by U.S. law fromcarrying local passengers between two points in the United States and the Company generally experiences comparable restrictions in foreign countries.Separately, "fifth freedom rights" allow the Company to operate between points in two different foreign countries and foreign carriers may also have fifthfreedom rights between the U.S. and another foreign country. In the absence of fifth freedom rights, or some other extra-bilateral right to conduct operationsbetween two foreign countries, U.S. carriers are constrained from carrying passengers to points beyond designated international gateway cities. Tocompensate partially for these structural limitations, U.S. and foreign carriers have entered into alliances, immunized JBAs and marketing arrangements thatenable these carriers to exchange traffic between each other's flights and route networks. See Alliances, above, for additional information.5Table of ContentsSeasonality. The air travel business is subject to seasonal fluctuations. Historically, demand for air travel is higher in the second and third quarters, drivinghigher revenues, than in the first and fourth quarters, which are periods of lower travel demand.Industry RegulationDomestic RegulationAll carriers engaged in air transportation in the United States are subject to regulation by the DOT. Absent an exemption, no air carrier may provide airtransportation of passengers or property without first being issued a DOT certificate of public convenience and necessity. The DOT also grants internationalroute authority, approves international codeshare arrangements and regulates methods of competition. The DOT regulates consumer protection and maintainsjurisdiction over advertising, denied boarding compensation, tarmac delays, baggage liability and other areas and may add additional expensive regulatoryburdens in the future. The DOT has launched investigations or claimed rulemaking authority to regulate commercial agreements among carriers or betweencarriers and third parties in a wide variety of contexts.Airlines are also regulated by the Federal Aviation Administration (the "FAA"), an agency within the DOT, primarily in the areas of flight safety, air carrieroperations and aircraft maintenance and airworthiness. The FAA issues air carrier operating certificates and aircraft airworthiness certificates, prescribesmaintenance procedures, oversees airport operations, and regulates pilot and other employee training. From time to time, the FAA issues directives thatrequire air carriers to inspect or modify aircraft and other equipment, potentially causing the Company to incur substantial, unplanned expenses. The airlineindustry is also subject to numerous other federal laws and regulations. The U.S. Department of Homeland Security ("DHS") has jurisdiction over virtuallyevery aspect of civil aviation security. The Antitrust Division of the U.S. Department of Justice ("DOJ") has jurisdiction over certain airline competitionmatters. The U.S. Postal Service has authority over certain aspects of the transportation of mail by airlines. Labor relations in the airline industry are generallygoverned by the Railway Labor Act ("RLA"), a federal statute. The Company is also subject to investigation inquiries by the DOT, FAA, DOJ, DHS, the U.S.Food and Drug Administration ("FDA"), the U.S. Department of Agriculture ("USDA") and other U.S. and international regulatory bodies.Airport Access. Access to landing and take-off rights, or "slots," at several major U.S. airports served by the Company are subject to government regulation.Federally-mandated domestic slot restrictions that limit operations and regulate capacity currently apply at three airports: Reagan National Airport inWashington, D.C. ("Reagan National"), John F. Kennedy International Airport and LaGuardia Airport in the New York City metropolitan region("LaGuardia"). Of these three airports, United currently operates at two: Reagan National and LaGuardia. Additional restrictions on takeoff and landing slotsat these and other airports may be implemented in the future and could affect the Company's rights of ownership and transfer as well as its operations.Legislation. The airline industry is subject to legislative actions (or inactions) that may have an impact on operations and costs. In 2018, the U.S. Congressapproved a five-year reauthorization for the FAA, which encompasses significant aviation tax and policy-related issues. The law includes a range of policychanges related to airline customer service and aviation safety which, depending on how they are implemented, could impact our operations and costs.Additionally, the U.S. Congress may fail to continue to fund the operations of one or more federal government agencies which could negatively impact theCompany and the airline industry.Catering Operations. The Company owns and operates catering kitchens at airports in Denver, Cleveland, Newark, Houston, and Honolulu, which prepareready-to-eat food for United flights. Some of the Company's kitchens also prepare ready-to-eat food for other domestic and international airlines. Theseoperations are subject to regulation by the FDA and the USDA, as well as other federal, state, and local regulatory agencies. The FDA has begun enforcing theFederal Food Safety Modernization Act which requires all food manufacturers to implement stringent risk-based preventive controls. As a result, ready-to-eatcatering operations are a focus of enhanced scrutiny by the FDA with inspections and greater enforcement.International RegulationInternational air transportation is subject to extensive government regulation. In connection with the Company's international services, the Company isregulated by both the U.S. government and the governments of the foreign countries the Company serves. In addition, the availability of international routesto U.S. carriers is regulated by aviation agreements between the U.S. and foreign governments, and in some cases, fares and schedules require the approval ofthe DOT and/or the relevant foreign governments.Legislation. Foreign countries are increasingly enacting passenger protection laws, rules and regulations that meet or exceed U.S. requirements. In caseswhere this activity exceeds U.S. requirements, additional burden and liability may be placed on the Company. Certain countries have regulations requiringpassenger compensation and/or enforcement penalties from the Company in addition to changes in operating procedures due to canceled and delayed flights.6Table of ContentsAirport Access. Historically, access to foreign markets has been tightly controlled through bilateral agreements between the U.S. and each foreign countryinvolved. These agreements regulate the markets served, the number of carriers allowed to serve each market and the frequency of carriers' flights. Since theearly 1990s, the U.S. has pursued a policy of "Open Skies" (meaning all U.S.-flag carriers have access to the destination), under which the U.S. governmenthas negotiated a number of bilateral agreements allowing unrestricted access between U.S. and foreign markets. Currently, there are more than 100 OpenSkies agreements in effect. However, even with Open Skies, many of the airports that the Company serves in Europe, Asia and Latin America maintain slotcontrols. A large number of these slot controls exist due to congestion, environmental and noise protection and reduced capacity due to runway and air trafficcontrol ("ATC") construction work, among other reasons. London Heathrow International Airport, Frankfurt Rhein-Main Airport, Shanghai PudongInternational Airport, Beijing Capital International Airport, Sao Paulo Guarulhos International Airport and Tokyo Haneda International Airport are amongthe most restrictive foreign airports due to slot and capacity limitations.The Company's ability to serve some foreign markets and expand into certain others is limited by the absence of aviation agreements between the U.S.government and the relevant foreign governments. Shifts in U.S. or foreign government aviation policies may lead to the alteration or termination of airservice agreements. Depending on the nature of any such change, the value of the Company's international route authorities and slot rights may be materiallyenhanced or diminished. Similarly, foreign governments control their airspace and can restrict our ability to overfly their territory, enhancing or diminishingthe value of the Company's existing international route authorities and slot rights.Environmental RegulationThe airline industry is subject to increasingly stringent federal, state, local and international environmental requirements, including those regulatingemissions to air, water discharges, safe drinking water and the use and management of hazardous substances and wastes.Climate Change. There is an increasing global regulatory focus on greenhouse gas ("GHG") emissions and their potential impacts relating to climate change.Initiatives to regulate GHG emissions from aviation had previously been adopted by the European Union ("EU") in 2009, but applicability to flights arrivingor departing from airports outside the EU have been postponed several times. In December 2017, the European Parliament voted to extend exemptions forextra-EU flights until December 2023 in order to align the extension date with the completion of the pilot phase of the International Civil AviationOrganization's ("ICAO") Carbon Offsetting and Reduction Scheme for International Aviation ("CORSIA"). CORSIA, which was adopted in October 2016, isintended to create a single global market-based measure to achieve carbon-neutral growth for international aviation after 2020, which can be achievedthrough airline purchases of carbon offset credits. Certain CORSIA program details remain to be developed and could potentially be affected by politicaldevelopments in participating countries or the results of the pilot phase of the program, and thus the impact of CORSIA cannot be fully predicted. However,CORSIA is expected to increase operating costs for airlines that operate internationally. In 2016, ICAO also adopted a carbon dioxide ("CO2") emissionstandard for aircraft. In 2016, the U.S. Environmental Protection Agency ("EPA") commenced procedural steps necessary to adopt its own standard, but thetiming of further action by the EPA is unknown. While the precise timing and final form of these various programs and requirements continue to evolve, in2018, the Company announced a pledge to reduce its greenhouse gas emissions by 50 percent relative to 2005 levels by the year 2050 and is taking variousactions that are expected to help reduce its CO2 emissions over time such as improving fuel efficiency, fleet renewal, aircraft retrofits and thecommercialization of aviation alternative fuels.Other Regulations. Our operations are subject to a variety of other environmental laws and regulations both in the United States and internationally. Theseinclude noise-related restrictions on aircraft types and operating times and state and local air quality initiatives which have, or could in the future, result incurtailments in services, increased operating costs, limits on expansion, or further emission reduction requirements. Certain airports and/or governments, bothdomestically and internationally, either have or are seeking to establish environmental fees and other requirements applicable to carbon emissions, local airquality pollutants and/or noise. The implementation of state plans to achieve national standards for ozone is expected to result in restrictions on mobilesources such as cars, trucks and airport ground support equipment in some locations. Certain states may also elect to impose restrictions apart from the revisednational standards. Finally, environmental cleanup laws could require the Company to undertake or subject the Company to liability for investigation andremediation costs at certain owned or leased locations or third-party disposal locations.Until applicability of new regulations to our specific operations is better defined and/or until pending regulations are finalized, future costs to comply withsuch regulations will remain uncertain but are likely to increase our operating costs over time. While we continue to monitor these developments, the precisenature of future requirements and their applicability to the Company are difficult to predict, but the financial impact to the Company and the aviationindustry could be significant.7Table of ContentsEmployeesAs of December 31, 2018, UAL, including its subsidiaries, had approximately 92,000 employees. Approximately 83% of the Company's employees wererepresented by various U.S. labor organizations.Collective bargaining agreements between the Company and its represented employee groups are negotiated under the RLA. Such agreements typically donot contain an expiration date and instead specify an amendable date, upon which the agreement is considered "open for amendment."The following table reflects the Company's represented employee groups, the number of employees per represented group, union representation for each ofUnited's employee groups, and the amendable date for each employee group's collective bargaining agreement as of December 31, 2018: EmployeeGroupNumber ofEmployeesUnionAgreement Openfor AmendmentFlight Attendants23,193Association of Flight Attendants (the "AFA")August 2021Fleet Service13,077International Association of Machinists and Aerospace Workers (the "IAM")December 2021Passenger Service11,932IAMDecember 2021Pilots11,742Air Line Pilots Association, InternationalJanuary 2019Technicians and Related & Flight SimulatorTechnicians9,236International Brotherhood of Teamsters (the "IBT")December 2022Passenger Service - United Ground Express,Inc.2,923IAMMarch 2025Catering Operations2,668UNITE HERE(a)Storekeeper Employees1,012IAMDecember 2021Dispatchers399Professional Airline Flight Control AssociationDecember 2021Fleet Tech Instructors131IAMDecember 2021Load Planners64IAMDecember 2021Security Officers48IAMDecember 2021Maintenance Instructors41IAMDecember 2021(a) On October 23, 2018, United's Catering Operations employees voted to unionize under the RLA. In an election overseen by the National MediationBoard, UNITE HERE received the majority of the votes and was officially certified to represent United's frontline Catering Operations employees. TheCompany expects contract negotiations to begin in 2019.ITEM 1A.RISK FACTORS.The following risk factors should be read carefully when evaluating the Company's business and the forward-looking statements contained in this reportand other statements the Company or its representatives make from time to time. Any of the following risks could materially and adversely affect theCompany's business, operating results, financial condition and the actual outcome of matters as to which forward-looking statements are made in thisreport.If we do not successfully execute our strategic operating plan, or if our strategic operating plan is unsuccessful, our business, operating results andfinancial condition could be materially and adversely affected.We have announced several strategic plans in recent years, including several revenue-generating initiatives and plans to optimize our revenue, such as ourplans to add capacity, including international expansion and new or increased service to mid-size airports, and initiatives and plans to optimize and controlour costs. We also continue to explore opportunities to enhance our segmentation, including the introduction of Polaris, Basic Economy and United PremiumPlus, and are implementing many programs and policies to improve the customer experience at all points in air travel. In developing our strategic operatingplan, we make certain assumptions including, but not limited to, those related to customer demand, competition, market consolidation and the globaleconomy. Actual economic, market and other conditions may be different from our assumptions and we may not be able to successfully execute our strategicoperating plan. If we do not successfully execute our strategic operating plan, or if actual results vary significantly from our assumptions, our business,operating results and financial condition could be materially and adversely impacted.8Table of ContentsUnfavorable economic and political conditions, in the United States and globally, may have a material adverse effect on our business, operating resultsand financial condition.The Company's business and operating results are significantly impacted by U.S. and global economic and political conditions. The airline industry is highlycyclical, and the level of demand for air travel is correlated to the strength of the U.S. and global economies. Robust demand for the Company's airtransportation services depends largely on favorable economic conditions, including the strength of the domestic and foreign economies, low unemploymentlevels, strong consumer confidence levels and the availability of consumer and business credit. Air transportation is often a discretionary purchase thatleisure travelers may limit or eliminate during difficult economic times. Short-haul travelers, in particular, have the option to replace air travel with surfacetravel. In addition, during periods of unfavorable economic conditions, business travelers historically have reduced the volume of their travel, either due tocost-saving initiatives, the replacement of travel with alternatives such as videoconferencing, or as a result of decreased business activity requiring travel.During such periods, the Company's business and operating results may be adversely affected due to significant declines in industry passenger demand,particularly with respect to the Company's business and premium cabin travelers, and a reduction in fare levels.As a global business with operations outside of the United States from which it derives significant operating revenues, volatile conditions in certaininternational regions may have a negative impact on the Company's operating results and its ability to achieve its business objectives. The Company'sinternational operations are a vital part of its worldwide airline network. Political disruptions and instability in certain regions can negatively impact thedemand and network availability for air travel.Stagnant or weakening global economic conditions either in the United States or in other geographic regions may have a material adverse effect on theCompany's revenues, operating results and liquidity.The global airline industry is highly competitive and susceptible to price discounting and changes in capacity, which could have a material adverse effecton our business, operating results and financial condition.The airline industry is highly competitive, marked by significant competition with respect to routes, fares, schedules (both timing and frequency), services,products, customer service and frequent flyer programs. Consolidation in the airline industry, the rise of well-funded government sponsored internationalcarriers, changes in international alliances and the creation of immunized JBAs have altered and are expected to continue to alter the competitive landscapein the industry, resulting in the formation of airlines and alliances with increased financial resources, more extensive global networks and services andcompetitive cost structures.Airlines also compete by increasing or decreasing their capacity, including route systems and the number of destinations served. Several of the Company'sdomestic and international competitors have increased their international capacity by including service to some destinations that the Company currentlyserves, causing overlap in destinations served and therefore increasing competition for those destinations. This increased competition in both domestic andinternational markets may have a material adverse effect on the Company's business, operating results and financial condition.The Company's U.S. operations are subject to competition from traditional network carriers, national point-to-point carriers, and discount carriers, includinglow-cost carriers and ultra-low-cost carriers. Such carriers may have lower costs and provide service at lower fares to destinations also served by the Company.The significant presence of low-cost carriers, which engage in substantial price discounting, may diminish our ability to achieve sustained profitability ondomestic and international routes. Our ability to compete in the domestic market effectively depends, in part, on our ability to maintain a competitive coststructure. If we cannot maintain our costs at a competitive level, then our business, financial condition and operating results could be materially andadversely affected.Our international operations are subject to competition from both foreign and domestic carriers. Competition is significant from government subsidizedcompetitors from certain Middle East countries. These carriers have large numbers of international widebody aircraft on order and are increasing service tothe U.S. from their hubs in the Middle East. The government support provided to these carriers has allowed them to grow quickly, reinvest in their product,invest in other airlines and expand their global presence.Through alliance and other marketing and codesharing agreements with foreign carriers, U.S. carriers have increased their ability to sell internationaltransportation, such as services to and beyond traditional European and Asian gateway cities. Similarly, foreign carriers have obtained increased access tointerior U.S. passenger traffic beyond traditional U.S. gateway cities through these relationships. In addition, several JBAs among U.S. and foreign carriershave received grants of antitrust immunity allowing the participating carriers to coordinate schedules, pricing, sales and inventory. If we are not able tocontinue participating in these types of alliance and other marketing and codesharing agreements in the future, our business, financial condition andoperating results could be materially and adversely affected.9Table of ContentsHigh and/or volatile fuel prices or significant disruptions in the supply of aircraft fuel could have a material adverse impact on the Company's strategicplans, operating results, financial condition and liquidity.Aircraft fuel is critical to the Company's operations and is our single largest operating expense. During the year ended December 31, 2018, the Company'sfuel expense was $9.3 billion. The timely and adequate supply of fuel to meet operational demand depends on the continued availability of reliable fuelsupply sources, as well as related service and delivery infrastructure. Although the Company has some ability to cover short-term fuel supply andinfrastructure disruptions at some major demand locations, it depends significantly on the continued performance of its vendors and service providers tomaintain supply integrity. Consequently, the Company can neither predict nor guarantee the continued timely availability of aircraft fuel throughout theCompany's system.Aircraft fuel has historically been the Company's most volatile operating expense due to the highly unpredictable nature of market prices for fuel. TheCompany generally sources fuel at prevailing market prices. Market prices for aircraft fuel have historically fluctuated substantially in short periods of timeand continue to be highly volatile due to a dependence on a multitude of unpredictable factors beyond the Company's control. These factors include changesin global crude oil prices, the balance between aircraft fuel supply and demand, natural disasters, prevailing inventory levels and fuel production andtransportation infrastructure. Prices of fuel are also impacted by indirect factors, such as geopolitical events, economic growth indicators, fiscal/monetarypolicies, fuel tax policies, changes in regulations, environmental concerns and financial investments in energy markets. Both actual changes in these factors,as well as changes in market expectations of these factors, can potentially drive rapid changes in fuel price levels in short periods of time.Given the highly competitive nature of the airline industry, the Company may not be able to increase its fares and fees sufficiently to offset the full impact ofincreases in fuel prices, especially if these increases are significant, rapid and sustained. Further, any such fare or fee increase may not be sustainable, mayreduce the general demand for air travel and may also eventually impact the Company's strategic growth and investment plans for the future. In addition,decreases in fuel prices for an extended period of time may result in increased industry capacity, increased competitive actions for market share and lowerfares or surcharges in general. If fuel prices were to then subsequently rise quickly, there may be a lag between the rise in fuel prices and any improvement ofthe revenue environment.To protect against increases in the market prices of fuel, the Company may hedge a portion of its future fuel requirements. The Company does not currentlyhedge its future fuel requirements. However, to the extent the Company decides to start a hedging program, such hedging program may not be successful inmitigating higher fuel costs, and any price protection provided may be limited due to choice of hedging instruments and market conditions, includingbreakdown of correlation between hedging instrument and market price of aircraft fuel and failure of hedge counterparties. To the extent that the Companydecides to hedge a portion of its future fuel requirements and uses hedge contracts that have the potential to create an obligation to pay upon settlement iffuel prices decline significantly, such hedge contracts may limit the Company's ability to benefit fully from lower fuel costs in the future. If fuel pricesdecline significantly from the levels existing at the time the Company enters into a hedge contract, the Company may be required to post collateral (margin)beyond certain thresholds. There can be no assurance that the Company's hedging arrangements, if any, will provide any particular level of protection againstrises in fuel prices or that its counterparties will be able to perform under the Company's hedging arrangements. Additionally, deterioration in the Company'sfinancial condition could negatively affect its ability to enter into new hedge contracts in the future.The Company relies heavily on technology and automated systems to operate its business and any significant failure or disruption of the technology orthese systems could materially harm its business.The Company depends on automated systems and technology to operate its business, including, but not limited to, computerized airline reservation systems,demand prediction software, flight operations systems, revenue management systems, accounting systems, technical and business operations systems,telecommunication systems and commercial websites and applications, including www.united.com and the United Airlines app. United's website and otherautomated systems must be able to accommodate a high volume of traffic, maintain secure information and deliver important flight and schedule information,as well as process critical financial transactions. These systems could suffer substantial or repeated disruptions due to various events, some of which arebeyond the Company's control, including natural disasters, power failures, terrorist attacks, equipment or software failures, computer viruses or cyber securityattacks. Substantial or repeated systems failures or disruptions, including failures or disruptions related to the Company's complex integration of systems,could reduce the attractiveness of the Company's services versus those of its competitors, materially impair its ability to market its services and operate itsflights, result in the unauthorized release of confidential or otherwise protected information, result in increased costs, lost revenue and the loss or compromiseof important data, and may adversely affect the Company's business, operating results and financial condition.10Table of ContentsThe Company's business relies extensively on third-party service providers, including certain technology providers. Failure of these parties to perform asexpected, or interruptions in the Company's relationships with these providers or their provision of services to the Company, could have an adverse effecton the Company's business, operating results and financial condition.The Company has engaged third-party service providers to perform a large number of functions that are integral to its business, including regional operations,operation of customer service call centers, distribution and sale of airline seat inventory, provision of information technology infrastructure and services,transmitting or uploading of data, provision of aircraft maintenance and repairs, provision of various utilities, performance of aircraft fueling operations andcatering services, among other vital functions and services. The Company does not directly control these third-party service providers, although it does enterinto agreements that define expected service performance.Any of these third-party service providers, however, may materially fail to meet its service performance commitments to the Company or may sufferdisruptions to its systems that could impact its services. For example, failures in certain third-party technology or communications systems may cause flightdelays or cancellations. The failure of any of the Company's third-party service providers to perform its service obligations adequately, or other interruptionsof services, may reduce the Company's revenues and increase its expenses, prevent the Company from operating its flights and providing other services to itscustomers or result in adverse publicity or harm to its brand. In addition, the Company's business and financial performance could be materially harmed if itscustomers believe that its services are unreliable or unsatisfactory.The Company may also have disagreements with such providers or such contracts may be terminated or may not be extended or renewed. For example, thenumber of flight reservations booked through third-party GDSs or online travel agents ("OTAs") may be adversely affected by disruptions in the businessrelationships between the Company and these suppliers. Such disruptions, including a failure to agree upon acceptable contract terms when contracts expireor otherwise become subject to renegotiation, may cause the Company's flight information to be limited or unavailable for display by the affected GDS orOTA operator, significantly increase fees for both the Company and GDS/OTA users and impair the Company's relationships with its customers and travelagencies. Any such disruptions or contract terminations may adversely impact our operations and financial results.If we are not able to negotiate or renew agreements with third-party service providers, or if we renew existing agreements on less favorable terms, ouroperations and financial results may be adversely affected.The Company could experience adverse publicity, harm to its brand, reduced travel demand and potential tort liability as a result of an accident,catastrophe or incident involving its aircraft or its operations, the aircraft or operations of its regional carriers, the aircraft or operations of its codesharepartners, or the aircraft or operations of another airline, which may result in a material adverse effect on the Company's business, operating results andfinancial condition.An accident, catastrophe or incident involving an aircraft that the Company operates, or an aircraft that is operated by a codeshare partner, one of theCompany's regional carriers or another airline, or an incident involving the Company's operations, or the operations of a codeshare partner, one of theCompany's regional carriers or of another airline, could have a material adverse effect on the Company if such accident, catastrophe or incident created apublic perception that the Company's operations, or the operations of its codeshare partners or regional carriers, are not safe or reliable, or are less safe orreliable than other airlines. Such public perception could, in turn, result in adverse publicity for the Company, cause harm to the Company's brand and reducetravel demand on the Company's flights, or the flights of its codeshare partners or regional carriers.In addition, any such accident, catastrophe or incident involving the Company, its regional carriers or its codeshare partners could expose the Company tosignificant tort liability. Although the Company currently maintains liability insurance in amounts and of the type the Company believes to be consistentwith industry practice to cover damages arising from any such accident, catastrophe or incident, and the Company's codeshare partners and regional carrierscarry similar insurance and generally indemnify the Company for their operations, if the Company's liability exceeds the applicable policy limits or theability of another carrier to indemnify it, the Company could incur substantial losses from an accident, catastrophe or incident which may result in a materialadverse effect on the Company's operating results and financial condition.Terrorist attacks, international hostilities or other security events, or the fear of terrorist attacks or hostilities, even if not made directly on the airlineindustry, could negatively affect the Company and the airline industry.Terrorist attacks or international hostilities, even if not made on or targeted directly at the airline industry, or the fear of or the precautions taken inanticipation of such attacks (including elevated national threat warnings, travel restrictions, selective cancellation or redirection of flights and new securityregulations) could materially and adversely affect the Company and the airline industry. Security events pose a significant risk to our passenger and cargooperations. These events could include acts of violence in public areas that we cannot control. The Company's financial resources may not be sufficient toabsorb the11Table of Contentsadverse effects of any future terrorist attacks, international hostilities or other security events. Any such events could have a material adverse impact on theCompany's financial condition, liquidity and operating results.Increasing privacy and data security obligations or a significant data breach may adversely affect the Company's business.The Company is subject to increasing legislative, regulatory and customer focus on privacy issues and data security. Also, a number of the Company'scommercial partners, including credit card companies, have imposed data security standards that the Company must meet. These standards continue toevolve. The Company will continue its efforts to meet its privacy and data security obligations; however, it is possible that certain new obligations may bedifficult to meet and could increase the Company's costs.Additionally, the Company must manage evolving cybersecurity risks. Our network systems and storage applications, and those systems and storage andother business applications maintained by our third-party providers, may be subject to attempts to gain unauthorized access, breach, malfeasance or othersystem disruptions. In some cases, it is difficult to anticipate or to detect immediately such incidents and the damage caused thereby. While we continuallywork to safeguard our internal network systems and validate the security of our third-party providers, including through information security policies andemployee awareness and training, there is no assurance that such actions will be sufficient to prevent cyber-attacks or security breaches. The loss, disclosure,misappropriation of or access to customers', employees' or business partners' information or the Company's failure to meet its obligations could result in legalclaims or proceedings, penalties and remediation costs. A significant data breach or the Company's failure to meet its obligations may adversely affect theCompany's reputation, business, operating results and financial condition.Disruptions to our regional network and United Express flights provided by third-party regional carriers could adversely affect our business, operatingresults and financial condition.The Company has contractual relationships with various regional carriers to provide regional aircraft service branded as United Express. These regionaloperations are an extension of the Company's mainline network and complement the Company's operations by carrying traffic that connects to mainlineservice and allows flights to smaller cities that cannot be provided economically with mainline aircraft. The Company's business and operations aredependent on its regional flight network, with regional capacity accounting for approximately 11% of the Company's total capacity for the year endedDecember 31, 2018.Although the Company has agreements with its regional carriers that include contractually agreed performance metrics, each regional carrier is a separatelycertificated commercial air carrier and the Company does not control the operations of these carriers. A number of factors may impact the Company's regionalnetwork, including weather-related effects and seasonality. In addition, the decrease in qualified pilots driven by changes to federal regulations has adverselyimpacted and could continue to affect the Company's regional flying. For example, the FAA's expansion of minimum pilot qualification standards, includinga requirement that a pilot have at least 1,500 total flight hours, as well as the FAA's revised pilot flight and duty time requirements under Part 117 of theFederal Aviation Regulations, have contributed to a smaller supply of pilots available to regional carriers. The decrease in qualified pilots resulting from theregulations as well as factors including a decreased student pilot population and a shrinking U.S. military from which to hire qualified pilots, could adverselyimpact the Company's operations and financial condition, and could also require the Company to reduce regional carrier flying.If a significant disruption occurs to the Company's regional network or flights or if one or more of the regional carriers with which the Company hasrelationships is unable to perform their obligations over an extended period of time, there could be a material adverse effect on the Company's business,financial condition and operating results.Current or future litigation and regulatory actions, or failure to comply with the terms of any settlement, order or arrangement relating to these actions,could have a material adverse impact on the Company.From time to time, we are subject to litigation and other legal and regulatory proceedings relating to our business or investigations or other actions bygovernmental agencies, including as described in Part I, Item 3, Legal Proceedings, of this report. No assurances can be given that the results of these or newmatters will be favorable to us. An adverse resolution of lawsuits, arbitrations, investigations or other proceedings or actions could have a material adverseeffect on our financial condition and operating results, including as a result of non-monetary remedies, and could also result in adverse publicity. Defendingourselves in these matters may be time-consuming, expensive and disruptive to normal business operations and may result in significant expense and adiversion of management's time and attention from the operation of our business, which could impede our ability to achieve our business objectives.Additionally, any amount that we may be required to pay to satisfy a judgment, settlement, fine or penalty may not be covered by insurance. If we fail tocomply with the terms contained in any settlement, order or agreement with a governmental authority relating to these matters, we could be subject tocriminal or civil penalties, which could have a material adverse impact on the Company. Under our charter and certain indemnification agreements that wehave entered into (and may in the future enter into) with our officers, directors and certain third parties, we12Table of Contentscould be required to indemnify and advance expenses to them in connection with their involvement in certain actions, suits, investigations and otherproceedings. There can be no assurance that any of these payments will not be material.Our significant investments in other airlines, including in other parts of the world, and the commercial relationships that we have with those carriers maynot produce the returns or results we expect.An important part of our strategy to expand our global network includes making significant investments in airlines in other parts of the world and expandingour commercial relationships with these carriers. For example, in November 2018, United entered into a revenue-sharing joint business agreement withAvianca, Copa and several of their respective affiliates, subject to regulatory approval. Concurrently with this transaction, United advanced a loan of $456million to affiliates of Synergy Aerospace Corporation ("Synergy"), the majority shareholder of Avianca Holdings S.A. ("AVH"), the parent company ofAvianca, and entered into certain other related agreements, including a put arrangement with Avianca's significant minority shareholder, Kingsland HoldingsLimited ("Kingsland"). The loan is secured by a pledge of Synergy's equity and Synergy's shares of AVH stock, and the loan and other agreements containseveral provisions whereby the Company may acquire AVH stock. We also have an equity investment in Azul. See Note 9 to the financial statementsincluded in Part II, Item 8 of this report for additional information regarding our investments in Avianca and Azul.We also have investments in several domestic regional airlines. In January 2019, we completed the acquisition of a 49.9% interest in ManaAir LLC, which, asof immediately following the closing of that investment, owns 100% of the equity interests in ExpressJet Airlines, Inc., a domestic regional airline. We alsohave minority equity interests in CommutAir and Republic Airways Holdings, Inc. See Note 9 to the financial statements included in Part II, Item 8 of thisreport for additional information regarding our investments in regional airlines.We expect to continue exploring similar non-controlling investments in, and entering into JBAs, commercial agreements, loan transactions and strategicalliances with, other carriers as part of our regional and global business strategy. These transactions and relationships involve significant challenges andrisks. We are dependent on these other carriers for significant aspects of our network in the regions in which they operate. While we work closely with thesecarriers, each is a separately certificated commercial air carrier and we do not have control over their operations, strategy, management or business methods.These airlines also are subject to a number of the same risks as our business, which are described in this Item 1A., Risk Factors, including competitivepressures on pricing, demand and capacity; changes in aircraft fuel pricing; and the impact of global and local political and economic conditions onoperations and customer travel patterns, among others.As a result of these and other factors, we may not realize a satisfactory return on our investment, and we may not receive repayment of any invested or loanedfunds. Further, these investments may not generate the revenue or operational synergies we expect, and they may distract management focus from ouroperations or other strategic options. Finally, our reliance on these other carriers in the regions in which they operate may negatively impact our regional andglobal operations and results if those carriers are impacted by general business risks or perform below our expectations or needs. Any one or more of theseevents could have a material adverse effect on our operating results or financial condition.We may also be subject to consequences from any improper behavior of JBA partners, including for failure to comply with anti-corruption laws such as theU.S. Foreign Corrupt Practices Act. Furthermore, our relationships with these carriers may be subject to the laws and regulations of non-U.S. jurisdictions inwhich these carriers are located or conduct business. Any political or regulatory change in these jurisdictions that negatively impact or prohibit ourarrangements with these carriers could have an adverse effect on our operating results or financial condition. To the extent that the operations of any of thesecarriers are disrupted over an extended period of time or their actions subject us to the consequences of failure to comply with laws and regulations, ouroperating results may be adversely affected.The airline industry may undergo further change with respect to alliances and JBAs or due to consolidations, any of which could have a material adverseeffect on the Company.The Company faces and may continue to face strong competition from other carriers due to the modification of alliances and formation of new JBAs. Carriersmay improve their competitive positions through airline alliances, slot swaps and/or JBAs. Certain types of airline JBAs further competition by allowingmultiple airlines to coordinate routes, pool revenues and costs, and enjoy other mutual benefits, achieving many of the benefits of consolidation. Open Skiesagreements, including the longstanding agreements between the United States and each of the EU, Canada, Japan, Korea, New Zealand, Australia, Colombiaand Panama, as well as the more recent agreements between the United States and each of Mexico and Brazil, may also give rise to better integrationopportunities among international carriers. Movement of airlines between current global airline alliances could reduce joint network coverage for members ofsuch alliances while also creating opportunities for JBAs and bilateral alliances that did not exist before such realignment. Further airline and airline allianceconsolidations or reorganizations could occur in the future. The Company routinely engages in analyses and discussions regarding its own strategic position,including current and potential alliances, asset acquisitions and divestitures and may have future discussions13Table of Contentswith other airlines regarding strategic activities. If other airlines participate in such activities, those airlines may significantly improve their cost structures orrevenue generation capabilities, thereby potentially making them stronger competitors of the Company and potentially impairing the Company's ability torealize expected benefits from its own strategic relationships.Orders for new aircraft typically must be placed years in advance of scheduled deliveries, and changes in the Company's network strategy over time maymake aircraft on order less economic for the Company, result in costs related to modification or termination of aircraft orders or cause the Company toenter into orders for new aircraft on less favorable terms.The Company's orders for new aircraft are typically made years in advance of actual delivery of such aircraft, and the financial commitment required forpurchases of new aircraft is substantial. At December 31, 2018, the Company had firm commitments to purchase 273 new aircraft from The Boeing Company("Boeing"), Airbus S.A.S ("Airbus") and Embraer S.A. ("Embraer"), as well as related agreements with engine manufacturers, maintenance providers and others.As of December 31, 2018, the Company's commitments relating to the acquisition of aircraft and related spare engines, aircraft improvements and otherrelated obligations aggregated to a total of $24.7 billion.Subsequent to the Company placing an order for new aircraft, the Company's network strategy may change. As a result, the Company's preference for aparticular aircraft that it has ordered, often years in advance, may be decreased or eliminated. If the Company were to modify or terminate any of its existingaircraft order commitments, it may be responsible for material liabilities to its counterparties arising from any such change. Additionally, the Company mayhave a need for additional aircraft that are not available under its existing orders. In such cases, the Company may seek to acquire aircraft from other sources,such as through lease arrangements, which may result in higher costs or less favorable terms, or through the purchase or lease of used aircraft. The Companymay not be able to acquire such aircraft when needed on favorable terms or at all.A majority of the Company's aircraft and certain parts are sourced from single suppliers; therefore, the Company would be materially and adverselyaffected if it were unable to obtain additional equipment or support from any of these suppliers.The Company currently sources the majority of its aircraft and many related aircraft parts from Boeing. In addition, our aircraft suppliers are dependent onother suppliers for certain other aircraft parts. Therefore, if the Company was unable to acquire additional aircraft from Boeing, or if Boeing was unable orunwilling to make timely deliveries of aircraft or to provide adequate support for its products, the Company's operations could be materially and adverselyaffected. The Company is also dependent on a limited number of suppliers for aircraft engines and certain other aircraft parts and could therefore also bematerially and adversely affected in the event of the unavailability of these engines and other parts.Union disputes, employee strikes or slowdowns, and other labor-related disruptions could adversely affect the Company's operations and could result inincreased costs that impair its financial performance.United is a highly unionized company. As of December 31, 2018, the Company and its subsidiaries had approximately 92,000 active employees, of whomapproximately 83% were represented by various U.S. labor organizations.There is a risk that unions or individual employees might pursue judicial or arbitral claims arising out of changes implemented as a result of the Companyentering into collective bargaining agreements with its represented employee groups. There is also a possibility that employees or unions could engage injob actions such as slowdowns, work-to-rule campaigns, sick-outs or other actions designed to disrupt the Company's normal operations, in an attempt topressure the Company in collective bargaining negotiations. Although the RLA makes such actions unlawful until the parties have been lawfully released toself-help, and the Company can seek injunctive relief against premature self-help, such actions can cause significant harm even if ultimately enjoined. Inaddition, collective bargaining agreements with the Company's represented employee groups increase the Company's labor costs, which increase could bematerial for any applicable reporting period.An outbreak of a disease or similar public health threat could have a material adverse impact on the Company's business, operating results and financialcondition.An outbreak of a disease or similar public health threat that affects travel demand, travel behavior, or travel restrictions could have a material adverse impacton the Company's business, financial condition and operating results.If we experience changes in, or are unable to retain, our senior management team or other key employees, our operating results could be adverselyaffected.Much of our future success depends on the continued availability of skilled personnel with industry experience and knowledge, including our seniormanagement team and other key employees. If we are unable to attract and retain talented, highly qualified senior management and other key employees, or ifwe are unable to effectively provide for the succession of senior management, our business may be adversely affected.14Table of ContentsExtended interruptions or disruptions in service at major airports where we operate could have a material adverse impact on our operations.The airline industry is heavily dependent on business models that concentrate operations in major airports in the United States and throughout the world. Anextended interruption or disruption at an airport where we have significant operations could have a material impact on our business, financial condition andresults of operation.We operate principally through our domestic hubs in at Newark, Chicago O'Hare, Denver, Houston Bush, LAX, Guam, SFO and Washington Dulles.Substantially all of our flights either originate in or fly into one of these locations. A significant interruption or disruption in service at one of our hubs orother airports where we have a significant presence resulting from ATC delays, weather conditions, natural disasters, growth constraints, relations with third-party service providers, failure of computer systems, disruptions to government agencies or personnel, disruptions at airport facilities or other key facilitiesused by us to manage our operations, labor relations, power supplies, fuel supplies, terrorist activities, international hostilities or otherwise could result in thecancellation or delay of a significant portion of our flights and, as a result, could have a material impact on our business, operating results and financialcondition. We have minimal control over the operation, quality or maintenance of these services or whether vendors will improve or continue to provideservices that are essential to our business.The airline industry is subject to extensive government regulation, which imposes significant costs and may adversely impact our business, operatingresults and financial condition.Airlines are subject to extensive regulatory and legal oversight. Compliance with U.S. and international regulations imposes significant costs and may haveadverse effects on the Company. Laws, regulations, taxes and airport rates and charges, both domestically and internationally, have been proposed from timeto time that could significantly increase the cost of airline operations or reduce airline revenue.United provides air transportation under certificates of public convenience and necessity issued by the DOT. If the DOT altered, amended, modified,suspended or revoked these certificates, it could have a material adverse effect on the Company's business. The FAA regulates the safety of United'soperations. United operates pursuant to an air carrier operating certificate issued by the FAA. The FAA's regulations include stringent pilot flight and dutytime requirements under Part 117 of the Federal Aviation Regulations, as well as minimum qualifications for air carrier first officers. These regulations havecaused mainline airlines to hire regional pilots, while simultaneously significantly reducing the pool of new pilots from which regional carriers themselvescan hire. Although this is an industry issue, it directly affects the Company and has required it to reduce regional partner flying, as several regional partnershave experienced difficulty flying their schedules due to reduced pilot availability. From time to time, the FAA also issues orders, airworthiness directivesand other regulations relating to the maintenance and operation of aircraft that require material expenditures or operational restrictions by the Company.These FAA orders and directives could include the temporary grounding of an entire aircraft type if the FAA identifies design, manufacturing, maintenance orother issues requiring immediate corrective action. These FAA directives or requirements could have a material adverse effect on the Company.In 2018, the U.S. Congress approved a five-year reauthorization for the FAA, which encompasses significant aviation tax and policy-related issues. The lawincludes a range of policy changes related to airline customer service and aviation safety which, depending on how they are implemented, could impact ouroperations and costs. Additionally, the U.S. Congress may fail to continue to fund the operations of one or more federal government agencies which couldnegatively impact the Company and the airline industry.The Company's operations may also be adversely impacted due to the existing antiquated ATC system utilized by the U.S. government and regulated by theFAA. During peak travel periods in certain markets, the current ATC system's inability to handle demand has led to short-term capacity constraints imposedby government agencies and resulted in delays and disruptions of air traffic. In addition, the current system will not be able to effectively handle projectedfuture air traffic growth. The outdated technologies also cause the ATC to be less resilient in the event of a failure, causing flight cancellations and delays.Imposition of these ATC constraints on a long-term basis may have a material adverse effect on the Company's operations. Failure to update the ATC systemin a timely manner, and the substantial funding requirements of a modernized ATC system that may be imposed on air carriers may have an adverse impact onthe Company's financial condition or operating results.Access to landing and take-off rights, or "slots," at several major U.S. airports and many foreign airports served by the Company are, or recently have been,subject to government regulation. Certain of the Company's major hubs are among the most congested airports in the United States and have been or could bethe subject of regulatory action that might limit the number of flights and/or increase costs of operations at certain times or throughout the day. The FAA maylimit the Company's15Table of Contentsairport access by limiting the number of departure and arrival slots at high density traffic airports, which could affect the Company's ownership and transferrights, and local airport authorities may have the ability to control access to certain facilities or the cost of access to their facilities, which could have anadverse effect on the Company's business. The FAA historically has taken actions with respect to airlines' slot holdings that airlines have challenged; if theFAA were to take actions that adversely affect the Company's slot holdings, the Company could incur substantial costs to preserve its slots or may lose slots.If slots are eliminated at an airport, or if the number of hours of operation governed by slots is reduced at an airport, the lack of controls on takeoffs andlandings could result in greater congestion both at the affected airport or in the regional airspace (e.g., the New York City metropolitan region airspace) andcould significantly impact the Company's operations. Further, the Company's operating costs at airports, including the Company's major hubs, may increasesignificantly because of capital improvements at such airports that the Company may be required to fund, directly or indirectly. Such costs could be imposedby the relevant airport authority without the Company's approval and may have a material adverse effect on the Company's financial condition.The ability of carriers to operate flights on international routes between the United States and other countries is highly regulated. Applicable arrangementsbetween the United States and foreign governments may be amended from time to time, government policies with respect to airport operations may berevised, and the availability of appropriate slots or facilities may change. The Company currently operates a number of flights on international routes undergovernment arrangements, regulations or policies that designate the number of carriers permitted to operate on such routes, the capacity of the carriersproviding services on such routes, the airports at which carriers may operate international flights, or the number of carriers allowed access to particularairports. Any limitations, additions or modifications to such arrangements, regulations or policies could have a material adverse effect on the Company'sfinancial condition and operating results. Additionally, a change in law, regulation or policy for any of the Company's international routes, such as OpenSkies, could have a material adverse impact on the Company's financial condition and operating results and could result in the impairment of materialamounts of related tangible and intangible assets. In addition, competition from revenue-sharing JBAs and other alliance arrangements by and among otherairlines could impair the value of the Company's business and assets on the Open Skies routes. The Company's plans to enter into or expand U.S. antitrustimmunized alliances and JBAs on various international routes are subject to receipt of approvals from applicable U.S. federal authorities and obtaining otherapplicable foreign government clearances or satisfying the necessary applicable regulatory requirements. There can be no assurance that such approvals andclearances will be granted or will continue in effect upon further regulatory review or that changes in regulatory requirements or standards can be satisfied.See Part I, Item 1, Business—Industry Regulation, of this report for additional information on government regulation impacting the Company.We are subject to many forms of environmental regulation and liability and risks associated with climate change, and may incur substantial costs as aresult.Many aspects of the Company's operations are subject to increasingly stringent federal, state, local and international laws protecting the environment,including those relating to emissions to the air, water discharges, safe drinking water and the use and management of hazardous materials and wastes.Compliance with existing and future environmental laws and regulations can require significant expenditures and violations can lead to significant fines andpenalties. In addition, from time to time we are identified as a responsible party for environmental investigation and remediation costs under applicableenvironmental laws due to the disposal of hazardous substances generated by our operations. We could also be subject to environmental liability claims fromvarious parties, including airport authorities, related to our operations at our leased premises or the off-site disposal of waste generated at our facilities.We may incur substantial costs as a result of changes in weather patterns due to climate change. Increases in the frequency, severity or duration of severeweather events such as thunderstorms, hurricanes, flooding, typhoons, tornados and other severe weather events could result in increases in delays andcancellations, turbulence-related injuries and fuel consumption to avoid such weather, any of which could result in significant loss of revenue and highercosts.To address climate change risks, CORSIA has been developed by ICAO, a UN specialized agency. CORSIA is intended to create a single global market-basedmeasure to achieve carbon-neutral growth for international aviation after 2020 through airline purchases of carbon offset credits. Certain CORSIA programdetails remain to be developed and could potentially be affected by political developments in participating countries or the results of the pilot phase of theprogram, and thus the impact of CORSIA cannot be fully predicted. However, CORSIA is expected to increase operating costs for airlines that operateinternationally.In addition to CORSIA, the EPA had begun preliminary work to adopt its own aircraft engine GHG emission standards which were expected to be alignedwith recent ICAO carbon dioxide emission standards. The timing of any U.S. EPA aircraft engine GHG emission standards is currently unknown, but somejurisdictions in which United operates have adopted or are considering GHG emission reduction initiatives, which could impact various aspects of theCompany's business. The precise16Table of Contentsnature of future requirements and their applicability to the Company are difficult to predict, but the financial impact to the Company and the aviationindustry would likely be adverse and could be significant.See Part I, Item 1, Business-Industry Regulation-Environmental Regulation, of this report for additional information on environmental regulation impactingthe Company.The United Kingdom's withdrawal from the EU may adversely impact our operations in the United Kingdom and elsewhere.In June 2016, United Kingdom ("UK") voters approved an advisory referendum for the UK to exit the EU. The UK parliament voted in favor of allowing thegovernment to commence negotiations to determine the future terms of the UK's relationship with the EU, including the terms of trade between the UK andthe EU and other nations. The timing of the proposed exit is currently scheduled for March 29, 2019, with a transition period potentially running throughDecember 2020. A withdrawal plan was presented to the UK parliament in January 2019 and rejected, creating further uncertainty in negotiations and theprocess of withdrawal.Depending on the outcome of these negotiations, we could face new challenges in our operations, such as instability in global financial and foreignexchange markets. This instability could include volatility in the value of the British pound and European euro, additional travel restrictions on passengerstraveling between the UK and other EU countries, changes to the legal status of EU-resident employees, legal uncertainty and potentially divergent nationallaws and regulations. At this time, we cannot predict the impact that an actual exit from the EU will have on our business generally and our UK and Europeanoperations more specifically, and no assurance can be given that our operating results, financial condition and prospects would not be adversely impacted bythe result.The Company's operating results fluctuate due to seasonality and other factors associated with the airline industry, many of which are beyond theCompany's control.Due to greater demand for air travel during the spring and summer months, revenues in the airline industry in the second and third quarters of the year aregenerally stronger than revenues in the first and fourth quarters of the year, which are periods of lower travel demand. The Company's operating resultsgenerally reflect this seasonality, but have also been impacted by numerous other factors that are not necessarily seasonal, including, among others, extremeor severe weather, outbreaks of disease or pandemics, ATC congestion, geological events, political instability, terrorism, natural disasters, changes in thecompetitive environment due to industry consolidation, tax obligations, general economic conditions and other factors. As a result, the Company's quarterlyoperating results are not necessarily indicative of operating results for an entire year and historical operating results in a quarterly or annual period are notnecessarily indicative of future operating results.Increases in insurance costs or inadequate insurance coverage may materially and adversely impact our business, operating results and financialcondition.The Company could be exposed to significant liability or loss if its property or operations were to be affected by a natural catastrophe or other event,including aircraft accidents. The Company maintains insurance policies, including, but not limited to, terrorism, aviation hull and liability, workers'compensation and property and business interruption insurance, but we are not fully insured against all potential hazards and risks incident to our business. Ifthe Company is unable to obtain sufficient insurance with acceptable terms, the costs of such insurance increase materially, or if the coverage obtained isinsufficient relative to actual liability or losses that the Company experiences, whether due to insurance market conditions, policy limitations and exclusionsor otherwise, its operating results and financial condition could be materially and adversely affected.The Company has a significant amount of financial leverage from fixed obligations, and insufficient liquidity may have a material adverse effect on theCompany's financial condition and business.The Company has a significant amount of financial leverage from fixed obligations, including aircraft lease and debt financings, leases of airport propertyand other facilities, and other material cash obligations. In addition, the Company has substantial noncancelable commitments for capital expenditures,including for the acquisition of new aircraft and related spare engines.Although the Company's cash flows from operations and its available capital, including the proceeds from financing transactions, have been sufficient tomeet these obligations and commitments to date, the Company's future liquidity could be negatively affected by the risk factors discussed in this report. If theCompany's liquidity is materially diminished, the Company might not be able to timely pay its leases and debts or comply with certain operating andfinancial covenants under its financing and credit card processing agreements or with other material provisions of its contractual obligations.The Company's substantial level of indebtedness and non-investment grade credit rating, as well as market conditions and the availability of assets ascollateral for loans or other indebtedness, may make it difficult for the Company to raise additional capital if needed to meet its liquidity needs on acceptableterms, or at all. In addition, our variable rate indebtedness may use17Table of ContentsLondon interbank offered rates ("LIBOR") as a benchmark for establishing the rate. As announced in July 2017, LIBOR is expected to be phased out by theend of 2021. Uncertainty as to the nature of alternative reference rates and as to potential changes or other reforms to LIBOR may adversely impact theavailability and cost of borrowings.See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of this report for additional informationregarding the Company's liquidity.Agreements governing our debt include financial and other covenants. Failure to comply with these covenants could result in events of default.Our financing agreements include various financial and other covenants. Certain of these covenants require UAL or United, as applicable, to maintainminimum liquidity and/or minimum collateral coverage ratios. UAL's or United's ability to comply with these covenants may be affected by events beyondits control, including the overall industry revenue environment, the level of fuel costs and the appraised value of the collateral. In addition, our financingagreements contain other negative covenants customary for such financings. These covenants are subject to important exceptions and qualifications. If wefail to comply with these covenants and are unable to remedy or obtain a waiver or amendment, an event of default would result.If an event of default were to occur, the lenders could, among other things, declare outstanding amounts due and payable. In addition, an event of default ordeclaration of acceleration under one financing agreement could also result in an event of default under other of our financing agreements due to cross-default and cross-acceleration provisions. The acceleration of significant amounts of debt could require us to renegotiate, repay or refinance the obligationsunder our financing arrangements.The Company may never realize the full value of its intangible assets or its long-lived assets causing it to record impairments that may negatively affect itsfinancial condition and operating results.In accordance with applicable accounting standards, the Company is required to test its indefinite-lived intangible assets for impairment on an annual basis,or more frequently where there is an indication of impairment. In addition, the Company is required to test certain of its other assets for impairment wherethere is any indication that an asset may be impaired.The Company may be required to recognize losses in the future due to, among other factors, extreme fuel price volatility, tight credit markets, governmentregulatory changes, decline in the fair values of certain tangible or intangible assets, such as aircraft, route authorities, airport slots and frequent flyerdatabase, unfavorable trends in historical or forecasted results of operations and cash flows and an uncertain economic environment, as well as otheruncertainties. The Company can provide no assurance that a material impairment loss of tangible or intangible assets will not occur in a future period. Thevalue of the Company's aircraft could be impacted in future periods by changes in supply and demand for these aircraft. Such changes in supply and demandfor certain aircraft types could result from grounding of aircraft by the Company or other carriers. An impairment loss could have a material adverse effect onthe Company's financial condition and operating results.ITEM 1B.UNRESOLVED STAFF COMMENTS.None.18Table of ContentsITEM 2.PROPERTIES.FleetIncluding aircraft operated by United's regional carriers, United's fleet consisted of 1,329 aircraft as of December 31, 2018, the details of which are presentedin the tables below:Aircraft Type Total Owned Leased Seats in StandardConfiguration Average Age (InYears)Mainline: 777-300ER 18 18 — 350-366 1.5777-200ER 55 46 9 269-274 18.8777-200 19 19 — 364 21.5787-10 3 3 — 318 0.1787-9 25 25 — 252 2.8787-8 12 12 — 219 5.5767-400ER 16 14 2 242 17.3767-300ER 38 25 13 167-214 22.9757-300 21 9 12 213-234 16.3757-200 56 50 6 142-169 22.8737 MAX 9 9 9 — 179 0.4737-900ER 136 136 — 179 6.0737-900 12 8 4 179 17.3737-800 141 90 51 166 14.8737-700 40 25 15 126 19.8A320-200 99 70 29 150 20.3A319-100 70 55 15 128 17.6Total mainline 770 614 156 15.1Aircraft Type CapacityPurchaseAgreementTotal Owned Leased Owned orLeased byRegionalCarrier Regional Carrier Operatorand Number of Aircraft Seats in StandardConfigurationRegional: Embraer E175 153 54 — 99 SkyWest:Mesa:Republic:656028 76Embraer 170 38 — — 38 Republic:38 70CRJ700 64 — — 64 SkyWest:GoJet:Mesa:192520 70CRJ200 128 — — 128 SkyWest:Air Wisconsin:ExpressJet:605612 50Embraer ERJ 145 (XR/LR/ER) 176 82 90 4 ExpressJet:Trans States:CommutAir:1054031 50Total regional 559 136 90 333 Total 1,329 750 246 333 In addition to the aircraft presented in the tables above, United owned the following aircraft listed below as of December 31, 2018:•One Boeing 737 MAX 9 and one Airbus 319-100, which were delivered in December 2018 but were awaiting operating certificates as of December31, 2018;•One Boeing 767-200, which is being subleased to another airline;•Nine Boeing 747s, which are permanently grounded; and•Three Embraer ERJ 145s, which are temporarily grounded.19Table of ContentsFirm Order and Option AircraftAs of December 31, 2018, United had firm commitments and options to purchase new aircraft from Boeing, Airbus and Embraer as presented in the tablebelow:Aircraft Type Number of FirmCommitments (a)Airbus A350 45Boeing 737 MAX 175Boeing 777-300ER 4Boeing 787 24Embraer E175 25(a) United also has options and purchase rights for additional aircraft.The aircraft listed in the table above are scheduled for delivery from 2019 through 2027. To the extent the Company and the aircraft manufacturers withwhom the Company has existing orders for new aircraft agree to modify the contracts governing those orders, the amount and timing of the Company's futurecapital commitments could change. In 2019, United expects to take delivery of 25 Embraer E175 aircraft, 20 Boeing 737 MAX aircraft, 8 Boeing 787 aircraftand 2 Boeing 777-300ER aircraft. United also has agreements to purchase 20 used Airbus A319 aircraft with expected delivery dates through 2022. See Notes10 and 13 to the financial statements included in Part II, Item 8 of this report for additional information.FacilitiesUnited's principal facilities relate to leases of airport facilities, gates, hangar sites, terminal buildings and other facilities in the municipalities it serves. Unitedhas major terminal facility leases at SFO, Washington Dulles, Chicago O'Hare, LAX, Denver, Newark, Houston Bush and Guam with expiration dates rangingfrom 2019 through 2055. Substantially all of these facilities are leased on a net-rental basis, resulting in the Company's responsibility for maintenance,insurance and other facility-related expenses and services.United also maintains administrative offices, catering, cargo, training facilities, maintenance facilities and other facilities to support operations in the citiesserved. In addition, United has multiple leases, which expire from 2019 through 2029, for its principal executive office and operations center in downtownChicago and administrative offices in downtown Houston.ITEM 3.LEGAL PROCEEDINGS.On June 30, 2015, UAL received a Civil Investigative Demand ("CID") from the Antitrust Division of the DOJ seeking documents and information from theCompany in connection with a DOJ investigation related to statements and decisions about airline capacity. The Company is working with the DOJ and hascompleted its response to the CID. The Company is not able to predict what action, if any, might be taken in the future by the DOJ or other governmentalauthorities as a result of the investigation. Beginning on July 1, 2015, subsequent to the announcement of the CID, UAL and United were named asdefendants in multiple class action lawsuits that asserted claims under the Sherman Antitrust Act, which have been consolidated in the United States DistrictCourt for the District of Columbia. The complaints generally allege collusion among U.S. airlines on capacity impacting airfares and seek treble damages.The Company intends to vigorously defend against the class action lawsuits.On October 13, 2015, United received a CID from the Civil Division of the DOJ. The CID requested documents and oral testimony from United in connectionwith an industry-wide DOJ investigation related to delivery scan and other data purportedly required for payment for the carriage of mail under United'sInternational Commercial Air Contracts with the U.S. Postal Service. The Company has been responding to the DOJ's request and cooperating in theinvestigation since that time. On November 8, 2016, the DOJ Criminal Division met with representatives from the Company and advised they are conductingan industry-wide investigation into the same matter. The Company is also cooperating with the government in this aspect of their investigation and, onDecember 21, 2016, representatives from the Company met with both the Civil and Criminal Divisions to provide additional information. The Companycannot predict what action, if any, might be taken in the future by the DOJ or other governmental authorities as a result of these investigations.20Table of ContentsOther Legal ProceedingsThe Company is involved in various other claims and legal actions involving passengers, customers, suppliers, employees and government agencies arisingin the ordinary course of business. Additionally, from time to time, the Company becomes aware of potential non-compliance with applicable environmentalregulations, which have either been identified by the Company (through internal compliance programs such as its environmental compliance audits) orthrough notice from a governmental entity. In some instances, these matters could potentially become the subject of an administrative or judicial proceedingand could potentially involve monetary sanctions. After considering a number of factors, including (but not limited to) the views of legal counsel, the natureof contingencies to which the Company is subject and prior experience, management believes that the ultimate disposition of these other claims and legalactions will not materially affect its consolidated financial position or results of operations. However, the ultimate resolutions of these matters are inherentlyunpredictable. As such, the Company's financial condition and results of operations could be adversely affected in any particular period by the unfavorableresolution of one or more of these matters.ITEM 4.MINE SAFETY DISCLOSURES.Not applicable.PART II ITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIES.Since September 7, 2018, UAL's common stock has traded on the Nasdaq Global Select Market ("Nasdaq") under the symbol "UAL." Previously, UAL'scommon stock was traded on the New York Stock Exchange ("NYSE"). As of February 22, 2019, there were 5,615 holders of record of UAL common stock.The following graph shows the cumulative total stockholder return for UAL's common stock during the period from December 31, 2013 to December 31,2018. The graph also shows the cumulative returns of the Standard and Poor's 500 Index ("SPX") and the NYSE Arca Airline Index ("XAL") of 15 investor-owned airlines over the same five-year period. The comparison assumes $100 was invested on December 31, 2013 in each of UAL common stock, the SPXand the XAL.Note: The stock price performance shown in the graph above should not be considered indicative of potential future stock price performance. The foregoing performance graph isbeing furnished as part of this report solely in accordance with the requirement under Rule 14a-3(b)(9) to furnish our stockholders with such information, and therefore, shall not bedeemed to be filed or incorporated by reference into any filings by the Company under the Securities Act or the Exchange Act.21Table of ContentsThe following table presents repurchases of UAL common stock made in the fourth quarter of 2018:Period Total number ofshares purchased (a)(b) Averageprice paidper share (b)(c) Total number of sharespurchased as part ofpublicly announced plansor programs (a) Approximate dollar value of sharesthat may yet be purchased under theplans or programs (in millions) (a)October 2018 572,349 $85.76 572,349 $1,941November 2018 927,969 91.76 927,969 1,856December 2018 1,228,339 85.87 1,228,339 1,750Total 2,728,657 2,728,657 (a) In 2018, UAL repurchased approximately 17.5 million shares of UAL common stock for $1.2 billion. In December 2017, UAL's Board of Directors authorized a $3.0 billionshare repurchase program to acquire UAL's common stock. As of December 31, 2018, the Company had approximately $1.8 billion remaining to purchase shares under its sharerepurchase program. UAL may repurchase shares through the open market, privately negotiated transactions, block trades or accelerated share repurchase transactions from time totime in accordance with applicable securities laws.(b) The table does not include shares withheld from employees to satisfy certain tax obligations due upon the vesting of restricted stock. The United Continental Holdings, Inc. 2017Incentive Compensation Plan and the United Continental Holdings, Inc. 2008 Incentive Compensation Plan, each provide for the withholding of shares to satisfy tax obligations dueupon the vesting of restricted stock. However, these plans do not specify a maximum number of shares that may be withheld for this purpose. A total of 1,368 shares were withheldunder the plans in the fourth quarter of 2018 at an average price of $91.79 per share. These shares of common stock withheld to satisfy tax withholding obligations may be deemedto be "issuer purchases" of shares that are required to be disclosed pursuant to this Item.(c) Average price paid per share is calculated on a settlement basis and excludes commission.ITEM 6.SELECTED FINANCIAL DATA. UAL's consolidated financial statements and statistical data are provided in the tables below: Year Ended December 31, 2018 2017 (a) 2016 (a) 2015 2014Income Statement Data (in millions, except per share amounts): Operating revenue $41,303 $37,784 $36,558 $37,864 $38,901Operating expense 38,011 34,113 32,214 32,698 36,528Operating income 3,292 3,671 4,344 5,166 2,373Net income 2,129 2,144 2,234 7,340 1,132Basic earnings per share 7.73 7.08 6.77 19.52 3.05Diluted earnings per share 7.70 7.06 6.76 19.47 2.93 Balance Sheet Data at December 31 (in millions): Unrestricted cash, cash equivalents and short-term investments $3,950 $3,798 $4,428 $5,196 $4,384Total assets 44,792 42,346 40,208 40,861 36,595Debt and capital lease obligations 14,728 14,392 11,705 11,759 11,947(a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) and Accounting Standards UpdateNo. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. See Note 1 to the financial statements contained in Part II,Item 8 of this report for additional information.22Table of Contents Year Ended December 31, 2018 2017 (a) 2016 (a) 2015 2014Consolidated (b) Passengers (thousands) (c)158,330 148,067 143,177 140,369 138,029Revenue passenger miles ("RPMs") (millions) (d)230,155 216,261 210,309 208,611 205,559Available seat miles ("ASMs") (millions) (e)275,262 262,386 253,590 250,003 246,021Cargo revenue ton miles (millions) (f)3,425 3,316 2,805 2,614 2,487Passenger load factor (g)83.6% 82.4% 82.9% 83.4% 83.6%Passenger revenue per available seat mile ("PRASM") (cents)13.70 13.13 13.18 13.11 13.72Total revenue per available seat mile ("TRASM") (cents)15.00 14.40 14.42 15.15 15.81Average yield per revenue passenger mile ("Yield") (cents) (h)16.38 15.93 15.90 15.72 16.42Cost per available seat mile ("CASM") (cents)13.81 13.00 12.70 13.08 14.85Average price per gallon of fuel, including fuel taxes$2.25 $1.74 $1.49 $1.94 $2.99Fuel gallons consumed (millions)4,137 3,978 3,904 3,886 3,905Average stage length (miles) (i)1,446 1,460 1,473 1,487 1,480Average daily utilization of each mainline aircraft (hours:minutes) (j) 10:45 10:27 10:06 10:24 10:26(a) PRASM, TRASM, Yield, and CASM are adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606)and Accounting Standards Update No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. See Note 1 to thefinancial statements contained in Part II, Item 8 of this report for additional information.(b) Includes data from our regional carriers operating under CPAs.(c) The number of revenue passengers measured by each flight segment flown.(d) The number of scheduled miles flown by revenue passengers.(e) The number of seats available for passengers multiplied by the number of scheduled miles those seats are flown.(f) The number of cargo revenue tons transported multiplied by the number of miles flown.(g) RPM divided by ASM.(h) The average passenger revenue received for each revenue passenger mile flown.(i) Average stage length equals the average distance a flight travels weighted for size of aircraft.(j) The average number of hours per day that an aircraft flown in revenue service is operated (from gate departure to gate arrival).23Table of ContentsITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.OverviewUnited Continental Holdings, Inc. (together with its consolidated subsidiaries, "UAL" or the "Company") is a holding company and its principal, wholly-owned subsidiary is United Airlines, Inc. (together with its consolidated subsidiaries, "United"). As UAL consolidates United for financial statement purposes,disclosures that relate to activities of United also apply to UAL, unless otherwise noted. United's operating revenues and operating expenses comprise nearly100% of UAL's revenues and operating expenses. In addition, United comprises approximately the entire balance of UAL's assets, liabilities and operatingcash flows. When appropriate, UAL and United are named specifically for their individual contractual obligations and related disclosures and any significantdifferences between the operations and results of UAL and United are separately disclosed and explained. We sometimes use the words "we," "our," "us," andthe "Company" in this report for disclosures that relate to all of UAL and United.2018 Financial Highlights•2018 net income was $2.1 billion, or $7.70 diluted earnings per share, as compared to $2.1 billion, or $7.06 diluted earnings per share, in 2017.•Revenue for 2018 increased $3.5 billion over 2017 due to a 4.9% growth in ASMs and a PRASM increase of 4.3% in 2018 compared to 2017.•Aircraft fuel cost for 2018 increased 34.6% over 2017 mainly due to higher fuel prices.•In 2018, UAL repurchased approximately 17.5 million shares of its common stock for $1.2 billion. As of December 31, 2018, the Company hadapproximately $1.8 billion remaining to purchase shares under its share repurchase program.•UAL ended 2018 with $6.0 billion in unrestricted liquidity, which consisted of unrestricted cash, cash equivalents, short-term investments andavailable capacity under the revolving credit facility of its Amended and Restated Credit and Guaranty Agreement (as amended, the "CreditAgreement").2018 Operational Highlights•RPMs for 2018 increased 6.4% as compared to 2017, and ASMs increased 4.9% from the prior year, resulting in a load factor of 83.6% in 2018versus 82.4% in 2017.•For 2018 and 2017, the Company recorded U.S. Department of Transportation on-time arrival rates of 79.8% and 81.9%, respectively, and mainlinecompletion factors of 99.2% and 99.0%, respectively.OutlookSet forth below is a discussion of matters that we believe could impact our financial and operating performance and cause our results of operations in futureperiods to differ materially from our historical operating results and/or from our anticipated results of operations described in the forward-looking statementsin this report. See Part I, Item 1A., Risk Factors, of this report and the factors described under "Forward-Looking Information" below for additional discussionof these and other factors that could affect us.Growth Strategy. In 2018, the Company completed the first year of its multi-year growth strategy, increasing ASMs 4.9% compared to 2017. Our priorities for2019 are delivering top-tier operational reliability and customer service while continuing to execute on our growth plan by strengthening our domesticnetwork through strategic and efficient growth and investing in our people and product.Fuel. The Company's average aircraft fuel price per gallon including related taxes was $2.25 in 2018 as compared to $1.74 in 2017. Based on the Company'sprojected fuel consumption in 2019, a one-dollar change in the price of a barrel of crude oil would change the Company's projected fuel expense byapproximately $104 million.24Table of ContentsResults of Operations2018 Compared to 2017Operating RevenueThe table below illustrates the year-over-year percentage change in the Company's operating revenues for the years ended December 31 (in millions, exceptpercentage changes): 2018 2017 Increase (Decrease) % ChangePassenger revenue$37,706 $34,460 $3,246 9.4Cargo1,237 1,114 123 11.0Other operating revenue2,360 2,210 150 6.8Total operating revenue$41,303 $37,784 $3,519 9.3The table below presents selected passenger revenue and operating data of the Company, broken out by geographic region, expressed as year-over-yearchanges: Increase (decrease) from 2017 (a): Domestic Atlantic Pacific Latin TotalPassenger revenue (in millions) $2,340 $688 $185 $33 $3,246Passenger revenue 11.1% 11.7 % 4.3 % 1.0 % 9.4%Average fare per passenger 2.8% 0.2 % 8.5 % 2.5 % 2.3%Yield 3.8% (0.4)% 2.7 % (0.3)% 2.8%PRASM 4.1% 6.3 % 3.0 % 0.8 % 4.3%Passengers 8.1% 11.5 % (3.9)% (1.4)% 6.9%RPMs (traffic) 7.0% 12.1 % 1.5 % 1.3 % 6.4%ASMs (capacity) 6.7% 5.1 % 1.3 % 0.3 % 4.9%Passenger load factor (points) 0.2 5.1 0.2 0.8 1.2(a) See Part II, Item 6, Selected Financial Data, of this report for the definition of these statistics. Passenger revenue increased $3.2 billion, or 9.4%, in 2018 as compared to 2017, primarily due to a 6.4% increase in traffic. PRASM increased 4.3% in 2018as compared to 2017. The increase in PRASM was driven by improvements in scheduling, higher corporate demand, increases in close-in bookings in thedomestic markets and premium cabin demand improvements in the Atlantic and Pacific markets.Cargo revenue increased $123 million, or 11.0%, in 2018 as compared to 2017, primarily due to freight volume and higher yield in the Atlantic and Pacificmarkets.Other operating revenue increased $150 million, or 6.8%, in 2018 as compared to 2017, primarily due to increased revenue related to MileagePlus milessales.25Table of ContentsOperating ExpenseThe table below includes data related to the Company's operating expense for the years ended December 31 (in millions, except percentage changes): 2018 2017 Increase (Decrease) % ChangeSalaries and related costs$11,458 $10,941 $517 4.7Aircraft fuel9,307 6,913 2,394 34.6Regional capacity purchase2,601 2,232 369 16.5Landing fees and other rent2,359 2,240 119 5.3Depreciation and amortization2,240 2,149 91 4.2Aircraft maintenance materials and outside repairs1,767 1,856 (89) (4.8)Distribution expenses1,558 1,435 123 8.6Aircraft rent433 621 (188) (30.3)Special charges487 176 311 NMOther operating expenses5,801 5,550 251 4.5Total operating expenses$38,011 $34,113 $3,898 11.4Salaries and related costs increased $517 million, or 4.7%, in 2018 as compared to 2017, primarily due to higher pay rates, higher benefit expenses (primarilyhealth and pension costs), and a 0.7% increase in average full-time employees.Aircraft fuel expense increased $2.4 billion, or 34.6%, in 2018 as compared to 2017, primarily due to increased fuel prices and a 4.9% increase in capacity.The table below presents the significant changes in aircraft fuel cost per gallon for the years ended December 31 (in millions, except percentage changes andper gallon data): 2018 2017 %ChangeFuel expense $9,307 $6,913 34.6Total fuel consumption (gallons) 4,137 3,978 4.0Average price per gallon $2.25 $1.74 29.3Regional capacity purchase costs increased $369 million, or 16.5%, in 2018 as compared to 2017, primarily due to increased flying related to the Company'sinitiative to improve connectivity at its domestic hubs, as well as rate increases under various capacity purchase agreements ("CPAs") with regional carriers.Landing fees and other rent increased $119 million, or 5.3%, in 2018 as compared to 2017, primarily due to increased rates and our capacity growth.Depreciation and amortization increased $91 million, or 4.2%, in 2018 as compared to 2017, primarily due to additions of new and used aircraft, aircraftimprovements and increases in information technology infrastructure and application development projects.Aircraft maintenance materials and outside repairs decreased $89 million, or 4.8%, in 2018 as compared to 2017, primarily due to optimization of fleetretirement schedules and related maintenance costs for those aircraft and timing of certain maintenance events.Distribution expenses increased $123 million, or 8.6%, in 2018 as compared to 2017, primarily due to higher credit card and travel agency booking fees as aresult of the overall increase in passenger revenue.Aircraft rent decreased $188 million, or 30.3%, in 2018 as compared to 2017, primarily due to the purchase of leased aircraft, conversion of certain operatingleases to capital leases and lease term expirations.The table below presents special charges incurred by the Company during the years ended December 31 (in millions):26Table of Contents 2018 2017Impairment of assets$377 $25Termination of an engine maintenance service agreement64 —Severance and benefit costs41 116(Gains) losses on sale of assets and other special charges5 35Total special charges$487 $176See Note 14 to the financial statements included in Part II, Item 8 of this report for additional information.Other operating expenses increased $251 million, or 4.5%, in 2018 as compared to 2017, primarily due to an increase in purchased services related to ourairport operations resulting from capacity growth, technology initiatives, facility projects, crew-related lodging and trucking and handling of cargoshipments.Nonoperating Income (Expense)The following table illustrates the year-over-year dollar and percentage changes in the Company's nonoperating income (expense) for the years endedDecember 31 (in millions, except percentage changes): 2018 2017 Increase (Decrease) % ChangeInterest expense$(729) $(671) $58 8.6Interest capitalized70 84 (14) (16.7)Interest income101 57 44 77.2Miscellaneous, net(76) (101) (25) (24.8)Total nonoperating expense, net$(634) $(631) $3 0.5Interest expense increased $58 million, or 8.6%, in 2018 as compared to 2017, primarily due to debt issued for the acquisition of new aircraft and theconversion of certain operating leases to capital leases.Interest income increased $44 million, or 77.2%, in 2018 as compared to 2017, primarily due to increased interest rates.Miscellaneous, net decreased $25 million, or 24.8%, in 2018 as compared to 2017, primarily due to a decrease in pension benefit costs that was partiallyoffset by an increase in foreign exchange losses and an increase in equity earnings from affiliates.2017 Compared to 2016Operating RevenueThe table below illustrates the year-over-year percentage change in the Company's operating revenues for the years ended December 31 (in millions, exceptpercentage changes): 2017 2016 Increase (Decrease) % ChangePassenger revenue$34,460 $33,429 $1,031 3.1Cargo1,114 934 180 19.3Other operating revenue2,210 2,195 15 0.7Total operating revenue$37,784 $36,558 $1,226 3.4The table below presents selected passenger revenue and operating data of the Company, broken out by geographic region, expressed as year-over-yearchanges:27Table of Contents Increase (decrease) in 2017 from 2016 (a): Domestic Atlantic Pacific Latin TotalPassenger revenue (in millions)$885 $117 $(144) $173 $1,031Passenger revenue4.4 % 2.0% (3.2)% 5.8% 3.1 %Average fare per passenger0.2 % 1.5% (0.1)% 4.0% (0.3)%Yield(0.3)% 1.1% (2.4)% 4.1% 0.2 %PRASM(0.5)% 1.6% (6.0)% 3.3% (0.4)%Passengers4.2 % 0.5% (3.1)% 1.7% 3.4 %RPMs (traffic)4.7 % 0.9% (0.9)% 1.6% 2.8 %ASMs (capacity)4.9 % 0.4% 2.9 % 2.4% 3.5 %Passenger load factor (points)(0.2) 0.4 (3.0) (0.7) (0.5)(a) See Part II, Item 6, Selected Financial Data, of this report for the definition of these statistics.Passenger revenue increased $1.0 billion, or 3.1%, in 2017 as compared to 2016, primarily due to a 2.8% increase in traffic. PRASM decreased 0.4% in 2017as compared to 2016. The decline in PRASM was driven by factors including more aggressive low-cost carrier pricing in our hub markets, temporary shareloss during roll-out of our Basic Economy pricing, and softer demand in China and Guam. Our revenue in 2017 was negatively impacted by severe stormsduring the third quarter.Cargo revenue increased $180 million, or 19.3%, in 2017 as compared to 2016 due to higher year-over-year international freight volume and yield.Operating ExpenseThe table below includes data related to the Company's operating expense for the years ended December 31 (in millions, except percentage changes): 2017 2016 Increase (Decrease) % ChangeSalaries and related costs$10,941 $10,176 $765 7.5Aircraft fuel6,913 5,813 1,100 18.9Landing fees and other rent2,240 2,165 75 3.5Regional capacity purchase2,232 2,197 35 1.6Depreciation and amortization2,149 1,977 172 8.7Aircraft maintenance materials and outside repairs1,856 1,749 107 6.1Distribution expenses1,435 1,395 40 2.9Aircraft rent621 680 (59) (8.7)Special charges176 745 (569) NMOther operating expenses5,550 5,317 233 4.4Total operating expenses$34,113 $32,214 $1,899 5.9Salaries and related costs increased $765 million, or 7.5%, in 2017 as compared to 2016, primarily due to higher pay rates and benefit expenses driven bycollective bargaining agreements finalized in 2016, and a 2.5% increase in average full-time equivalent employees, partially offset by a decrease in profitsharing and other employee incentives.Aircraft fuel expense increased $1.1 billion, or 18.9%, in 2017 as compared to 2016, primarily due to increased fuel prices and a 3.5% increase in capacity.The table below presents the significant changes in aircraft fuel cost per gallon for the years ended December 31 (in millions, except percentage changes andper gallon data): (In millions) Average price per gallon 2017 2016 %Change 2017 2016 %ChangeTotal aircraft fuel purchase cost excluding fuel hedge impacts$6,911 $5,596 23.5 $1.74 $1.43 21.7Hedge losses reported in fuel expense2 217 NM — 0.06 NMFuel expense$6,913$5,813 18.9 $1.74 $1.49 16.8Total fuel consumption (gallons)3,978 3,904 1.9 28Table of ContentsLanding fees and other rent increased $75 million, or 3.5%, in 2017 as compared to the year-ago period due to higher rental and landing fee rates.Regional capacity purchase costs increased $35 million, or 1.6%, in 2017 as compared to the year-ago period despite regional capacity being down 3.8% in2017 as compared to 2016 due to increases in annual rates, maintenance cycle-related costs and lease return costs.Depreciation and amortization increased $172 million, or 8.7%, in 2017 as compared to 2016, primarily due to additions of new and used aircraft, aircraftimprovements and increases in information technology infrastructure and application development projects.Aircraft maintenance materials and outside repairs increased $107 million, or 6.1%, in 2017 as compared to 2016, primarily due to an increase in airframe andengine maintenance visits and additional repairs to wireless and inflight entertainment equipment.Aircraft rent decreased $59 million, or 8.7%, in 2017 as compared to 2016, primarily due to the purchase of leased aircraft and lower lease renewal rates.The table below presents special charges incurred by the Company during the years ended December 31 (in millions): 2017 2016Severance and benefit costs$116 $37Impairment of assets25 412Cleveland airport lease restructuring— 74Labor agreement costs— 171(Gains) losses on sale of assets and other special charges35 51Total special charges$176 $745See Note 14 to the financial statements included in Part II, Item 8 of this report for additional information.Other operating expenses increased $233 million, or 4.4%, in 2017 as compared to 2016, primarily due to increased costs in food, marketing and technologyassociated with the Company's enhanced customer experience initiatives, and due to volume-driven increases in cargo trucking and handling costs.Nonoperating Income (Expense)The following table illustrates the year-over-year dollar and percentage changes in the Company's nonoperating income (expense) for the years endedDecember 31 (in millions, except percentage changes): 2017 2016 Increase (Decrease) % ChangeInterest expense$(671) $(674) $(3) (0.4)Interest capitalized84 72 12 16.7Interest income57 42 15 35.7Miscellaneous, net(101) (11) 90 NMTotal nonoperating expense, net$(631) $(571) $60 10.5Miscellaneous, net increased $90 million in 2017 as compared to 2016 primarily due to 2016 curtailments gains related to changes in the new laboragreements. See Note 14 to the financial statements included in Part II, Item 8 of this report for additional information.Liquidity and Capital ResourcesAs of December 31, 2018, the Company had $4.0 billion in unrestricted cash, cash equivalents and short-term investments, an increase of $0.2 billion fromDecember 31, 2017. The Company had its entire commitment capacity of $2.0 billion under the revolving credit facility of the Credit Agreement availablefor borrowings as of December 31, 2018.We have a significant amount of fixed obligations, including debt, aircraft leases and financings, leases of airport property and other facilities and pensionfunding obligations. At December 31, 2018, the Company had approximately $14.7 billion of debt and capital lease obligations, including $1.4 billion thatare due within the next 12 months. In addition, we have substantial noncancelable commitments for capital expenditures, including the acquisition of newaircraft and related spare engines. As of29December 31, 2018, our current liabilities exceeded our current assets by approximately $6.0 billion. However, approximately $6.7 billion of our currentliabilities are related to our advance ticket sales and frequent flyer deferred revenue, both of which largely represent revenue to be recognized for travel in thenear future and not cash outlays. The deficit in working capital does not have an adverse impact to our cash flows, liquidity or operations.For 2019, the Company expects approximately $4.7 billion of gross capital expenditures. See Note 13 to the financial statements included in Part II, Item 8 ofthis report for additional information on commitments.As of December 31, 2018, a substantial portion of the Company's assets, principally aircraft, route authorities and airport slots, was pledged under variousloan and other agreements. Collateral pledged under these loans continues to be sufficient to satisfy the loan covenants. We must sustain our profitabilityand/or access the capital markets to meet our significant long-term debt and capital lease obligations and future commitments for capital expenditures,including the acquisition of aircraft and related spare engines. See Note 10 to the financial statements included in Part II, Item 8 of this report for additionalinformation on assets provided as collateral by the Company.The following is a discussion of the Company's sources and uses of cash from 2016 through 2018.Operating Activities2018 Compared to 2017Cash flow provided by operations for the year ended December 31, 2018 was $6.2 billion compared to $3.4 billion in the same period in 2017. The followingwere significant working capital items in 2018:•MileagePlus sales. In 2018, we received $1.3 billion more for MileagePlus miles sales to our partners as compared to 2017, mainly due to ourdomestic co-branded credit card partner fully utilizing the $0.9 billion remaining balance in its pre-purchased miles in 2017.•Advance ticket sales and deferred revenue. Our 2018 traffic growth and yield improvements contributed to a $0.7 billion increase in advance ticketsales and frequent flyer deferred revenue.2017 Compared to 2016Cash flow provided by operations for the year ended December 31, 2017 was $3.4 billion compared to $5.5 billion in the same period in 2016, the decreaseresulting from lower operating income and reduced cash flows from certain changes in working capital items. Excluding the non-cash impairment of theNewark slots, operating income for 2017 was approximately $1.2 billion lower than 2016. Working capital changes reduced cash flow from operations by anadditional $1.2 billion year-over-year in 2017 as compared to 2016. The following were significant working capital items in 2017:•$0.9 billion decrease in advanced purchase of miles due to increased utilization of pre-purchased miles.•$0.4 billion increase in prepayments for maintenance contracts.Investing Activities2018 Compared to 2017The Company's capital expenditures were $4.2 billion and $4.0 billion in 2018 and 2017, respectively. The Company's capital expenditures for both yearswere primarily attributable to the purchase of aircraft, aircraft improvements, facility and fleet-related costs and the purchase of information technologyassets.On November 29, 2018, United, as lender, entered into a Term Loan Agreement (the "Synergy Loan Agreement") with affiliates of Synergy AerospaceCorporation ("Synergy"), as borrower and guarantor, respectively, and on November 30, 2018, pursuant to the Synergy Loan Agreement, United provided asecured $456 million term loan to Synergy. Synergy is the majority shareholder of Avianca Holdings S.A. ("AVH"), the parent company of Avianca. The loanwas made in conjunction with a revenue-sharing joint business agreement among United, Avianca and Copa Airlines as described in Part 1, Item 1 of thisreport. For additional information regarding the Synergy Loan Agreement and related agreements, see Notes 9 and 13 to the financial statements included inPart II, Item 8 of this report.In April 2018, through a wholly-owned subsidiary, the Company invested $138 million in Azul Linhas Aéreas Brasileiras S.A. ("Azul") thus increasing itspreferred equity stake in Azul to approximately 8% (representing approximately 2% of the total capital stock of Azul).302017 Compared to 2016The Company's capital expenditures were $4.0 billion and $3.2 billion in 2017 and 2016, respectively. The Company's capital expenditures for both yearswere primarily attributable to the purchase of aircraft, aircraft improvements, facility and fleet-related costs and the purchase of information technologyassets.Financing ActivitiesSignificant financing events in 2018 were as follows:Share RepurchasesThe Company used $1.2 billion of cash to purchase approximately 17.5 million shares of its common stock during 2018. As of December 31, 2018, theCompany had approximately $1.8 billion remaining to purchase shares under its share repurchase program.Debt IssuancesDuring 2018, United received and recorded $1.2 billion of proceeds as debt related to enhanced equipment trust certificate ("EETC") offerings created in2018 to finance the purchase of aircraft.During 2018, United borrowed approximately $424 million aggregate principal amount from various financial institutions to finance the purchase ofseveral aircraft delivered in 2018.Debt and Capital Lease Principal PaymentsDuring the year ended December 31, 2018, the Company made debt and capital lease principal payments of $1.9 billion.Significant financing events in 2017 were as follows:Share RepurchasesThe Company used $1.8 billion of cash to purchase approximately 27.8 million shares of its common stock during 2017, completing its July 2016repurchase authorization. In December 2017, UAL's Board of Directors authorized a new $3.0 billion share repurchase program to acquire UAL's commonstock. As of December 31, 2017, the Company had approximately $3.0 billion remaining to purchase shares under its share repurchase program.Debt IssuancesDuring 2017, United received and recorded $1.8 billion of proceeds as debt related to enhanced equipment trust certificate ("EETC") offerings created in2016 and 2017 to finance the purchase of aircraft.In 2017, UAL issued, and United guaranteed, (i) $400 million aggregate principal amount of unsecured 4.25% Senior Notes due October 1, 2022, and (ii)$300 million aggregate principal amount of unsecured 5% Senior Notes due February 1, 2024.In 2017, United and UAL, as borrower and guarantor, respectively, increased the term loan under the Credit Agreement by approximately $440 million.During 2017, United borrowed approximately $497 million aggregate principal amount from various financial institutions to finance the purchase ofseveral aircraft delivered in 2017.Debt and Capital Lease Principal PaymentsDuring the year ended December 31, 2017, the Company made debt and capital lease principal payments of $1.0 billion.Significant financing events in 2016 were as follows:Share RepurchasesThe Company used $2.6 billion of cash to purchase 50.3 million shares of its common stock during 2016 under its share repurchase programs.31Debt IssuancesIn 2016, United completed two EETC offerings for a total principal amount of $2.0 billion. Of the $2.0 billion, United received and recorded $708 millionof proceeds as debt as of December 31, 2016 to finance the purchase of 17 aircraft. In 2016, United borrowed approximately $369 million aggregateprincipal amount from various financial institutions to finance the purchase of several aircraft delivered in 2016.Debt and Capital Lease Principal PaymentsDuring the year ended December 31, 2016, the Company made debt and capital lease principal payments of $1.4 billion.For additional information regarding these Liquidity and Capital Resource matters, see Notes 3, 10, 11 and 12 to the financial statements included in Part II,Item 8 of this report. For information regarding non-cash investing and financing activities, see the Company's statements of consolidated cash flows.Credit Ratings. As of the filing date of this report, UAL and United had the following corporate credit ratings: S&P Moody's FitchUALBB Ba2 BBUnitedBB * BB*The credit agency does not issue corporate credit ratings for subsidiary entities.These credit ratings are below investment grade levels. Downgrades from these rating levels, among other things, could restrict the availability, or increasethe cost, of future financing for the Company. Other Liquidity MattersBelow is a summary of additional liquidity matters. See the indicated notes to our consolidated financial statements included in Part II, Item 8 of this reportfor additional details related to these and other matters affecting our liquidity and commitments.Pension and other postretirement plansNote 8Long-term debt and debt covenantsNote 10Leases and capacity purchase agreementsNote 11Commitments and contingenciesNote 13Contractual Obligations. The Company's business is capital intensive, requiring significant amounts of capital to fund the acquisition of assets, particularlyaircraft. In the past, the Company has funded the acquisition of aircraft with cash, by using EETC financing, by entering into capital or operating leases, orthrough other financings. The Company also often enters into long-term lease commitments with airports to ensure access to terminal, cargo, maintenanceand other required facilities.The table below provides a summary of the Company's material contractual obligations as of December 31, 2018 (in billions): 2019 2020 2021 2022 2023 After 2023 TotalLong-term debt (a) $1.2 $1.3 $1.3 $1.7 $0.7 $7.4 $13.6Capital lease obligations—principal portion 0.2 0.1 0.1 0.1 — 0.9 1.3Total debt and capital lease obligations 1.4 1.4 1.4 1.8 0.7 8.3 14.9Interest on debt and capital lease obligations (b) 0.7 0.6 0.5 0.4 0.4 1.1 3.6Aircraft operating lease obligations 0.8 0.7 0.6 0.4 0.4 1.2 4.1Regional CPAs (c) 2.2 2.0 1.8 1.4 0.8 3.1 11.3Other operating lease obligations 1.3 1.4 1.1 1.0 1.0 7.0 12.8Postretirement obligations (d) 0.1 0.1 0.1 0.1 0.1 0.5 1.0Pension obligations (e) — — — 0.3 0.2 0.5 1.0Capital purchase obligations (f) 4.2 5.3 3.5 2.8 1.9 7.0 24.7Total contractual obligations $10.7 $11.5 $9.0 $8.2 $5.5 $28.7 $73.4 32(a) Long-term debt presented in the Company's financial statements is net of $191 million of debt discount, premiums and debt issuance costs which arebeing amortized over the debt terms. Contractual payments do not include the debt discount, premiums and debt issuance costs.(b) Includes interest portion of capital lease obligations of $124 million in 2019, $104 million in 2020, $80 million in 2021, $63 million in 2022, $57million in 2023 and $410 million thereafter. Interest payments on variable interest rate debt were calculated using London interbank offered rates("LIBOR") applicable at December 31, 2018.(c) Represents our estimates of future minimum noncancelable commitments under our CPAs and does not include the portion of the underlying obligationsfor aircraft and facility rent that is disclosed as part of aircraft and nonaircraft operating leases. Amounts also exclude a portion of United's capital leaseobligation recorded for certain of its CPAs. See Note 11 to the financial statements included in Part II, Item 8 of this report for the significant assumptionsused to estimate the payments.(d) Amounts represent postretirement benefit payments, net of subsidy receipts, through 2028. Benefit payments approximate plan contributions as plans aresubstantially unfunded.(e) Represents an estimate of the minimum funding requirements as determined by government regulations for United's U.S. pension plans. Amounts aresubject to change based on numerous assumptions, including the performance of assets in the plans and bond rates. See Critical Accounting Policies,below, for a discussion of our current year assumptions regarding United's pension plans.(f) Represents contractual commitments for firm order aircraft, spare engines and other capital purchase commitments. See Note 13 to the financial statementsincluded in Part II, Item 8 of this report for a discussion of our purchase commitments.Off-Balance Sheet Arrangements. An off-balance sheet arrangement is any transaction, agreement or other contractual arrangement involving anunconsolidated entity under which a company has (1) made guarantees, (2) a retained or a contingent interest in transferred assets, (3) an obligation underderivative instruments classified as equity, or (4) any obligation arising out of a material variable interest in an unconsolidated entity that provides financing,liquidity, market risk or credit risk support, or that engages in leasing, hedging or research and development arrangements. The Company's primary off-balance sheet arrangements include operating leases, which are summarized in the contractual obligations table under Contractual Obligations, above, andcertain municipal bond obligations, as discussed below.As of December 31, 2018, United had cash collateralized $73 million of letters of credit, which generally have evergreen clauses and are expected to berenewed on an annual basis. As of December 31, 2018, United also had $418 million of surety bonds securing various obligations with expiration datesthrough 2022.As of December 31, 2018, United is the guarantor of approximately $1.9 billion in aggregate principal amount of tax-exempt special facilities revenue bondsand interest thereon. These bonds, issued by various airport municipalities, are payable solely from rentals paid under long-term agreements with therespective governing bodies. The leasing arrangements associated with a majority of these obligations are accounted for as operating leases. The leasingarrangements associated with a portion of these obligations are accounted for as capital leases. The annual lease payments for those obligations are includedin the contractual obligations table under Contractual Obligations, above.In connection with funding the Synergy Loan Agreement, the Company entered into an agreement with AVH's significant minority shareholder, KingslandHoldings Limited ("Kingsland"), pursuant to which, in return for Kingsland's pledge of its 144.8 million shares of AVH common stock (equivalent to 18.1million American Depositary Receipts ("ADRs")) and its consent to Synergy's pledge of its AVH common stock to United under the Synergy LoanAgreement, United (1) granted to Kingsland the right to put its shares of AVH common stock to United at market price on the fifth anniversary of the SynergyLoan Agreement, and (2) guaranteed Synergy's obligation to pay Kingsland (which amount, if paid by United, will increase United's secured loan to Synergyby such amount) if the market price of AVH common stock on the fifth anniversary is less than $12 per ADR on the NYSE, for an aggregate maximumpossible combined put payment and guarantee amount on the fifth anniversary of $217.2 million. Accordingly, the Company recorded a liability of $31million for the fair value of its guarantee to loan additional funds to Synergy if required. Any additional loans to Synergy would be collateralized bySynergy's shares of AVH stock and other collateral.As of December 31, 2018, United is the guarantor of $145 million of aircraft mortgage debt issued by one of United's regional carriers. The aircraft mortgagedebt is subject to increased cost provisions and the Company would potentially be responsible for those costs under the guarantees. The increased costprovisions in the $145 million of aircraft mortgage debt are similar to those in certain of the Company's debt agreements. See discussion under IncreasedCost Provisions, below, for additional information on increased cost provisions related to the Company's debt.EETCs. As of December 31, 2018, United had $8.8 billion principal amount of equipment notes outstanding issued under EETC financings. Generally, thestructure of these EETC financings consists of pass-through trusts created by United to issue pass-through certificates, which represent fractional undividedinterests in the respective pass-through trusts and are not obligations of United. The proceeds of the issuance of the pass-through certificates are used topurchase equipment notes which33are issued by United and secured by its aircraft. The payment obligations under the equipment notes are those of United. Proceeds received from the sale ofpass-through certificates are initially held by a depositary in escrow for the benefit of the certificate holders until United issues equipment notes to the trust,which purchases such notes with a portion of the escrowed funds. These escrowed funds are not guaranteed by United and are not reported as debt on United'sconsolidated balance sheet because the proceeds held by the depositary are not United's assets. In February 2019, United completed a $1.0 billion EETCoffering to finance certain 2018 and 2019 aircraft deliveries. See Note 10 to the financial statements included in Part II, Item 8 of this report for additionalinformation.Increased Cost Provisions. In United's financing transactions that include loans, United typically agrees to reimburse lenders for any reduced returns withrespect to the loans due to any change in capital requirements and, in the case of loans in which the interest rate is based on LIBOR, for certain otherincreased costs that the lenders incur in carrying these loans as a result of any change in law, subject, in most cases, to obligations of the lenders to takecertain limited steps to mitigate the requirement for, or the amount of, such increased costs. At December 31, 2018, the Company had $3.5 billion of floatingrate debt and $27 million of fixed rate debt, with remaining terms of up to 12 years, that are subject to these increased cost provisions. In several financingtransactions involving loans or leases from non-U.S. entities, with remaining terms of up to 12 years and an aggregate balance of $3.2 billion, the Companybears the risk of any change in tax laws that would subject loan or lease payments thereunder to non-U.S. entities to withholding taxes, subject to customaryexclusions.Fuel Consortia. United participates in numerous fuel consortia with other air carriers at major airports to reduce the costs of fuel distribution and storage.Interline agreements govern the rights and responsibilities of the consortia members and provide for the allocation of the overall costs to operate theconsortia based on usage. The consortia (and in limited cases, the participating carriers) have entered into long-term agreements to lease certain airport fuelstorage and distribution facilities that are typically financed through tax-exempt bonds, either special facilities lease revenue bonds or general airportrevenue bonds, issued by various local municipalities. In general, each consortium lease agreement requires the consortium to make lease payments inamounts sufficient to pay the maturing principal and interest payments on the bonds. As of December 31, 2018, approximately $1.7 billion principal amountof such bonds were secured by significant fuel facility leases in which United participates, as to which United and each of the signatory airlines has providedindirect guarantees of the debt. As of December 31, 2018, the Company's contingent exposure was approximately $164 million principal amount of suchbonds based on its recent consortia participation. The Company's contingent exposure could increase if the participation of other air carriers decreases. Theguarantees will expire when the tax-exempt bonds are paid in full, which ranges from 2022 to 2051. The Company did not record a liability at the time theseindirect guarantees were made.Critical Accounting PoliciesCritical accounting policies are defined as those that are affected by significant judgments and uncertainties which potentially could result in materiallydifferent accounting under different assumptions and conditions. The Company has prepared the financial statements in conformity with accountingprinciples generally accepted in the United States of America ("GAAP"), which requires management to make estimates and assumptions that affect thereported amounts in the financial statements. Actual results could differ from those estimates under different assumptions or conditions. The Company hasidentified the following critical accounting policies that impact the preparation of the financial statements.Frequent Flyer Accounting. United's MileagePlus loyalty program builds customer loyalty by offering awards, benefits and services to program participants.Members in this program earn miles for travel on United, United Express, Star Alliance members and certain other airlines that participate in the program.Members can also earn miles by purchasing the goods and services of our network of non-airline partners. We have contracts to sell miles to these partnerswith the terms extending from one to eight years. These partners include domestic and international credit card issuers, retail merchants, hotels, car rentalcompanies and our participating airline partners. Miles can be redeemed for free (other than taxes and government imposed fees), discounted or upgraded airtravel and non-travel awards. Miles expire after 18 months of member account inactivity.Miles Earned in Conjunction with Travel. When frequent flyers earn miles for flights, the Company recognizes a portion of the ticket sales as revenue whenthe travel occurs and defers a portion of the ticket sale representing the value of the related miles as a separate performance obligation. The Companydetermines the estimated selling price of travel and miles as if each element is sold on a separate basis. The total consideration from each ticket sale is thenallocated to each of these elements, individually, on a pro-rata basis. At the time of travel, the Company records the portion allocated to the miles to Frequentflyer deferred revenue on the Company's consolidated balance sheet and subsequently recognizes it into revenue when miles are redeemed for air travel andnon-air travel awards.The Company's estimated selling price of miles is based on an equivalent ticket value less breakage, which incorporates the expected redemption of miles, asthe best estimate of selling price for these miles. The equivalent ticket value is based on the prior 12 months' weighted average equivalent ticket value ofsimilar fares as those used to settle award redemptions while34Table of Contentstaking into consideration such factors as redemption pattern, cabin class, loyalty status and geographic region. The estimated selling price of miles isadjusted by breakage that considers a number of factors, including redemption patterns of various customer groups. The Company reviews its breakageestimates annually based upon the latest available information regarding redemption and expiration patterns. The Company's estimate of the expectedexpiration of miles requires significant management judgment. Current and future changes to expiration assumptions or to the expiration policy, or toprogram rules and program redemption opportunities, may result in material changes to the deferred revenue balance as well as recognized revenues from theprogram. For the portion of the outstanding miles that we estimate will not be redeemed, we recognize the associated value proportionally as the remainingmiles 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 ChaseBank USA, N.A. ("Chase"). Chase awards miles to MileagePlus members based on their credit card activity. United identified the following significantseparately 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 Otherrevenue related to the non-travel awards when the goods or services are delivered. The Company records the cost associated with non-travel awards inOther 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 toOther 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 suchas United's website, email promotions, direct mail campaigns, airport advertising and in-flight advertising. Advertising revenue is recorded to Otheroperating 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 loungepasses. Lounge passes are recorded to Other operating revenue as customers use the lounge passes. Bag fees and seat upgrades are recorded toPassenger 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 separatelyidentifiable performance obligations. The fair value of the separately identifiable performance obligations is determined using management's estimatedselling price of each component. The objective of using the estimated selling price based methodology is to determine the price at which we would transact asale if the product or service were sold on a stand-alone basis. Accordingly, we determine our best estimate of selling price by considering multiple inputsand methods including, but not limited to, discounted cash flows, brand value, volume discounts, published selling prices, number of miles awarded andnumber of miles redeemed. The Company estimated the selling prices and volumes over the term of the Co-Brand Agreement in order to determine theallocation 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 theallocation 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, theCompany 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) $5,005Percentage 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) $50Revenue Recognition. The Company presents Passenger revenue, Cargo revenue and Other operating revenue on its income statement. Passenger revenue isrecognized when transportation is provided and Cargo revenue is recognized when shipments arrive at their destination. Other operating revenue isrecognized 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 ticketsales liability, deferring revenue recognition until the travel occurs. For travel that has more than one flight segment, the Company deems each segment as aseparate performance obligation and recognizes revenue for each segment as travel occurs. Tickets sold by other airlines where the Company provides the35Table of Contentstransportation are recognized as passenger revenue at the estimated value to be billed to the other airline when travel is provided. Differences betweenamounts billed and the actual amounts may be rejected and rebilled or written off if the amount recorded was different from the original estimate. Whennecessary, the Company records a reserve against its billings and payables with other airlines based on historical experience.The Company sells certain tickets with connecting flights with one or more segments operated by its other airline partners. For segments operated by its otherairline partners, the Company has determined that it is acting as an agent on behalf of the other airlines as they are responsible for their portion of the contract(i.e. transportation of the passenger). The Company, as the agent, recognizes revenue within Other operating revenue at the time of the travel for the netamount representing commission to be retained by the Company for any segments flown by other airlines.Refundable tickets expire after one year from the date of issuance. Non-refundable tickets generally expire on the date of the intended travel, unless the dateis extended by notification from the customer on or before the intended travel date. The Company records breakage revenue on the travel date for its estimateof tickets that will expire unused. To determine breakage, the Company uses its historical experience with refundable and nonrefundable expired tickets andother facts, such as recent aging trends, program changes and modifications that could affect the ultimate expiration patterns of tickets. Fees charged inassociation with changes or extensions to non-refundable tickets are considered part of the Company's passenger travel obligation. As such, those fees aredeferred at the time of collection and recognized at the time the travel is provided. United initially capitalizes the costs of selling airline travel tickets and then recognizes those costs as Distribution expense at the time of travel. Passengerticket costs include credit card fees, travel agency and other commissions paid, as well as global distribution systems booking fees.Long-Lived Assets. The net book value of operating property and equipment for the Company was $28 billion and $26 billion at December 31, 2018 and2017, respectively. The assets' recorded value is impacted by a number of accounting policy elections, including the estimation of useful lives and residualvalues and, when necessary, the recognition of asset impairment charges.The Company records assets acquired, including aircraft, at acquisition cost. Depreciable life is determined through economic analysis, such as reviewingexisting fleet plans, obtaining appraisals and comparing estimated lives to other airlines that operate similar fleets. The Company has generally estimated thelives of those aircraft to be between 25 and 30 years. Residual values are estimated based on historical experience with regard to the sale of both aircraft andspare parts and are established in conjunction with the estimated useful lives of the related fleets. Residual values are based on when the aircraft are acquiredand typically reflect asset values that have not reached the end of their physical life. Both depreciable lives and residual values are revised periodically asfacts and circumstances arise to recognize changes in the Company's fleet plan and other relevant information. A one-year increase in the average depreciablelife of the Company's flight equipment would reduce annual depreciation expense on flight equipment by approximately $85 million.The Company evaluates the carrying value of long-lived assets and intangible assets subject to amortization whenever events or changes in circumstancesindicate that an impairment may exist. For purposes of this testing, the Company has generally identified the aircraft fleet type as the lowest level ofidentifiable cash flows for purposes of testing aircraft for impairment. An impairment charge is recognized when the asset's carrying value exceeds its netundiscounted future cash flows and its fair market value. The amount of the charge is the difference between the asset's carrying value and fair market value.See Note 14 to the financial statements included in Part II, Item 8 of this report for additional information.Indefinite-lived intangible assets. The Company has indefinite-lived intangible assets, including goodwill. Goodwill and indefinite-lived intangible assetsare not amortized but are reviewed for impairment on an annual basis as of October 1, or on an interim basis whenever a triggering event occurs. Animpairment occurs when the fair value of an intangible asset is less than its carrying value.See Note 2 to the financial statements included in Part II, Item 8 of this report for additional information.Defined Benefit Plan Accounting. We sponsor defined benefit pension plans for eligible employees and retirees. The most critical assumptions impacting ourdefined benefit pension plan obligations and expenses are the weighted average discount rate and the expected long-term rate of return on the plan assets.United's pension plans' under-funded status was $1.6 billion at December 31, 2018. Funding requirements for tax-qualified defined benefit pension plans aredetermined by government regulations. In 2019, we anticipate contributing at least $318 million to our pension plans. The fair value of the plans' assets was$3.8 billion at December 31, 2018.36Table of ContentsWhen calculating pension expense for 2019, the Company assumed that its plans' assets would generate a long-term rate of return of approximately 7.4%.The expected long-term rate of return assumption was developed based on historical experience and input from the trustee managing the plans' assets. Theexpected long-term rate of return on plan assets is based on a target allocation of assets, which is based on a goal of earning the highest rate of return whilemaintaining risk at acceptable levels. Our projected long-term rate of return reflects the active management of our plans' assets. The plans strive to have assetssufficiently diversified so that adverse or unexpected results from one security class will not have an unduly detrimental impact on the entire portfolio. Planfiduciaries regularly review actual asset allocation and the pension plans' investments are periodically rebalanced to the targeted allocation when consideredappropriate.The defined benefit pension plans' assets consist of return generating investments and risk mitigating investments which are held through direct ownership orthrough interests in common collective trusts. Return generating investments include primarily equity securities, fixed-income securities and alternativeinvestments (e.g. private equity and hedge funds). Risk mitigating investments include primarily U.S. government and investment grade corporate fixed-income securities. The allocation of assets was as follows at December 31, 2018: Percent of Total Expected Long-TermRate of ReturnEquity securities36% 9.5%Fixed-income securities37 5.8 Alternatives16 7.3 Other11 7.8 Pension expense increases as the expected rate of return on plan assets decreases. Lowering the expected long-term rate of return on plan assets by 50 basispoints (from 7.4% to 6.9%) would increase estimated 2019 pension expense by approximately $20 million. Future pension obligations for United's planswere discounted using a weighted average rate of 4.2% at December 31, 2018. The Company selected the discount rate for substantially all of its plans byusing a hypothetical portfolio of high quality bonds at December 31, 2018 that would provide the necessary cash flows to match the projected benefitpayments. The pension liability and future pension expense both increase as the discount rate is reduced. Lowering the discount rate by 50 basis points (from4.2% to 3.7%) would increase the pension liability at December 31, 2018 by approximately $585 million and increase the estimated 2019 pension expenseby approximately $69 million. Future changes in plan asset returns, plan provisions, assumed discount rates, pension funding law and various other factorsrelated to the participants in our pension plans will impact our future pension expense and liabilities. We cannot predict with certainty what these factors willbe in the future.Actuarial gains or losses are triggered by changes in assumptions or experience that differ from the original assumptions. Under the applicable accountingstandards for defined benefit pension plans, those gains and losses are not required to be recognized currently as pension benefit expense, but instead may bedeferred as part of accumulated other comprehensive income and amortized into expense over the average remaining service life of the covered activeemployees. All gains and losses in accumulated other comprehensive income are amortized to expense over the remaining years of service of the coveredactive employees. At December 31, 2018 and 2017, the Company had unrecognized actuarial losses for pension benefit plans of $1.4 billion and $1.6 billion,respectively, recorded in accumulated other comprehensive income.Other Postretirement Benefit Plan Accounting. United's postretirement plan provides certain health care benefits, primarily in the United States, to retireesand eligible dependents, as well as certain life insurance benefits to certain retirees reflected as "Other Benefits." United also has retiree medical programs thatpermit retirees who meet certain age and service requirements to continue medical coverage between retirement and Medicare eligibility. Eligible employeesare required to pay a portion of the costs of their retiree medical benefits, which in some cases may be offset by accumulated unused sick time at the time oftheir retirement. Plan benefits are subject to co-payments, deductibles and other limits as described in the plans.The Company accounts for other postretirement benefits by recognizing the difference between plan assets and obligations, or the plan's funded status, in itsfinancial statements. Other postretirement benefit expense is recognized on an accrual basis over employees' approximate service periods and is generallycalculated independently of funding decisions or requirements. United has not been required to pre-fund its plan obligations, which has resulted in asignificant net obligation, as discussed below. The Company's benefit obligation was $1.4 billion and $1.7 billion for the other postretirement benefit plansat December 31, 2018 and 2017, respectively.The calculation of other postretirement benefit expense and obligations requires the use of a number of assumptions, including the assumed discount rate formeasuring future payment obligations and the health care cost trend rate. The Company determines the appropriate discount rate for each of the plans basedon current rates on high quality corporate bonds that would generate the cash flow necessary to pay plan benefits when due. The Company's weightedaverage discount rate to determine its37Table of Contentsbenefit obligations as of December 31, 2018 was 4.30%, as compared to 3.63% for December 31, 2017. The health care cost trend rate assumed for 2018 was6.25%, declining to 5.0% in 2023, as compared to assumed trend rate for 2019 of 6.0%, declining to 5.0% in 2023. A 1% increase in assumed health caretrend rates would increase the Company's total service and interest cost for the year ended December 31, 2018 by $9 million; whereas, a 1% decrease inassumed health care trend rates would decrease the Company's total service and interest cost for the year ended December 31, 2018 by $7 million. A onepercentage point decrease in the weighted average discount rate would increase the Company's postretirement benefit liability by approximately $139million and increase the estimated 2018 benefits expense by approximately $10 million.Actuarial gains or losses are triggered by changes in assumptions or experience that differ from the original assumptions and prior service credits result from aretroactive reduction in benefits due under the plans. Under the applicable accounting standards for postretirement welfare benefit plans, actuarial gains andlosses and prior service credits are not required to be recognized currently, but instead may be deferred as part of accumulated other comprehensive incomeand amortized into expense over the average remaining service life of the covered active employees or the average life expectancy of inactive participants. AtDecember 31, 2018 and 2017, the Company had unrecognized actuarial gains for postretirement welfare benefit plans of $554 million and $301 million,respectively, recorded in accumulated other comprehensive income.Forward-Looking InformationCertain statements throughout Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere in thisreport are forward-looking and thus reflect the Company's current expectations and beliefs with respect to certain current and future events and anticipatedfinancial and operating performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to the Company'soperations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-lookingstatements. Words such as "expects," "will," "plans," "anticipates," "indicates," "believes," "estimates," "forecast," "guidance," "outlook," "goals" and similarexpressions are intended to identify forward-looking statements.Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties ortrends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertaintiescannot be predicted, guaranteed or assured. All forward-looking statements in this report are based upon information available to us on the date of this report.We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changedcircumstances or otherwise, except as required by applicable law.Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: ourability to execute our strategic operating plan, including our growth, revenue-generating and cost-control initiatives; general economic conditions(including interest rates, foreign currency exchange rates, investment or credit market conditions, crude oil prices, costs of aircraft fuel and energy refiningcapacity in relevant markets); risks of doing business globally, including instability and political developments that may impact our operations in certaincountries; demand for travel and the impact that global economic and political conditions have on customer travel patterns; our capacity decisions and thecapacity decisions of our competitors; competitive pressures on pricing and on demand; changes in aircraft fuel prices; disruptions in our supply of aircraftfuel; our ability to cost-effectively hedge against increases in the price of aircraft fuel, if we decide to do so; the effects of any technology failures orcybersecurity breaches; disruptions to services provided by third-party service providers; potential reputational or other impact from adverse eventsinvolving our aircraft or operations, the aircraft or operations of our regional carriers or our code share partners or the aircraft or operations of another airline;our ability to attract and retain customers; the effects of any terrorist attacks, international hostilities or other security events, or the fear of such events;disruptions to our regional network; the impact of regulatory, investigative and legal proceedings and legal compliance risks; the success of our investmentsin other airlines, including in other parts of the world; industry consolidation or changes in airline alliances; the ability of other air carriers with whom wehave alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; costs associated with any modificationor termination of our aircraft orders; disruptions in the availability of aircraft, parts or support from our suppliers; our ability to maintain satisfactory laborrelations and the results of any collective bargaining agreement process with our union groups; any disruptions to operations due to any potential actions byour labor groups; labor costs; an outbreak of a disease that affects travel demand or travel behavior; the impact of any management changes; extendedinterruptions or disruptions in service at major airports where we operate; U.S. or foreign governmental legislation, regulation and other actions (includingOpen Skies agreements, environmental regulations and the United Kingdom's withdrawal from the European Union); the seasonality of the airline industry;weather conditions; the costs and availability of aviation and other insurance; the costs and availability of financing; our ability to maintain adequateliquidity; our ability to comply with the terms of our various financing arrangements; our ability to realize the full value of our intangible assets and long-lived assets; and other risks and uncertainties set forth under Part I, Item 1A., Risk Factors, of this report, as well as other risks and uncertainties set forth fromtime to time in the reports we file with the SEC.38Table of ContentsITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rates. Our net income is affected by fluctuations in interest rates (e.g. interest expense on variable rate debt and interest income earned on short-terminvestments). The Company's policy is to manage interest rate risk through a combination of fixed and variable rate debt. The following table summarizesinformation related to the Company's interest rate market risk at December 31 (in millions): 2018 2017Variable rate debt Carrying value of variable rate debt at December 31$3,500 $3,342Impact of 100 basis point increase on projected interest expense for the following year35 33Fixed rate debt Carrying value of fixed rate debt at December 319,945 9,926Fair value of fixed rate debt at December 319,901 10,349Impact of 100 basis point increase in market rates on fair value(378) (403)A change in market interest rates would also impact interest income earned on our cash, cash equivalents and short-term investments. Assuming our cash,cash equivalents and short-term investments remain at their average 2018 levels, a 100 basis point increase in interest rates would result in a correspondingincrease in the Company's interest income of approximately $45 million during 2019.Commodity Price Risk (Aircraft Fuel). The price level of aircraft fuel can significantly affect the Company's operations, results of operations, financialposition and liquidity.Our operational and financial results can be significantly impacted by changes in the price and availability of aircraft fuel. To provide adequate supplies offuel, the Company routinely enters into purchase contracts that are customarily indexed to market prices for aircraft fuel, and the Company generally hassome ability to cover short-term fuel supply and infrastructure disruptions at some major demand locations. The Company's current strategy is to not enterinto transactions to hedge fuel price volatility, although the Company regularly reviews its policy based on market conditions and other factors. TheCompany's 2019 forecasted fuel consumption is presently approximately 4.3 billion gallons, and based on this forecast, a one-dollar change in the price of abarrel of crude oil would change the Company's annual fuel expense by approximately $104 million.Foreign Currency. The Company generates revenues and incurs expenses in numerous foreign currencies. Changes in foreign currency exchange rates impactthe Company's results of operations through changes in the dollar value of foreign currency-denominated operating revenues and expenses. Some of theCompany's more significant foreign currency exposures include the Canadian dollar, Chinese renminbi, European euro, British pound and Japanese yen. TheCompany's current strategy is to not enter into transactions to hedge its foreign currency sales, although the Company regularly reviews its policy based onmarket conditions and other factors.The result of a uniform 1% strengthening in the value of the U.S. dollar from December 31, 2018 levels relative to each of the currencies in which theCompany has foreign currency exposure would result in a decrease in pre-tax income of approximately $24 million for the year ending December 31, 2019.This sensitivity analysis was prepared based upon projected 2019 foreign currency-denominated revenues and expenses as of December 31, 2018.39Table of ContentsITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and the Board of Directors of United Continental Holdings, Inc.Opinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of United Continental Holdings, Inc. (the "Company") as of December 31, 2018 and 2017,the related statements of consolidated operations, comprehensive income (loss), cash flows, and stockholders' equity for each of the three years in the periodended December 31, 2018, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the"consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of theCompany at December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31,2018, in conformity with U.S. generally accepted accounting principles.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company'sinternal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control-Integrated Framework issued by theCommittee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 28, 2019, expressed an unqualifiedopinion thereon.Adoption of ASU No. 2014-09As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for revenue in 2018, 2017 and 2016 due tothe adoption of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Companyin accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing proceduresto assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also includedevaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financialstatements. We believe that our audits provide a reasonable basis for our opinion./s/ Ernst & Young LLPWe have served as the Company's auditor since 2009.Chicago, IllinoisFebruary 28, 2019 40Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholder and the Board of Directors of United Airlines, Inc.Opinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of United Airlines, Inc. (the "Company") as of December 31, 2018 and 2017, and the relatedstatements of consolidated operations, comprehensive income (loss), cash flows, and stockholder's equity, for each of the three years in the period endedDecember 31, 2018, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the "consolidatedfinancial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company atDecember 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, inconformity with U.S. generally accepted accounting principles.Adoption of ASU No. 2014-09As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for revenue in 2018, 2017 and 2016 due tothe adoption of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606).Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations ofthe Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, norwere we engaged to perform an audit of the Company's internal control over financial reporting. As part of our audits we are required to obtain anunderstanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internalcontrol over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures inthe financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion./s/ Ernst & Young LLPWe have served as the Company's auditor since 2009.Chicago, IllinoisFebruary 28, 201941Table of ContentsUNITED CONTINENTAL HOLDINGS, INC.STATEMENTS OF CONSOLIDATED OPERATIONS(In millions, except per share amounts) Year Ended December 31, 2018 2017 (a) 2016 (a)Operating revenue: Passenger revenue$37,706 $34,460 $33,429Cargo1,237 1,114 934Other operating revenue2,360 2,210 2,195Total operating revenue41,303 37,784 36,558Operating expense: Salaries and related costs11,458 10,941 10,176Aircraft fuel9,307 6,913 5,813Regional capacity purchase2,601 2,232 2,197Landing fees and other rent2,359 2,240 2,165Depreciation and amortization2,240 2,149 1,977Aircraft maintenance materials and outside repairs1,767 1,856 1,749Distribution expenses1,558 1,435 1,395Aircraft rent433 621 680Special charges487 176 745Other operating expenses5,801 5,550 5,317Total operating expense38,011 34,113 32,214Operating income3,292 3,671 4,344 Nonoperating income (expense): Interest expense(729) (671) (674)Interest capitalized70 84 72Interest income101 57 42Miscellaneous, net(76) (101) (11)Total nonoperating expense, net(634) (631) (571)Income before income taxes2,658 3,040 3,773Income tax expense529 896 1,539Net income$2,129 $2,144 $2,234Earnings per share, basic$7.73 $7.08 $6.77Earnings per share, diluted$7.70 $7.06 $6.76(a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) and Accounting Standards Update No.2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. See Note 1 to the financial statements contained in Part II, Item 8 ofthis report for additional information.The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.42Table of ContentsUNITED CONTINENTAL HOLDINGS, INC.STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)(In millions) Year Ended December 31, 2018 2017 (a) 2016 (a) Net income$2,129 $2,144 $2,234 Other comprehensive income (loss), net change related to: Employee benefit plans, net of taxes342 (195) (313)Fuel derivative financial instruments, net of taxes— 1 316Investments and other, net of taxes(4) (6) (1)Total other comprehensive income (loss), net338 (200) 2Total comprehensive income, net$2,467 $1,944 $2,236(a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 1 to the financial statementscontained in Part II, Item 8 of this report for additional information.The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.43Table of ContentsUNITED CONTINENTAL HOLDINGS, INC.CONSOLIDATED BALANCE SHEETS(In millions, except shares) At December 31,ASSETS2018 2017 (a)Current assets: Cash and cash equivalents$1,694 $1,482Short-term investments2,256 2,316Receivables, less allowance for doubtful accounts (2018—$8; 2017—$7)1,346 1,340Aircraft fuel, spare parts and supplies, less obsolescence allowance (2018—$412; 2017—$354)985 924Prepaid expenses and other913 1,071Total current assets7,194 7,133Operating property and equipment: Owned— Flight equipment31,607 28,692Other property and equipment7,919 6,946Total owned property and equipment39,526 35,638Less—Accumulated depreciation and amortization(12,760) (11,159)Total owned property and equipment, net26,766 24,479 Purchase deposits for flight equipment1,177 1,344 Capital leases— Flight equipment1,029 1,151Other property and equipment11 11Total capital leases1,040 1,162Less—Accumulated amortization(654) (777)Total capital leases, net386 385Total operating property and equipment, net28,329 26,208Other assets: Goodwill4,523 4,523Intangibles, less accumulated amortization (2018—$1,380; 2017—$1,313)3,159 3,539Restricted cash105 91Notes receivable, net516 46Investments in affiliates and other, net966 806Total other assets9,269 9,005Total assets$44,792 $42,346(continued on next page)44Table of ContentsUNITED CONTINENTAL HOLDINGS, INC.CONSOLIDATED BALANCE SHEETS(In millions, except shares) At December 31,LIABILITIES AND STOCKHOLDERS' EQUITY2018 2017 (a)Current liabilities: Advance ticket sales$4,381 $3,940Frequent flyer deferred revenue2,286 2,192Accounts payable2,363 2,196Accrued salaries and benefits2,184 2,166Current maturities of long-term debt1,230 1,565Current maturities of capital leases149 128Other619 576Total current liabilities13,212 12,763 Long-term debt12,215 11,703Long-term obligations under capital leases1,134 996 Other liabilities and deferred credits: Frequent flyer deferred revenue2,719 2,591Postretirement benefit liability1,295 1,602Pension liability1,576 1,921Deferred income taxes814 204Other1,832 1,832Total other liabilities and deferred credits8,236 8,150Commitments and contingencies Stockholders' equity: Preferred stock— —Common stock at par, $0.01 par value; authorized 1,000,000,000 shares; outstanding 269,914,769 and286,973,195 shares at December 31, 2018 and 2017, respectively3 3Additional capital invested6,120 6,098Retained earnings6,668 4,549Stock held in treasury, at cost(1,993) (769)Accumulated other comprehensive loss(803) (1,147)Total stockholders' equity9,995 8,734Total liabilities and stockholders' equity$44,792 $42,346(a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 1 to the financial statementscontained in Part II, Item 8 of this report for additional information.The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.45Table of ContentsUNITED CONTINENTAL HOLDINGS, INC.STATEMENTS OF CONSOLIDATED CASH FLOWS(In millions) Year Ended December 31, 2018 2017 (a) 2016 (a)Operating Activities: Net income$2,129 $2,144 $2,234Adjustments to reconcile net income to net cash provided by operating activities - Deferred income taxes515 973 1,631Depreciation and amortization2,240 2,149 1,977Special charges, non-cash portion416 35 391Other operating activities170 141 109Changes in operating assets and liabilities - Increase in receivables(29) (183) (16)(Increase) decrease in other assets29 (533) (296)Increase (decrease) in advance ticket sales441 145 (28)Increase (decrease) in frequent flyer deferred revenue222 (107) (55)Increase in accounts payable130 66 239Decrease in advanced purchase of miles— (942) (206)Decrease in other liabilities(82) (475) (438)Net cash provided by operating activities6,181 3,413 5,542Investing Activities: Capital expenditures(4,177) (3,998) (3,223)Purchases of short-term and other investments(2,552) (3,241) (2,768)Proceeds from sale of short-term and other investments2,616 3,177 2,712Loans made to others(466) (30) (56)Investment in affiliates(139) (2) (14)Other, net155 164 111Net cash used in investing activities(4,563) (3,930) (3,238)Financing Activities: Proceeds from issuance of long-term debt and airport construction financing1,740 2,765 808Payments of long-term debt(1,727) (901) (1,215)Repurchases of common stock(1,235) (1,844) (2,614)Principal payments under capital leases(134) (124) (136)Capitalized financing costs(37) (80) (64)Other, net(17) (11) 8Net cash used in financing activities(1,410) (195) (3,213)Net increase (decrease) in cash, cash equivalents and restricted cash208 (712) (909)Cash, cash equivalents and restricted cash at beginning of year1,591 2,303 3,212Cash, cash equivalents and restricted cash at end of year$1,799 $1,591 $2,303 Investing and Financing Activities Not Affecting Cash: Property and equipment acquired through the issuance of debt and capital leases$174 $935 $386Debt associated with termination of a maintenance service agreement163 — —Investment in Republic Airways Holdings, Inc. received from bankruptcy claims— 92 —Airport construction financing12 42 91Operating lease conversions to capital lease52 — 12 Cash Paid During the Period for: Interest$651 $571 $584Income taxes19 20 14(a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 1 to the financial statementscontained in Part II, Item 8 of this report for additional information.The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.46Table of ContentsUNITED CONTINENTAL HOLDINGS, INC.STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY(In millions) CommonStock AdditionalCapitalInvested TreasuryStock Retained Earnings(AccumulatedDeficit) AccumulatedOther ComprehensiveIncome (Loss) Total Shares Amount Balance at December 31, 2015364.6 $4 $7,946 $(1,610) $3,457 $(831) $8,966Net income (a)— — — — 2,234 — 2,234Other comprehensive income— — — — — 2 2Stock-settled share-based compensation— — 32 — — — 32Proceeds from exercise of stock options0.3 — 6 — — — 6Repurchases of common stock(50.3) — — (2,607) — — (2,607)Treasury stock retired— (1) (1,415) 3,709 (2,293) — —Other (a)— — — (3) (56) — (59)Balance at December 31, 2016314.6 3 6,569 (511) 3,342 (829) 8,574Net income (a)— — — — 2,144 — 2,144Other comprehensive loss— — — — — (200) (200)Stock-settled share-based compensation— — 56 — — — 56Proceeds from exercise of stock options— — 2 — — — 2Repurchases of common stock(27.8) — — (1,844) — — (1,844)Treasury stock retired— — (508) 1,576 (1,068) — —Net treasury stock issued for share-based awards0.2 — (21) 10 (1) — (12)Excess tax benefits from share-based awards— — — — 14 — 14Reclassification of stranded tax effects— — — — 118 (118) —Balance at December 31, 2017287.0 3 6,098 (769) 4,549 (1,147) 8,734 Net income— — — — 2,129 — 2,129Other comprehensive loss— — — — — 338 338Stock-settled share-based compensation— — 60 — — — 60Repurchases of common stock(17.5) — — (1,250) — — (1,250)Net treasury stock issued for share-based awards0.4 — (38) 26 (4) — (16)Adoption of accounting standard related to equityinvestments— — — — (6) 6 —Balance at December 31, 2018269.9 $3 $6,120 $(1,993) $6,668 $(803) $9,995(a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 1 to the financial statementscontained in Part II, Item 8 of this report for additional information.The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.47Table of ContentsUNITED AIRLINES, INC.STATEMENTS OF CONSOLIDATED OPERATIONS(In millions) Year Ended December 31, 2018 2017 (a) 2016 (a)Operating revenue: Passenger revenue$37,706 $34,460 $33,429Cargo1,237 1,114 934Other operating revenue2,360 2,210 2,195Total operating revenue41,303 37,784 36,558Operating expense: Salaries and related costs11,458 10,941 10,176Aircraft fuel9,307 6,913 5,813Regional capacity purchase2,601 2,232 2,197Landing fees and other rent2,359 2,240 2,165Depreciation and amortization2,240 2,149 1,977Aircraft maintenance materials and outside repairs1,767 1,856 1,749Distribution expenses1,558 1,435 1,395Aircraft rent433 621 680Special charges487 176 745Other operating expenses5,799 5,548 5,315Total operating expense38,009 34,111 32,212Operating income3,294 3,673 4,346 Nonoperating income (expense): Interest expense(729) (671) (674)Interest capitalized70 84 72Interest income101 57 42Miscellaneous, net(76) (101) (11)Total nonoperating expense, net(634) (631) (571)Income before income taxes2,660 3,042 3,775Income tax expense529 879 1,541Net income$2,131 $2,163 $2,234(a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) and Accounting Standards Update No.2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. See Note 1 to the financial statements contained in Part II, Item 8 ofthis report for additional information.The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.48Table of ContentsUNITED AIRLINES, INC.STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)(In millions) Year Ended December 31, 2018 2017 (a) 2016 (a) Net income$2,131 $2,163 $2,234 Other comprehensive income (loss), net change related to: Employee benefit plans, net of taxes342 (195) (313)Fuel derivative financial instruments, net of taxes— 1 316Investments and other, net of taxes(4) (6) (1)Total other comprehensive income (loss), net338 (200) 2Total comprehensive income, net$2,469 $1,963 $2,236(a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 1 to the financial statementscontained in Part II, Item 8 of this report for additional information.The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.49Table of ContentsUNITED AIRLINES, INC.CONSOLIDATED BALANCE SHEETS(In millions, except shares) At December 31,ASSETS2018 2017 (a)Current assets: Cash and cash equivalents$1,688 $1,476Short-term investments2,256 2,316Receivables, less allowance for doubtful accounts (2018—$8; 2017—$7)1,346 1,340Aircraft fuel, spare parts and supplies, less obsolescence allowance (2018—$412; 2017—$354)985 924Prepaid expenses and other913 1,071Total current assets7,188 7,127Operating property and equipment: Owned— Flight equipment31,607 28,692Other property and equipment7,919 6,946Total owned property and equipment39,526 35,638Less—Accumulated depreciation and amortization(12,760) (11,159)Total owned property and equipment, net26,766 24,479 Purchase deposits for flight equipment1,177 1,344 Capital leases— Flight equipment1,029 1,151Other property and equipment11 11Total capital leases1,040 1,162Less—Accumulated amortization(654) (777)Total capital leases, net386 385Total operating property and equipment, net28,329 26,208Other assets: Goodwill4,523 4,523Intangibles, less accumulated amortization (2018—$1,380; 2017—$1,313)3,159 3,539Restricted cash105 91Notes receivable, net516 46Investments in affiliates and other, net966 806Total other assets9,269 9,005Total assets$44,786 $42,340(continued on next page)50Table of ContentsUNITED AIRLINES, INC.CONSOLIDATED BALANCE SHEETS(In millions, except shares) At December 31,LIABILITIES AND STOCKHOLDER'S EQUITY2018 2017 (a)Current liabilities: Advance ticket sales$4,381 $3,940Frequent flyer deferred revenue2,286 2,192Accounts payable2,363 2,196Accrued salaries and benefits2,184 2,166Current maturities of long-term debt1,230 1,565Current maturities of capital leases149 128Other624 581Total current liabilities13,217 12,768 Long-term debt12,215 11,703Long-term obligations under capital leases1,134 996 Other liabilities and deferred credits: Frequent flyer deferred revenue2,719 2,591Postretirement benefit liability1,295 1,602Pension liability1,576 1,921Deferred income taxes842 231Other1,831 1,832Total other liabilities and deferred credits8,263 8,177Commitments and contingencies Stockholder's equity: Common stock at par, $0.01 par value; authorized 1,000 shares; issued and outstanding 1,000 shares atDecember 31, 2018 and 2017— —Additional capital invested598 1,787Retained earnings10,272 8,146Accumulated other comprehensive loss(803) (1,147)Receivable from related parties(110) (90)Total stockholder's equity9,957 8,696Total liabilities and stockholder's equity$44,786 $42,340(a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 1 to the financial statementscontained in Part II, Item 8 of this report for additional information.The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.51Table of ContentsUNITED AIRLINES, INC.STATEMENTS OF CONSOLIDATED CASH FLOWS(In millions) Year Ended December 31, 2018 2017 (a) 2016 (a)Operating Activities: Net income$2,131 $2,163 $2,234Adjustments to reconcile net income to net cash provided by operating activities - Deferred income taxes515 956 1,633Depreciation and amortization2,240 2,149 1,977Special charges, non-cash portion416 35 391Other operating activities170 140 109Changes in operating assets and liabilities - Increase in receivables(29) (183) (16)Increase in intercompany receivables(20) (15) (57)(Increase) decrease in other assets29 (533) (250)Increase (decrease) in advance ticket sales441 145 (28)Increase (decrease) in frequent flyer deferred revenue222 (107) (55)Increase in accounts payable130 66 239Decrease in advanced purchase of miles— (942) (206)Decrease in other liabilities(82) (475) (436)Net cash provided by operating activities6,163 3,399 5,535Investing Activities: Capital expenditures(4,177) (3,998) (3,223)Purchases of short-term and other investments(2,552) (3,241) (2,768)Proceeds from sale of short-term and other investments2,616 3,177 2,712Loans made to others(466) (30) (56)Investment in affiliates(139) (2) (14)Other, net155 164 111Net cash used in investing activities(4,563) (3,930) (3,238)Financing Activities: Proceeds from issuance of long-term debt and airport construction financing1,740 2,765 808Payments of long-term debt(1,727) (901) (1,215)Dividend to UAL(1,235) (1,844) (2,614)Principal payments under capital leases(134) (124) (136)Capitalized financing costs(37) (80) (64)Other, net1 3 15Net cash used in financing activities(1,392) (181) (3,206)Net increase (decrease) in cash, cash equivalents and restricted cash208 (712) (909)Cash, cash equivalents and restricted cash at beginning of year1,585 2,297 3,206Cash, cash equivalents and restricted cash at end of year$1,793 $1,585 $2,297 Investing and Financing Activities Not Affecting Cash: Property and equipment acquired through the issuance of debt and capital leases$174 $935 $386Debt associated with termination of a maintenance service agreement163 — —Investment in Republic Airways Holdings, Inc. received from bankruptcy claims— 92 —Airport construction financing12 42 91Operating lease conversions to capital lease52 — 12 Cash Paid During the Period for: Interest$651 $571 $584Income taxes19 20 14(a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 1 to the financial statementscontained in Part II, Item 8 of this report for additional information.The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.52Table of ContentsUNITED AIRLINES, INC.STATEMENTS OF CONSOLIDATED STOCKHOLDER'S EQUITY(In millions) AdditionalCapitalInvested Retained Earnings(AccumulatedDeficit) AccumulatedOtherComprehensiveIncome (Loss) Receivable fromRelated Parties, Net TotalBalance at December 31, 2015$6,138 $3,673 $(831) $(17) $8,963Net income (a)— 2,234 — — 2,234Other comprehensive income— — 2 — 2Dividend to UAL(2,603) — — — (2,603)Stock-settled share-based compensation32 — — — 32UAL contribution related to stock plans6 — — — 6Other (a)— (56) — (58) (114)Balance at December 31, 20163,573 5,851 (829) (75) 8,520Net income (a)— 2,163 — — 2,163Other comprehensive loss— — (200) — (200)Dividend to UAL(1,844) — — — (1,844)Stock-settled share-based compensation56 — — — 56UAL contribution related to stock plans2 — — — 2Excess tax benefits from share-based awards— 14 — — 14Reclassification of stranded tax effects— 118 (118) — —Other— — — (15) (15)Balance at December 31, 20171,787 8,146 (1,147) (90) 8,696Net income— 2,131 — — 2,131Other comprehensive loss— — 338 — 338Dividend to UAL(1,249) — — — (1,249)Stock-settled share-based compensation60 — — — 60Other— (5) 6 (20) (19)Balance at December 31, 2018$598 $10,272 $(803) $(110) $9,957(a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 1 to the financial statementscontained in Part II, Item 8 of this report for additional information.The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.53Table of ContentsUNITED CONTINENTAL HOLDINGS, INC.UNITED AIRLINES, INC.COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSOverviewUnited Continental Holdings, Inc. (together with its consolidated subsidiaries, "UAL" or the "Company") is a holding company and its principal, wholly-owned subsidiary is United Airlines, Inc. (together with its consolidated subsidiaries, "United"). As UAL consolidates United for financial statement purposes,disclosures that relate to activities of United also apply to UAL, unless otherwise noted. United's operating revenues and operating expenses comprise nearly100% of UAL's revenues and operating expenses. In addition, United comprises approximately the entire balance of UAL's assets, liabilities and operatingcash flows. When appropriate, UAL and United are named specifically for their individual contractual obligations and related disclosures and any significantdifferences between the operations and results of UAL and United are separately disclosed and explained. We sometimes use the words "we," "our," "us," andthe "Company" in this report for disclosures that relate to all of UAL and United.NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES(a)Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States ofAmerica ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in these financial statements andaccompanying notes. Actual results could differ from those estimates.(b)Revenue Recognition— The Company presents Passenger revenue, Cargo revenue and Other operating revenue on its income statement. Passengerrevenue is recognized when transportation is provided and Cargo revenue is recognized when shipments arrive at their destination. Other operatingrevenue 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 cardtransactions, with payments collected by the Company in advance of the performance of related services. The Company initially records ticket salesin its Advance ticket sales liability, deferring revenue recognition until the travel occurs. For travel that has more than one flight segment, theCompany deems each segment as a separate performance obligation and recognizes revenue for each segment as travel occurs. Tickets sold by otherairlines where the Company provides the transportation are recognized as passenger revenue at the estimated value to be billed to the other airlinewhen travel is provided. Differences between amounts billed and the actual amounts may be rejected and rebilled or written off if the amountrecorded was different from the original estimate. When necessary, the Company records a reserve against its billings and payables with otherairlines based on historical experience.The Company sells certain tickets with connecting flights with one or more segments operated by its other airline partners. For segments operated byits other airline partners, the Company has determined that it is acting as an agent on behalf of the other airlines as they are responsible for theirportion of the contract (i.e. transportation of the passenger). The Company, as the agent, recognizes revenue within Other operating revenue at thetime of the travel for the net amount representing commission to be retained by the Company for any segments flown by other airlines.Refundable tickets expire after one year from the date of issuance. Non-refundable tickets generally expire on the date of the intended travel, unlessthe date is extended by notification from the customer on or before the intended travel date. The Company records breakage revenue on the traveldate for its estimate of tickets that will expire unused. To determine breakage, the Company uses its historical experience with refundable andnonrefundable expired tickets and other facts, such as recent aging trends, program changes and modifications that could affect the ultimateexpiration patterns of tickets. Fees charged in association with changes or extensions to non-refundable tickets are considered part of the Company'spassenger travel obligation. As such, those fees are deferred at the time of collection and recognized at the time the travel is provided. United initially capitalizes the costs of selling airline travel tickets and then recognizes those costs as Distribution expense at the time of travel.Passenger ticket costs include credit card fees, travel agency and other commissions paid, as well as global distribution systems booking fees.54Table of ContentsAdvance Ticket Sales. Advance ticket sales represent the Company's liability to provide air transportation in the future. In the years ended December31, 2018 and 2017, the Company recognized approximately $3.1 billion and $2.9 billion, respectively, of passenger revenue for tickets that wereincluded in Advance ticket sales at the beginning of those periods. All tickets sold at any given point of time have travel dates extending up totwelve months. As a result, the balance of the Company's Advance ticket sales liability represents activity that will be recognized in the next twelvemonths.Revenue by Geography. The Company further disaggregates revenue by geographic regions. Operating segments are defined as components of anenterprise with separate financial information, which are evaluated regularly by the chief operating decision maker and are used in resourceallocation and performance assessments.The Company deploys its aircraft across its route network through a single route scheduling system to maximize its value. When making resourceallocation decisions, the Company's chief operating decision maker evaluates flight profitability data, which considers aircraft type and routeeconomics. The Company's chief operating decision maker makes resource allocation decisions to maximize the Company's consolidated financialresults. Managing the Company as one segment allows management the opportunity to maximize the value of its route network.The Company's operating revenue by principal geographic region (as defined by the U.S. Department of Transportation) for the years endedDecember 31 is presented in the table below (in millions): 2018 2017¹ 2016¹Domestic (U.S. and Canada) $25,552 $23,114 $22,151Atlantic 7,103 6,340 6,194Pacific 5,188 4,914 4,984Latin America 3,460 3,416 3,229Total $41,303 $37,784 $36,558(1) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See (u) below for additionalinformation.The Company attributes revenue among the geographic areas based upon the origin and destination of each flight segment. The Company'soperations involve an insignificant level of dedicated revenue-producing assets in geographic regions as the overwhelming majority of theCompany's revenue-producing assets (primarily U.S. registered aircraft) can be deployed in any of its geographic regions.Ancillary Fees. The Company charges fees, separately from ticket sales, for certain ancillary services that are directly related to passengers' travel,such as ticket change fees, baggage fees, inflight amenities fees, and other ticket-related fees. These ancillary fees are part of the travel performanceobligation and, as such, are recognized as passenger revenue when the travel occurs. The Company recorded $2.2 billion, $2.0 billion, and $1.9billion of ancillary fees within passenger revenue in the years ended December 31, 2018, 2017 and 2016 respectively.(c)Frequent Flyer Accounting— United's MileagePlus loyalty program builds customer loyalty by offering awards, benefits and services to programparticipants. Members in this program earn miles for travel on United, United Express, Star Alliance members and certain other airlines thatparticipate in the program. Members can also earn miles by purchasing the goods and services of our network of non-airline partners. We havecontracts to sell miles to these partners with the terms extending from one to eight years. These partners include domestic and international creditcard issuers, retail merchants, hotels, car rental companies and our participating airline partners. Miles can be redeemed for free (other than taxes andgovernment imposed fees), discounted or upgraded air travel and non-travel awards. Miles expire after 18 months of member account inactivity.Miles Earned in Conjunction with Travel. When frequent flyers earn miles for flights, the Company recognizes a portion of the ticket sales asrevenue when the travel occurs and defers a portion of the ticket sale representing the value of the related miles as a separate performance obligation.The Company determines the estimated selling price of travel and miles as if each element is sold on a separate basis. The total consideration fromeach ticket sale is then allocated to each of these elements, individually, on a pro-rata basis. At the time of travel, the Company records the portionallocated to the miles to Frequent flyer deferred revenue on the Company's consolidated balance sheet and subsequently recognizes it into revenuewhen miles are redeemed for air travel and non-air travel awards.The Company's estimated selling price of miles is based on an equivalent ticket value less breakage, which incorporates the expected redemption ofmiles, as the best estimate of selling price for these miles. The equivalent ticket value is based on the prior 12 months' weighted average equivalentticket value of similar fares as those used to55Table of Contentssettle award redemptions while taking into consideration such factors as redemption pattern, cabin class, loyalty status and geographic region. Theestimated selling price of miles is adjusted by breakage that considers a number of factors, including redemption patterns of various customergroups. The Company reviews its breakage estimates annually based upon the latest available information regarding redemption and expirationpatterns. The Company's estimate of the expected expiration of miles requires significant management judgment. Current and future changes toexpiration assumptions or to the expiration policy, or to program rules and program redemption opportunities, may result in material changes to thedeferred revenue balance as well as recognized revenues from the program. For the portion of the outstanding miles that we estimate will not beredeemed, 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 partnerChase Bank USA, N.A. ("Chase"). Chase awards miles to MileagePlus members based on their credit card activity. United identified the followingsignificant 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 traveland non-travel award redemptions. The Company records Passenger revenue related to the travel awards when the transportation isprovided and records Other revenue related to the non-travel awards when the goods or services are delivered. The Company records thecost 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 revenueis 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 contactpoints such as United's website, email promotions, direct mail campaigns, airport advertising and in-flight advertising. Advertisingrevenue 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 upgradesand lounge passes. Lounge passes are recorded to Other operating revenue as customers use the lounge passes. Bag fees and seat upgradesare 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 theseparately identifiable performance obligations. The fair value of the separately identifiable performance obligations is determined usingmanagement's estimated selling price of each component. The objective of using the estimated selling price based methodology is to determine theprice 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 ofselling 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 theterm of the Co-Brand Agreement in order to determine the allocation of proceeds to each of the components to be delivered. We also evaluatevolumes on an annual basis, which may result in a change in the allocation of the estimated consideration from the Co-Brand Agreement on aprospective basis.Frequent flyer deferred revenue. Miles in MileagePlus members' accounts are combined into one homogeneous pool and are thus not separatelyidentifiable, for award redemption purposes, between miles earned in the current period and those in their beginning balance. Of the miles expectedto be redeemed, the Company expects the majority of these miles to be redeemed within two years. The table below presents a roll forward ofFrequent flyer deferred revenue (in millions): Twelve Months EndedDecember 31, 2018 2017Total Frequent flyer deferred revenue - beginning balance$4,783 $4,889Total miles awarded2,451 2,077Travel miles redeemed (Passenger revenue)(2,068) (2,004)Non-travel miles redeemed (Other operating revenue)(161) (179)Total Frequent flyer deferred revenue - ending balance$5,005 $4,78356Table of ContentsIn the year ended December 31, 2018, 2017 and 2016, the Company recognized, in Other operating revenue, $2.0 billion, $1.8 billion and $1.7billion, respectively, related to the marketing, advertising, non-travel miles redeemed (net of related costs) and other travel-related benefits of themileage revenue associated with our various partner agreements including, but not limited to, our Chase co-brand agreement. The portion related tothe MileagePlus miles awarded of the total amounts received is deferred and presented in the table above as an increase to the frequent flyer liability.(d)Cash and Cash Equivalents and Restricted Cash— Highly liquid investments with a maturity of three months or less on their acquisition date areclassified as cash and cash equivalents.Restricted cash primarily includes cash collateral for letters of credit and collateral associated with obligations for facility leases and otherinsurance-related obligations. Restricted cash is classified as short-term or long-term in the consolidated balance sheets based on the expectedtiming of return of the assets to the Company.The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sumto the total of the same such amounts shown in the statements of consolidated cash flows (in millions): UAL United At December 31, At December 31, 2018 2017 2016 2018 2017 2016Current assets: Cash and cash equivalents$1,694 $1,482 $2,179 $1,688 $1,476 $2,173Restricted cash included in Prepaid expenses and other— 18 — — 18 —Other assets: Restricted cash105 91 124 105 91 124Total cash, cash equivalents and restricted cash shown in thestatement of consolidated cash flows$1,799 $1,591 $2,303 $1,793 $1,585 $2,297(e)Short-term Investments—Debt investments are classified as available-for-sale and are stated at fair value. Realized gains and losses on sales of theseinvestments are reflected in Miscellaneous, net in the consolidated statements of operations. Unrealized gains and losses on available-for-salesecurities are reflected as a component of accumulated other comprehensive income (loss). Equity investments with readily determinable fair valuesare measured at fair value. Equity investments without readily determinable fair values are measured using the equity method, or measured at costwith adjustments for observable changes in price or impairments (referred to as the measurement alternative). Changes in fair value are recorded inMiscellaneous, net in the consolidated statements of operations.(f)Accounts Receivable. Accounts receivable primarily consist of amounts due from credit card companies, non-airline partners, and cargotransportation customers. We provide an allowance for uncollectible accounts equal to the estimated losses expected to be incurred based onhistorical write-offs and other specific analyses. Bad debt expense and write-offs were not material for the year ended December 31, 2018 and 2017.(g)Aircraft Fuel, Spare Parts and Supplies—The Company accounts for aircraft fuel, spare parts and supplies at average cost and provides anobsolescence allowance for aircraft spare parts with an assumed residual value of 10% of original cost.(h)Property and Equipment—The Company records additions to owned operating property and equipment at cost when acquired. Property undercapital leases and the related obligation for future lease payments are recorded at an amount equal to the initial present value of those leasepayments. Modifications that enhance the operating performance or extend the useful lives of airframes or engines are capitalized as property andequipment. It is the Company's policy to record compensation from delays in delivery of aircraft as a reduction of the cost of the related aircraft.Depreciation and amortization of owned depreciable assets is based on the straight-line method over the assets' estimated useful lives. Leaseholdimprovements are amortized over the remaining term of the lease, including estimated facility renewal options when renewal is reasonably assured atkey airports, or the estimated useful life of the related asset, whichever is less. Properties under capital leases are amortized on the straight-linemethod over the life of the lease or, in the case of certain aircraft, over their estimated useful lives, whichever is shorter. Amortization57Table of Contentsof capital lease assets is included in depreciation and amortization expense. The estimated useful lives of property and equipment are as follows: Estimated Useful Life (in years)Aircraft and related rotable parts 25 to 30Aircraft seats 10 to 15Buildings 25 to 45Other property and equipment 3 to 15Computer software 5 to 15Building improvements 1 to 40As of December 31, 2018 and 2017, the Company had a carrying value of computer software of $359 million and $345 million, respectively. For theyears ended December 31, 2018, 2017 and 2016, the Company's depreciation expense related to computer software was $122 million, $117 millionand $108 million, respectively. Aircraft and aircraft spare parts were assumed to have residual values of approximately 10% of original cost, andother categories of property and equipment were assumed to have no residual value.(i)Maintenance and Repairs—The cost of maintenance and repairs, including the cost of minor replacements, is charged to expense as incurred,except for costs incurred under our power-by-the-hour ("PBTH") engine maintenance agreements. PBTH contracts transfer certain risk to third-partyservice providers and fix the amount we pay per flight hour or per cycle to the service provider in exchange for maintenance and repairs under apredefined maintenance program. Under PBTH agreements, the Company recognizes expense at a level rate per engine hour, unless the level ofservice effort and the related payments during the period are substantially consistent, in which case the Company recognizes expense based on theamounts paid.(j)Lease Fair Value Adjustments—Lease fair value adjustments, which arose from recording operating leases at fair value under fresh start or businesscombination accounting, are amortized on a straight-line basis over the related lease term.(k)Regional Capacity Purchase—Payments made to regional carriers under capacity purchase agreements ("CPAs") are reported in Regional capacitypurchase in our consolidated statements of operations.(l)Advertising—Advertising costs, which are included in Other operating expenses, are expensed as incurred. Advertising expenses were $211 million,$217 million and $220 million for the years ended December 31, 2018, 2017 and 2016 respectively.(m)Intangibles—The Company has finite-lived and indefinite-lived intangible assets, including goodwill. Finite-lived intangible assets are amortizedover their estimated useful lives. Goodwill and indefinite-lived intangible assets are not amortized but are reviewed for impairment annually or morefrequently if events or circumstances indicate that the asset may be impaired. Goodwill and indefinite-lived assets are reviewed for impairment on anannual basis as of October 1, or on an interim basis whenever a triggering event occurs. See Note 2 of this report for additional information related tointangibles.(n)Long-Lived Asset Impairments—The Company evaluates the carrying value of long-lived assets subject to amortization whenever events orchanges in circumstances indicate that an impairment may exist. For purposes of this testing, the Company has generally identified the aircraft fleettype as the lowest level of identifiable cash flows. An impairment charge is recognized when the asset's carrying value exceeds its net undiscountedfuture cash flows and its fair market value. The amount of the charge is the difference between the asset's carrying value and fair market value. SeeNote 14 of this report for additional information related to asset impairments.(o)Share-Based Compensation—The Company measures the cost of employee services received in exchange for an award of equity instruments basedon the grant date fair value of the award. The resulting cost is recognized over the period during which an employee is required to provide service inexchange for the award, usually the vesting period. Obligations for cash-settled restricted stock units ("RSUs") are remeasured at fair valuethroughout the requisite service period at the close of the reporting period based upon UAL's stock price. In addition to the service requirement,certain RSUs have performance metrics that must be achieved prior to vesting. These awards are accrued based on the expected level of achievementat each reporting period. An adjustment is recorded each reporting period to adjust compensation expense based on both UAL's stock price and thethen current level of58Table of Contentsexpected performance achievement for the performance-based awards. See Note 5 of this report for additional information on UAL's share-basedcompensation plans.(p)Ticket Taxes—Certain governmental taxes are imposed on the Company's ticket sales through a fee included in ticket prices. The Company collectsthese fees and remits them to the appropriate government agency. These fees are recorded on a net basis and, as a result, are excluded from revenue.(q)Retirement of Leased Aircraft—The Company accrues for estimated lease costs over the remaining term of the lease at the present value of futureminimum lease payments, net of estimated sublease rentals (if any), in the period that aircraft are permanently removed from service. Whenreasonably estimable and probable, the Company estimates maintenance lease return condition obligations for items such as minimum aircraft andengine conditions specified in leases and accrues these amounts over the lease term while the aircraft are operating, and any remaining unrecognizedestimated obligations are accrued in the period that an aircraft is removed from service.(r)Uncertain Income Tax Positions—The Company has recorded reserves for income taxes and associated interest that may become payable in futureyears. Although management believes that its positions taken on income tax matters are reasonable, the Company nevertheless has established taxand interest reserves in recognition that various taxing authorities may challenge certain of the positions taken by the Company, potentiallyresulting in additional liabilities for taxes and interest. The Company's uncertain tax position reserves are reviewed periodically and are adjusted asevents occur that affect its estimates, such as the availability of new information, the lapsing of applicable statutes of limitation, the conclusion oftax audits, the measurement of additional estimated liability, the identification of new tax matters, the release of administrative tax guidanceaffecting its estimates of tax liabilities, or the rendering of relevant court decisions. The Company records penalties and interest relating to uncertaintax positions as part of income tax expense in its consolidated statements of operations. See Note 7 of this report for additional information on UAL'suncertain tax positions.(s)Labor Costs—The Company records expenses associated with amendable labor agreements when the amounts are probable and estimable. Theseinclude costs associated with lump sum cash payments that would be made in conjunction with the ratification of labor agreements. To the extentthese upfront costs are in lieu of future pay increases, they would be capitalized and amortized over the term of the labor agreements. If not, theseamounts would be expensed.(t)Third-Party Business—The Company has third-party business revenue that includes fuel sales, catering, ground handling, maintenance servicesand frequent flyer award non-air redemptions. Third-party business revenue is recorded in Other operating revenue. The Company also incurs third-party business expenses, such as maintenance, ground handling and catering services for third parties, fuel sales and non-air mileage redemptions.The third-party business expenses are recorded in Other operating expenses, except for non-air mileage redemption. Non-air mileage redemptionexpenses are recorded to Other operating revenue.(u)Recently Issued Accounting Standards— The Company adopted Financial Accounting Standards Board ("FASB") Accounting StandardsCodification Topic 606, Revenue from Contracts with Customers (the "New Revenue Standard"), effective January 1, 2018 using the full-retrospective method. Topic 606 prescribes that an entity should recognize revenue to depict the transfer of promised goods or services to customersin an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For the Company, themost significant impact of the standard was the reclassification of certain ancillary fees from other operating revenue into passenger revenue on thestatement of consolidated operations. These ancillary fees are directly related to passenger travel, such as ticket change fees and baggage fees, andare no longer considered distinct performance obligations separate from the passenger travel component. In addition, the ticket change fees, whichwere previously recognized when received, are now recognized when transportation is provided. Adoption of the standard had no impact on theCompany's consolidated cash flows statements.The Company adopted Accounting Standards Update No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net PeriodicPostretirement Benefit Cost (the "New Retirement Standard"), effective January 1, 2018 using the full-retrospective method. The New RetirementStandard requires employers to present the service cost component of the net periodic benefit cost in the same income statement line item as otheremployee compensation costs arising from services rendered during the period. The other components of net benefit cost, including interest cost,expected return on plan assets, amortization of prior service cost/credit and actuarial gain/loss, and settlement and curtailment effects, are to bepresented outside of any subtotal of operating income. The Company elected to apply the practical expedient and use the amounts disclosed in Note8 to the financial statements included in Part II, Item 8 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31,2017 as the estimation basis for applying the retrospective presentation requirements of the standard.59Table of ContentsThe New Revenue Standard and the New Retirement Standard had the same impact on the financial statements of United as they had on the financialstatements of UAL. The tables below present the impact of the adoption of the New Revenue Standard and the New Retirement Standard on selectaccounts and captions of UAL's statements of consolidated operations for the twelve months ended December 31, 2017 and 2016 (in millions,except per share amounts) and the impact on UAL's balance sheet accounts and captions as of December 31, 2017 (in millions):Statements of Consolidated Operations for the Years Ended December 31, As Previously Reported New RevenueStandardAdjustments New RetirementStandardAdjustments As Adjusted 2017 2016 2017 2016 2017 2016 2017 2016Operating revenue: Passenger revenue$32,404 $31,457 $2,056 $1,972 $— $— $34,460 $33,429Cargo1,035 876 79 58 — — 1,114 934Other operating revenue4,297 4,223 (2,087) (2,028) — — 2,210 2,195Total operating revenue37,736 36,556 48 2 — — 37,784 36,558Operating expenses34,238 32,218 (21) (12) (104) 8 34,113 32,214Operating income3,498 4,338 69 14 104 (8) 3,671 4,344Nonoperating expense, net(499) (519) (28) (60) (104) 8 (631) (571)Income before income taxes2,999 3,819 41 (46) — — 3,040 3,773Income tax expense868 1,556 28 (17) — — 896 1,539Net income$2,131 $2,263 $13 $(29) $— $— $2,144 $2,234 Earnings per share, basic$7.04 $6.86 $0.04 $(0.09) $— $— $7.08 $6.77Earnings per share, diluted$7.02 $6.85 $0.04 $(0.09) $— $— $7.06 $6.76Consolidated Balance Sheet as of December 31, 2017 As PreviouslyReported New Revenue StandardAdjustments As AdjustedCurrent assets: Prepaid expenses and other$1,051 $20 $1,071Current liabilities: Advance ticket sales3,876 64 3,940Frequent flyer deferred revenue2,176 16 2,192Other569 7 576Other liabilities and deferred credits: Frequent flyer deferred revenue2,565 26 2,591Deferred income taxes225 (21) 204Stockholders' equity: Retained earnings$4,621 $(72) $4,549The Company adopted Accounting Standards Update No. 2016-01, Financial Instruments—Overall (Subtopic 825-10) effective January 1, 2018.This standard made several changes, including the elimination of the available-for-sale classification of equity investments, and requires equityinvestments with readily determinable fair values to be measured at fair value with changes in fair value recognized in earnings. The Companyreclassified to retained earnings $6 million of unrealized loss, net of tax, on the Company's investment in Azul, S.A. ("Azul") which was previouslyclassified as an available-for-sale security. See Notes 6 and 9 to the financial statements included in this Part II, Item 8 for additional information.60Table of ContentsIn June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses ("ASU 2016-13"). The mainobjective is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments andother commitments to extend credit held by a reporting entity at each reporting date. The amendments in this update replace the incurred lossmethodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportableinformation to calculate credit loss estimates. For trade receivables, loans and held-to-maturity debt securities, entities will be required to estimatelifetime expected credit losses. For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than areduction to the carrying value of the asset. The amendments are effective for public business entities for fiscal years and interim periods beginningafter December 15, 2019. The Company is evaluating the impact the adoption of ASU 2016-13 will have on its consolidated financial statementsand believes that it will not have a material impact on its consolidated financial statements. In 2016, the FASB amended the FASB Accounting Standards Codification and created a new Topic 842, Leases (the "New Lease Standard"). Theguidance requires lessees to recognize a right-of-use asset and a lease liability for all leases (with the exception of short-term leases) at thecommencement date and recognize expenses on their income statements similar to the current Topic 840, Leases ("Topic 840"). The New LeaseStandard is effective for fiscal years and interim periods beginning after December 15, 2018. The Company adopted this standard on January 1, 2019using a modified retrospective approach for all leases existing at or commencing after the date of initial application and utilizing certain practicalexpedients.The adoption of the New Lease Standard is expected to impact our reported results as shown in the tables below (in millions, except per shareamounts):61Table of ContentsConsolidated Balance Sheets as of December 31, As Reported New Lease StandardAdjustments As Adjusted 2018 2017 2018 2017 2018 2017Current assets: Receivables, less allowance for doubtful accounts$1,346 $1,340 $80 $126 $1,426 $1,466Prepaid expenses and other913 1,071 (180) (208) 733 863 Operating property and equipment: Other property and equipment (owned)7,919 6,946 (1,041) (922) 6,878 6,024Less-Accumulated depreciation and amortization(owned)(12,760) (11,159) 140 92 (12,620) (11,067)Flight equipment (finance leases) (a)1,029 1,151 (37) (211) 992 940Less-Accumulated amortization(654) (777) 8 169 (646) (608) Operating lease assets Flight equipment— — 2,380 3,102 2,380 3,102Other property and equipment— — 2,882 2,975 2,882 2,975 Current liabilities: Current maturities of finance leases (a)149 128 (26) (50) 123 78Current maturities of operating leases— — 719 949 719 949Other619 576 (66) (58) 553 518 Long-term obligations under finance leases (a)1,134 996 (910) (766) 224 230Long-term obligations under operating leases— — 5,276 5,789 5,276 5,789 Other liabilities and deferred credits: Deferred income taxes814 204 14 16 828 220Other1,832 1,832 (822) (811) 1,010 1,021 Stockholders' equity: Retained earnings6,668 4,549 47 54 6,715 4,603(a) Finance leases, under the New Lease Standard, are the equivalent of capital leases under Topic 840.The adoption of the New Lease Standard primarily resulted in the recording of assets and obligations of our operating leases on our consolidatedbalance sheets. Certain amounts recorded for prepaid and accrued rent associated with historical operating leases were reclassified to the newlycaptioned Operating lease assets in the consolidated balance sheets. Also, certain leases designated under Topic 840 as owned assets and capitalizedfinance leases will not be considered assets under the New Lease Standard and will be removed from the consolidated balance sheets, along with therelated capital lease liability.62Table of ContentsStatements of Consolidated Operations for the Years Ended December 31, As Reported New Lease StandardAdjustments As Adjusted 2018 2017 2018 2017 2018 2017Operating expense: Regional capacity purchase$2,601 $2,232 $48 $36 $2,649 $2,268Landing fees and other rent2,359 2,240 90 70 2,449 2,310Depreciation and amortization2,240 2,149 (75) (53) 2,165 2,096Total operating expenses38,011 34,113 63 53 38,074 34,166Operating income3,292 3,671 (63) (53) 3,229 3,618 Nonoperating income (expense): Interest expense(729) (671) 59 45 (670) (626)Interest capitalized70 84 (5) (10) 65 74Total nonoperating expense, net(634) (631) 53 36 (581) (595)Income before income taxes2,658 3,040 (10) (17) 2,648 3,023Income tax expense529 896 (3) (16) 526 880Net income$2,129 $2,144 $(7) $(1) $2,122 $2,143Earnings per share, basic$7.73 $7.08 $(0.03) $— $7.70 $7.08Earnings per share, diluted$7.70 $7.06 $(0.03) $— $7.67 $7.06The expense for leases under the New Lease Standard will continue to be classified in their historical income statement captions (primarily inAircraft rent, Landing fees and other rent and Regional capacity purchase in our statements of consolidated operations). The adoption of the NewLease Standard also resulted in the recharacterization of certain leases from capital leases under Topic 840 to operating leases under the New LeaseStandard. This change will result in less depreciation and amortization and interest expense associated with capital leases offset by higher leaseexpense associated with operating leases. The change is associated with leases of aircraft under certain CPAs and certain airport facilities. Thereduction in capitalized interest is also associated with the same airport facilities.63Table of ContentsNOTE 2 - GOODWILL AND OTHER INTANGIBLE ASSETSThe following table presents information about the Company's goodwill and other intangible assets at December 31 (in millions): 2018 2017Item Gross CarryingAmount AccumulatedAmortization Gross CarryingAmount AccumulatedAmortizationGoodwill $4,523 $4,523 Finite-lived intangible assets Frequent flyer database $1,177 $884 $1,177 $832Hubs 145 97 145 89Contracts 120 106 121 103Patents and tradenames 108 108 108 108Airport slots and gates 97 97 97 97Other 109 88 109 84Total $1,756 $1,380 $1,757 $1,313Indefinite-lived intangible assets Route authorities $1,240 $1,562 Airport slots and gates 546 536 Tradenames and logos 593 593 Alliances 404 404 Total $2,783 $3,095 Amortization expense in 2018, 2017 and 2016 was $67 million, $79 million and $90 million, respectively. Projected amortization expense in 2019, 2020,2021, 2022 and 2023 is $61 million, $55 million, $50 million, $40 million and $37 million, respectively.See Note 14 of this report for additional information related to impairment of intangible assets.NOTE 3 - COMMON STOCKHOLDERS' EQUITY AND PREFERRED SECURITIESIn 2018, UAL repurchased approximately 17.5 million shares of UAL common stock for $1.2 billion. In December 2017, UAL's Board of Directors authorizeda $3.0 billion share repurchase program to acquire UAL's common stock. As of December 31, 2018, the Company had approximately $1.8 billion remainingto purchase shares under its share repurchase program. UAL may repurchase shares through the open market, privately negotiated transactions, block trades oraccelerated share repurchase transactions from time to time in accordance with applicable securities laws. UAL may repurchase shares of UAL common stocksubject to prevailing market conditions, and may discontinue such repurchases at any time. See Part II, Item 5, Market for registrant's common equity, relatedstockholder matters and issuer purchases of equity securities, of this report for additional information.At December 31, 2018, approximately 10 million shares of UAL's common stock were reserved for future issuance related to the issuance of equity-basedawards under the Company's incentive compensation plans.As of December 31, 2018, UAL had two shares of junior preferred stock (par value $0.01 per share) outstanding. In addition, UAL is authorized to issue 250million shares of preferred stock (without par value) under UAL's amended and restated certificate of incorporation.64Table of ContentsNOTE 4 - EARNINGS PER SHAREThe computations of UAL's basic and diluted earnings per share are set forth below for the years ended December 31 (in millions, except per share amounts): 2018 2017 (a) 2016 (a)Earnings available to common stockholders $2,129 $2,144 $2,234 Basic weighted-average shares outstanding 275.5 302.7 329.9Effect of employee stock awards 1.2 0.9 0.4Diluted weighted-average shares outstanding 276.7 303.6 330.3 Earnings per share, basic $7.73 $7.08 $6.77Earnings per share, diluted $7.70 $7.06 $6.76(a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 1 to the financial statementscontained in Part II, Item 8 of this report for additional information.The number of antidilutive securities excluded from the computation of diluted earnings per share amounts was not material.NOTE 5 - SHARE-BASED COMPENSATION PLANSUAL maintains several share-based compensation plans. These plans provide for grants of non-qualified stock options, incentive stock options (within themeaning of Section 422 of the Internal Revenue Code of 1986), stock appreciation rights, restricted shares, RSUs, performance compensation awards,performance units, cash incentive awards, other equity-based and equity-related awards, and dividends and dividend equivalents.All awards are recorded as either equity or a liability in the Company's consolidated balance sheets. The share-based compensation expense is recorded insalaries and related costs.During 2018, UAL granted share-based compensation awards pursuant to the United Continental Holdings, Inc. 2017 Incentive Compensation Plan. Theseshare-based compensation awards included approximately 1.8 million RSUs consisting of 1.1 million time-vested RSUs and 0.7 million performance-basedRSUs. The time-vested RSUs vest pro-rata, a majority of which vest on February 28th of each year over a three-year period from the date of grant. These RSUsare generally equity awards settled in stock for domestic employees and liability awards settled in cash for international employees. The cash payments arebased on the 20-day average closing price of UAL common stock immediately prior to the vesting date. The performance-based RSUs vest based on theCompany's relative improvement in pre-tax margin compared to a group of airline industry peers for the three years ending December 31, 2020. If theperformance condition is achieved, cash payments will be made after the end of the performance period based on the 20-day average closing price of UALcommon stock immediately prior to the vesting date and based on the level, if any, of the performance goal achieved. The Company accounts for theperformance-based RSUs as liability awards.The following table provides information related to UAL's share-based compensation plan cost for the years ended December 31 (in millions): 2018 2017 2016Compensation cost: RSUs $98 $63 $58Restricted stock 2 8 11Stock options 1 2 1Total $101 $73 $7065Table of ContentsThe table below summarizes UAL's unearned compensation and weighted-average remaining period to recognize costs for all outstanding share-based awardsthat are probable of being achieved as of December 31, 2018 (in millions, except as noted): Unearned Compensation Weighted-AverageRemainingPeriod(in years)RSUs $66 1.6Stock options 2 2.6Total $68 RSUs and Restricted Stock. All performance-based RSUs, as well as a portion of the outstanding time-vested RSUs, will be settled in cash. As of December 31,2018, UAL had recorded a liability of $51 million related to its RSUs. UAL paid $28 million, $50 million and $69 million related to its RSUs during 2018,2017 and 2016, respectively.The table below summarizes UAL's RSUs and restricted stock activity for the years ended December 31 (shares in millions): Liability Awards Equity Awards RSUs RSUs Weighted-AverageGrant Price Restricted Stock Weighted-AverageGrant PriceOutstanding at December 31, 2015 2.6 — $— 0.3 $48.68Granted 1.0 0.9 51.60 0.4 50.63Vested (1.4) — — (0.1) 41.47Forfeited (0.1) (0.1) 50.57 (0.1) 53.42Outstanding at December 31, 2016 2.1 0.8 51.67 0.5 52.00Granted 0.6 1.0 71.68 — —Vested (0.7) (0.3) 51.81 (0.2) 51.60Forfeited (0.2) (0.1) 57.49 — —Outstanding at December 31, 2017 1.8 1.4 63.99 0.3 52.30Granted 0.7 1.1 67.74 — —Vested (0.5) (0.5) 63.02 (0.2) 53.24Forfeited (0.1) (0.2) 67.34 — —Outstanding at December 31, 2018 1.9 1.8 66.29 0.1 51.17The fair value of RSUs and restricted stock that vested in 2018, 2017 and 2016 was $70 million, $76 million and $80 million, respectively. The fair value ofthe restricted stock and the stock-settled RSUs was based upon the UAL common stock price on the date of grant. These awards are accounted for as equityawards. The fair value of the cash-settled RSUs was based on the UAL common stock price as of the last day preceding the settlement date. These awards areaccounted for as liability awards. Restricted stock vesting and the recognition of the expense is similar to the stock option vesting described below.Stock Options. During 2018, UAL did not grant any stock option awards. In 2017, UAL granted approximately 36,000 stock options with exercise pricesequal to the fair market value of UAL's common stock on the date of grant with a weighted-average exercise price of $77.56 and a weighted-average grantdate fair value of approximately $0.7 million. In 2016, UAL granted approximately 0.1 million stock options with exercise prices equal to the fair marketvalue of UAL's common stock on the date of grant and an additional approximately 0.3 million stock options with exercise prices at a 25% premium of thegrant date fair market value resulting in a weighted-average exercise price of $56.19 and a weighted-average grant date fair value of approximately $2.3million. Expense related to each portion of an option grant is recognized on a straight-line basis over the specific vesting period for those options.The Company determined the grant date fair value of stock options using a Black-Scholes option pricing model, which requires the use of severalassumptions. The risk-free interest rate is based on the U.S. treasury yield curve in effect for the expected term of the option at the time of grant. The dividendyield on UAL's common stock was assumed to be zero since UAL did not have any plans to pay dividends at the time of the option grants. The volatilityassumptions were based upon historical volatilities of UAL using daily stock price returns equivalent to the expected term of the option. The expected termof the66Table of Contentsoptions was determined based upon a simplified assumption that the option will be exercised evenly from vesting to expiration due to the Company's lack ofrelevant historical data related to stock options.As of December 31, 2018, there were approximately 0.4 million outstanding stock option awards, 0.2 million of which were exercisable, with weighted-average exercise prices of $55.62 and $47.07, respectively, intrinsic values of $12 million and $6 million, respectively, and weighted-average remainingcontractual lives (in years) of 5.8 and 3.8, respectively.NOTE 6 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)The tables below present the components of the Company's AOCI, net of tax (in millions): Pension andOtherPostretirementLiabilities Fuel DerivativesContracts Investments andOther Deferred Taxes TotalBalance at December 31, 2015$(363) $(215) $3 $(256) $(831)Other comprehensive income (loss) beforereclassifications(517)(a)(4) — 187 (334)Amounts reclassified from accumulated othercomprehensive income26 217 (2) 95 336Balance at December 31, 2016(854) (2) 1 26 (829)Other comprehensive income (loss) beforereclassifications(306)(a)— (7) 74 (239)Amounts reclassified from accumulated othercomprehensive income58 2 — (21) 39Reclassification of stranded tax effects— — — (118)(b)(118)Balance at December 31, 2017(1,102) — (6) (39) (1,147)Other comprehensive income (loss) beforereclassifications377(a)— (5) (83) 289Amounts reclassified from accumulated othercomprehensive income62 — — (13) 49Amounts reclassified to retained earnings— — 7 (1) 6Balance at December 31, 2018$(663) $— $(4) $(136)$(803)Details about AOCI Components Amount Reclassified from AOCI toIncome Affected Line Item in theStatement Where Net Income isPresented Year Ended December 31, 2018 2017 2016 Fuel derivative contracts Fuel contracts-reclassifications of losses into earnings $— $2 $217 Aircraft fuelPension and Postretirement liabilities and other Amortization of unrecognized (gains) losses and prior service cost (c) 62 58 26 Miscellaneous, netInvestments and other Available-for-sale securities - reclassifications of gains into earnings — — (2) Miscellaneous, net(a) Prior service credits decreased by $3 million, $0 million and increased by $30 million and actuarial losses decreased by approximately $380 million, and increased $306 millionand $560 million for 2018, 2017 and 2016, respectively.(b) This amount represents the reclassification from AOCI to RE of the stranded tax effects resulting from the enactment of the Tax Cuts and Jobs Act (the "Tax Act").(c) This AOCI component is included in the computation of net periodic pension and other postretirement costs (see Note 8 of this report for additional information).NOTE 7 - INCOME TAXESThe income tax provision (benefit) differed from amounts computed at the statutory federal income tax rate and consisted of the following significantcomponents, as follows (in millions):67Table of Contents UAL 2018 2017 (a) 2016 (a)Income tax provision at statutory rate $558 $1,064 $1,320State income taxes, net of federal income tax benefit 29 30 38Foreign tax rate differential (84) (43) —Global intangible low-taxed income 4 — —Foreign income taxes 2 3 3Nondeductible employee meals 12 17 16Impact of Tax Act (5) (179) —Income tax adjustment from AOCI (b) — — 180State rate change 3 12 (12)Valuation allowance (3) (16) 20Other, net 13 8 (26) $529 $896 $1,539 Current $14 $(77) $(92)Deferred 515 973 1,631 $529 $896 $1,539 United 2018 2017 (a) 2016 (a)Income tax provision at statutory rate $559 $1,065 $1,321State income taxes, net of federal income tax 29 30 38Foreign tax rate differential (84) (43) —Global intangible low-taxed income 4 — —Foreign income taxes 2 3 3Nondeductible employee meals 12 17 16Impact of Tax Act (5) (196) —Income tax adjustment from AOCI (b) — — 180State rate change 3 12 (12)Valuation allowance (3) (16) 20Other, net 12 7 (25) $529 $879 $1,541 Current $14 $(77) $(92)Deferred 515 956 1,633 $529 $879 $1,541(a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 1 to the financial statementscontained in Part II, Item 8 of this report for additional information.(b) Prior to the release of the deferred income tax valuation allowance in the third quarter of 2015, the Company recorded approximately $465 million of valuation allowanceadjustments in AOCI. Subsequent to the release of the deferred income tax valuation allowance in 2015, the $465 million debit remained within AOCI, of which $180 million relatedto losses on fuel hedges designated for hedge accounting and $285 million related to pension and other postretirement liabilities. Accounting rules required the adjustments to remainin AOCI as long as the Company had fuel derivatives designated for cash flow hedge accounting and the Company continues to provide pension and postretirement benefits. In 2016,the Company settled all of its fuel hedges and has not entered into any new fuel derivative contracts for hedge accounting. Accordingly, the Company reclassified the $180 million toincome tax expense in 2016.The Company's effective tax rate for the year ended December 31, 2018 differed from the federal statutory rate of 21% due to a blend of federal, state andforeign taxes as well as the impact of certain nondeductible items.On December 22, 2017, Congress enacted the Tax Act, which made significant changes to U.S. federal income tax laws, including reducing the corporate ratefrom 35% to 21% effective January 1, 2018. In December 2017, the SEC issued Staff Accounting Bulletin No. 118 ("SAB 118"), which allowed the Companyto record provisional amounts related to the impact of68Table of Contentsthe Tax Act and to adjust those amounts during a measurement period not to extend more than one year from the date of enactment. Based on our currentinterpretation of the Tax Act and published Treasury and Internal Revenue Service ("IRS") guidance as of December 31, 2018, the Company's accounting forthe impacts of the Tax Act is complete and the Company has not recorded any material adjustments to the provisional amounts under SAB 118. In 2018, werecorded an income tax benefit for the one-time transition tax of $4 million and have completed the re-measurement of our net deferred tax balances. The TaxAct included a Global Intangible Low-Taxed Income ("GILTI") provision which introduced a new tax on foreign income in excess of a deemed return ontangible business property of foreign subsidiaries. The GILTI provisions of the Tax Act became effective for the Company during 2018 and we elected toaccount for it in the period incurred (the "period cost method").Temporary differences and carryforwards that give rise to deferred tax assets and liabilities at December 31, 2018 and 2017 were as follows (in millions): UAL United 2018 2017 2018 2017Deferred income tax asset (liability): Federal and state net operating loss ("NOL") carryforwards $398 $601 $372 $574Deferred revenue 1,232 1,090 1,232 1,090Employee benefits, including pension, postretirement and medical 885 1,051 885 1,051Other 408 351 406 351Less: Valuation allowance (59) (63) (59) (63)Total deferred tax assets $2,864 $3,030 $2,836 $3,003 Depreciation $(2,929) $(2,431) $(2,929) $(2,431)Intangibles (749) (803) (749) (803)Total deferred tax liabilities $(3,678) $(3,234) $(3,678) $(3,234)Net deferred tax liability $(814) $(204) $(842) $(231)United and its domestic consolidated subsidiaries file a consolidated federal income tax return with UAL. Under an intercompany tax allocation policy,United and its subsidiaries compute, record and pay UAL for their own tax liability as if they were separate companies filing separate returns. In determiningtheir own tax liabilities, United and each of its subsidiaries take into account all tax credits or benefits generated and utilized as separate companies and theyare each compensated for the aforementioned tax benefits only if they would be able to use those benefits on a separate company basis.The Company's federal and state NOL carryforwards relate to prior years' NOLs, which may be used to reduce tax liabilities in future years. These tax benefitsare mostly attributable to federal pre-tax NOL carryforwards of $1.6 billion for UAL. If not utilized these federal pre-tax NOLs will expire as follows (inbillions): $0.6 in 2030, $1.0 thereafter. In addition, for UAL the majority of tax benefits of the state NOLs of $83 million will expire over a five to twenty yearperiod. We have recorded a $48 million valuation allowance against these state NOLs.The Company's unrecognized tax benefits related to uncertain tax positions were $39 million, $21 million and $74 million at December 31, 2018, 2017 and2016, respectively. Included in the ending balance at December 31, 2018 is $39 million that would affect the Company's effective tax rate if recognized. Thechanges in unrecognized tax benefits relating to settlements with taxing authorities, unrecognized tax benefits as a result of tax positions taken during a priorperiod and unrecognized tax benefits relating from a lapse of the statute of limitations were immaterial during 2018, 2017 and 2016. The Company does notexpect significant increases or decreases in their unrecognized tax benefits within the next 12 months. There are no material amounts included in the balanceat December 31, 2018 for tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of suchdeductibility.The Company's federal income tax returns for tax years after 2002 remain subject to examination by the IRS and state taxing jurisdictions. Currently, thereare no ongoing examinations of the Company's prior year tax returns being conducted by the IRS.NOTE 8 - PENSION AND OTHER POSTRETIREMENT PLANSThe following summarizes the significant pension and other postretirement plans of United:Pension Plans. United maintains two primary defined benefit pension plans, one covering certain pilot employees and another covering certain U.S. non-pilot employees. Each of these plans provide benefits based on a combination of years of benefit69Table of Contentsaccruals service and an employee's final average compensation. Additional benefit accruals are frozen under the plan covering certain pilot employees andmanagement and administrative employees. Benefit accruals for certain non-pilot employees continue. United maintains additional defined benefit pensionplans, which cover certain international employees.Other Postretirement Plans. United maintains postretirement medical programs which provide medical benefits to certain retirees and eligible dependents,as well as life insurance benefits to certain retirees participating in the plan. Benefits provided are subject to applicable contributions, co-payments,deductibles and other limits as described in the specific plan documentation.Actuarial assumption changes are reflected as a component of the net actuarial loss/(gain) during 2018 and 2017. The 2018 actuarial gains were mainlyrelated to an increase in the discount rate applied in 2018 compared to 2017. These amounts will be amortized over the average remaining service life of thecovered active employees or the average life expectancy of inactive participants. The impacts on 2018 and 2017 pension and retiree medical expense arepresented below.The following tables set forth the reconciliation of the beginning and ending balances of the benefit obligation and plan assets, the funded status and theamounts recognized in these financial statements for the defined benefit and other postretirement plans (in millions): Pension Benefits Year EndedDecember 31, 2018 Year EndedDecember 31, 2017Accumulated benefit obligation:$4,448 $4,739 Change in projected benefit obligation: Projected benefit obligation at beginning of year$5,852 $5,253Service cost228 195Interest cost217 220Actuarial (gain) loss(601) 525Gross benefits paid and settlements(292) (366)Other(8) 25Projected benefit obligation at end of year$5,396 $5,852 Change in plan assets: Fair value of plan assets at beginning of year$3,932 $3,355Actual (loss) return on plan assets(215) 510Employer contributions413 419Gross benefits paid and settlements(292) (366)Other(11) 14Fair value of plan assets at end of year$3,827 $3,932Funded status—Net amount recognized$(1,569) $(1,920)70Table of Contents Pension Benefits December 31, 2018 December 31, 2017Amounts recognized in the consolidated balance sheets consist of: Noncurrent asset$13 $9Current liability(6) (8)Noncurrent liability(1,576) (1,921)Total liability$(1,569) $(1,920) Amounts recognized in accumulated other comprehensive loss consist of: Net actuarial loss$(1,382) $(1,610)Prior service cost(5) (1)Total accumulated other comprehensive loss$(1,387) $(1,611) Other Postretirement Benefits Year Ended December31, 2018 Year Ended December31, 2017Change in benefit obligation: Benefit obligation at beginning of year$1,710 $1,687Service cost12 13Interest cost61 66Plan participants' contributions68 68Benefits paid(181) (178)Actuarial loss (gain)(285) 40Other6 14Benefit obligation at end of year$1,391 $1,710 Change in plan assets: Fair value of plan assets at beginning of year$54 $55Actual return on plan assets1 1Employer contributions111 108Plan participants' contributions68 68Benefits paid(181) (178)Fair value of plan assets at end of year53 54Funded status—Net amount recognized$(1,338) $(1,656) Other Postretirement Benefits December 31, 2018 December 31, 2017Amounts recognized in the consolidated balance sheets consist of: Current liability$(43) $(54)Noncurrent liability(1,295) (1,602)Total liability$(1,338) $(1,656)Amounts recognized in accumulated other comprehensive income consist of: Net actuarial gain$554 $301Prior service credit170 208Total accumulated other comprehensive income$724 $50971Table of ContentsThe following information relates to all pension plans with an accumulated benefit obligation and a projected benefit obligation in excess of plan assets atDecember 31 (in millions): 2018 2017Projected benefit obligation$5,196 $5,637Accumulated benefit obligation4,286 4,567Fair value of plan assets3,614 3,709Net periodic benefit cost for the years ended December 31 included the following components (in millions): 2018 2017 2016 PensionBenefits Other PostretirementBenefits PensionBenefits Other PostretirementBenefits PensionBenefits OtherPostretirementBenefitsService cost$228 $12 $195 $13 $112 $19Interest cost217 61 220 66 200 86Expected return on plan assets(292) (2) (243) (2) (216) (2)Curtailment gain— — — — — (107)Amortization of unrecognized actuarial(gain) loss130 (32) 128 (33) 76 (19)Amortization of prior service credits— (37) — (37) — (31)Other1 — 5 — 5 —Net periodic benefit cost (credit)$284 $2 $305 $7 $177 $(54)Service cost is recorded in Salaries and related costs on the statement of consolidated operations. All other components of net periodic benefit costs arerecorded in Miscellaneous, net on the statement of consolidated operations.See Note 14 of this report for additional information related to the curtailment gain recorded in 2016.The assumptions used for the benefit plans were as follows: Pension BenefitsAssumptions used to determine benefit obligations 2018 2017Discount rate 4.20% 3.65%Rate of compensation increase 3.89% 3.89% Assumptions used to determine net expense Discount rate 3.65% 4.19%Expected return on plan assets 7.31% 7.02%Rate of compensation increase 3.89% 3.54% Other Postretirement BenefitsAssumptions used to determine benefit obligations 2018 2017Discount rate 4.30% 3.63% Assumptions used to determine net expense Discount rate 3.63% 4.07%Expected return on plan assets 3.00% 3.00%Health care cost trend rate assumed for next year 6.00% 6.25%Rate to which the cost trend rate is assumed to decline (ultimate trend rate in 2023) 5.00% 5.00%The Company used the Society of Actuaries' 2014 mortality tables, modified to reflect the Social Security AdministrationTrustee's Report on current projections regarding expected longevity improvements.The Company selected the 2018 discount rate for substantially all of its plans by using a hypothetical portfolio of high quality bonds at December 31, 2018,that would provide the necessary cash flows to match projected benefit payments.72Table of ContentsWe develop our expected long-term rate of return assumption for our defined benefit plans based on historical experience and by evaluating input from thetrustee managing the plans' assets. Our expected long-term rate of return on plan assets for these plans is based on a target allocation of assets, which is basedon our goal of earning the highest rate of return while maintaining risk at acceptable levels. The plans strive to have assets sufficiently diversified so thatadverse or unexpected results from one security class will not have an unduly detrimental impact on the entire portfolio. Plan fiduciaries regularly review ouractual asset allocation and the pension plans' investments are periodically rebalanced to our targeted allocation when considered appropriate. United's planassets are allocated within the following guidelines: Percent ofTotal Expected Long-TermRate of ReturnEquity securities30-45% 9.5%Fixed-income securities30-40 5.8 Alternatives10-25 7.3 Other0-10 7.8 One-hundred percent of other postretirement plan assets are invested in a deposit administration fund.A one percentage point decrease in the weighted average discount rate would increase the Company's postretirement benefit liability by approximately $139million and increase the estimated 2018 benefits expense by approximately $10 million.Fair Value Information. Accounting standards require us to use valuation techniques to measure fair value that maximize the use of observable inputs andminimize the use of unobservable inputs. These inputs are prioritized as follows:Level 1Unadjusted quoted prices in active markets for assets or liabilities identical to those to be reported at fairvalueLevel 2Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities ormarket-corroborated inputsLevel 3Unobservable inputs for which there is little or no market data and which require us to develop our ownassumptions about how market participants would price the assets or liabilitiesAssets and liabilities measured at fair value are based on the valuation techniques identified in the tables below. The valuation techniques are as follows:(a) Market approach. Prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities; and(b) Income approach. Techniques to convert future amounts to a single current value based on market expectations (including present value techniques,option-pricing and excess earnings models).The following tables present information about United's pension and other postretirement plan assets at December 31, (in millions): 2018 2017Pension Plan Assets: Total Level 1 Level 2 Level 3 AssetsMeasured atNAV(a) Total Level 1 Level 2 Level 3 AssetsMeasured atNAV(a)Equity securities funds $1,394 $254 $106 $— $1,034 $1,406 $269 $133 $— $1,004Fixed-income securities 1,431 — 605 21 805 1,470 — 834 18 618Alternatives 596 — — 134 462 637 — — 139 498Other investments 406 224 40 142 — 419 32 124 172 91Total $3,827 $478 $751 $297 $2,301 $3,932 $301 $1,091 $329 $2,211Other Postretirement BenefitPlan Assets: Deposit administration fund $53 $— $— $53 $— $54 $— $— $54 $—(a) In accordance with the relevant accounting standards, certain investments that are measured at fair value using the net asset value ("NAV") per share (or its equivalent) have notbeen classified in the fair value hierarchy. These investments are commingled funds that invest in fixed-income instruments including bonds, debt securities, and other similarinstruments issued by various U.S. and non-U.S. public- or private-sector entities. Redemption periods for these investments range from daily to semiannually.73Table of ContentsEquity and Fixed-Income. Equities include investments in both developed market and emerging market equity securities. Fixed-income includes primarilyU.S. and non-U.S. government fixed-income securities and U.S. and non-U.S. corporate fixed-income securities.Deposit Administration Fund. This investment is a stable value investment product structured to provide investment income.Alternatives. Alternative investments consist primarily of investments in hedge funds, real estate and private equity interests.Other investments. Other investments consist of cash, insurance contracts and other funds.The reconciliation of United's defined benefit plan assets measured at fair value using unobservable inputs (Level 3) for the years ended December 31, 2018and 2017 is as follows (in millions): 2018 2017Balance at beginning of year$383 $287Actual return (loss) on plan assets: Sold during the year10 7Held at year end(21) 16Purchases, sales, issuances and settlements (net)(22) 73Balance at end of year$350 $383Funding requirements for tax-qualified defined benefit pension plans are determined by government regulations. United's contributions reflected above havesatisfied its required contributions through the 2018 calendar year. In 2019, employer anticipated contributions to all of United's pension and postretirementplans are at least $318 million and approximately $95 million, respectively.The estimated future benefit payments, net of expected participant contributions, in United's pension plans and other postretirement benefit plans as ofDecember 31, 2018 are as follows (in millions): Pension OtherPostretirement Other Postretirement—subsidy receipts2019$329 $100 $52020327 104 62021353 108 62022367 111 62023379 113 7Years 2024 – 20282,022 575 38Defined Contribution PlansDepending upon the employee group, employer contributions consist of matching contributions and/or non-elective employer contributions. United'semployer contribution percentages vary from 1% to 16% of eligible earnings depending on the terms of each plan. United recorded expenses for its definedcontribution plans of $693 million, $656 million and $592 million in the years ended December 31, 2018, 2017 and 2016, respectively.Multi-Employer PlansUnited's participation in the IAM National Pension Plan ("IAM Plan") for the annual period ended December 31, 2018 is outlined in the table below. Therehave been no significant changes that affect the comparability of 2018 and 2017 contributions. The risks of participating in these multi-employer plans aredifferent from single-employer plans, as United may be subject to additional risks that others do not meet their obligations, which in certain circumstancescould revert to United. The IAM Plan reported $435 million in employers' contributions for the year ended December 31, 2017. For 2017, the Company'scontributions to the IAM Plan represented more than 5% of total contributions to the IAM Plan. The 201874Table of Contentsinformation is not available as Form 5500 is not final for the plan year.Pension FundIAM National Pension FundEIN/ Pension Plan Number51-6031295 - 002Pension Protection Act Zone Status (2018 and 2017)Green Zone. Plans in the green zone are at least 80 percent funded.FIP/RP Status Pending/ImplementedNoUnited's Contributions$52 million, $50 million and $41 million in the years ended December 31, 2018,2017 and 2016, respectivelySurcharge ImposedNoExpiration Date of Collective Bargaining AgreementN/AProfit SharingSubstantially all employees participate in profit sharing based on a percentage of pre-tax earnings, excluding special charges, profit sharing expense andshare-based compensation. Profit sharing percentages range from 5% to 20% depending on the work group, and in some cases profit sharing percentages varyabove and below certain pre-tax margin thresholds. Eligible U.S. co-workers in each participating work group receive a profit sharing payout using a formulabased on the ratio of each qualified co-worker's annual eligible earnings to the eligible earnings of all qualified co-workers in all domestic work groups.Eligible non-U.S. co-workers receive profit sharing based on the calculation under the U.S. profit sharing plan for management and administrative employees.The Company recorded profit sharing and related payroll tax expense of $334 million, $349 million and $628 million in 2018, 2017 and 2016, respectively.Profit sharing expense is recorded as a component of Salaries and related costs in the Company's statements of consolidated operations.NOTE 9 - INVESTMENTS AND FAIR VALUE MEASUREMENTSFair Value Information. Accounting standards require us to use valuation techniques to measure fair value that maximize the use of observable inputs andminimize the use of unobservable inputs. These inputs are described in Note 8 of this report. The table below presents disclosures about the fair value offinancial assets and liabilities measured at fair value on a recurring basis in the Company's financial statements as of December 31 (in millions): 2018 2017 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3Cash and cash equivalents$1,694 $1,694 $— $— $1,482 $1,482 $— $—Short-term investments: Corporate debt1,023 — 1,023 — 958 — 958 —Asset-backed securities746 — 746 — 753 — 753 —U.S. government and agency notes108 — 108 — 113 — 113 —Certificates of deposit placed through an account registryservice ("CDARS")75 — 75 — 120 — 120 —Other fixed-income securities116 — 116 — 188 — 188 —Other investments measured at NAV188 — — — 184 — — —Restricted cash105 105 — — 109 109 — —Long-term investments: Equity securities249 249 — — 99 99 — —Enhanced equipment trust certificates ("EETC")18 — — 18 22 — — 22Avianca Holdings S.A. ("AVH") Derivative Assets11 — — 11 — — — —Available-for-sale investment maturities - The short-term investments shown in the table above are classified as available-for-sale, with the exception ofinvestments measured at NAV. As of December 31, 2018, asset-backed securities have remaining maturities of less than one year to approximately 16 years,corporate debt securities have remaining maturities of less than one year to approximately three years and CDARS have maturities of less than one year. U.S.government and other securities have maturities of less than one year to approximately two years. The EETC securities mature in 2019.Restricted cash - Restricted cash primarily includes cash collateral for letters of credit and collateral associated with obligations for facility leases and otherinsurance-related obligations.Equity securities - Equity securities represent United's investment in Azul. In 2018, the Company invested $138 million in Azul thus increasing its preferredequity stake in Azul to approximately 8% (representing approximately 2% of the total capital75Table of Contentsstock of Azul). The Company recognizes changes to the fair value of its equity investment in Azul in Miscellaneous, net in its statements of consolidatedoperations.Synergy Term Loan - On November 29, 2018, United, as lender, entered into a Term Loan Agreement (the "Synergy Loan Agreement") with affiliates ofSynergy Aerospace Corporation ("Synergy"), as borrower and guarantor, respectively, and, pursuant to the Synergy Loan Agreement, on November 30, 2018,United provided a $456 million term loan to Synergy (the "Synergy Term Loan"), secured by a pledge of borrower's equity, as well as Synergy's 516 millionshares of common stock of AVH, the parent company of Avianca (equivalent to 64.5 million American Depositary Receipts ("ADRs"), the class of AVHsecurities that trades on the New York Stock Exchange ("NYSE")). Pursuant to the Synergy Loan Agreement, the Synergy Term Loan is due and payable infive annual installments beginning on November 30, 2021, to be repaid in full on November 30, 2025 (a portion of which is subject to extension in limitedcircumstances). Subject to the satisfaction of collateral coverage thresholds, minimum share price levels and certain other conditions, Synergy may repayUnited in shares of AVH common stock, at market value, in an amount up to 25 percent of any principal installment, or with cash from the sale of Synergy'sshares of AVH stock. The Synergy Term Loan bears interest at an annual rate of 3 percent per annum, payable quarterly in arrears. United also obtained anoption to acquire, on a gross or net basis and at a fixed price, up to 77.4 million shares of AVH common stock from Synergy (the "AVH Call Options"), andagreed with Synergy to share in any increase in value of the remaining 438.6 million shares of Synergy's AVH common stock within certain price ranges (the"AVH Share Appreciation Rights"). Until the third anniversary of funding, Synergy has the option to capitalize interest that would have been due, adding itto the outstanding principal balance of the Synergy Term Loan. Pursuant to the Synergy Loan Agreement, Synergy has agreed to certain financial and non-financial covenants, as well as customary events of default.In connection with funding the Synergy Loan Agreement, on November 29, 2018, United also entered into an agreement with AVH's significant minorityshareholder, Kingsland Holdings Limited ("Kingsland"), pursuant to which, in return for Kingsland's pledge of its 144.8 million shares of AVH common stock(equivalent to 18.1 million ADRs) and its consent to Synergy's pledge of its AVH common stock to United under the Synergy Loan Agreement, United(1) granted to Kingsland the right to put its shares of AVH common stock to United at market price on the fifth anniversary of the Synergy Loan Agreement,and (2) guaranteed Synergy's obligation to pay Kingsland (which amount, if paid by United, will increase United's secured loan to Synergy by such amount)if the market price of AVH common stock on the fifth anniversary is less than $12 per ADR on the NYSE, for an aggregate maximum possible combined putpayment and guarantee amount on the fifth anniversary of $217.2 million. United also agreed with Kingsland to share in any increase in value of AVHcommon stock within certain price ranges (the "Upside Sharing Agreement").AVH Derivative Assets - The AVH Call Options, AVH Share Appreciation Rights and the Upside Sharing Agreement (collectively, the "AVH DerivativeAssets") are recorded at fair value as Other assets on the Company's balance sheet and are included in the table above. Changes in the fair value of the AVHDerivative Assets are recorded as part of Nonoperating income (expense): Miscellaneous, net on the Company's statements of consolidated operations.Investments presented in the table above have the same fair value as their carrying value. The table below presents the carrying values and estimated fairvalues of financial instruments not presented in the tables above as of December 31 (in millions). Carrying amounts include any related discounts, premiums,issuance costs and origination costs: 2018 2017 CarryingAmount Fair Value CarryingAmount Fair Value Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3Long-term debt$13,445 $13,450 $— $9,525 $3,925 $13,268 $13,787 $— $10,115 $3,672Synergy Term Loan478 422 — — 422 — — — — —Fair value of the financial instruments included in the tables above was determined as follows:76Table of ContentsDescriptionFair Value MethodologyCash and cash equivalentsThe carrying amounts approximate fair value because of the short-term maturity of these assets.Short-term investments,Equity securities, EETC andRestricted cashFair value is based on (a) the trading prices of the investment or similar instruments, (b) an incomeapproach, which uses valuation techniques to convert future amounts into a single present amountbased on current market expectations about those future amounts when observable trading pricesare not available, or (c) broker quotes obtained by third-party valuation services.Other investments measured at NAVIn accordance with the relevant accounting standards, certain investments that are measured at fairvalue using the NAV per share (or its equivalent) practical expedient have not been classified inthe fair value hierarchy. The fair value amounts presented in the table above are intended topermit reconciliation of the fair value hierarchy to the amounts presented in the statement offinancial position. The investments measured using NAV are shares of mutual funds that invest infixed-income instruments including bonds, debt securities, and other similar instruments issuedby various U.S. and non-U.S. public- or private-sector entities. The Company can redeem its sharesat any time at NAV subject to a three-day settlement period.Long-term debtFair values were based on either market prices or the discounted amount of future cash flows usingour current incremental rate of borrowing for similar liabilities or assets.Synergy Term Loan and AVH Derivative AssetsFair values are calculated using a Monte Carlo simulation approach. Unobservable inputs includeexpected volatility, expected dividend yield and control and acquisition premiums.Investments in Regional Carriers. United holds investments in several regional carriers that fly for the Company as United Express under CPAs. Thecombined carrying value of the investments was approximately $144 million as of the date of this report. United accounts for each investment using theequity method. Each investment and United's ownership stake is listed below.•Republic Airways Holdings Inc. ("Republic"). United holds a 19% minority interest in Republic which the Company received in 2017 in considerationfor its unsecured claim in Republic's bankruptcy case. Republic does business as Republic Airways.•ManaAir, LLC ("ManaAir"). In a series of transactions completed in January 2019, United obtained a 49.9% minority ownership stake in ManaAir, LLC("ManaAir") and ManaAir purchased 100% of the equity of ExpressJet Airlines, Inc.•Champlain Enterprises LLC ("Champlain"). United owns a 40% minority ownership stake in Champlain. Champlain does business as CommutAir.Other Investments. United owns approximately 9% of the preferred shares of Fulcrum BioEnergy, Inc. ("Fulcrum"), a company that is developing a processfor transforming municipal solid waste into transportation fuels, including jet fuel and diesel. United records its investment in Fulcrum at cost lessimpairment, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same issuer. As of December 31, 2018,the carrying value of United's investment was $48 million.77Table of ContentsNOTE 10 - DEBT(In millions) At December 31, 2018 2017Secured Notes payable, fixed interest rates of 0.0% to 9.52% (weighted average rate of 4.18% as of December 31, 2018), payable through 2030 $8,811 $8,661Notes payable, floating interest rates of the London interbank offered rate ("LIBOR") plus 1.05% to 1.75%, payable through 2030 2,051 1,880Term loan, LIBOR plus 1.75%, or alternative rate based on certain market rates plus 0.75%, due 2024 1,474 1,489Unsecured 6.375% Senior Notes due 2018 (a) — 3006% Senior Notes due 2020 (a) 300 3004.25% Senior Notes due 2022 (a) 400 4005% Senior Notes due 2024 (a) 300 300Other 300 101 13,636 13,431Less: unamortized debt discount, premiums and debt issuance costs (191) (163) Less: current portion of long-term debt (1,230) (1,565)Long-term debt, net $12,215 $11,703(a) UAL is the issuer of this debt. United is a guarantor.The table below presents the Company's contractual principal payments (not including debt discount or debt issuance costs) at December 31, 2018 underthen-outstanding long-term debt agreements in each of the next five calendar years (in millions): 2019 $1,2302020 1,3102021 1,3002022 1,6532023 703After 2023 7,440 $13,636Secured debtCredit and Guaranty Agreement. On March 29, 2017, United and UAL, as borrower and guarantor, respectively, entered into an Amended and RestatedCredit and Guaranty Agreement (as amended, the "Credit Agreement"). The Credit Agreement consists of a $1.5 billion term loan due April 1, 2024 and a$2.0 billion revolving credit facility available for drawing until April 1, 2022. The obligations of United under the amended Credit Agreement are secured byliens on certain international route authorities, certain take-off and landing rights and related assets of United.Term loan borrowings under the Credit Agreement bear interest at a variable rate equal to LIBOR plus a margin of 1.75% per annum, or another rate based oncertain market interest rates, plus a margin of 0.75% per annum. The principal amount of the term loan must be repaid in consecutive quarterly installments of0.25% of the original principal amount thereof, commencing on June 30, 2017, with any unpaid balance due on April 1, 2024. United may prepay all or aportion of the loan from time to time, at par plus accrued and unpaid interest.As of December 31, 2018, United had its entire capacity of $2.0 billion available under the revolving credit facility of the Company's Credit Agreement.United pays a commitment fee equal to 0.75% per annum on the undrawn amount available under the revolving credit facility. If drawn, revolving loansunder the Credit Agreement bear interest at a variable rate equal to LIBOR plus a margin of 2.25% per annum, or another rate based on certain market interestrates, plus a margin of 1.25% per annum.As of December 31, 2018, United had cash collateralized $73 million of letters of credit, which generally have evergreen clauses and are expected to berenewed on an annual basis. As of December 31, 2018, United also had $418 million of surety bonds securing various obligations with expiration datesthrough 2022.78Table of ContentsEETCs. As of December 31, 2018, United had $8.8 billion principal amount of equipment notes outstanding issued under EETC financings included in notespayable in the table of outstanding debt above. Generally, the structure of these EETC financings consists of pass-through trusts created by United to issuepass-through certificates, which represent fractional undivided interests in the respective pass-through trusts and are not obligations of United. The proceedsof the issuance of the pass-through certificates are used to purchase equipment notes which are issued by United and secured by its aircraft. The paymentobligations under the equipment notes are those of United. Proceeds received from the sale of pass-through certificates are initially held by a depositary inescrow for the benefit of the certificate holders until United issues equipment notes to the trust, which purchases such notes with a portion of the escrowedfunds. These escrowed funds are not guaranteed by United and are not reported as debt on United's consolidated balance sheet because the proceeds held bythe depositary are not United's assets.In February 2018, May 2018 and February 2019, United created separate EETC pass-through trusts, each of which issued pass-through certificates. Theproceeds of the issuance of the pass-through certificates are used to purchase equipment notes issued by United and secured by its aircraft. The Companyrecords the debt obligation upon issuance of the equipment notes rather than upon the initial issuance of the pass-through certificates. Certain details of thepass-through trusts with proceeds received from issuance of debt in 2018 are as follows (in millions, except stated interest rate):EETC Date Class Principal Final expecteddistribution date Statedinterest rate Total debt recorded as of December 31,2018 Proceeds receivedfrom issuance of debtduring 2018 Remaining proceedsfrom issuance of debt tobe received in futureperiodsFebruary 2019 AA $717 August 2031 4.15% $— $— $717February 2019 A 296 August 2031 4.55% — — 296May 2018 B 226 March 2026 4.60% 226 226 —February 2018 AA 677 March 2030 3.50% 677 677 —February 2018 A 258 March 2030 3.70% 258 258 — $2,174 $1,161 $1,161 $1,013In 2018, United borrowed approximately $424 million aggregate principal amount from various financial institutions to finance the purchase of severalaircraft delivered in 2018. The notes evidencing these borrowings, which are secured by the related aircraft, mature in 2030 and have interest rates comprisedof LIBOR plus a specified margin.Unsecured debt4.25% Senior Notes due 2022. In September 2017, UAL issued $400 million aggregate principal amount of 4.25% Senior Notes due October 1, 2022 (the"4.25% Senior Notes due 2022"). These notes are fully and unconditionally guaranteed and recorded by United on its balance sheet as debt. The indenture forthe 4.25% Senior Notes due 2022 requires UAL to offer to repurchase the notes for cash if certain changes of control of UAL occur at a purchase price equal to101% of the principal amount of notes repurchased plus accrued and unpaid interest.5% Senior Notes due 2024. In January 2017, UAL issued $300 million aggregate principal amount of 5% Senior Notes due February 1, 2024 (the "5% SeniorNotes due 2024"). These notes are fully and unconditionally guaranteed and recorded by United on its balance sheet as debt. The indenture for the 5% SeniorNotes due 2024 requires UAL to offer to repurchase the notes for cash if certain changes of control of UAL occur at a purchase price equal to 101% of theprincipal amount of notes repurchased plus accrued and unpaid interest.79Table of ContentsAs of December 31, 2018, UAL and United were in compliance with their respective debt covenants. The collateral, covenants and cross default provisions ofthe Company's principal debt instruments that contain such provisions are summarized in the table below:Debt InstrumentCollateral, Covenants and Cross Default ProvisionsVarious equipment notes and other notes payableSecured by certain aircraft. The indentures contain events of default that arecustomary for aircraft financing, including in certain cases cross default to otherrelated aircraft.Credit AgreementSecured by certain of United's international route authorities, specified take-offand landing slots at certain airports and certain other assets. The Credit Agreement requires the Company to maintain at least $2.0 billion ofunrestricted liquidity at all times, which includes unrestricted cash, short-terminvestments and any undrawn amounts under any revolving credit facility, and tomaintain a minimum ratio of appraised value of collateral to the outstandingobligations under the Credit Agreement of 1.6 to 1.0 at all times. The CreditAgreement contains covenants that, among other things, restrict the ability ofUAL and its restricted subsidiaries (as defined in the Credit Agreement) to incuradditional indebtedness and to pay dividends on or repurchase stock, although, asof December 31, 2018, the Company had ample ability under these restrictions torepurchase stock under the Company's share repurchase program.The Credit Agreement contains events of default customary for this type offinancing, including a cross default and cross acceleration provision to certainother material indebtedness of the Company.6% Senior Notes due 20204.25% Senior Notes due 20225% Senior Notes due 2024The indentures for these notes contain covenants that, among other things, restrictthe ability of the Company and its restricted subsidiaries (as defined in theindentures) to incur additional indebtedness and pay dividends on or repurchasestock, although the Company currently has ample ability under these restrictionsto repurchase stock under the Company's share repurchase program.NOTE 11 - LEASES AND CAPACITY PURCHASE AGREEMENTSUnited leases aircraft, airport passenger terminal space, aircraft hangars and related maintenance facilities, cargo terminals, other airport facilities, othercommercial real estate, office and computer equipment and vehicles.In 2018, United entered into a new Airline Use and Lease Agreement at Chicago O'Hare International Airport ("Chicago O'Hare") with the City of Chicagowith a lease term of approximately 15 years, effective May 12, 2018 through December 31, 2033. United also entered into several new ground and facilityleases at Chicago O'Hare, effective May 12, 2018, for hangars, a ground equipment maintenance building, and employee parking with lease terms rangingfrom 15 years to 30 years.At December 31, 2018, United's scheduled future minimum lease payments under operating leases having initial or remaining noncancelable lease terms ofmore than one year, aircraft leases, including aircraft rent under CPAs and capital leases80Table of Contents(substantially all of which are for aircraft) were as follows (in millions): Capital Leases (b) Facility and Other OperatingLeases Aircraft OperatingLeases2019 $308 $1,330 $8452020 170 1,351 6822021 147 1,107 5832022 123 970 4072023 104 953 379After 2023 1,268 7,029 1,160Minimum lease payments (a) $2,120 $12,740 $4,056Imputed interest (837) Present value of minimum lease payments 1,283 Current portion (149) Long-term obligations under capital leases $1,134 (a) Includes fair value lease and deferred financing fee balances, which are being amortized over the terms of their respective leases.(b) Includes airport construction projects managed by United in which United has construction risk, including project cost overruns. The Company recorded an asset for project costsand a related liability equal to project costs funded by parties other than United. As of December 31, 2018, United had an asset balance of $886 million recorded in operating propertyand equipment and $920 million recorded in current and long-term obligations under capital leases for these airport construction projects.As of December 31, 2018, United's aircraft capital lease minimum payments relate to leases of 28 mainline and 90 regional aircraft as well as to leases ofnonaircraft assets. Imputed interest rate ranges are 3.5% to 115.1%.Aircraft operating leases have initial terms of five to 26 years, with expiration dates ranging from 2019 through 2029. Under the terms of most leases, Unitedhas the right to purchase the aircraft at the end of the lease term, in some cases, at fair market value, and in others, at fair market value or a percentage of cost.United is the lessee of real property under long-term operating leases at a number of airports where we are also the guarantor of approximately $1.3 billion ofunderlying debt and interest thereon as of December 31, 2018. These leases are typically with municipalities or other governmental entities, which areexcluded from the consolidation requirements concerning a variable interest entity ("VIE"). To the extent United's leases and related guarantees are with aseparate legal entity other than a governmental entity, United is not the primary beneficiary because the lease terms are consistent with market terms at theinception of the lease and the lease does not include a residual value guarantee, fixed-price purchase option, or similar feature. United has facility operatingleases that extend to 2055.United's nonaircraft rent expense was approximately $1.3 billion, $1.3 billion and $1.2 billion for the years ended December 31, 2018, 2017 and 2016,respectively.In addition to nonaircraft rent and aircraft rent, which is separately presented in the consolidated statements of operations, United had aircraft rent related toregional aircraft operating leases, which is included as part of Regional capacity purchase expense in United's consolidated statement of operations, of $505million, $458 million and $439 million for the years ended December 31, 2018, 2017 and 2016, respectively.In connection with UAL Corporation's and United Air Lines, Inc.'s (predecessors to UAL and United) fresh-start reporting requirements upon their exit fromChapter 11 bankruptcy protection in 2006 and the Company's acquisition accounting adjustments related to the Company's merger transaction in 2010, leasevaluation adjustments for operating leases were initially recorded in the consolidated balance sheet, representing the net present value of the differencesbetween contractual lease rates and the fair market lease rates for similar leased assets at the time. An asset (liability) results when the contractual lease ratesare more (less) favorable than market lease terms at the valuation date. The lease valuation adjustment is amortized on a straight-line basis as an increase(decrease) to rent expense over the individual applicable remaining lease terms, resulting in recognition of rent expense as if United had entered into theleases at market rates. The related remaining lease terms, primarily related to aircraft which make up the majority of the fair value lease adjustment balance,are one to six years for United. The lease valuation adjustments are classified within other noncurrent liabilities and the net accretion amounts are $60million, $79 million and $82 million for the years ended December 31, 2018, 2017 and 2016, respectively.Regional CPAsUnited has contractual relationships with various regional carriers to provide regional aircraft service branded as United Express. Under these CPAs, theCompany pays the regional carriers contractually agreed fees (carrier costs) for operating these81Table of Contentsflights plus a variable reimbursement (incentive payment for operational performance) based on agreed performance metrics, subject to annual adjustments.The fees for carrier costs are based on specific rates for various operating expenses of the regional carriers, such as crew expenses, maintenance and aircraftownership, some of which are multiplied by specific operating statistics (e.g., block hours, departures), while others are fixed monthly amounts. Under theseCPAs, the Company is responsible for all fuel costs incurred, as well as landing fees and other costs, which are either passed through by the regional carrier tothe Company without any markup or directly incurred by the Company, and, in some cases, the Company owns or leases some or all of the aircraft subject tothe CPA, and leases or subleases, as applicable, such aircraft to the regional carrier. United's CPAs are for 559 regional aircraft as of December 31, 2018, andthe CPAs have terms expiring through 2029. Aircraft operated under CPAs include aircraft leased directly from the regional carriers and those owned byUnited or leased from third-party lessors and operated by the regional carriers. See Part I, Item 2, Properties, of this report for additional information.In 2017, United entered into a five-year CPA with Air Wisconsin Airlines for regional service under the United Express brand to operate up to 65 CRJ200aircraft. In addition, United extended the term of its existing CPA with ExpressJet Airlines to operate up to approximately 125 aircraft through December 31,2022.United recorded approximately $979 million, $907 million and $935 million in expenses related to its CPAs with its regional carriers, in which United is aminority shareholder, for the years ended December 31, 2018, 2017 and 2016, respectively. There were approximately $53 million and $24 million inaccounts payable due to these companies as of December 31, 2018 and December 31, 2017, respectively. There were no material accounts receivables duefrom these companies as of December 31, 2018 and December 31, 2017. The CPAs with these related parties were executed in the ordinary course of business.Our future commitments under our CPAs are dependent on numerous variables, and are, therefore, difficult to predict. The most important of these variables isthe number of scheduled block hours. Although we are not required to purchase a minimum number of block hours under certain of our CPAs, we have setforth below estimates of our future payments under the CPAs based on our assumptions. United's estimates of its future payments under all of the CPAs do notinclude the portion of the underlying obligation for any aircraft leased to a regional carrier or deemed to be leased from other regional carriers and facilityrent that are disclosed as part of aircraft and nonaircraft operating leases. For purposes of calculating these estimates, we have assumed (1) the number ofblock hours flown is based on our anticipated level of flight activity or at any contractual minimum utilization levels if applicable, whichever is higher, (2)that we will reduce the fleet as rapidly as contractually allowed under each CPA, (3) that aircraft utilization, stage length and load factors will remainconstant, (4) that each carrier's operational performance will remain at historic levels and (5) an annual projected inflation rate. These amounts excludevariable pass-through costs such as fuel and landing fees, among others. Based on these assumptions as of December 31, 2018, our future payments throughthe end of the terms of our CPAs are presented in the table below (in billions):2019$2.220202.020211.820221.420230.8After 20233.1 $11.3The actual amounts we pay to our regional operators under CPAs could differ materially from these estimates. For example, a 10% increase or decrease inscheduled block hours for all of United's regional operators (whether as a result of changes in average daily utilization or otherwise) in 2019 would result in acorresponding change in annual cash obligations under the CPAs of approximately $160 million.NOTE 12 - VARIABLE INTEREST ENTITIESVariable interests are contractual, ownership or other monetary interests in an entity that change with fluctuations in the fair value of the entity's net assetsexclusive of variable interests. A VIE can arise from items such as lease agreements, loan arrangements, guarantees or service contracts. An entity is a VIE if(a) the entity lacks sufficient equity or (b) the entity's equity holders lack power or the obligation and right as equity holders to absorb the entity's expectedlosses or to receive its expected residual returns.If an entity is determined to be a VIE, the entity must be consolidated by the primary beneficiary. The primary beneficiary is the holder of the variableinterests that has the power to direct the activities of a VIE that (i) most significantly impact the VIE's economic performance and (ii) has the obligation toabsorb losses of or the right to receive benefits from the VIE that could82Table of Contentspotentially be significant to the VIE. Therefore, the Company must identify which activities most significantly impact the VIE's economic performance anddetermine whether it, or another party, has the power to direct those activities.Aircraft Leases. We are the lessee in a number of operating leases covering the majority of our leased aircraft. The lessors are trusts established specifically topurchase, finance and lease aircraft to us. These leasing entities meet the criteria for VIEs. We are generally not the primary beneficiary of the leasing entitiesif the lease terms are consistent with market terms at the inception of the lease and do not include a residual value guarantee, fixed-price purchase option orsimilar feature that obligates us to absorb decreases in value or entitles us to participate in increases in the value of the aircraft. This is the case for many ofour operating leases; however, leases of 23 mainline jet aircraft contain a fixed-price purchase option that allow United to purchase the aircraft atpredetermined prices on specified dates during the lease term. Additionally, leases covering 90 leased regional jet aircraft contain an option to purchase theaircraft at the end of the lease term at prices that, depending on market conditions, could be below fair value. United has not consolidated the related trustsbecause, even taking into consideration these purchase options, United is still not the primary beneficiary. United's maximum exposure under these leases isthe remaining lease payments, which are reflected in future lease commitments in Note 11 of this report.EETCs. United evaluated whether the pass-through trusts formed for its EETC financings, treated as either debt or aircraft operating leases, are VIEs requiredto be consolidated by United under applicable accounting guidance, and determined that the pass-through trusts are VIEs. Based on United's analysis asdescribed below, United determined that it does not have a variable interest in the pass-through trusts.The primary risk of the pass-through trusts is credit risk (i.e. the risk that United, the issuer of the equipment notes, may be unable to make its principal andinterest payments). The primary purpose of the pass-through trust structure is to enhance the credit worthiness of United's debt obligation through certainbankruptcy protection provisions, a liquidity facility (in certain of the EETC structures) and improved loan-to-value ratios for more senior debt classes. Thesecredit enhancements lower United's total borrowing cost. Pass-through trusts are established to receive principal and interest payments on the equipmentnotes purchased by the pass-through trusts from United and remit these proceeds to the pass-through trusts' certificate holders.United does not invest in or obtain a financial interest in the pass-through trusts. Rather, United has an obligation to make interest and principal payments onits equipment notes held by the pass-through trusts. United did not intend to have any voting or non-voting equity interest in the pass-through trusts or toabsorb variability from the pass-through trusts. Based on this analysis, the Company determined that it is not required to consolidate the pass-through trusts.Synergy affiliates.•BRW Aviation LLC ("BRW"): Synergy's wholly-owned affiliate, BRW, is a special purpose entity created to be the borrower of the Synergy Term Loan.BRW is also the owner of the collateral that secures the Synergy Term Loan, including Synergy's shares of AVH. BRW is a VIE and United holds variableinterests in BRW including the Synergy Term Loan. However, United is not the primary beneficiary of BRW because it does not hold BRW equity anddoes not have management rights at BRW and therefore does not have the power to direct the activities that most significantly impact BRW's economicperformance.•AVH: United concluded that AVH is a VIE and that United holds a variable interest through its call option on Synergy's AVH shares. However, United isnot the primary beneficiary because it does not hold a material number of shares of AVH and does not have the power through any other agreements todirect the activities that most significantly impact AVH's economic performance.NOTE 13 - COMMITMENTS AND CONTINGENCIES Commitments. As of December 31, 2018, United had firm commitments and options to purchase aircraft from The Boeing Company ("Boeing"), Airbus S.A.S.("Airbus") and Embraer S.A. ("Embraer") presented in the table below:Aircraft Type Number of FirmCommitments (a)Airbus A350 45Boeing 737 MAX 175Boeing 777-300ER 4Boeing 787 24Embraer E175 25(a) United also has options and purchase rights for additional aircraft.83Table of ContentsThe aircraft listed in the table above are scheduled for delivery from 2019 through 2027. To the extent the Company and the aircraft manufacturers withwhom the Company has existing orders for new aircraft agree to modify the contracts governing those orders, the amount and timing of the Company's futurecapital commitments could change. In 2019, United expects to take delivery of 25 Embraer E175 aircraft, 20 Boeing 737 MAX aircraft, 8 Boeing 787 aircraftand 2 Boeing 777-300ER aircraft. United also has agreements to purchase 20 used Airbus A319 aircraft with expected delivery dates through 2022.During the third quarter of 2018, United entered into an agreement with the lessor of 54 Embraer ERJ 145 aircraft to purchase those aircraft in 2019. Theprovisions of such agreement resulted in a change in accounting classification of the applicable leases from operating leases to capital leases up until theapplicable purchase date.The table below summarizes United's commitments as of December 31, 2018, which primarily relate to the acquisition of aircraft and related spare engines,aircraft improvements and include other capital purchase commitments for the years ended December 31 (in billions). Any new firm aircraft orders, includingthrough the exercise of purchase options and purchase rights, will increase the total future capital commitments of the Company.2019$4.220205.320213.520222.820231.9After 20237.0 $24.7In February 2019, the Company secured $1.0 billion of EETC financing to finance certain aircraft deliveries in 2018 and 2019. The Company has alsosecured backstop financing commitments from certain of its aircraft manufacturers for a limited number of its future aircraft deliveries, subject to certaincustomary conditions. Financing may be necessary to satisfy the Company's capital commitments for its firm order aircraft and other related capitalexpenditures.Legal and Environmental. The Company has certain contingencies resulting from litigation and claims incident to the ordinary course of business. As ofDecember 31, 2018, management believes, after considering a number of factors, including (but not limited to) the information currently available, the viewsof legal counsel, the nature of contingencies to which the Company is subject and prior experience, that the ultimate disposition of the litigation and claimswill not materially affect the Company's consolidated financial position or results of operations. The Company records liabilities for legal and environmentalclaims when a loss is probable and reasonably estimable. These amounts are recorded based on the Company's assessments of the likelihood of their eventualdisposition.Guarantees and Indemnifications. In the normal course of business, the Company enters into numerous real estate leasing and aircraft financingarrangements that have various guarantees included in the contracts. These guarantees are primarily in the form of indemnities under which the Companytypically indemnifies the lessors and any tax/financing parties against tort liabilities that arise out of the use, occupancy, operation or maintenance of theleased premises or financed aircraft. Currently, the Company believes that any future payments required under these guarantees or indemnities would beimmaterial, as most tort liabilities and related indemnities are covered by insurance (subject to deductibles). Additionally, certain leased premises such asfueling stations or storage facilities include indemnities of such parties for any environmental liability that may arise out of or relate to the use of the leasedpremises.As of December 31, 2018, United is the guarantor of approximately $1.9 billion in aggregate principal amount of tax-exempt special facilities revenue bondsand interest thereon. These bonds, issued by various airport municipalities, are payable solely from rentals paid under long-term agreements with therespective governing bodies. The leasing arrangements associated with approximately $1.3 billion of these obligations are accounted for as operating leaseswith the associated expense recorded on a straight-line basis resulting in ratable accrual of the lease obligation over the expected lease term. These tax-exempt special facilities revenue bonds are included in our lease commitments disclosed in Note 11 of this report. The leasing arrangements associated withapproximately $466 million of these obligations are accounted for as capital leases. All of these bonds are due between 2019 and 2038.In connection with funding the Synergy Loan Agreement, the Company entered into an agreement with AVH's significant minority shareholder, KingslandHoldings Limited ("Kingsland"), pursuant to which, in return for Kingsland's pledge of its 144.8 million shares of AVH common stock (equivalent to 18.1million American Depositary Receipts ("ADRs")) and its consent to Synergy's pledge of its AVH common stock to United under the Synergy LoanAgreement, United (1) granted to Kingsland the right to put its shares of AVH common stock to United at market price on the fifth anniversary of the Synergy84Table of ContentsLoan Agreement, and (2) guaranteed Synergy's obligation to pay Kingsland (which amount, if paid by United, will increase United's secured loan to Synergyby such amount) if the market price of AVH common stock on the fifth anniversary is less than $12 per ADR on the NYSE, for an aggregate maximumpossible combined put payment and guarantee amount on the fifth anniversary of $217.2 million. Accordingly, the Company recorded a liability of $31million for the fair value of its guarantee to loan additional funds to Synergy if required. Any additional loans to Synergy would be collateralized bySynergy's shares of AVH stock and other collateral.Increased Cost Provisions. In United's financing transactions that include loans, United typically agrees to reimburse lenders for any reduced returns withrespect to the loans due to any change in capital requirements and, in the case of loans in which the interest rate is based on LIBOR, for certain otherincreased costs that the lenders incur in carrying these loans as a result of any change in law, subject, in most cases, to obligations of the lenders to takecertain limited steps to mitigate the requirement for, or the amount of, such increased costs. At December 31, 2018, the Company had $3.5 billion of floatingrate debt and $27 million of fixed rate debt, with remaining terms of up to 12 years, that are subject to these increased cost provisions. In several financingtransactions involving loans or leases from non-U.S. entities, with remaining terms of up to 12 years and an aggregate balance of $3.2 billion, the Companybears the risk of any change in tax laws that would subject loan or lease payments thereunder to non-U.S. entities to withholding taxes, subject to customaryexclusions.As of December 31, 2018, United is the guarantor of $145 million of aircraft mortgage debt issued by one of United's regional carriers. The aircraft mortgagedebt is subject to similar increased cost provisions as described above for the Company's debt, and the Company would potentially be responsible for thosecosts under the guarantees.Fuel Consortia. United participates in numerous fuel consortia with other air carriers at major airports to reduce the costs of fuel distribution and storage.Interline agreements govern the rights and responsibilities of the consortia members and provide for the allocation of the overall costs to operate theconsortia based on usage. The consortia (and in limited cases, the participating carriers) have entered into long-term agreements to lease certain airport fuelstorage and distribution facilities that are typically financed through tax-exempt bonds, either special facilities lease revenue bonds or general airportrevenue bonds, issued by various local municipalities. In general, each consortium lease agreement requires the consortium to make lease payments inamounts sufficient to pay the maturing principal and interest payments on the bonds. As of December 31, 2018, approximately $1.7 billion principal amountof such bonds were secured by significant fuel facility leases in which United participates, as to which United and each of the signatory airlines has providedindirect guarantees of the debt. As of December 31, 2018, the Company's contingent exposure was approximately $164 million principal amount of suchbonds based on its recent consortia participation. The Company's contingent exposure could increase if the participation of other air carriers decreases. Theguarantees will expire when the tax-exempt bonds are paid in full, which ranges from 2022 to 2051. The Company did not record a liability at the time theseindirect guarantees were made.Regional Capacity Purchase. As of December 31, 2018, United had 292 call options to purchase regional jet aircraft being operated by certain of its regionalcarriers with contract dates extending until 2029. These call options are exercisable upon wrongful termination or breach of contract, among otherconditions. None of the call options were exercisable at December 31, 2018.Credit Card Processing Agreements. The Company has agreements with financial institutions that process customer credit card transactions for the sale of airtravel and other services. Under certain of the Company's credit card processing agreements, the financial institutions in certain circumstances have the rightto require that the Company maintain a reserve equal to a portion of advance ticket sales that has been processed by that financial institution, but for whichthe Company has not yet provided the air transportation. Such financial institutions may require additional cash or other collateral reserves to be establishedor additional withholding of payments related to receivables collected if the Company does not maintain certain minimum levels of unrestricted cash, cashequivalents and short-term investments (collectively, "Unrestricted Liquidity"). The Company's current level of Unrestricted Liquidity is substantially inexcess of these minimum levels.Labor Negotiations. As of December 31, 2018, United, including its subsidiaries, had approximately 92,000 employees. Approximately 83% of United'semployees were represented by various U.S. labor organizations as of December 31, 2018. The agreement with the International Brotherhood of Teamsters(the "IBT") contains provisions that require the Company to align contract terms with other airlines' workgroups under certain conditions.On October 23, 2018, United's Catering Operations employees voted to unionize under the Railway Labor Act. In an election overseen by the NationalMediation Board, UNITE HERE received the majority of the votes and was officially certified to represent United's frontline Catering Operations employees.The Company expects contract negotiations to begin in 2019.85Table of ContentsNOTE 14 - SPECIAL CHARGESSpecial charges in the statements of consolidated operations consisted of the following for the years ended December 31 (in millions):Operating: 2018 2017 (a) 2016 (a)Impairment of assets $377 $25 $412Termination of an engine maintenance service agreement 64 — —Severance and benefit costs 41 116 37Cleveland airport lease restructuring — — 74Labor agreement costs — — 171(Gains) losses on sale of assets and other special charges 5 35 51Total operating special charges 487 176 745Nonoperating: Postretirement curtailment gain — — (107)Gains on extinguishment of debt and other — — (1)Total operating and nonoperating special charges before income taxes 487 176 637Nonoperating mark-to-market ("MTM") losses on financial instruments 5 — —Total special charges and MTM losses on financial instruments 492 176 637Income tax benefit (110) (63) (229)Income tax adjustments (Note 7) (5) (179) 180Total special charges and MTM losses on financial instruments, net of income taxes and incometax adjustments $377 $(66) $588(a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) and Accounting Standards Update No.2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. See Note 1 to the financial statements contained in Part II, Item 8 ofthis report for additional information. 2018The Company conducted its annual impairment review of intangible assets in the fourth quarter of 2018, which consisted of a comparison of the book valueof specific assets to the fair value of those assets. Due to increased costs without sufficient corresponding increases in revenue in the Hong Kong market, theCompany determined that the value of its Hong Kong routes had been impaired. Accordingly, in the fourth quarter of 2018, the Company recorded a specialnon-cash impairment charge of $206 million ($160 million net of taxes) associated with its Hong Kong routes. The collateral pledged under the Company'sterm loan, including the Hong Kong routes, continues to be sufficient to satisfy the loan covenants. The Company determined the fair value of the HongKong routes using a variation of the income approach known as the excess earnings method, which discounts an asset's projected future net cash flows todetermine the current fair value. Assumptions used in the discounted cash flow methodology include a discount rate, which is based upon the Company'scurrent weighted average cost of capital plus an asset-specific risk factor, and a projection of sales, expenses, gross margin, tax rates and contributory assetcharges for four future years and a terminal growth rate. The assumptions used for future projections are determined based upon the Company's asset-specificforecasts along with the Company's strategic plan. These assumptions are inherently uncertain as they relate to future events and circumstances. Actual resultswill be influenced by the competitive environment, fuel costs and other expenses, and potentially other unforeseen events or circumstances that could have amaterial negative impact on future results.In May 2018, the Brazil–United States open skies agreement was ratified, which provides air carriers with unrestricted access between the United States andBrazil. The Company determined that the approval of the open skies agreement impaired the entire value of its Brazil route authorities because the agreementremoves all limitations or reciprocity requirements for flights between the United States and Brazil. Accordingly, the Company recorded a $105 millionspecial charge ($82 million net of taxes) to write off the entire value of the intangible asset associated with its Brazil routes. This asset is not part of anycollateral pledged against any of the Company's borrowings. The Company continues to maintain its slot assets related to Brazil since airport access is stillregulated by slot allocations that are limited by airport facility constraints.During 2018, the Company also recorded $66 million ($51 million net of taxes) of fair value adjustments related to aircraft purchased off lease, write-offs ofunexercised aircraft purchase options and other impairments related to certain fleet types and international slots no longer in use.86Table of Contents During 2018, the Company recorded a one-time termination charge of $64 million ($50 million net of tax) related to one of its engine maintenance serviceagreements.During 2018, the Company recorded severance and benefit costs related to a voluntary early-out program for its technicians and related employeesrepresented by the IBT of $22 million ($17 million net of taxes). In the first quarter of 2017, approximately 1,000 technicians and related employees electedto voluntarily separate from the Company and receive a severance payment, with a maximum value of $100,000 per participant, based on years of service,with retirement dates through the end of 2018. Also during 2018, the Company recorded other management severance of $19 million ($15 million net oftaxes).During 2018, the Company recorded gains of $28 million ($22 million net of taxes) for the change in market value of certain of its equity investments. Also,the Company recorded losses of $33 million ($26 million net of taxes) for the change in fair value of certain derivative assets related to equity of AviancaHoldings S.A. For equity investments and derivative assets subject to MTM accounting, the Company records gains and losses as part of Nonoperatingincome (expense): Miscellaneous, net in its statements of consolidated operations.2017During 2017 the Company recorded a $10 million ($6 million net of taxes) impairment charge related to obsolete spare parts inventory and a $15 million($10 million net of taxes) intangible asset impairment charge related to a maintenance service agreement.During 2017, the Company recorded $83 million ($53 million net of taxes) of severance and benefit costs related to the voluntary early-out program for itstechnicians and related employees represented by the IBT as described above. Also during 2017, the Company recorded $33 million ($21 million net oftaxes) of other management severance.2016In April 2016, the Federal Aviation Administration ("FAA") announced that it will designate Newark Liberty International Airport ("Newark") as a Level 2schedule-facilitated airport under the International Air Transport Association Worldwide Slot Guidelines. The designation was associated with an updateddemand and capacity analysis of Newark by the FAA. In 2016, the Company determined that the FAA's action impaired the entire value of its Newark slotsbecause the slots are no longer the mechanism that governs take-off and landing rights. Accordingly, the Company recorded a $412 million special charge($264 million net of taxes) to write off the intangible asset.During 2016, the Company recorded $37 million ($24 million net of taxes) of severance and benefit costs related to a voluntary early-out program for theCompany's flight attendants and other severance agreements. In 2014, more than 2,500 flight attendants elected to voluntarily separate from the Company fora severance payment, with a maximum value of $100,000 per participant, based on years of service, with retirement dates through the end of 2016.In 2016, the City of Cleveland agreed to amend the Company's lease, which runs through 2029, associated with certain excess airport terminal space(principally Terminal D) and related facilities at Hopkins International Airport ("Cleveland"). The Company recorded an accrual for remaining paymentsunder the lease for facilities that the Company no longer uses and will continue to incur costs under the lease without economic benefit to the Company. Thisliability was measured and recorded at its fair value when the Company ceased its right to use such facilities leased to it pursuant to the lease. The Companyrecorded a net charge of $74 million ($47 million net of taxes) related to the amended lease.The fleet service, passenger service, storekeeper and other employees represented by the International Association of Machinists and Aerospace Workers (the"IAM") ratified seven new contracts with the Company which extended the contracts through 2021. The technicians and related employees represented bythe IBT ratified a six-year joint collective bargaining agreement which extended the contract through 2022. During 2016, the Company recorded $171million ($110 million net of taxes) of special charges primarily for payments in conjunction with the IAM and IBT agreements described above.As part of the ratified contract with the IBT, the Company amended some of its technicians and related employees' postretirement medical plans. Theamendments triggered curtailment accounting, resulting in the recognition of a one-time $60 million gain ($38 million net of taxes) for acceleratedrecognition of a prior service credit in one of the plans. Also, as part of the ratified contract with the Association of Flight Attendants, the Company amendedtwo of its flight attendant postretirement medical plans. The amendments triggered curtailment accounting, resulting in the recognition of a one-time $47million gain ($30 million net of taxes) for accelerated recognition of a prior service credit.87Table of ContentsAccrual ActivityActivity related to the accruals for severance and medical costs and future lease payments on permanently grounded aircraft is as follows (in millions): Severance/ Benefit Costs Permanently GroundedAircraftBalance at December 31, 2015$27 $78Accrual and related adjustments37 (17)Payments(50) (20)Balance at December 31, 201614 41Accrual116 (4)Payments(93) (15)Balance at December 31, 201737 22Accrual41 (7)Payments(53) (3)Balance at December 31, 2018$25 $12NOTE 15 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)UAL Quarter Ended(In millions, except per share amounts) March 31 June 30 September 30 December 312018 Operating revenue $9,032 $10,777 $11,003 $10,491Income from operations 276 1,161 1,203 652Net income 147 684 836 462Basic earnings per share 0.52 2.49 3.07 1.71Diluted earnings per share 0.52 2.48 3.06 1.70 2017 (a) Operating revenue $8,426 $10,008 $9,899 $9,451Income from operations 320 1,437 1,138 776Net income 99 821 645 579Basic earnings per share 0.32 2.67 2.15 1.99Diluted earnings per share 0.32 2.67 2.15 1.98(a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) and Accounting Standards Update No.2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. See Note 1 to the financial statements contained in Part II, Item 8 ofthis report for additional information.UAL's quarterly financial data is subject to seasonal fluctuations and historically its second and third quarter financial results, which reflect higher traveldemand, are better than its first and fourth quarter financial results. UAL's quarterly results were88Table of Contentsimpacted by the following significant items (in millions): Quarter Ended March 31 June 30 September 30 December 312018 Operating: Impairment of assets $23 $111 $11 $232Termination of an engine maintenance service agreement — — — 64Severance and benefit costs 14 11 9 7(Gains) losses on sale of assets and other special charges 3 7 (3) (2)Total operating special charges 40 129 17 301Nonoperating: Nonoperating mark-to-market ("MTM") (gains) losses on financialinstruments (45) 135 (29) (56)Total special charges and MTM (gains) losses on financialinstruments (5) 264 (12) 245Income taxes: Income tax expense (benefit) related to special charges and MTMgains and losses on financial instruments 1 (59) 3 (55)Income tax adjustments — — — (5)Total special charges and MTM (gains) losses on financialinstruments, net of tax $(4) $205 $(9) $185 2017 (a) Operating: Severance and benefit costs $37 $41 $23 $15Impairment of assets — — 15 10(Gains) losses on sale of assets and other special charges 14 3 12 6Total operating special charges 51 44 50 31Income taxes: Income tax benefit related to special charges (18) (16) (18) (11)Income tax adjustments — — — (179)Total operating special charges, net of income taxes andincome tax adjustments $33 $28 $32 $(159)(a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 1 to the financial statementscontained in Part II, Item 8 of this report for additional information.See Note 14 of this report for additional information related to these items.89Table of ContentsITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.None.ITEM 9A.CONTROLS AND PROCEDURESEvaluation of Disclosure Control and ProceduresUAL and United each maintain controls and procedures that are designed to ensure that information required to be disclosed in the reports filed or submittedby UAL and United to the SEC is recorded, processed, summarized and reported, within the time periods specified by the SEC's rules and forms, and isaccumulated and communicated to management including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisionsregarding required disclosure. The management of UAL and United, including the Chief Executive Officer and Chief Financial Officer, performed anevaluation to conclude with reasonable assurance that UAL's and United's disclosure controls and procedures were designed and operating effectively toreport the information each company is required to disclose in the reports they file with the SEC on a timely basis. Based on that evaluation, the ChiefExecutive Officer and the Chief Financial Officer of UAL and United have concluded that as of December 31, 2018, disclosure controls and procedures wereeffective.Changes in Internal Control over Financial Reporting during the Quarter Ended December 31, 2018During the three months ended December 31, 2018, there was no change in UAL's or United's internal control over financial reporting that materially affected,or is reasonably likely to materially affect, their internal control over financial reporting.90Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of United Continental Holdings, Inc.Opinion on Internal Control over Financial ReportingWe have audited United Continental Holdings, Inc.'s (the "Company") internal control over financial reporting as of December 31, 2018, based on criteriaestablished in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework)(the COSO criteria). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31,2018, based on the COSO criteria.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the consolidatedfinancial statements as of and for the year ended December 31, 2018 of the Company and our report dated February 28, 2019 expressed an unqualifiedopinion thereon.Basis for OpinionThe Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness ofinternal control over financial reporting included in the accompanying Management Report on Internal Control over Financial Reporting in Item 9A. Ourresponsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firmregistered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether effective internal control over financial reporting was maintained in all material respects.Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing andevaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considerednecessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.Definition and Limitations of Internal Control Over Financial ReportingA company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal controlover financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate./s/ Ernst & Young LLPChicago, IllinoisFebruary 28, 201991Table of ContentsUnited Continental Holdings, Inc. Management Report on Internal Control Over Financial ReportingFebruary 28, 2019To the Stockholders of United Continental Holdings, Inc.Chicago, IllinoisThe management of United Continental Holdings, Inc. ("UAL") is responsible for establishing and maintaining adequate internal control over financialreporting, as such term is defined in Exchange Act Rules 13a-15(f). Our internal control over financial reporting is designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally acceptedaccounting principles. Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Also,projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,or that the degree of compliance with the policies or procedures may deteriorate.Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we conducted anevaluation of the design and operating effectiveness of our internal control over financial reporting as of December 31, 2018. In making this assessment,management used the framework set forth in Internal Control—Integrated Framework (2013 Framework) issued by the Committee of the SponsoringOrganizations of the Treadway Commission. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our internalcontrol over financial reporting was effective as of December 31, 2018.Our independent registered public accounting firm, Ernst & Young LLP, who audited UAL's consolidated financial statements included in this Form 10-K,has issued a report on UAL's internal control over financial reporting, which is included herein.United Airlines, Inc. Management Report on Internal Control Over Financial ReportingFebruary 28, 2019To the Stockholder of United Airlines, Inc.Chicago, IllinoisThe management of United Airlines, Inc. ("United") is responsible for establishing and maintaining adequate internal control over financial reporting, as suchterm is defined in Exchange Act Rules 13a-15(f). United's internal control over financial reporting is designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples. Because of its inherent limitations, United's internal control over financial reporting may not prevent or detect misstatements. Also, projections ofany evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that thedegree of compliance with the policies or procedures may deteriorate.Under the supervision and with the participation of management, including United's Chief Executive Officer and Chief Financial Officer, United conductedan evaluation of the design and operating effectiveness of its internal control over financial reporting as of December 31, 2018. In making this assessment,management used the framework set forth in Internal Control—Integrated Framework (2013 Framework) issued by the Committee of the SponsoringOrganizations of the Treadway Commission. Based on this evaluation, United's Chief Executive Officer and Chief Financial Officer concluded that itsinternal control over financial reporting was effective as of December 31, 2018.This annual report does not include an attestation report of United's registered public accounting firm regarding internal control over financial reporting.Management's report was not subject to attestation by United's registered public accounting firm pursuant to the rules of the Securities and ExchangeCommission that permit United to provide only management's report in this annual report.92Table of ContentsITEM 9B.OTHER INFORMATION.None.PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.Certain information required by this item with respect to UAL is incorporated by reference from UAL's definitive proxy statement for its 2019 AnnualMeeting of Stockholders under the captions "Election of Directors," "Corporate Governance" and "Beneficial Ownership of Securities—Section 16(a)Beneficial Ownership Reporting Compliance." Information regarding the executive officers of UAL is presented below.Information required by this item with respect to United is omitted pursuant to General Instruction I(2)(c) of Form 10-K.EXECUTIVE OFFICERS OF UALKate Gebo. Age 50. Ms. Gebo has served as Executive Vice President Human Resources and Labor Relations of UAL and United since December 2017. FromNovember 2016 to November 2017, Ms. Gebo served as Senior Vice President, Global Customer Service Delivery and Chief Customer Officer of United. FromOctober 2015 to November 2016, Ms. Gebo served as Vice President of the Office of the Chief Executive Officer. From November 2009 to October 2015, Ms.Gebo served as Vice President of Corporate Real Estate of United.Brett J. Hart. Age 49. Mr. Hart has served as Executive Vice President, Chief Administrative Officer and General Counsel of UAL and United since May2017. From February 2012 to May 2017, he served as Executive Vice President and General Counsel of UAL and United. Mr. Hart served as acting ChiefExecutive Officer and principal executive officer of the Company, on an interim basis, from October 2015 to March 2016. From December 2010 to February2012, he served as Senior Vice President, General Counsel and Secretary of UAL, United and Continental Airlines, Inc. ("Continental"). From June 2009 toDecember 2010, Mr. Hart served as Executive Vice President, General Counsel and Corporate Secretary at Sara Lee Corporation, a consumer food andbeverage company. From March 2005 to May 2009, Mr. Hart served as Deputy General Counsel and Chief Global Compliance Officer of Sara LeeCorporation.Gregory L. Hart. Age 53. Mr. Hart has served as Executive Vice President and Chief Operations Officer of UAL and United since February 2014. FromDecember 2013 to February 2014, he served as Senior Vice President Operations of UAL and United. From September 2012 to December 2013, Mr. Hartserved as Senior Vice President Technical Operations of United. From October 2010 to September 2012, Mr. Hart served as Senior Vice President Network ofUnited and Continental. From September 2008 to September 2010, Mr. Hart served as Vice President Network Strategy of Continental. Mr. Hart joinedContinental in 1997.Linda P. Jojo. Age 53. Ms. Jojo has served as Executive Vice President Technology and Chief Digital Officer of UAL and United since May 2017. FromNovember 2014 to May 2017, Ms. Jojo served as Executive Vice President and Chief Information Officer of UAL and United. From July 2011 to October2014, Ms. Jojo served as Executive Vice President and Chief Information Officer of Rogers Communications, Inc., a Canadian communications and mediacompany. From October 2008 to June 2011, Ms. Jojo served as Chief Information Officer of Energy Future Holdings, a Dallas-based privately held energycompany and electrical utility provider.Chris Kenny. Age 54. Mr. Kenny has served as Vice President and Controller of UAL and United since October 2010. From September 2003 to September2010, Mr. Kenny served as Vice President and Controller of Continental. Mr. Kenny joined Continental in 1997.J. Scott Kirby. Age 51. Mr. Kirby has served as President of UAL and United since August 2016. Prior to joining the Company, from December 2013 toAugust 2016, Mr. Kirby served as President of American Airlines Group and American Airlines, Inc. Mr. Kirby also previously served as President of USAirways from October 2006 to December 2013. Mr. Kirby held significant other leadership roles at US Airways and at America West prior to the 2005 mergerof those carriers, including Executive Vice President—Sales and Marketing (2001 to 2006); Senior Vice President, e-business (2000 to 2001); Vice President,Revenue Management (1998 to 2000); Vice President, Planning (1997 to 1998); and Senior Director, Scheduling and Planning (1995 to 1998). Prior tojoining America West, Mr. Kirby worked for American Airlines Decision Technologies and at the Pentagon.Gerald Laderman. Age 61. Mr. Laderman has served as Executive Vice President and Chief Financial Officer since August 2018. Mr. Laderman served asSenior Vice President Finance, Procurement and Treasurer for UAL and United from 2013 to August 2015, and again from August 2016 to May 2018. Mr.Laderman additionally was acting Chief Financial Officer from93Table of ContentsAugust 2015 to August 2016 and from May 2018 to August 2018. Mr. Laderman served as Senior Vice President Finance and Treasurer for the Companyfrom 2010 to 2013. From 2001 to 2010, Mr. Laderman served as Senior Vice President of Finance and Treasurer for Continental. Mr. Laderman joinedContinental in 1988 as senior director legal affairs, finance and aircraft programs.Oscar Munoz. Age 60. Mr. Munoz has served as Chief Executive Officer of UAL and United since September 2015, and also as President of UAL and Unitedfrom September 2015 until August 2016. From February 2015 to September 2015, Mr. Munoz served as President and Chief Operating Officer of CSXCorporation ("CSX"), a railroad and intermodal transportation services company, overseeing operations, sales and marketing, human resources, service designand information technology. Prior to his appointment as President and Chief Operating Officer of CSX, Mr. Munoz served as Executive Vice President andChief Operating Officer of CSX from January 2012 to February 2015 and as Executive Vice President and Chief Financial Officer of CSX from 2003 to2012. Mr. Munoz has been a member of the UAL Board of Directors since 2010.Andrew Nocella. Age 49. Mr. Nocella has served as Executive Vice President and Chief Commercial Officer of UAL and United since September 2017. FromFebruary 2017 to September 2017, he served as Executive Vice President and Chief Revenue Officer of UAL and United. Prior to joining the Company, fromAugust 2016 to February 2017, Mr. Nocella served as Senior Vice President, Alliances and Sales of American Airlines, Inc. From December 2013 to August2016, he served as Senior Vice President and Chief Marketing Officer of American Airlines, Inc. From August 2007 to December 2013, he served as SeniorVice President, Marketing and Planning of US Airways.There are no family relationships among the executive officers or the directors of UAL. The executive officers are elected by UAL's Board of Directors eachyear and hold office until the next annual meeting of stockholders, until their successors are elected and qualified, or until their earlier death, resignation orremoval.The Company has a code of ethics, the "Code of Ethics and Business Conduct," for its directors, officers and employees. The code serves as a "Code of Ethics"as defined by SEC regulations, and as a "Code of Conduct" under Nasdaq Listing Rule 5610. The code is available on the Company's investor relationswebsite at ir.united.com. Waivers granted to certain officers from compliance with or future amendments to the code will be disclosed on the Company'sinvestor relations website in accordance with Item 5.05 of Form 8-K.ITEM 11.EXECUTIVE COMPENSATION.Information required by this item with respect to UAL is incorporated by reference from UAL's definitive proxy statement for its 2019 Annual Meeting ofStockholders under the captions "Executive Compensation," "2018 Director Compensation" and "Corporate Governance—Compensation CommitteeInterlocks and Insider Participation."Information required by this item with respect to United is omitted pursuant to General Instruction I(2)(c) of Form 10-K. ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS.Information required by this item with respect to UAL is incorporated by reference from UAL's definitive proxy statement for its 2019 Annual Meeting ofStockholders under the caption "Beneficial Ownership of Securities."Information required by this item with respect to United is omitted pursuant to General Instruction I(2)(c) of Form 10-K.ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.Information required by this item with respect to UAL is incorporated by reference from UAL's definitive proxy statement for its 2019 Annual Meeting ofStockholders under the captions "Corporate Governance—Certain Relationships and Related Transactions," "Corporate Governance—Committees of theBoard" and "Corporate Governance—Director Independence."Information required by this item with respect to United is omitted pursuant to General Instruction I(2)(c) of Form 10-K.ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES.The Audit Committee of the UAL Board of Directors has adopted a policy on pre-approval of services of the Company's independent registered publicaccounting firm. As a wholly-owned subsidiary of UAL, United's audit services are determined by UAL. The policy provides that the Audit Committee shallpre-approve all audit and non-audit services to be provided to UAL and its subsidiaries and affiliates by its independent auditors. The process by which thisis carried out is as follows:94Table of ContentsFor recurring services, the Audit Committee reviews and pre-approves the independent registered public accounting firm's annual audit services inconjunction with the annual appointment of the outside auditors. The reviewed materials include a description of the services along with related fees. TheAudit Committee also reviews and pre-approves other classes of recurring services along with fee thresholds for pre-approved services. In the event that theadditional services are required prior to the next scheduled Audit Committee meeting, pre-approvals of additional services follow the process describedbelow.Any requests for audit, audit related, tax and other services not contemplated with the recurring services approval described above must be submitted to theAudit Committee for specific pre-approval and cannot commence until such approval has been granted. Normally, pre-approval is provided at regularlyscheduled meetings. However, the authority to grant specific pre-approval between meetings, as necessary, has been delegated to the Chair of the AuditCommittee. The Chair must update the Audit Committee at the next regularly scheduled meeting of any services that were granted specific pre-approval.On a periodic basis, the Audit Committee reviews the status of services and fees incurred year-to-date and a list of newly pre-approved services since its lastregularly scheduled meeting. The Audit Committee has considered whether the 2018 and 2017 non-audit services provided by Ernst & Young LLP, theCompany's independent registered public accounting firm, are compatible with maintaining auditor independence.All of the services in 2018 and 2017 under the Audit Fees, Audit Related Fees, Tax Fees and All Other Fees categories below have been approved by theAudit Committee pursuant to paragraph (c)(7) of Rule 2-01 of Regulation S-X of the Exchange Act.The aggregate fees billed for professional services rendered by the Company's independent auditors in 2018 and 2017 are as follows (in thousands): Service 2018 2017Audit Fees $3,992 $4,548Audit Related Fees 375 565Tax Fees 166 584All Other Fees 2 2Total Fees $4,535 $5,699Note: UAL and United amounts are the same. AUDIT FEESFor 2018 and 2017, audit fees consist primarily of the audit and quarterly reviews of the consolidated financial statements and the audit of the effectivenessof internal control over financial reporting of United Continental Holdings, Inc. and its wholly-owned subsidiaries. Audit fees also include the audit of theconsolidated financial statements of United, employee benefit plan audits, attestation services required by statute or regulation, comfort letters, consents,assistance with and review of documents filed with the SEC, and accounting and financial reporting consultations and research work necessary to complywith generally accepted auditing standards.AUDIT RELATED FEESFor 2018 and 2017, fees for audit related services primarily consisted of professional services related to due diligence and consultations related to theadoption of new accounting standards.TAX FEESTax fees for 2018 and 2017 relate to professional services provided for research and consultations regarding tax accounting and tax compliance matters andreview of U.S. and international tax impacts of certain transactions, exclusive of tax services rendered in connection with the audit.ALL OTHER FEESFees for all other services billed in 2018 and 2017 consist of subscriptions to Ernst & Young LLP's on-line accounting research tool.95Table of ContentsPART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) List of documents filed as part of this report: (1) Financial Statements. The financial statements required by this item are listed in Part II, Item 8, Financial Statements and SupplementaryData herein. (2) Financial Statement Schedules. The financial statement schedule required by this item is listed below and included in this report after thesignature page hereto. Schedule II-Valuation and Qualifying Accounts for the years ended December 31, 2018, 2017 and 2016. All other schedules are omitted because they are not applicable, not required or the required information is shown in the consolidatedfinancial statements or notes thereto. (b) Exhibits. The exhibits required by this item are provided in the Exhibit Index.ITEM 16. FORM 10-K SUMMARY.None.EXHIBIT INDEXExhibit No.RegistrantExhibit Articles of Incorporation and Bylaws 3.1UALAmended and Restated Certificate of Incorporation of United Continental Holdings, Inc. (filed as Exhibit 3.1 to UAL'sForm 8-K filed October 1, 2010, Commission file number 1-6033, and incorporated herein by reference) 3.2UALAmended and Restated Bylaws of United Continental Holdings, Inc. (filed as Exhibit 3.1 to UAL's Form 10-Q for thequarter ended March 31, 2016, Commission file number 1-6033, and incorporated herein by reference) 3.3UnitedAmended and Restated Certificate of Incorporation of United Airlines, Inc. (filed as Exhibit 3.1 to UAL's Form 8-K filedApril 3, 2013, Commission file number 1-6033, and incorporated herein by reference) 3.4UnitedAmended and Restated By-laws of United Airlines, Inc. (filed as Exhibit 3.2 to UAL's Form 8-K filed April 3, 2013,Commission file number 1-6033, and incorporated herein by reference) Instruments Defining Rights of Security Holders, Including Indentures 4.1UALUnitedAmended and Restated Indenture, dated as of January 11, 2013, by and among United Continental Holdings, Inc. asIssuer, United Air Lines, Inc. as Guarantor, and the Bank of New York Mellon Trust Company, N.A. as Trustee,providing for issuance of 6% Notes due 2028, 6% Notes due 2026 and 8% Notes due 2024 (filed as Exhibit 4.6 to UAL'sForm 10-K for the year ended December 31, 2012, Commission file number 1-6033, and incorporated herein byreference) 4.2UALUnitedFirst Supplemental Indenture, dated as of April 1, 2013, by and among United Continental Holdings, Inc., UnitedAirlines, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Amended and RestatedIndenture, dated as of January 11, 2013 (filed as Exhibit 4.1 to UAL's Form 8-K filed April 3, 2013, Commission filenumber 1-6033, and incorporated herein by reference) 96Table of Contents4.3UALUnitedSecond Supplemental Indenture, dated as of September 13, 2013, by and among United Continental Holdings, Inc.,United Airlines, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Amended and RestatedIndenture, dated as of January 11, 2013 (filed as Exhibit 4.1 to UAL's Form 8-K filed September 19, 2013, Commissionfile number 1-6033, and incorporated herein by reference) 4.4UALUnitedIndenture, dated as of May 7, 2013, among United Continental Holdings, Inc., United Airlines, Inc. and The Bank ofNew York Mellon Trust Company, N.A., as Trustee (filed as Exhibit 4.1 to UAL's Form 8-K filed on May 10, 2013,Commission file number 1-6033, and incorporated herein by reference) 4.5UALUnitedFirst Supplemental Indenture, dated as of May 7, 2013, among United Continental Holdings, Inc., United Airlines, Inc.and The Bank of New York Mellon Trust Company, N.A., as Trustee, providing for the issuance of 6.375% Senior Notesdue 2018 (filed as Exhibit 4.2 to UAL's Form 8-K filed on May 10, 2013, Commission file number 1-6033, andincorporated herein by reference) 4.6UALUnitedForm of 6.375% Senior Notes due 2018 (filed as Exhibit A to Exhibit 4.2 to UAL's Form 8-K filed on May 10, 2013,Commission file number 1-6033, and incorporated herein by reference) 4.7UALUnitedForm of Notation of Note Guarantee (filed as Exhibit B to Exhibit 4.2 to UAL's Form 8-K filed on May 10, 2013,Commission file number 1-6033, and incorporated herein by reference) 4.8UALUnitedSecond Supplemental Indenture, dated as of November 8, 2013, among United Continental Holdings, Inc., UnitedAirlines, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee, providing for the issuance of 6.000%Senior Notes due 2020 (filed as Exhibit 4.2 to UAL's Form 8-K filed on November 12, 2013, Commission file number 1-6033, and incorporated herein by reference) 4.9UALUnitedForm of 6.000% Senior Notes due 2020 (filed as Exhibit 4.3 to UAL's Form 8-K filed on November 12, 2013,Commission file number 1-6033, and incorporated herein by reference) 4.10UALUnitedForm of Notation of Note Guarantee (filed as Exhibit 4.4 to UAL's Form 8-K filed on November 12, 2013, Commissionfile number 1-6033, and incorporated herein by reference) 4.11UALUnitedThird Supplemental Indenture, dated as of January 26, 2017, among United Continental Holdings, Inc., United Airlines,Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee, providing for the issuance of 5.000% SeniorNotes due 2024 (filed as Exhibit 4.2 to UAL's Form 8-K filed January 27, 2017, Commission file number 1-6033, andincorporated herein by reference) 4.12UALUnitedForm of 5.000% Senior Notes due 2024 (filed as Exhibit A to Exhibit 4.2 to UAL's Form 8-K filed January 27, 2017,Commission file number 1-6033, and incorporated herein by reference) 4.13UALUnitedForm of Notation of Note Guarantee (filed as Exhibit B to Exhibit 4.2 to UAL's Form 8-K filed January 27, 2017,Commission file number 1-6033, and incorporated herein by reference) 4.14UALUnitedFourth Supplemental Indenture, dated as of September 29, 2017, among United Continental Holdings, Inc., UnitedAirlines, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee, providing for the issuance of 4.250%Senior Notes due 2022 (filed as Exhibit 4.2 to UAL's Form 8-K filed October 4, 2017, Commission file number 1-6033, and incorporated herein by reference) 4.15UALUnitedForm of 4.250% Senior Notes due 2022 (filed as Exhibit A to Exhibit 4.2 to UAL's Form 8-K filed October 4, 2017,Commission file number 1-6033, and incorporated herein by reference) 4.16UALUnitedForm of Notation of Note Guarantee (filed as Exhibit B to Exhibit 4.2 to UAL's Form 8-K filed October 4, 2017,Commission file number 1-6033, and incorporated herein by reference) Material Contracts †10.1UALAgreement, dated April 19, 2016, by and among PAR Capital Management, Inc., Altimeter Capital Management, LP,United Continental Holdings, Inc. and the other signatories listed on the signature page thereto (filed as Exhibit 10.1 toUAL's Form 8-K filed April 20, 2016, Commission file number 1-6033, and incorporated herein by reference) †10.2UALUnited Continental Holdings, Inc. Profit Sharing Plan (amended and restated effective January 1, 2016) (Filed asExhibit 10.2 to UAL's Form 10-K for the year ended December 31, 2016, Commission file number 1-6033, andincorporated herein by reference) 97Table of Contents †10.3UALFirst Amendment, dated January 29, 2018, to United Continental Holdings, Inc Profit Sharing Plan (Filed as Exhibit10.3 to UAL's Form 10-K for the year ended December 31, 2017, Commission file number 1-6033, and incorporatedherein by reference) †10.4UALUnitedEmployment Agreement, dated December 31, 2015, among United Continental Holdings, Inc., United Airlines, Inc. andOscar Munoz (filed as Exhibit 10.1 to UAL's Form 8-K/A filed January 7, 2016, Commission file number 1-6033, andincorporated herein by reference) †10.5UALUnitedAmendment to Employment Agreement, dated April 19, 2016, by and among United Continental Holdings, Inc., UnitedAirlines, Inc. and Oscar Munoz (filed as Exhibit 10.1 to UAL's Form 8-K filed April 20, 2016, Commission file number1-6033, and incorporated herein by reference) †10.6UALUnitedSecond Amendment to Employment Agreement, dated April 21, 2017, by and among United Continental Holdings,Inc., United Airlines, Inc. and Oscar Munoz (incorporated by reference to Exhibit 10.1 to the Registrant's Current Reporton Form 8-K filed on April 21, 2017, Commission file number 1-6033, and incorporated herein by reference) †10.7UALUnitedSERP Agreement, dated as of October 1, 2010, by and among United Continental Holdings, Inc., Continental Airlines,Inc. and Gerald Laderman (filed as Exhibit 10.2 to UAL's Form 10-Q for the quarter ended September 30, 2015,Commission file number 1-10323, and incorporated herein by reference) †10.8UALUnitedPerformance Award Agreement, dated May 5, 2016, by and among United Continental Holdings, Inc., United Airlines,Inc. and Brett J. Hart (filed as Exhibit 10.3 to UAL's Form 10-Q for the quarter ended June 30, 2016, Commission filenumber 1-6033, and incorporated herein by reference) †10.9UALForm of Stock Option Award Notice pursuant to the United Continental Holdings, Inc. 2008 Incentive CompensationPlan (filed as Exhibit 10.1 to UAL's Form 10-Q for the quarter ended September 30, 2016, Commission file number 1-6033, and incorporated herein by reference) †10.10UALForm of Restricted Stock Unit Award Notice pursuant to the United Continental Holdings, Inc. 2008 IncentiveCompensation Plan (filed as Exhibit 10.2 to UAL's Form 10-Q for the quarter ended September 30, 2016, Commissionfile number 1-6033, and incorporated herein by reference) †10.11UALUnitedDescription of Benefits for Officers of United Continental Holdings, Inc. and United Airlines, Inc. (filed as Exhibit 10.11to UAL's Form 10-K for the year ended December 31, 2015, Commission file number 1-6033 and incorporated herein byreference) †10.12UALUnited Continental Holdings, Inc. Officer Travel Policy (filed as Exhibit 10.24 to UAL's Form 10-K for the year endedDecember 31, 2010, Commission file number 1-6033, and incorporated herein by reference) †10.13UALUnited Continental Holdings, Inc. 2008 Incentive Compensation Plan (filed as Annex A to UAL Corporation's 2013Definitive Proxy Statement filed on April 26, 2013, Commission file number 1-6033, and incorporated herein byreference) (now named the United Continental Holdings, Inc. 2008 Incentive Compensation Plan) †10.14UALFirst Amendment to the United Continental Holdings, Inc. 2008 Incentive Compensation Plan (changing the name toUnited Continental Holdings, Inc. 2008 Incentive Compensation Plan) (filed as Annex A to UAL's Definitive ProxyStatement filed on April 26, 2013, Commission file number 1-6033, and incorporated herein by reference) †10.15UALSecond Amendment to the United Continental Holdings, Inc. 2008 Incentive Compensation Plan (filed as Exhibit 10.19to UAL's Form 10-K for the year ended December 31, 2016, Commission file number 1-6033, and incorporated hereinby reference) †10.16UALForm of Stock Option Award Notice pursuant to the United Continental Holdings, Inc. 2008 Incentive CompensationPlan (filed as Exhibit 10.5 to UAL's Form 10-Q for the quarter ended June 30, 2008, Commission file number 1-6033,and incorporated herein by reference) †10.17UALForm of Restricted Stock Unit Award Notice pursuant to the United Continental Holdings, Inc. 2008 IncentiveCompensation Plan (stock settled) (filed as Exhibit 10.21 to UAL's Form 10-K for the year ended December 31, 2016,Commission file number 1-6033, and incorporated herein by reference) †10.18UALForm of Restricted Share Award Notice pursuant to the United Continental Holdings, Inc. 2008 Incentive CompensationPlan (awards during and after 2014) (filed as Exhibit 10.27 to UAL's Form 10-K for the year ended December 31, 2013,Commission file number 1-6033, and incorporated by reference)98Table of Contents †10.19UALUnited Continental Holdings, Inc. Performance-Based Restricted Stock Unit Program (adopted pursuant to the UnitedContinental Holdings, Inc. 2008 Incentive Compensation Plan) (filed as Exhibit 10.31 to UAL's Form 10-K for the yearended December 31, 2010, Commission file number 1-6033, and incorporated herein by reference) †10.20UALFirst Amendment to the United Continental Holdings, Inc. Performance-Based Restricted Stock Unit Program (adoptedpursuant to the United Continental Holdings, Inc. 2008 Incentive Compensation Plan) (effective with respect toperformance periods beginning on or after January 1, 2012) (filed as Exhibit 10.33 to UAL's Form 10-K for the yearended December 31, 2011, Commission file number 1-6033, and incorporated herein by reference) †10.21UALSecond Amendment to the United Continental Holdings, Inc. Performance-Based Restricted Stock Unit Program(adopted pursuant to the United Continental Holdings, Inc. 2008 Incentive Compensation Plan) (filed as Exhibit 10.29to UAL's Form 10-K for the year ended December 31, 2012, Commission file number 1-6033, and incorporated hereinby reference) †10.22UALThird Amendment to the United Continental Holdings, Inc. Performance-Based Restricted Stock Unit Program (adoptedpursuant to the United Continental Holdings, Inc. 2008 Incentive Compensation Plan) (filed as Exhibit 10.1 to UAL'sForm 10-Q for the quarter ended March 31, 2015, Commission file number 1-6033, and incorporated herein byreference) †10.23UALFourth Amendment to the United Continental Holdings, Inc. Performance-Based Restricted Stock Unit Program(adopted pursuant to the United Continental Holdings, Inc. 2008 Incentive Compensation Plan) (filed as Exhibit 10.22to UAL's Form 10-K for the year ended December 31, 2015, Commission file number 1-6033 and incorporated herein byreference) †10.24UALForm of Performance-Based Restricted Stock Unit Award Notice pursuant to the United Continental Holdings, Inc.Performance-Based Restricted Stock Unit Program (ROIC awards) (filed as Exhibit 10.23 to UAL's Form 10-K for theyear ended December 31, 2015, Commission file number 1-6033 and incorporated herein by reference) †10.25UALForm of Performance-Based Restricted Stock Unit Award Notice pursuant to the United Continental Holdings, Inc.Performance-Based Restricted Stock Unit Program (Relative Pre-tax Margin awards) (for performance periods beginningon or after January 1, 2015) (filed as Exhibit 10.2 to UAL's Form 10-Q for the quarter ended March 31, 2015,Commission file number 1-6033, and incorporated herein by reference) †10.26UALUnited Continental Holdings, Inc. Incentive Plan 2010, as amended and restated February 17, 2011 (previously namedthe Continental Airlines, Inc. Incentive Plan 2010) (filed as Annex B to UAL's Definitive Proxy Statement filed April26, 2013, Commission file number 1-6033, and incorporated herein by reference) †10.27UALFirst Amendment to the United Continental Holdings, Inc. Incentive Plan 2010, as amended and restated February 17,2011 (filed as Annex B to UAL's 2013 Definitive Proxy Statement filed on April 26, 2013, Commission file number 1-6033, incorporated herein by reference) †10.28UALUnited Air Lines, Inc. Management Cash Direct & Cash Match Program (amended and restated effective January 1,2016) †10.29UALUnited Continental Holdings, Inc. Executive Severance Plan (effective October 1, 2014) (filed as Exhibit 10.1 to UAL'sForm 8-K filed June 20, 2014, Commission file number 1-6033, and incorporated herein by reference) †10.30UALUnited Continental Holdings, Inc. 2017 Incentive Compensation Plan (filed as Exhibit 10.1 to UAL's Form 8-K filed onMay 30, 2017, Commission file number 1-6033, and incorporated herein by reference) †10.31UALForm of Restricted Stock Unit Award Notice pursuant to the United Continental Holdings, Inc. 2017 IncentiveCompensation Plan (filed as Exhibit 10.6 to UAL's Form 10-Q for the quarter ended June 30, 2017, Commission filenumber 1-6033, and incorporated herein by reference) †10.32UALForm of Stock Option Award Notice pursuant to the United Continental Holdings, Inc. 2017 Incentive CompensationPlan (filed as Exhibit 10.7 to UAL's Form 10-Q for the quarter ended June 30, 2017, Commission file number 1-6033,and incorporated herein by reference) †10.33UALUnited Continental Holdings, Inc. Performance-Based RSU Program (adopted pursuant to the United ContinentalHoldings, Inc. 2017 Incentive Compensation Plan) (filed as Exhibit 10.8 to UAL's Form 10-Q for the quarter ended June30, 2017, Commission file number 1-6033, and incorporated herein by reference) 99Table of Contents†10.34UALFirst Amendment to the United Continental Holdings, Inc. Performance-Based RSU Program (adopted pursuant to theUnited Continental Holdings, Inc. 2017 Incentive Compensation Plan) †10.35UALForm of Performance-Based RSU Award Notice pursuant to the United Continental Holdings, Inc. Performance-BasedRSU Program (Relative Pre-tax Margin awards) (stock settled form of award) †10.36UALForm of Performance-Based RSU Award Notice pursuant to the United Continental Holdings, Inc. Performance-BasedRSU Program (Relative Pre-tax Margin awards) (filed as Exhibit 10.9 to UAL's Form 10-Q for the quarter ended June 30,2017, Commission file number 1-6033, and incorporated herein by reference) †10.37UALUnited Continental Holdings, Inc. Annual Incentive Program (cash settled form of award) (adopted pursuant to theUnited Continental Holdings, Inc. 2017 Incentive Compensation Plan) (filed as Exhibit 10.63 to UAL's Form 10-K forthe year ended December 31, 2017, Commission file number 1-6033, and incorporated herein by reference) †10.38UALForm of Annual Incentive Plan Award Notice pursuant to the United Continental Holdings, Inc. Annual IncentiveProgram (adopted pursuant to the United Continental Holdings, Inc. 2017 Incentive Compensation Plan) (filed asExhibit 10.64 to UAL's Form 10-K for the year ended December 31, 2017, Commission file number 1-6033, andincorporated herein by reference) †10.39UALDescription of Compensation and Benefits for United Continental Holdings, Inc. Non-Employee Directors †10.40UALUnited Continental Holdings, Inc. 2006 Director Equity Incentive Plan (as amended and restated, effective February 20,2014, filed as Annex A to UAL's Definitive Proxy Statement filed April 25, 2014, Commission file number 1-6033, andincorporated herein by reference) †10.41UALFirst Amendment to the United Continental Holdings, Inc. 2006 Director Equity Incentive Plan (as amended andrestated on February 20, 2014) (filed as Exhibit 10.3 to UAL's Form 10-Q for the quarter ended March 31, 2017,Commission file number 1-6033, and incorporated herein by reference) †10.42UALForm of Share Unit Award Notice pursuant to the United Continental Holdings, Inc. 2006 Director Equity IncentivePlan (for awards granted on or after June 2011) (filed as Exhibit 10.9 to UAL's Form 10-Q for the quarter ended June 30,2014, Commission file number 1-6033, and incorporated herein by reference) †10.43UALUnitedAmended and Restated A350-900 Purchase Agreement, dated September 1, 2017, including letter agreements relatedthereto, between Airbus S.A.S. and United Airlines, Inc. (filed as Exhibit 10.1 to UAL's Form 10-Q for the quarter endedSeptember 30, 2017, Commission file number 1-6033, and incorporated herein by reference) †10.44UALUnitedPurchase Agreement No. 1951, including exhibits and side letters thereto, dated July 23, 1996, by and amongContinental and Boeing (filed as Exhibit 10.8 to Continental's Form 10-Q for the quarter ended June 30, 1996,Commission file number 1-10323, and incorporated herein by reference) ^10.45UALUnitedSupplemental Agreement No. 1 to Purchase Agreement No. 1951, dated October 10, 1996 (filed as Exhibit 10.14(a) toContinental's Form 10-K for the year ended December 31, 1996, Commission file number 1-10323, and incorporatedherein by reference) ^10.46UALUnitedSupplemental Agreement No. 2 to Purchase Agreement No. 1951, dated March 5, 1997 (filed as Exhibit 10.3 toContinental's Form 10-Q for the quarter ended March 31, 1997, Commission file number 1-10323 and incorporatedherein by reference) ^10.47UALUnitedSupplemental Agreement No. 3, including exhibit and side letter, to Purchase Agreement No. 1951, dated July 17, 1997(filed as Exhibit 10.14(c) to Continental's Form 10-K for the year ended December 31, 1997, Commission file number 1-10323, and incorporated herein by reference) ^10.48UALUnitedSupplemental Agreement No. 4, including exhibits and side letters, to Purchase Agreement No. 1951, dated October 10,1997 (filed as Exhibit 10.14(d) to Continental's Form 10-K for the year ended December 31, 1997, Commission filenumber 1-10323, and incorporated herein by reference) ^10.49UALUnitedSupplemental Agreement No. 5, including exhibits and side letters, to Purchase Agreement No. 1951, dated October 10,1997 (filed as Exhibit 10.1 to Continental's Form 10-Q for the quarter ended June 30, 1998, Commission file number 1-10323, and incorporated herein by reference) 100Table of Contents^10.50UALUnitedSupplemental Agreement No. 6, including exhibits and side letters, to Purchase Agreement No. 1951, dated July 30,1998 (filed as Exhibit 10.1 to Continental's Form 10-Q for the quarter ended September 30, 1998, Commission filenumber 1-10323, and incorporated herein by reference) ^10.51UALUnitedSupplemental Agreement No. 7, including side letters, to Purchase Agreement No. 1951, dated November 12, 1998(filed as Exhibit 10.24(g) to Continental's Form 10-K for the year ended December 31, 1998, Commission file number 1-10323, and incorporated herein by reference) ^10.52UALUnitedSupplemental Agreement No. 8, including side letters, to Purchase Agreement No. 1951, dated December 7, 1998 (filedas Exhibit 10.24(h) to Continental's Form 10-K for the year ended December 31, 1998, Commission file number 1-10323, and incorporated herein by reference) ^10.53UALUnitedLetter Agreement No. 6-1162-GOC-131R1 to Purchase Agreement No. 1951, dated March 26, 1998 (filed as Exhibit10.1 to Continental's Form 10-Q for the quarter ended March 31, 1998, Commission file number 1-10323, andincorporated herein by reference) ^10.54UALUnitedSupplemental Agreement No. 9, including side letters, to Purchase Agreement No. 1951, dated February 18, 1999 (filedas Exhibit 10.4 to Continental's Form 10-Q for the quarter ended March 31, 1999, Commission file number 1-10323,and incorporated herein by reference) ^10.55UALUnitedSupplemental Agreement No. 10, including side letters, to Purchase Agreement No. 1951, dated March 19, 1999 (filedas Exhibit 10.4(a) to Continental's Form 10-Q for the quarter ended March 31, 1999, Commission file number 1-10323,and incorporated herein by reference) ^10.56UALUnitedSupplemental Agreement No. 11, including side letters, to Purchase Agreement No. 1951, dated March 14, 1999 (filedas Exhibit 10.7 to Continental's Form 10-Q for the quarter ended June 30, 1999, Commission file number 1-10323, andincorporated herein by reference) ^10.57UALUnitedSupplemental Agreement No. 12, including side letters, to Purchase Agreement No. 1951, dated July 2, 1999 (filed asExhibit 10.8 to Continental's Form 10-Q for the quarter ended September 30, 1999, Commission file number 1-10323,and incorporated herein by reference) ^10.58UALUnitedSupplemental Agreement No. 13 to Purchase Agreement No. 1951, dated October 13, 1999 (filed as Exhibit 10.25(n) toContinental's Form 10-K for the year ended December 31, 1999, Commission file number 1-10323, and incorporatedherein by reference) ^10.59UALUnitedSupplemental Agreement No. 14 to Purchase Agreement No. 1951, dated December 13, 1999 (filed as Exhibit 10.25(o)to Continental's Form 10-K for the year ended December 31, 1999, Commission file number 1-10323, and incorporatedherein by reference) ^10.60UALUnitedSupplemental Agreement No. 15, including side letters, to Purchase Agreement No. 1951, dated January 13, 2000 (filedas Exhibit 10.1 to Continental's Form 10-Q for the quarter ended March 31, 2000, Commission file number 1-10323,and incorporated herein by reference) ^10.61UALUnitedSupplemental Agreement No. 16, including side letters, to Purchase Agreement No. 1951, dated March 17, 2000 (filedas Exhibit 10.2 to Continental's Form 10-Q for the quarter ended March 31, 2000, Commission file number 1-10323,and incorporated herein by reference) ^10.62UALUnitedSupplemental Agreement No. 17, including side letters, to Purchase Agreement No. 1951, dated May 16, 2000 (filed asExhibit 10.2 to Continental's Form 10-Q for the quarter ended June 30, 2000, Commission file number 1-10323, andincorporated herein by reference) ^10.63UALUnitedSupplemental Agreement No. 18, including side letters, to Purchase Agreement No. 1951, dated September 11, 2000(filed as Exhibit 10.6 to Continental's Form 10-Q for the quarter ended September 30, 2000, Commission file number 1-10323, and incorporated herein by reference) ^10.64UALUnitedSupplemental Agreement No. 19, including side letters, to Purchase Agreement No. 1951, dated October 31, 2000 (filedas Exhibit 10.20(t) to Continental's Form 10-K for the year ended December 31, 2000, Commission file number 1-10323, and incorporated herein by reference) ^10.65UALUnitedSupplemental Agreement No. 20, including side letters, to Purchase Agreement No. 1951, dated December 21, 2000(filed as Exhibit 10.20(u) to Continental's Form 10-K for the year ended December 31, 2000, Commission file number 1-10323, and incorporated herein by reference) ^10.66UALUnitedSupplemental Agreement No. 21, including side letters, to Purchase Agreement No. 1951, dated March 30, 2001 (filedas Exhibit 10.1 to Continental's Form 10-Q for the quarter ended March 31, 2001, Commission file number 1-10323,and incorporated herein by reference) 101Table of Contents ^10.67UALUnitedSupplemental Agreement No. 22, including side letters, to Purchase Agreement No. 1951, dated May 23, 2001 (filed asExhibit 10.3 to Continental's Form 10-Q for the quarter ended June 30, 2001, Commission file number 1-10323, andincorporated herein by reference) ^10.68UALUnitedSupplemental Agreement No. 23, including side letters, to Purchase Agreement No. 1951, dated June 29, 2001 (filed asExhibit 10.4 to Continental's Form 10-Q for the quarter ended June 30, 2001, Commission file number 1-10323, andincorporated herein by reference) ^10.69UALUnitedSupplemental Agreement No. 24, including side letters, to Purchase Agreement No. 1951, dated August 31, 2001 (filedas Exhibit 10.11 to Continental's Form 10-Q for the quarter ended September 30, 2001, Commission file number 1-10323, and incorporated herein by reference) ^10.70UALUnitedSupplemental Agreement No. 25, including side letters, to Purchase Agreement No. 1951, dated December 31, 2001(filed as Exhibit 10.22(z) to Continental's Form 10-K for the year ended December 31, 2001, Commission file number 1-10323, and incorporated herein by reference) ^10.71UALUnitedSupplemental Agreement No. 26, including side letters, to Purchase Agreement No. 1951, dated March 29, 2002 (filedas Exhibit 10.4 to Continental's Form 10-Q for the quarter ended March 31, 2002, Commission file number 1-10323,and incorporated herein by reference) ^10.72UALUnitedSupplemental Agreement No. 27, including side letters, to Purchase Agreement No. 1951, dated November 6, 2002(filed as Exhibit 10.22(ab) to Continental's Form 10-K for the year ended December 31, 2002, Commission file number1-10323, and incorporated herein by reference) ^10.73UALUnitedSupplemental Agreement No. 28, including side letters, to Purchase Agreement No. 1951, dated April 1, 2003 (filed asExhibit 10.6 to Continental's Form 10-Q for the quarter ended March 31, 2003, Commission file number 1-10323, andincorporated herein by reference) ^10.74UALUnitedSupplemental Agreement No. 29, including side letters, to Purchase Agreement No. 1951, dated August 19, 2003 (filedas Exhibit 10.2 to Continental's Form 10-Q for the quarter ended September 30, 2003, Commission file number 1-10323, and incorporated herein by reference) ^10.75UALUnitedSupplemental Agreement No. 30 to Purchase Agreement No. 1951, dated November 4, 2003 (filed as Exhibit 10.23(ae)to Continental's Form 10-K for the year ended December 31, 2003, Commission file number 1-10323, and incorporatedherein by reference) ^10.76UALUnitedSupplemental Agreement No. 31 to Purchase Agreement No. 1951, dated August 20, 2004 (filed as Exhibit 10.4 toContinental's Form 10-Q for the quarter ended September 30, 2004, Commission file number 1-10323, and incorporatedherein by reference) ^10.77UALUnitedSupplemental Agreement No. 32, including side letters, to Purchase Agreement No. 1951, dated December 29, 2004(filed as Exhibit 10.21(ag) to Continental's Form 10-K for the year ended December 31, 2004, Commission file number1-10323, and incorporated herein by reference) ^10.78UALUnitedSupplemental Agreement No. 33, including side letters, to Purchase Agreement No. 1951, dated December 29, 2004(filed as Exhibit 10.21(ah) to Continental's Form 10-K for the year ended December 31, 2004, Commission file number1-10323, and incorporated herein by reference) ^10.79UALUnitedSupplemental Agreement No. 34 to Purchase Agreement No. 1951, dated June 22, 2005 (filed as Exhibit 10.3 toContinental's Form 10-Q for the quarter ended June 30, 2005, Commission file number 1-10323, and incorporatedherein by reference) ^10.80UALUnitedSupplemental Agreement No. 35 to Purchase Agreement No. 1951, dated June 30, 2005 (filed as Exhibit 10.4 toContinental's Form 10-Q for the quarter ended June 30, 2005, Commission file number 1-10323, and incorporatedherein by reference) ^10.81UALUnitedSupplemental Agreement No. 36 to Purchase Agreement No. 1951, dated July 28, 2005 (filed as Exhibit 10.1 toContinental's Form 10-Q for the quarter ended September 30, 2005, Commission file number 1-10323, and incorporatedherein by reference) ^10.82UALUnitedSupplemental Agreement No. 37 to Purchase Agreement No. 1951, dated March 30, 2006 (filed as Exhibit 10.2 toContinental's Form 10-Q for the quarter ended March 31, 2006, Commission file number 1-10323, and incorporatedherein by reference) ^10.83UALUnitedSupplemental Agreement No. 38 to Purchase Agreement No. 1951, dated June 6, 2006 (filed as Exhibit 10.3 toContinental's Form 10-Q for the quarter ended June 30, 2006, Commission file number 1-10323, and incorporatedherein by reference) ^10.84UALUnitedSupplemental Agreement No. 39 to Purchase Agreement No. 1951, dated August 3, 2006 (filed as Exhibit 10.4 toContinental's Form 10-Q for the quarter ended September 30, 2006, Commission file number 1-10323, and incorporatedherein by reference) 102Table of Contents ^10.85UALUnitedSupplemental Agreement No. 40 to Purchase Agreement No. 1951, dated December 5, 2006 (filed as Exhibit 10.23(ao)to Continental's Form 10-K for the year ended December 31, 2006, Commission file number 1-10323, and incorporatedherein by reference) ^10.86UALUnitedSupplemental Agreement No. 41 to Purchase Agreement No. 1951, dated June 1, 2007 (filed as Exhibit 10.1 toContinental's Form 10-Q for the quarter ended June 30, 2007, Commission file number 1-10323, and incorporatedherein by reference) ^10.87UALUnitedSupplemental Agreement No. 42 to Purchase Agreement No. 1951, dated June 12, 2007 (filed as Exhibit 10.2 toContinental's Form 10-Q for the quarter ended June 30, 2007, Commission file number 1-10323, and incorporatedherein by reference) ^10.88UALUnitedSupplemental Agreement No. 43 to Purchase Agreement No. 1951, dated July 18, 2007 (filed as Exhibit 10.1 toContinental's Form 10-Q for the quarter ended September 30, 2007, Commission file number 1-10323, and incorporatedherein by reference) ^10.89UALUnitedSupplemental Agreement No. 44 to Purchase Agreement No. 1951, dated December 7, 2007 (filed as Exhibit 10.21(as)to Continental's Form 10-K for the year ended December 31, 2007, Commission file number 1-10323, and incorporatedherein by reference) ^10.90UALUnitedSupplemental Agreement No. 45 to Purchase Agreement No. 1951, dated February 20, 2008 (filed as Exhibit 10.2 toContinental's Form 10-Q for the quarter ended March 31, 2008, Commission file number 1-10323, and incorporatedherein by reference) ^10.91UALUnitedSupplemental Agreement No. 46 to Purchase Agreement No. 1951, dated June 25, 2008 (filed as Exhibit 10.5 toContinental's Form 10-Q for the quarter ended June 30, 2008, Commission file number 1-10323, and incorporatedherein by reference) ^10.92UALUnitedSupplemental Agreement No. 47 to Purchase Agreement No. 1951, dated October 30, 2008 (filed as Exhibit 10.21(av) toContinental's Form 10-K for the year ended December 31, 2008, Commission file number 1-10323, and incorporatedherein by reference) ^10.93UALUnitedSupplemental Agreement No. 48 to Purchase Agreement No. 1951, dated January 29, 2009 (filed as Exhibit 10.3 toContinental's Form 10-Q for the quarter ended June 30, 2009, Commission file number 1-10323, and incorporatedherein by reference) ^10.94UALUnitedSupplemental Agreement No. 49 to Purchase Agreement No. 1951, dated May 1, 2009 (filed as Exhibit 10.4 toContinental's Form 10-Q for the quarter ended June 30, 2009, Commission file number 1-10323, and incorporatedherein by reference) ^10.95UALUnitedSupplemental Agreement No. 50 to Purchase Agreement No. 1951, dated July 23, 2009 (filed as Exhibit 10.2 toContinental's Form 10-Q for the quarter ended September 30, 2009, Commission file number 1-10323, and incorporatedherein by reference) ^10.96UALUnitedSupplemental Agreement No. 51 to Purchase Agreement No. 1951, dated August 5, 2009 (filed as Exhibit 10.3 toContinental's Form 10-Q for the quarter ended September 30, 2009, Commission file number 1-10323, and incorporatedherein by reference) ^10.97UALUnitedSupplemental Agreement No. 52 to Purchase Agreement No. 1951, dated August 31, 2009 (filed as Exhibit 10.4 toContinental's Form 10-Q for the quarter ended September 30, 2009, Commission file number 1-10323, and incorporatedherein by reference) ^10.98UALUnitedSupplemental Agreement No. 53 to Purchase Agreement No. 1951, dated December 23, 2009 (filed as Exhibit 10.22(bb)to Continental's Form 10-K for the year ended December 31, 2009, Commission file number 1-10323, and incorporatedherein by reference) ^10.99UALUnitedSupplemental Agreement No. 54 to Purchase Agreement No. 1951, dated March 2, 2010 (filed as Exhibit 10.2 toContinental's Form 10-Q for the quarter ended March 31, 2010, Commission file number 1-10323, and incorporatedherein by reference) ^10.100UALUnitedSupplemental Agreement No. 55 to Purchase Agreement No. 1951, dated March 31, 2010 (filed as Exhibit 10.3 toContinental's Form 10-Q for the quarter ended March 31, 2010, Commission file number 1-10323, and incorporatedherein by reference) ^10.101UALUnitedSupplemental Agreement No. 56 to Purchase Agreement No. 1951, dated August 12, 2010 (filed as Exhibit 10.4 toContinental's Form 10-Q for the quarter ended September 30, 2010, Commission File Number 1-10323, andincorporated herein by reference) ^10.102UALUnitedSupplemental Agreement No. 57 to Purchase Agreement No. 1951, dated March 2, 2011 (filed as Exhibit 10.1 to UAL'sForm 10-Q for the quarter ended March 31, 2011, Commission file number 1-6033, and incorporated herein byreference)103Table of Contents ^10.103UALUnitedSupplemental Agreement No. 58 to Purchase Agreement No. 1951, dated January 6, 2012 (filed as Exhibit 10.1 to UAL'sForm 10-Q for the quarter ended March 31, 2012, Commission file number 1-6033, and incorporated herein byreference) ^10.104UALUnitedSupplemental Agreement No. 59 to Purchase Agreement No. 1951, dated July 12, 2012 (filed as Exhibit 10.5 to UAL'sForm 10-Q for the quarter ended September 30, 2012, Commission file number 1-6033, and incorporated herein byreference) ^10.105UALUnitedSupplemental Agreement No. 60 to Purchase Agreement No. 1951, dated November 7, 2012 (filed as Exhibit 10.2 toUAL's Form 10-Q for the quarter ended June 30, 2013, Commission file number 1-6033, and incorporated herein byreference) ^10.106UALUnitedSupplemental Agreement No. 61 to Purchase Agreement No. 1951, dated September 11, 2013 (filed as Exhibit 10.1 forthe quarter ended September 30, 2013, Commission file number 1-6033, and incorporated herein by reference) ^10.107UALUnitedSupplemental Agreement No. 62 to Purchase Agreement No. 1951, dated January 14, 2015 (filed as Exhibit 10.3 for thequarter ended March 31, 2015, Commission file number 1-6033, and incorporated herein by reference) ^10.108UALUnitedSupplemental Agreement No. 63 to Purchase Agreement No. 1951, dated May 26, 2015 (filed as Exhibit 10.1 for thequarter ended June 30, 2015, Commission file number 1-10323, and incorporated herein by reference) ^10.109UALUnitedSupplemental Agreement No. 64 to Purchase Agreement No. 1951, dated June 12, 2015 (filed as Exhibit 10.2 for thequarter ended June 30, 2015, Commission file number 1-10323, and incorporated herein by reference) ^10.110UALUnitedAircraft General Terms Agreement, dated October 10, 1997, by and among Continental and Boeing (filed as Exhibit10.15 to Continental's Form 10-K for the year ended December 31, 1997, Commission File Number 1-10323, andincorporated herein by reference) ^10.111UALUnitedLetter Agreement 6-1162-CHL-048, dated February 8, 2002, by and among Continental and Boeing (filed as Exhibit10.44 to Continental's Form 10-K for the year ended December 31, 2001, Commission file number 1-10323, andincorporated herein by reference) ^10.112UALUnitedPurchase Agreement No. 2484, including exhibits and side letters, dated December 29, 2004, by and among Continentaland Boeing (filed as Exhibit 10.27 to Continental's Form 10-K for the year ended December 31, 2004, Commission filenumber 1-10323, and incorporated herein by reference) ^10.113UALUnitedSupplemental Agreement No. 1 to Purchase Agreement No. 2484, dated June 30, 2005 (filed as Exhibit 10.5 toContinental's Form 10-Q for the quarter ended June 30, 2005, Commission file number 1-10323, and incorporatedherein by reference) ^10.114UALUnitedSupplemental Agreement No. 2, including exhibits and side letters, to Purchase Agreement No. 2484, dated January 20,2006 (filed as Exhibit 10.27(b) to Continental's Form 10-K for the year ended December 31, 2005, Commission filenumber 1-10323, and incorporated herein by reference) ^10.115UALUnitedSupplemental Agreement No. 3 to Purchase Agreement No. 2484, dated May 3, 2006 (filed as Exhibit 10.4 toContinental's Form 10-Q for the quarter ended June 30, 2006, Commission file number 1-10323, and incorporatedherein by reference) ^10.116UALUnitedSupplemental Agreement No. 4 to Purchase Agreement No. 2484, dated July 14, 2006 (filed as Exhibit 10.5 toContinental's Form 10-Q for the quarter ended September 30, 2006, Commission file number 1-10323, and incorporatedherein by reference) ^10.117UALUnitedSupplemental Agreement No. 5 to Purchase Agreement No. 2484, dated March 12, 2007 (filed as Exhibit 10.1 toContinental's Form 10-Q for the quarter ended March 31, 2007, Commission file number 1-10323, and incorporatedherein by reference) ^10.118UALUnitedSupplemental Agreement No. 6 to Purchase Agreement No. 2484, dated October 22, 2008 (filed as Exhibit 10.25(f) toContinental's Form 10-K for the year ended December 31, 2008, Commission file number 1-10323, and incorporatedherein by reference) ^10.119UALUnitedSupplemental Agreement No. 7 to Purchase Agreement No. 2484, dated November 7, 2012 (filed as Exhibit 10.179 toUAL's Form 10-K for the year ended December 31, 2012, Commission file number 1-6033, and incorporated herein byreference) 104Table of Contents ^10.120UALUnitedSupplemental Agreement No. 8 to Purchase Agreement No. 2484, dated June 17, 2013 (filed as Exhibit 10.4 to UAL'sForm 10-Q for the quarter ended June 30, 2013, Commission file number 1-6033, and incorporated herein by reference) ^10.121UALUnitedSupplemental Agreement No. 9 to Purchase Agreement No. 2484, dated June 6, 2014 (filed as Exhibit 10.4 to UAL'sForm 10-Q for the quarter ended June 30, 2014, Commission file number 1-6033, and incorporated herein by reference) ^10.122UALUnitedSupplemental Agreement No. 10 to Purchase Agreement No. 2484, dated January 14, 2015 (filed as Exhibit 10.4 toUAL's Form 10-Q for the quarter ended March 31, 2015, Commission file number 1-6033, and incorporated herein byreference) ^10.123UALUnitedSupplemental Agreement No. 11 to Purchase Agreement No. 2484, dated April 30, 2015 (filed as Exhibit 10.3 to UAL'sForm 10-Q for the quarter ended June 30, 2015, Commission file number 1-10323, and incorporated herein by reference) ^10.124UALUnitedAmended and Restated Letter Agreement No. 11, dated August 8, 2005, by and among Continental and General ElectricCompany (filed as Exhibit 10.3 to Continental's Form 10-Q for the quarter ended September 30, 2005, Commission filenumber 1-10323, and incorporated herein by reference) ^10.125UALUnitedPurchase Agreement No. PA-03784, dated July 12, 2012, between The Boeing Company and United Air Lines, Inc.(filed as Exhibit 10.1 to UAL's Form 10-Q for the quarter ended September 30, 2012, Commission file number 1-6033,and incorporated herein by reference) ^10.126UALUnitedSupplemental Agreement No. 01 to Purchase Agreement No. PA-03784, dated September 27, 2012 (filed as Exhibit 10.2to UAL's Form 10-Q for the quarter ended September 30, 2012, Commission file number 1-6033, and incorporatedherein by reference) ^10.127UALUnitedSupplemental Agreement No. 02 to Purchase Agreement Number PA-03784, dated March 1, 2013 (filed as Exhibit 10.3to UAL's Form 10-Q for the quarter ended June 30, 2013, Commission file number 1-6033, and incorporated herein byreference) ^10.128UALUnitedSupplemental Agreement No. 03 to Purchase Agreement Number PA-03784, dated June 27, 2013 (filed as Exhibit 10.7to UAL's Form 10-Q for the quarter ended June 30, 2013, Commission file number 1-6033, and incorporated herein byreference) ^10.129UALUnitedSupplemental Agreement No. 04 to Purchase Agreement Number PA-03784, dated September 11, 2013 (filed as Exhibit10.2 to UAL's Form 10-Q for the quarter ended September 30, 2013, Commission file number 1-6033, and incorporatedherein by reference) ^10.130UALUnitedSupplemental Agreement No. 05 to Purchase Agreement Number PA-03784, dated March 3, 2014 (filed as Exhibit 10.2to UAL's Form 10-Q for the quarter ended June 30, 2014, Commission file number 1-6033 and incorporated herein byreference) ^10.131UALUnitedSupplemental Agreement No. 06 to Purchase Agreement Number PA-03784, dated June 6, 2014 (filed as Exhibit 10.3 toUAL's Form 10-Q for the quarter ended June 30, 2014, Commission file number 1-6033, and incorporated herein byreference) ^10.132UALUnitedSupplemental Agreement No. 07 to Purchase Agreement Number PA-03784, dated May 26, 2015 (filed as Exhibit 10.6to UAL's Form 10-Q for the quarter ended June 30, 2015, Commission file number 1-10323 and incorporated herein byreference) ^10.133UALUnitedSupplemental Agreement No. 08 to Purchase Agreement Number PA-03784, dated June 12, 2015 (filed as Exhibit 10.7to UAL's Form 10-Q for the quarter ended June 30, 2015, Commission file number 1-10323 and incorporated herein byreference) ^10.134UALUnitedSupplemental Agreement No. 9 to Purchase Agreement No. 03784, dated January 20, 2016, between The BoeingCompany and United Airlines, Inc. (filed as Exhibit 10.2 to UAL's Form 10-Q for the quarter ended March 31, 2016,Commission file number 1-6033, and incorporated herein by reference) ^10.135UALUnitedSupplemental Agreement No. 10 to Purchase Agreement No. 03784, dated February 8, 2016, between The BoeingCompany and United Airlines, Inc. (filed as Exhibit 10.4 to UAL's Form 10-Q for the quarter ended March 31, 2016,Commission file number 1-6033, and incorporated herein by reference) ^10.136UALUnitedSupplemental Agreement No. 11 to Purchase Agreement Number No. 03784, dated March 7, 2016, between The BoeingCompany and United Airlines, Inc. (filed as Exhibit 10.6 to UAL's Form 10-Q for the quarter ended March 31, 2016,Commission file number 1-6033, and incorporated herein by reference)105Table of Contents ^10.137UALUnitedSupplemental Agreement No. 12 to Purchase Agreement No. 03784, dated June 24, 2016, between The BoeingCompany and United Airlines, Inc. (filed as Exhibit 10.7 to UAL's Form 10-Q for the quarter ended June 30, 2016,Commission file number 1-6033, and incorporated herein by reference) ^10.138UALUnitedSupplemental Agreement No. 13 to Purchase Agreement No. 03784, dated December 27, 2016, between The BoeingCompany and United Airlines, Inc. (filed as Exhibit 10.174 to UAL's Form 10-K for the year ended December 31, 2016,Commission file number 1-6033, and incorporated herein by reference) ^10.139UALUnitedPurchase Agreement No. PA-03776, dated July 12, 2012, between The Boeing Company and United ContinentalHoldings, Inc. (filed as Exhibit 10.3 to UAL's Form 10-Q for the quarter ended September 30, 2012, Commission filenumber 1-6033, and incorporated herein by reference) ^10.140UALUnitedSupplemental Agreement No. 01 to Purchase Agreement No. 03776, dated June 17, 2013 (filed as Exhibit 10.5 to UAL'sForm 10-Q for the quarter ended June 30, 2013, Commission file number 1-6033, and incorporated herein by reference) ^10.141UALUnitedPurchase Agreement Assignment to Purchase Agreement No. 03776, dated October 23, 2013, between UnitedContinental Holdings, Inc. and United Airlines, Inc. (filed as Exhibit 10.3 to UAL's Form 10-Q for the quarter endedSeptember 30, 2013, Commission file number 1-6033, and incorporated herein by reference) ^10.142UALUnitedSupplemental Agreement No. 02 to Purchase Agreement No. 03776, dated January 14, 2015 (filed as Exhibit 10.5 toUAL's Form 10-Q for the quarter ended March 31, 2015, Commission file number 1-6033, and incorporated herein byreference) ^10.143UALUnitedSupplemental Agreement No. 03 to Purchase Agreement No. 03776, dated May 26, 2015 (filed as Exhibit 10.4 to UAL'sForm 10-Q for the quarter ended June 30, 2015, Commission file number 1-10323, and incorporated herein by reference) ^10.144UALUnitedSupplemental Agreement No. 04 to Purchase Agreement No. 03776, dated June 12, 2015 (filed as Exhibit 10.5 to UAL'sForm 10-Q for the quarter ended June 30, 2015, Commission file number 1-10323, and incorporated herein by reference) ^10.145UALUnitedSupplemental Agreement No. 5 to Purchase Agreement No. 03776, dated January 20, 2016, between The BoeingCompany and United Airlines, Inc. (filed as Exhibit 10.1 to UAL's Form 10-Q for the quarter ended March 31, 2016,Commission file number 1-6033, and incorporated herein by reference) ^10.146UALUnitedSupplemental Agreement No. 6 to Purchase Agreement No. 03776, dated February 8, 2016, between The BoeingCompany and United Airlines, Inc. (filed as Exhibit 10.3 to UAL's Form 10-Q for the quarter ended March 31, 2016,Commission file number 1-6033, and incorporated herein by reference) ^10.147UALUnitedSupplemental Agreement No. 7 to Purchase Agreement No. 03776, dated December 27, 2016, between The BoeingCompany and United Airlines, Inc. (filed as Exhibit 10.183 to UAL's Form 10-K for the year ended December 31, 2016,Commission file number 1-6033, and incorporated herein by reference) ^10.148UALUnitedSupplemental Agreement No. 8, including exhibits and side letters, to Purchase Agreement No. 03776, dated June 7,2017, between The Boeing Company and United Airlines, Inc. (filed as Exhibit 10.3 to UAL's Form 10-Q for the quarterended June 30, 2017, Commission file number 1-6033, and incorporated herein by reference) ^10.149UALUnitedSupplemental Agreement No. 9, including exhibits and side letters, to Purchase Agreement No. 03776, dated June 15,2017, between The Boeing Company and United Airlines, Inc. (filed as Exhibit 10.4 to UAL's Form 10-Q for the quarterended June 30, 2017, Commission file number 1-6033, and incorporated herein by reference) ^10.150UALUnitedSupplemental Agreement No. 10, including exhibits and side letters, to Purchase Agreement No. 03776, dated as of May15, 2018, between The Boeing Company and United Airlines, Inc. (filed as Exhibit 10.2 to UAL's Form 10-Q for thequarter ended June 30, 2018, Commission file number 1-6033, and incorporated herein by reference) ^10.151UALUnitedSupplemental Agreement No. 11, including exhibits and side letters, to Purchase Agreement No. 03776, dated as ofSeptember 25, 2018, between The Boeing Company and United Airlines, Inc. (filed as Exhibit 10.1 to UAL's Form 10-Qfor the quarter ended September 30, 2018, Commission file number 1-6033, and incorporated herein by reference) 106Table of Contents ^10.152UALUnitedSupplemental Agreement No. 12, including exhibits and side letters, to Purchase Agreement No. 03776, dated as ofDecember 12, 2018, between The Boeing Company and United Airlines, Inc. ^10.153UALUnitedLetter Agreement No. 6-1162-KKT-080, dated July 12, 2012, among Boeing, United Continental Holdings, Inc., UnitedAir Lines, Inc., and Continental Airlines, Inc. (filed as Exhibit 10.4 to UAL's Form 10-Q for the quarter ended September30, 2012, Commission file number 1-6033, and incorporated herein by reference) ^10.154UALUnitedPurchase Agreement No. 3860, dated September 27, 2012, between Boeing and United Air Lines, Inc. (filed as Exhibit10.6 to UAL's Form 10-Q for the quarter ended September 30, 2012, Commission file number 1-6033, and incorporatedherein by reference) ^10.155UALUnitedSupplemental Agreement No. 1 to Purchase Agreement No. 3860, dated June 17, 2013 (filed as Exhibit 10.6 to UAL'sForm 10-Q for the quarter ended June 30, 2013, Commission file number 1-6033, and incorporated herein by reference) ^10.156UALUnitedSupplemental Agreement No. 2 to Purchase Agreement No. 3860, dated December 16, 2013 (filed as Exhibit 10.1 toUAL's Form 10-Q for the quarter ended June 30, 2014, Commission file number 1-6033, and incorporated herein byreference) ^10.157UALUnitedSupplemental Agreement No. 3 to Purchase Agreement No. 3860, dated as of July 22, 2014 (filed as Exhibit 10.3 toUAL's Form 10-Q for the quarter ended September 30, 2014, Commission file number 1-6033, and incorporated hereinby reference) ^10.158UALUnitedSupplemental Agreement No. 4 to Purchase Agreement No. 3860, dated as of January 14, 2015 (filed as Exhibit 10.6 toUAL's Form 10-Q for the quarter ended March 31, 2015, Commission file number 1-6033, and incorporated herein byreference) ^10.159UALUnitedSupplemental Agreement No. 5 to Purchase Agreement No. 3860, dated as of April 30, 2015 (filed as Exhibit 10.8 toUAL's Form 10-Q for the quarter ended June 30, 2015, Commission file number 1-10323, and incorporated herein byreference) ^10.160UALUnitedSupplemental Agreement No. 6 to Purchase Agreement No. 3860, dated as of December 31, 2015 (filed as Exhibit10.178 to UAL's Form 10-K for the year ended December 31, 2015, Commission file number 1-6033, and incorporatedherein by reference) ^10.161UALUnitedSupplemental Agreement No. 7 to Purchase Agreement No. 3860, dated March 7, 2016, between The Boeing Companyand United Airlines, Inc. (filed as Exhibit 10.5 to UAL's Form 10-Q for the quarter ended March 31, 2016, Commissionfile number 1-6033, and incorporated herein by reference) ^10.162UALUnitedLetter Agreement to Purchase Agreement No. 3860, dated May 5, 2016, between The Boeing Company and UnitedAirlines, Inc. (filed as Exhibit 10.5 to UAL's Form 10-Q for the quarter ended June 30, 2016, Commission file number 1-6033, and incorporated herein by reference) ^10.163UALUnitedSupplemental Agreement No. 8, including exhibits and side letters, to Purchase Agreement No. 3860, Dated June 15,2017, between The Boeing Company and United Airlines, Inc. (filed as Exhibit 10.5 to UAL's Form 10-Q for the quarterended June 30, 2017, Commission file number 1-6033, and incorporated herein by reference) ^10.164UALUnitedLetter Agreement No. UAL-LA-1604287 to Purchase Agreement Nos. 3776, 3784 and 3860, dated December 27, 2016,between The Boeing Company and United Airlines, Inc. (filed as Exhibit 10.194 to UAL's Form 10-K for the year endedDecember 31, 2016, Commission file number 1-6033, and incorporated herein by reference) ^10.165UALUnitedSupplemental Agreement No. 9, including exhibits and side letters, to Purchase Agreement No. 3860, dated as of May31, 2018, between The Boeing Company and United Airlines, Inc. (filed as Exhibit 10.3 to UAL's Form 10-Q for thequarter ended June 30, 2018, Commission file number 1-6033, and incorporated herein by reference) ^10.166UALUnitedSupplemental Agreement No. 10, including exhibits and side letters, to Purchase Agreement No. 3860, dated as ofNovember 1, 2018, between The Boeing Company and United Airlines, Inc. ^10.167UALUnitedSupplemental Agreement No. 11, including exhibits and side letters, to Purchase Agreement No. 3860, dated as ofDecember 12, 2018, between The Boeing Company and United Airlines, Inc. 107Table of Contents10.168UALUnitedAmended and Restated Credit and Guaranty Agreement, dated as of March 29, 2017, among United Airlines, Inc., asborrower, United Continental Holdings, Inc., as parent and a guarantor, the subsidiaries of United Continental Holdings,Inc. from time to time party thereto other than the borrower party thereto from time to time, as guarantors, the lendersfrom time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent (filed as Exhibit 10.1 to UAL'sForm 8-K filed April 3, 2017, Commission file number 1-6033, and incorporated herein by reference) 10.169UALUnitedFirst Amendment, dated as of November 15, 2017, to Amended and Restated Credit Guaranty Agreement (filed asExhibit 10.219 to UAL's Form 10-K for the year ended December 31, 2017, Commission file number 1-6033, andincorporated herein by reference) 10.170UALUnitedSecond Amendment, dated as of May 16, 2018, to Amended and Restated Credit Guaranty Agreement filed as Exhibit10.1 to UAL's Form 10-Q for the quarter ended June 30, 2018, Commission file number 1-6033, and incorporated hereinby reference) List of Subsidiaries 21UALUnitedList of United Continental Holdings, Inc. and United Airlines, Inc. Subsidiaries Consents of Experts and Counsel 23.1UALConsent of Independent Registered Public Accounting Firm (Ernst & Young LLP) for United Continental Holdings, Inc. 23.2UnitedConsent of Independent Registered Public Accounting Firm (Ernst & Young LLP) for United Airlines, Inc. Rule 13a-14(a)/15d-14(a) Certifications 31.1UALCertification of the Principal Executive Officer of United Continental Holdings, Inc. pursuant to 15 U.S.C. 78m(a) or78o(d) (Section 302 of the Sarbanes-Oxley Act of 2002) 31.2UALCertification of the Principal Financial Officer of United Continental Holdings, Inc. pursuant to 15 U.S.C. 78m(a) or78o(d) (Section 302 of the Sarbanes-Oxley Act of 2002) 31.3UnitedCertification of the Principal Executive Officer of United Airlines, Inc. pursuant to 15 U.S.C. 78m(a) or 78o(d)(Section 302 of the Sarbanes-Oxley Act of 2002) 31.4UnitedCertification of the Principal Financial Officer of United Airlines, Inc. pursuant to 15 U.S.C. 78m(a) or 78o(d)(Section 302 of the Sarbanes-Oxley Act of 2002) Section 1350 Certifications 32.1UALCertification of the Chief Executive Officer and Chief Financial Officer of United Continental Holdings, Inc. pursuantto 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002) 32.2UnitedCertification of the Chief Executive Officer and Chief Financial Officer of United Airlines, Inc. pursuant to 18 U.S.C.1350 (Section 906 of the Sarbanes-Oxley Act of 2002) Interactive Data File 101UALUnitedThe following materials from each of United Continental Holdings, Inc.'s and United Airlines, Inc.'s Annual Reports onForm 10-K for the year ended December 31, 2018, formatted in XBRL (Extensible Business Reporting Language): (i)the Statements of Consolidated Operations, (ii) the Statements of Consolidated Comprehensive Income (Loss), (iii) theConsolidated Balance Sheets, (iv) the Statements of Consolidated Cash Flows, (v) the Statements of ConsolidatedStockholders' Equity (Deficit) and (vi) the Combined Notes to Consolidated Financial Statements.†Indicates management contract or compensatory plan or arrangement. Pursuant to Item 601(b)(10), United is permitted to omit certain compensation-related exhibits from this report and therefore only UAL is identified as the registrant for purposes of those items.^Confidential portion of this exhibit has been omitted and filed separately with the SEC pursuant to a request for confidential treatment.108Table of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized. UNITED CONTINENTAL HOLDINGS, INC.UNITED AIRLINES, INC.(Registrants) By:/s/ Gerald Laderman Gerald Laderman Executive Vice President and Chief Financial Officer Date: February 28, 2019Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of UnitedContinental Holdings, Inc. and in the capacities and on the date indicated. Signature Capacity /s/ Oscar MunozChief Executive Officer, DirectorOscar Munoz(Principal Executive Officer) /s/ Gerald LadermanExecutive Vice President and Chief Financial OfficerGerald Laderman(Principal Financial Officer) /s/ Chris KennyVice President and ControllerChris Kenny(Principal Accounting Officer) /s/ Carolyn CorviDirectorCarolyn Corvi /s/ Jane C. GarveyDirectorJane C. Garvey /s/ Barney HarfordDirectorBarney Harford /s/ Michele J. HooperDirectorMichele J. Hooper /s/ Todd M. InslerDirectorTodd M. Insler 109Table of Contents/s/ Walter IsaacsonDirectorWalter Isaacson /s/ James A.C. KennedyDirectorJames A.C. Kennedy DirectorWilliam R. Nuti /s/ Sito PantojaDirectorSito Pantoja /s/ Edward M. PhilipDirectorEdward M. Philip /s/ Edward L. ShapiroDirectorEdward L. Shapiro /s/ David J. VitaleDirectorDavid J. Vitale /s/ James M. WhitehurstDirectorJames M. Whitehurst Date:February 28, 2019110Table of ContentsPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of UnitedAirlines, Inc. and in the capacities and on the date indicated.Signature Capacity /s/ Oscar MunozChief Executive Officer, DirectorOscar Munoz(Principal Executive Officer) /s/ Gerald LadermanExecutive Vice President and Chief Financial Officer,DirectorGerald Laderman(Principal Financial Officer) /s/ Chris KennyVice President and ControllerChris Kenny(Principal Accounting Officer) /s/ Gregory L. HartDirectorGregory L. Hart /s/ J. Scott KirbyDirectorJ. Scott Kirby Date: February 28, 2019111Table of ContentsSchedule IIValuation and Qualifying AccountsFor the Years Ended December 31, 2018, 2017 and 2016 (In millions) DescriptionBalance atBeginning ofPeriod AdditionsCharged toCosts andExpenses Deductions (a) Other Balance atEnd ofPeriodAllowance for doubtful accounts: 2018$7 $17 $16 $— $8201710 20 23 — 7201618 18 26 — 10Obsolescence allowance—spare parts: 2018$354 $73 $15 $— $4122017295 75 17 1 3542016235 61 16 15 295Valuation allowance for deferred tax assets: 2018$63 $2 $6 $— $59201768 11 27 11 63201648 47 27 — 68(a) Deduction from reserve for purpose for which reserve was created.112Exhibit 10.28UNITED AIRLINES, INC.MANAGEMENT CASH DIRECT & CASH MATCH PROGRAM(Amended and Restated Effective January 1, 2016)As part of the overall awards package for Management co-workers, United Airlines, Inc. (the “Company”) offers the UnitedAirlines, Inc. Cash Direct & Cash Match Program (the “Program”). The purpose of the Program is to pay direct and matchingcontributions to eligible employees in cash where, as a result of IRS limits, such contributions cannot be made to the applicableCompany 401(k) plan. This Program is intended to provide all Management benefits-eligible co-workers the same opportunity toreceive Company contributions to their retirement savings based upon their total eligible cash compensation. This documentationof the Program is an amendment and restatement of the Company’s prior cash direct and cash match programs and sets forth theterms of the Program effective January 1, 2016.EligibilityYou are eligible for the Program if you are a Management Employee of the Company who, on or afterJanuary 1, 2016, is a participant in the United Airlines 401(k) Savings Plan (the “401(k) Plan”),including any plan that was merged into the 401(k) Plan effective July 1, 2016.The term “Management Employee” means that you have been designated by the Company as amanagement employee in accordance with its policies and you are not in a unit of employees coveredby a collective bargaining agreement between a union and the Company. All other employee groupsparticipating in the 401(k) Plan, including any union-represented employees, are excluded from theProgram.Cash DirectThe Cash Direct portion of the Program defines how Company direct contributions determined inaccordance with the formula under the 401(k) Plan are paid once IRS limits on 401(k) contributionsare met. Direct contributions are non-elective Company-provided contributions to your 401(k)account, meaning the Company makes them even if you do not contribute to your 401(k) account.Direct contributions are equal to 2-4% of eligible earnings depending upon your age and years ofservice as determined under the 401(k) Plan. The Company will cease contributing direct contributions to the 401(k) Plan and instead pay them toyou in cash if the following occurs: ●Your earnings for the year exceed the IRS total annual compensation limit (e.g., $265,000in 2016; $270,000 in 2017) under Section 401(a)(17) of the Internal Revenue Code, and/or ●Contributions for the year to your 401(k) Plan account (the total of your contributions andthe Company’s) reach the IRS total annual contribution limit (e.g., $53,000 in 2016;$54,000 in 2017) under Section 415(c) of the Internal Revenue Code. Your “earnings” are determined in accordance with the 401(k) Plan and only include amounts earnedwhile a Management Employee. EXAMPLE: Using the 2016 limits for example purposes only, assume that your 2016 earnings were$300,000. $300,000 minus $265,000 is $35,000. $35,000 is multiplied by your Company directcontribution percentage under the 401(k) Plan, which is 2-4% depending upon your age and years ofservice. Thus, you would receive a Cash Direct payment of between $700 and $1,400, dependingupon your age and years of service as determined under the 401(k) Plan.Cash MatchThe Cash Match portion of the Program defines how Company matching contributions determined inaccordance with the formula under the 401(k) Plan are paid once IRS limits on 401(k) contributionsare met. Matching contributions to the 401(k) Plan are based upon eligible year-to-date compensationthat you defer to your 401(k) account, up to a maximum of 4% of eligible earnings as determinedunder the 401(k) Plan. The Company will cease making matching contributions to the 401(k) Plan and instead pay them toyou in cash if the following occurs:●Your earnings as a Management co-worker for the year exceed the IRS total annualcompensation limit (e.g., $265,000 in 2016; $270,000 in 2017) under Section 401(a)(17) ofthe Internal Revenue Code and you have made pre-tax and/or Roth contributions totalingthe elective deferral limit (e.g., $18,000 in 2016 and 2017) under Section 402(g) of theInternal Revenue Code, or●Contributions for the year to your 401(k) account (the total of your contributions and theCompany’s) reach the IRS total annual contribution limit (e.g., $53,000 in 2016; $54,000 in2017) under Section 415(c) of the Internal Revenue Code.Your “earnings” are determined in accordance with the 401(k) Plan and only include amounts earnedwhile a Management Employee. Please note that if you are eligible to make Catch-up Contributions tothe 401(k) Plan, you are not required to make such contributions in order to qualify for Cash Matchpayments under the Program.EXAMPLE: Using the 2016 limits for example purposes only, assume that your 2016 earnings were$300,000 and that you have made pre-tax and/or Roth contributions totaling the elective deferral limitof $18,000 to the 401(k) Plan. $300,000 minus $265,000 is $35,000. $35,000 is multiplied by yourmatching contribution percentage under the 401(k) Plan, which is 4%. Thus, you would receive aCash Match payment of $1,400.Additional Rules1.The timing of Cash Direct and Cash Match payments is determined by the Company,provided that they shall be made no later than March 15th of the year following thecalendar year earned. You do not have the option to accelerate or defer payment, andthese amounts are taxable in the year paid.2.If you cease employment during the calendar year (other than termination for cause),you are eligible for Cash Direct and/or Cash Match payments based upon your actualearnings for the calendar year, and your payment will be made at the same time thatother Management Employees receive their payments. If you are terminated for cause,you are not eligible for Cash Direct or Cash Match payments. You are considered to beterminated for cause for purposes of this Program if you are determined to be ineligiblefor severance benefits due to termination for cause under the applicable severance planin which you participate (or, if applicable, your individual employment agreement).3.No interest accrues between the time a Cash Direct or Cash Match payment is earnedand the time it is paid by the Company.4.Cash Direct and Cash Match payments count as earnings under the 401(k) Plan forpurposes of calculating your Section 415 limitation (the maximum amount that can becontributed per plan year) but not for any other purposes.How to RequestPaymentIt is not necessary to file a claim in order to receive payments under the Program. They are paidautomatically. The Company has the sole discretion to determine whether any amount is payableunder the terms of the Program, and the Company’s determination is final. If you believe that theCompany has failed to pay you an amount owed under the Program (or miscalculated your payment),please contact Rainier Villatuya, Managing Director -Benefits.22016 Cash Direct & Cash Match ProgramChanges to the 401(k) Planor IRS LimitsThe terms of this Program are dependent upon the terms of the 401(k) Plan and applicable IRS limits.This Program shall be interpreted by the Company in its sole discretion to adapt to any changes in the401(k) Plan, IRS limits, or the Company’s interpretation of the application of IRS limits to the 401(k)Plan. Payments under this Program are only made to the extent corresponding contributions cannot bemade to the 401(k) Plan.409A ComplianceThe Program is intended to be exempt from the provisions of Section 409A of the Internal RevenueCode applicable to deferred compensation. However, in the event the Program is not exempt, allprovisions of the Program are to be construed and interpreted in a manner consistent with Section409A. In certain cases, it may be necessary to modify the timing of payment, or otherwise modify theadministration of the Program, to comply with Section 409A. Notwithstanding herein to the contrary,you are solely responsible and liable for the satisfaction of all taxes and penalties that may arise inconnection with amounts payable pursuant to the Program (including any taxes arising under Section409A of the Code), and the Company will not have any obligation to indemnify or otherwise hold youharmless from any or all of such taxes.Amendment andTerminationThe Company reserves the right to amend, modify or terminate the Program at any time and for anyreason without notice.Not a Contract ofEmploymentThis Program does not create a contract of employment between you and the Company, nor does theProgram restrict in any way the rights of the Company (subject to any written employment contractyou may have with the Company) to terminate your employment at any time and for any reason.Governing LawThis Program is a Company policy and is not an employee benefit plan governed by the EmployeeRetirement Income Security Act of 1974 (ERISA). This Program shall be governed by the laws of theState of Illinois.32016 Cash Direct & Cash Match ProgramExhibit 10.34FIRST AMENDMENT TOUNITED CONTINENTAL HOLDINGS, INC.PERFORMANCE-BASED RSU PROGRAMWHEREAS, the United Continental Holdings, Inc. Performance-Based RSU Program (the “Program”) has heretofore been adopted by theCompensation Committee (the “Committee”) of the Board of Directors of United Continental Holdings, Inc. to implement in part the “RSU” provisions of theUnited Continental Holdings, Inc. 2017 Incentive Compensation Plan;WHEREAS, the Committee is authorized to amend the Program; andWHEREAS, the Committee desires to amend the Program in certain respects;NOW, THEREFORE, the Program shall be amended as follows, effective with respect to Performance Periods (as such term is defined in the Program)beginning on or after January 1, 2019:1. Sections 2.1(o) of the Program shall be deleted and the following shall be substituted therefor:“(o) “Fair Market Value” means, as of any specified date, in the case of a cash-settled Award, the simple average of the closing sales pricesof Company Stock on the principal securities market on which the Company Stock is then traded over the 20 most recent consecutive Trading Daysending on the last Trading Day preceding the specified date, adjusted appropriately by the Committee for any stock splits, stock dividends, reversestock splits, special dividends or other similar matters occurring during or with respect to any relevant measurement period.”2. Sections 2.1(s) of the Program shall be deleted and the following shall be substituted therefor:“(s)” Payment Amount” means, with respect to each Participant and each Performance Period for which the Performance Goal is satisfied, (i)in the case of a cash-settled Award, an amount equal to (A) the number of RSUs subject to such Participant’s Award for such Performance Period,multiplied by (B) such Participant’s Vested Percentage for such Performance Period, multiplied by (C) the Fair Market Value as of the PaymentComputation Date for such Performance Period, and (ii) in the case of a stock-settled Award, an amount equal to (A) the number of RSUs subject to suchParticipant’s Award for such Performance Period, multiplied by (B) such Participant’s Vested Percentage for such Performance Period. Notwithstandingthe foregoing, a Payment Amount may be prorated as provided in the Program.”3. As amended hereby, the Program is specifically ratified and reaffirmed. Exhibit 10.35PERFORMANCE-BASED RSU AWARD NOTICEto [Name]Pursuant to the United Continental Holdings, Inc.Performance-Based RSU ProgramRelative Pre-tax Margin(Stock-Settled)Performance Period January 1, 20[ ] to December 31, 20[ ]1. The Program. This document constitutes your formal Award Notice with respect to an Award of RSUs as a Participant under the UnitedContinental Holdings, Inc. Performance-Based RSU Program (as amended from time to time, the “Program”) adopted under the United Continental Holdings,Inc. 2017 Incentive Compensation Plan (as amended from time to time, the “ICP”). This Award Notice evidences your receipt of an award of RSUs under theProgram with respect to the performance period commencing on January 1, 20[ ] and ending on December 31, 20[__] (the “Performance Period”) and withrespect to Performance Goals based on the Company’s achievement of relative pre-tax margin performance. This Award is subject to the terms of the Programand the ICP. The effective date of your commencement in the Program with respect to this Award is [ ].2. Number of RSUs; Performance Measure and Performance Goals. The Committee has established certain Performance Goals for RSUs under theProgram. The Committee has established the following terms and Performance Goals with respect to your Award:(a) RSUs. The number of RSUs subject to this Award as of the effective date of grant is (stretch level).(b) Performance Measure and Performance Goal. Achievement of the Performance Goal for the Performance Period means that the Pre-tax Margin achieved by the Company with respect to the Performance Period equals or exceeds the Entry Level for the Performance Period. The Entry Level,Target Level, and Stretch Level are as follows: i.Entry Level Pre-tax Margin generally means [(A)] the percentage determined by dividing the cumulative Pre-tax Income of all companies in theIndustry Group (currently [ ]) for the Performance Period by all such companies’ cumulative revenues over such period [(B) minusthe percentage determined by dividing the cumulative Pre-tax Income of the Industry Group for calendar year [ ] by the cumulativerevenues of the Industry Group for such year (as more specifically defined in the Program, the “Industry Pre-Tax Margin”) [[plus][minus] [ ] Basis Points)]; ii.Target Level Pre-tax Margin is equal to Industry Pre-tax Margin plus [ ] Basis Points; and iii.Stretch Level Pre-tax Margin is equal to Industry Pre-tax Margin plus [ ] Basis Points.If a Change of Control occurs during the Performance Period, then the Company’s Pre-tax Margin for the Performance Period will be deemed to equal TargetLevel Pre-tax Margin.3. Payout upon Achievement of Goal.(a) Payment Amount. If the Pre-tax Margin for the Performance Period equals or exceeds the Entry Level Pre-tax Margin for thePerformance Period and you have remained continuously employed by the Company or a Subsidiary through the end of the Performance Period, then thePayment Amount with respect to thisAward will be an amount equal to (i) the number of RSUs subject to your Award for the Performance Period, multiplied by (ii) your Vested Percentage for thePerformance Period.(b) Vested Percentage. Your Vested Percentage with respect to the Performance Period will be determined in accordance with thefollowing table (straight line interpolation will be used between levels): Level of Pre-tax Margin Achieved Vested PercentageEntry % (Entry Level RSU Percentage) Target % (Target Level RSU Percentage) Stretch (or higher) % (Stretch Level RSU Percentage)4. Continuous Employment Required. Receipt of a Payment Amount is conditioned on your continuous employment with the Company or itsSubsidiaries through the last day of the Performance Period (with limited exceptions, as described in the Program).5. Pro-Rated Payment. Your Payment Amount may be prorated as provided in the Program under certain circumstances.6. Settlement of RSUs. The RSUs granted to you pursuant to this Award Notice will be settled in Company Stock. The Company shall deliver toyou, at the times set forth in the Program, one share of Company Stock for each RSU that becomes vested in accordance with the terms of this Award Notice.Upon settlement, a number of RSUs equal to the number of shares of Company Stock represented thereby shall be extinguished and such number of RSUswill no longer be considered to be held by you for any purpose. To the extent that any RSUs do not vest in accordance with this Award Notice, such RSUsshall be forfeited and you shall have no further rights with respect to such RSUs.7. Voting Rights; Dividend Equivalents. You do not have any of the rights of a stockholder with respect to the RSUs granted to you pursuant tothis Award Notice until shares of Company Stock with respect to such RSUs are delivered to you in accordance with Section 6. Further, except as otherwiserequired pursuant to the adjustment provisions set forth in the ICP, you do not have the right to vote or to receive any dividends or any dividend equivalentsrelating to such dividends declared or paid on the shares of Company Stock with respect to the RSUs granted to you pursuant to this Award Notice.8. Tax Withholding and Consents.(a) Tax Withholding. The delivery of shares of Company Stock pursuant to Section 6 of this Award Notice is conditioned on satisfaction of anyapplicable withholding taxes in accordance with Section 10(d) of the ICP. The Company will withhold from the number of shares of Company Stockotherwise deliverable to you pursuant to Section 6 a number of shares (or, to the extent applicable, such other securities) having a Fair Market Value (asdefined in the ICP) equal to such withholding liability; provided that you may elect alternatively to satisfy your tax withholding obligation, in whole or inpart, by any of the following means: (i) a cash payment to the Company or (ii) delivery (either actual delivery or by attestation procedures established by theCompany) to the Company of previously owned whole shares of Company Stock having an aggregate Fair Market Value (as defined in the ICP) equal to suchwithholding liability. Notwithstanding the foregoing, the Company shall be authorized to take such actions as the Company may deem necessary (including,without limitation, in accordance with applicable law, withholding amounts from any compensation or other amounts owing from the Company to you) tosatisfy all obligations for the payment of such taxes. Subject to the terms of the ICP and as a condition of the Award, you acknowledge that, regardless of anyaction taken by the Company, or if different, your employer, the ultimate liability for all applicable Federal, state, local or foreign income tax, socialinsurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Program and legally applicable toyou (“Tax-Related Items”), is and remains your responsibility and may exceed the amount actually withheld by the Company, or if different, your employer.You further acknowledge that the Company and/or your employer (1) makeno representations or undertaking regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including but not limited to,the grant, vesting or settlement of the Award; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of theAward to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are subject to Tax-Related Items in morethan one jurisdiction between the grant date and the date of any relevant taxable or tax withholding event, as applicable, you acknowledge that the Companyand/or the employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.(b) Consents. Your rights in respect of the RSUs are conditioned on the receipt to the full satisfaction of the Committee of any required consentsthat the Committee may determine to be necessary or advisable (including, without limitation, your consenting to the Company’s supplying to any third-party recordkeeper of the ICP such personal information as the Committee deems advisable to administer the ICP).9. Requirements of Law. The grant of RSUs under the Program, and the issuance of shares of Company Stock upon the vesting of the RSUs shallbe subject to, and conditioned upon, satisfaction of all applicable laws, rules, and regulations, and to such approvals by any governmental agencies ornational securities exchanges as may be required.10. Additional Requirements. The Company reserves the right to impose other requirements on the RSUs, and your participation in theProgram, to the extent the Company determines, in its sole discretion, that such other requirements are necessary or advisable in order to comply with locallaws, rules and regulations, or to facilitate the administration of the Award and the Program. Such requirements may include (but are not limited to) requiringyou to sign any agreements or undertakings that may be necessary to accomplish the foregoing.11. Program and ICP Control. Capitalized terms used in this Award Notice are defined in the Program. The Program and the ICP are herebyincorporated into this Award Notice by reference. All statements in this Award Notice are qualified in their entirety by reference to the Program and the ICP. Ifyou have any questions, please contact , or if you wish to obtain a copy of the Program or the ICP, please contact .Exhibit 10.39Description of Compensation and Benefits for Non-Employee DirectorsActive non-employee directors of United Continental Holdings, Inc. (the “Company”) elected by the holders of the Company’s Common Stock (for purposesof this summary, “non-employee directors”) receive the compensation and benefits described in this summary.Cash and Equity Compensation. Active non-employee directors receive the following annual cash and equity compensation: (i) cash retainer of $100,000;(ii) grant of $170,000 of restricted stock units granted following election to the Board at the annual meeting of stockholders and valued based on the averageof the high and low sales prices of the Company’s common stock on the date of grant; (iii) Non-Executive Chairman receives additional cash retainer of$80,000 and additional grant of $120,000 of restricted stock units; (iv) Chair of the Audit Committee receives $25,000 and members receive $15,000; and(v) Chair of each of the Compensation, Executive, Finance, Nominating/Governance, and Public Responsibility Committees receive $20,000 and membersreceive $12,500.Travel Benefits.UATP Travel Card. Each non-employee director receives a UATP Travel Card to be used for leisure travel on the United system. The annual travel limit ofthe UATP Travel Card for 2019 is $45,728.Tax Gross-Up. Each non-employee director is entitled to an annual tax gross-up payment for travel. The annual limit for 2019 is $31,439. The gross-up isintended to reimburse a non-employee director for taxes incurred as a result of including the leisure travel benefits in his or her income.Club Membership. Each non-employee director and the non-employee director’s spouse or qualified domestic partner receives membership in the UnitedClub (or any successor program).Frequent Flyer Status. Each non-employee director and the non-employee director’s spouse or qualified domestic partner receives Global Services status.Lifetime Benefits. A non-employee director who (i) served as a member of the Board on October 1, 2010 or (ii) becomes a member of the Board followingOctober 1, 2010 and attains at least five consecutive years of service, shall be eligible to receive, along with his or her spouse or qualified domestic partner, aUATP Travel Card, club membership and frequent flyer status for his or her lifetime. Non-employee directors who were eligible to receive reimbursement fortaxes incurred on post-separation flight benefits pursuant to a similar policy with UAL Corporation or Continental Airlines, Inc. prior to October 1, 2010 willreceive tax gross-up payments for the lifetime of the non-employee director.Survivorship Benefits. Non-employee directors elected by the holders of the Company’s Common Stock who served as a member of the Board on October 1,2010 will have certain survivorship benefits, which are available to such non-employee director’s surviving spouse or qualified domestic partner. Thesurvivorship benefits shall include an annual survivor travel limit granted annually on January 1 of each calendar year during the fifteen calendar year periodbeginning January 1st of the calendar year following the non-employee director’s death and ending on December 31st of the year of the fifteenth anniversaryof the non-employee director’s death (such annual survivor benefit amount to be equal to thirty percent of the value of the annual director flight benefitprovided under the UATP at the time of such non-employee director’s death). Survivorship benefits are not eligible to receive any form of tax reimbursementor tax gross-up protection from the Company.Charitable Tickets. Each non-employee director receives up to four round-trip tickets annually to donate to qualified charities.Charitable Contribution Matching Program. The Company will provide matching cash payments to nonprofit organizations to which an active non-employee director makes a personal contribution in the amount of $20,000 per year. In the case of each ALPA and IAM director, the Company will providematching cash payments to organizations to which the director or their respective union contributes up to $20,000 per year in the aggregate.Directors’ and Officers’ Liability Insurance and Indemnification. The Company has a policy that provides liability insurance for directors and officers ofUnited Continental Holdings, Inc. and its subsidiaries. The Company also provides indemnification for directors as set forth in the Restated Certificate ofIncorporation of United Continental Holdings, Inc.Exhibit 10.152CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIESAND EXCHANGE COMMISSION IN ACCORDANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATEDTHEREUNDER. OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.Supplemental Agreement No. 12toPurchase Agreement No. 03776betweenThe Boeing CompanyandUnited Airlines, Inc.Relating to Boeing Model 737 *** AircraftTHIS SUPPLEMENTAL AGREEMENT, entered into as of December 12, 2018, by and between THE BOEINGCOMPANY (Boeing) and UNITED AIRLINES, INC. (Customer) (SA‑12);WHEREAS, the parties hereto entered into Purchase Agreement No. 3776 dated July 12, 2012, as amended and supplemented(Purchase Agreement), relating to the purchase and sale of Boeing model 737 *** aircraft (Aircraft). This Supplemental Agreementis an amendment to the Purchase Agreement;WHEREAS, the parties wish to (i) *** 737-*** Aircraft scheduled for delivery in *** from the Purchase Agreement; and (ii)*** certain promotional support elements.NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties agree to amend the PurchaseAgreement as follows:1.Table of Contents.The “Table of Contents” is deleted in its entirety and replaced with the attached “Table of Contents” (identified by “SA-12”).2.Tables.Table 1A entitled “737-*** Aircraft Delivery, Description, Price and ***” is deleted in its entirety and replaced with theattached similarly titled “Table 1A” (identified by “SA-12”) to *** 737-*** Aircraft scheduled for delivery in ***, inclusive.3.Letter Agreements.Letter Agreement UAL-PA-03776-LA-1207646R2 entitled “Promotional Support” is deleted in its entirety and replaced withUAL-PA-03776-LA-1207646R3 (identified by “SA-12”) to revise certain promotional support elements.UAL-PA-03776 SA-12, Page 1BOEING / UNITED AIRLINES, INC. PROPRIETARYSupplemental Agreement No. 12 toPurchase Agreement No. 037764.Miscellaneous.Boeing and Customer agree to the *** to Customer’s *** for (i) ***; and (ii) ***.The Purchase Agreement will be deemed supplemented to the extent provided herein as of the date hereof and as so supplemented willcontinue in full force and effect.The rest of this page is left intentionally blank.UAL-PA-03776 SA-12, Page 2BOEING / UNITED AIRLINES, INC. PROPRIETARYSupplemental Agreement No. 12 toPurchase Agreement No. 03776EXECUTED IN DUPLICATE as of the day and year first written above.THE BOEING COMPANY UNITED AIRLINES, INC./s/ Irma L. Krueger /s/ Gerald LadermanSignature Signature Irma L. Krueger Gerald LadermanPrinted Name Printed Name Attorney-in-Fact Executive Vice President and Chief Financial OfficerTitle Title UAL-PA-03776 SA-12, Page 3BOEING / UNITED AIRLINES, INC. PROPRIETARYTABLE OF CONTENTSARTICLESSA NUMBERArticle 1.Quantity, Model and Description Article 2.Delivery Schedule Article 3.Price Article 4.Payment Article 5.Additional Terms TABLE 1.737-*** Aircraft Delivery, Description, Price and ***SA-91.1*** 737-*** Aircraft Delivery, Description, Price and ***SA-10 1A.737-*** Aircraft Delivery, Description, Price and ***SA-12EXHIBITS A-1737-*** & *** 737-*** Aircraft ConfigurationSA-8 A-2737-*** Aircraft Configuration A-3737-*** Aircraft Configuration A-4737-*** Aircraft ConfigurationSA-9 B.Aircraft Delivery Requirements and Responsibilities SUPPLEMENTAL EXHIBITS AE1.*** Adjustment/Airframe and *** AE2.*** Adjustment/Airframe and *** for the 737-*** AircraftSA-9 BFE1.BFE Variables 737-*** AircraftSA-7 BFE2.BFE Variables 737-*** AircraftSA-9 CS1.Customer Support VariablesSA-9 EE1.Engine Warranty and *** SLP1.Service Life Policy Components UAL-PA-03776 SA-12, Page 1 of 3BOEING/UNITED AIRLINES, INC. PROPRIETARYTABLE OF CONTENTS, CONTINUED LETTER AGREEMENTSSA NUMBERUAL-PA-03776-LA-1207637R1*** MattersSA-8UAL-PA-03776-LA-1207638R2***SA-10UAL-PA-03776-LA-1207640Demonstration Flight Waiver UAL-PA-03776-LA-1207643R1Open Matters 737-*** AircraftSA-9UAL-PA-03776-LA-1207646R3Promotional SupportSA-12UAL-PA-03776-LA-1207647Seller Purchased Equipment UAL-PA-03776-LA-1207649Spare Parts Initial Provisioning UAL-PA-03776-LA-1207650R4Special MattersSA-10UAL-PA-03776-LA-1208055R1***SA-7UAL-PA-03776-LA-1208122***SA-10UAL-PA-03776-LA-1208123R1*** Matters for 737-*** AircraftSA-9UAL-PA-03776-LA-1208157R2***SA-9UAL-PA-03776-LA-1208234Privileged and Confidential Matters UAL-PA-03776-LA-1208596R1AGTA MattersSA-10UAL-PA-03776-LA-1208238Assignment Matters UAL-PA-03776-LA-1208869Delivery *** Matters UAL-PA-03784-LA-1207869737 Production Adjustments UAL-PA-03776-LA-1606848R2*** Special *** AircraftSA-9UAL-PA-03776-LA-1703685737-*** Aircraft ***SA-9UAL-PA-03776-LA-17037432017 ***SA-9UAL-PA-03776-LA-1703858R1*** Program for the 737-*** AircraftSA-10 *** Commitment for the 737‑*** Aircraft§5.1.2 of SA‑9UAL-PA-3776-LA-1801367Loading of Customer SoftwareSA-10UAL-PA-3776-LA-1801619Installation of Cabin Systems EquipmentSA-10UAL-PA-3776-LA-1807469*** From *** for 737-*** AircraftSA-11UAL-PA-03776 SA-12, Page 2 of 3BOEING/UNITED AIRLINES, INC. PROPRIETARYSUPPLEMENTAL AGREEMENTSDATED AS OFSupplemental Agreement No. 1June 17, 2013Supplemental Agreement No. 2January 14, 2015Supplemental Agreement No. 3May 26, 2015Supplemental Agreement No. 4June 12, 2015Supplemental Agreement No. 5January 20, 2016Supplemental Agreement No. 6February 8, 2016Supplemental Agreement No. 7December 27, 2016Supplemental Agreement No. 8June 7, 2017Supplemental Agreement No. 9June 15, 2017Supplemental Agreement No. 10May 15, 2018Supplemental Agreement No. 11September 25, 2018Supplemental Agreement No. 12December 12, 2018UAL-PA-03776 SA-12, Page 3 of 3BOEING/UNITED AIRLINES, INC. PROPRIETARYTable 1A To Purchase Agreement No. 03776737-*** Aircraft Delivery, Description, Price and *** Airframe Model/MTOW:737-*******pounds Detail Specification: *** Engine Model/Thrust:*******pounds Airframe Price Base Year/***Formula:******Airframe Price: $*** Engine Price Base Year/***Formula:********* Features: $*** Sub-Total of Airframe and Features:$*** Airframe *** Data: Engine Price (Per Aircraft): $*** Base Year Index (ECI): *** Aircraft Basic Price (Excluding BFE/SPE):$*** Base Year Index (CPI): *** Buyer Furnished Equipment (BFE) Estimate:$*** Seller Purchased Equipment (SPE) Estimate:$*** Deposit per Aircraft: $*** # ofAircraftDeliveryDate ***ManufacturerSerialNumberActual orNominalDelivery*******Estimate*** Per Aircraft (Amts. Due/*** Prior to Delivery):NumberofFactor*** Base************Aircraft(Airframe)Price PerA/P******************************$***$***$***$***$*** Total:*** * Nominal delivery *** pursuant to Letter Agreement number UAL-PA-03776-LA-1207643 entitled "Open Matters 737-*** Aircraft",including successors thereof. Note: Serial Numbers are provided as guidance only and are subject to change. *** UAL-PA-03776 APR: 105568.TXTBoeing / United Airlines, Inc. ProprietaryTable 1A per SA-12, Page 1 The Boeing CompanyP.O. Box 3707Seattle, WA 98124‑2207UAL-PA-03776-LA-1207646R3United Airlines, Inc.233 South Wacker DriveChicago, Illinois 60606Subject:Promotional SupportReference:Purchase Agreement No. 03776 (Purchase Agreement) between The Boeing Company (Boeing) and UnitedAirlines, Inc. (as assignee of United Continental Holdings, Inc.) (Customer) relating to Model 737 *** aircraft(Aircraft)This letter agreement (Letter Agreement) amends and supplements the Purchase Agreement. This Letter Agreementsupersedes and replaces in its entirety Letter Agreement UAL-PA-03776-LA-1207646R2 dated May 15, 2018. All terms usedbut not defined in this Letter Agreement shall have the same meaning as in the Purchase Agreement.Boeing and Customer wish to enter into an agreement pursuant to which each party will contribute equally to promotionalprograms in support of the entry into service of the Aircraft as more specifically provided below.1. Definitions.1.1 Commitment Limit shall have the meaning set forth in Article 2, below.1.2 Covered Aircraft shall mean those Aircraft identified on Table 1, Table 1.1 and Table 1A to the Purchase Agreement asof the date of signing of this Letter Agreement.1.3 Performance Period shall mean the period beginning ***.1.4 Promotional Support shall mean mutually agreed *** promotion programs, advertising campaigns or such othermarketing and promotional activities as the parties may mutually agree.1.5 Qualifying Third Party Fees shall mean fees paid by Customer to third party providers for Promotional Supportprovided to Customer during the Performance Period.UAL-PA-03776-LA-1207646R3Promotional Support SA-12Page 1BOEING / UNITED AIRLINES, INC. PROPRIETARY2. Commitment.As more particularly set forth in this Letter Agreement, Boeing agrees to provide Promotional Support to Customer during thePerformance Period in a value not to exceed *** for the first Covered Aircraft delivered to Customer and not to exceed *** perCovered Aircraft for each Covered Aircraft delivered to Customer thereafter. For the avoidance of doubt, Customer may requestpayment of any or all of such Promotional Support prior to delivery of the first Covered Aircraft to Customer. 3. Methods of Performance.3.1 Subject to the Commitment Limit, Boeing will reimburse *** of Customer’s payments of Qualifying Third Party Feesprovided that Customer provides Boeing copies of paid invoices for such Qualifying Third Party Fees no later *** after the delivery ofthe first Covered Aircraft.3.2 Notwithstanding the above, at Customer’s request and subject to a mutually agreed project, Boeing will provide certainPromotional Support during the Performance Period directly to Customer. The full value of such Boeing provided PromotionalSupport will be accounted for as part of the Commitment Limit and will correspondingly reduce the amount of Qualifying Third PartyFees that are subject to reimbursement pursuant to Article 3.1 above. Additionally, without duplication the parties agree that the sum of*** (*** Promo Support) shall be available to Customer on a *** basis. For the avoidance of doubt, the *** Promo Support shall bespent on promotional activity selected at Customer’s discretion and shall be made available within *** of the effective date of thisLetter Agreement.3.2.1 Without duplication, the parties further agree that the sum of *** (2018 *** Promo Support) shall be availableto Customer on a *** basis. For the avoidance of doubt, the 2018 *** Promo Support shall be spent on promotional activity selected atCustomer’s discretion and shall be made available for payment within *** of presentation of invoices for Promotional Support.3.3 In the event Customer does not (i) *** of the Commitment Limit within the Performance Period or (ii) submit its paidinvoices for Qualifying Third Party Fees within the required time, as set forth in Article 3.1, Boeing shall have no further obligation toCustomer for such *** Commitment Limit or to *** Customer for such Qualifying Third Party Fees, respectively.UAL-PA-03776-LA-1207646R3Promotional Support SA-12Page 2BOEING / UNITED AIRLINES, INC. PROPRIETARY4. Project Approval.Following the execution of this Letter Agreement, a Boeing Airline Marketing Services representative will meet withCustomer’s designated representative to review and approve the extent, selection, scheduling, and *** process for the PromotionalSupport to be provided pursuant to this Letter Agreement.5. Assignment.Except as provided in Letter Agreement No. UAL-PA-03776-LA-1208238 the rights and obligations described in this LetterAgreement are provided to Customer in consideration of Customer’s becoming the operator of the Aircraft and cannot be assigned inwhole or, in part.6. Confidential Treatment.Customer and Boeing understand that certain commercial and financial information contained in this Letter Agreement are consideredby Boeing and Customer as confidential and are subject to the terms and conditions set forth in Letter Agreement No. UAL-PA-03776-LA-1208234.Very truly yours, THE BOEING COMPANY By:/s/ Irma L. Krueger Its:Attorney-in-Fact UAL-PA-03776-LA-1207646R3Promotional Support SA-12Page 3BOEING / UNITED AIRLINES, INC. PROPRIETARY ACCEPTED AND AGREED TO this Date:December 12, 2018 UNITED AIRLINES, INC. By:/s/ Gerald Laderman Its:Executive Vice President and Chief Financial OfficerUAL-PA-03776-LA-1207646R3Promotional Support SA-12Page 4BOEING / UNITED AIRLINES, INC. PROPRIETARYExhibit 10.166CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIESAND EXCHANGE COMMISSION IN ACCORDANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATEDTHEREUNDER. OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.Supplemental Agreement No. 10toPurchase Agreement No. 3860betweenThe Boeing CompanyandUnited Airlines, Inc.Relating to Boeing Model 787 AircraftUAL-PA-3860SA-10 Page 1BOEING / UNITED AIRLINES, INC. PROPRIETARYTHIS SUPPLEMENTAL AGREEMENT No. 10 (SA-10), entered into as of November 1, 2018, by and between THEBOEING COMPANY (Boeing) and UNITED AIRLINES, INC. (Customer);WHEREAS, the parties hereto entered into Purchase Agreement No. 3860 dated September 27, 2012, as amended andsupplemented (Purchase Agreement), relating to the purchase and sale of Boeing model 787 aircraft (Aircraft). This SupplementalAgreement is an amendment to the Purchase Agreement;The parties to the Purchase Agreement have agreed to *** of *** 787‑*** Aircraft;NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties agree to amend the PurchaseAgreement as follows:1.Table of Contents.The “Table of Contents” is deleted in its entirety and replaced with the attached “Table of Contents” (identified by “SA-10”).2.Tables.Table 1A entitled “787-*** Aircraft with GENX-1B*** Engines Delivery, Description, Price and ***” is deleted in its entiretyand replaced with the attached similarly titled “Table 1A” (identified by “SA-10”) to reflect *** of *** 787-*** Aircraft .3.Miscellaneous.3.1. The parties mutually agree that the terms of Letter Agreement UAL-PA-03860-LA-1802900 entitled “*** Rights forCertain 787 Aircraft” have expired.3.2. Boeing and Customer agree that *** under this Supplemental Agreement No. 10 and shall be due no later than *** daysafter execution of this SA-10.The Purchase Agreement will be deemed to be supplemented to the extent herein provided as of the date hereof and as sosupplemented will continue in full force and effect.UAL-PA-3860SA-10 Page 2BOEING / UNITED AIRLINES, INC. PROPRIETARYEXECUTED IN DUPLICATE as of the day and year first written above.THE BOEING COMPANY UNITED AIRLINES, INC./s/ Irma L. Krueger /s/ Gerald LadermanSignature Signature Irma L. Krueger Gerald LadermanPrinted Name Printed Name Attorney-in-Fact Executive Vice President and Chief Financial OfficerTitle Title UAL-PA-3860SA-10 Page 3BOEING / UNITED AIRLINES, INC. PROPRIETARYTABLE OF CONTENTSARTICLESSA NUMBERArticle 1.Quantity, Model and DescriptionSA-1Article 2.Delivery ScheduleSA-1Article 3.PriceSA-1Article 4.PaymentSA-1Article 5.Additional TermsSA-1TABLE 1787-*** Aircraft Delivery, Description, Price and ***SA-71A.787-*** with GENX-1B*** Engines Aircraft InformationTableSA-10EXHIBITS A2*787-*** Aircraft ConfigurationSA-9A3.787-*** Aircraft ConfigurationSA-9B.Aircraft Delivery Requirements and Responsibilities * - Note: There is no Exhibit A1 in this Purchase Agreement SUPPLEMENTAL EXHIBITS AE1.*** Adjustment/Airframe and *** Features BFE1.BFE Variables for the 787-*** AircraftSA-7CS1.Customer Support Document EE1.Engine ***/Engine Warranty *** SLP1.Service Life Policy Components P.A. 3860TABLE OF CONTENTS, Page 1 of 4SA-10BOEING/UNITED AIRLINES, INC. PROPRIETARY TABLE OF CONTENTS, CONTINUEDLETTER AGREEMENTSSA NUMBERUAL-PA-03860-LA-1209247787 e-Enabling UAL-PA-03860-LA-1209264Open Configuration Matters Completed: No longer applicableSA-9UAL-PA-03860-LA-1209409Spare Parts Initial Provisioning UAL-PA-03860-LA-1209410Special Matters Relating to COTS Software and End UserLicense Agreements UAL-PA-03860-LA-1209411Special Terms – Seats and In-flight Entertainment UAL-PA-03860-LA-1209417Model 787 Post-Delivery Software & Data Loading CONFIDENTIAL LETTER AGREEMENTS UAL-PA-03860-LA-1209236R1Model ***SA-1 Attachment A, 787-*** Airframe Pricing of *** Aircraftwith General Electric GEnx-1B***SA-1 Attachment B, 787-*** with General Electric GEnx-1B***SA-1 Attachment C, 787-***with General Electric GEnx-1B***SA-1UAL-PA-03860-LA-1209412Spare Parts Commitment UAL-PA-03860-LA-1209413R3Special MattersSA-9UAL-PA-03860-LA-1209413A1R3Special Matters – Amendment 1SA-7UAL-PA-03860-LA-1209414Other Special Matters UAL-PA-03860-LA-1209413A1Other Special Matters - Amendment 1SA-1UAL-PA-03860-LA-1209416R1Promotional SupportSA-2UAL-PA-03860-LA-1209430*** UAL-PA-03860-LA-1209429*** P.A. 3860TABLE OF CONTENTS, Page 2 of 4SA-10BOEING/UNITED AIRLINES, INC. PROPRIETARY TABLE OF CONTENTS, CONTINUEDCONFIDENTIAL LETTER AGREEMENTS, continuedSA NUMBER6-1162-ELP-0794*** Program- *** 6-1162-ELP-0795*** Program- *** UAL-PA-03860-LA-1301368*** (787-***)SA-1UAL-PA-03860-LA-1301373787-*** Aircraft Open Configuration and Other MattersSA-1UAL-PA-03860-LA-1301375R1Provisions Relating to Customer’s *** for 787‑*** AircraftSA-7UAL-PA-03860-LA-1301377787-***SA-1UAL-PA-03860-LA-1301377A1787- *** – Amendment 1SA-4UAL-PA-03860-LA-1301380787-*** Program LaunchSA-1UAL-PA-03860-LA-1500017***SA-4UAL-PA-03860-LA-1500059Installation of Cabin Systems EquipmentSA-4UAL-PA-03860-LA-1703319Privileged and Confidential MattersSA-8UAL-PA-03860-LA-1802899Assignment MattersSA-9UAL-PA-03860-LA-1802900*** Rights for Certain 787 AircraftSA-9P.A. 3860TABLE OF CONTENTS, Page 3 of 4SA-10BOEING/UNITED AIRLINES, INC. PROPRIETARY SUPPLEMENTAL AGREEMENTSDATED AS OFSupplemental Agreement No. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 17, 2013Supplemental Agreement No. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 16, 2013Supplemental Agreement No. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 22, 2014Supplemental Agreement No. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . January 14, 2015Supplemental Agreement No. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 12, 2015Supplemental Agreement No. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 31, 2015Supplemental Agreement No. 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 7, 2016Supplemental Agreement No. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 7, 2017Supplemental Agreement No. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 31, 2018Supplemental Agreement No. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . November 1, 2018P.A. 3860TABLE OF CONTENTS, Page 4 of 4SA-10BOEING/UNITED AIRLINES, INC. PROPRIETARY Table 1A to Purchase Agreement No. 3860787-*** Aircraft with GENX-1B*** Engines Delivery, Description, Price and ***(787-***/GE/***)Airframe Model/MTOW:787-******pounds# Detail Specification: ***Engine Model/Thrust:GENX-1B***1***pounds Airframe Price Base Year/***Formula: ******Airframe Price: $*** Engine Price Base Year/***Formula: ********* Features: $*** Airframe *** Data: Sub-Total of Airframe and Features: $*** Base Year Index (ECI): ***Engine Price (Per Aircraft) : $***1 Base Year Index (CPI): ***Aircraft Basic Price (ExcludingBFE/SPE): $*** Engine *** Data: Buyer Furnished Equipment (BFE)Estimate: $*** Base Year Index (ECI): ***In-Flight Entertainment (IFE) Estimate: $*** Base Year Index (CPI): *** # ofAircraftDeliveryDateNumber ofAircraft***Factor(Airframe)***Factor(Engine)See footnote for*** forecastbeing usedSerialNumber+*** Estimate ***Base Price PerA/P*** Per Aircraft (Amts. Due/*** Prior toDelivery):*********************************************$***$***$***$***$*** Total:*** 1 Pursuant to GE agreement: GEnx-1B***. * ** *** Factors *** # ***. Aircraft are eligible for the provisions of Letter Agreement UAL-PA-03860- LA-1301375R1 entitled "Provisions Relating to Customer's *** for 787-*** Aircaft" + Serial Numbers Identified are for informational purposes only and subject to change APR-111650BOEING / UNITED AIRLINES PROPRIETARY787-*** with GE Engines Table 1A (SA-10) Page 1Exhibit 10.167CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIESAND EXCHANGE COMMISSION IN ACCORDANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATEDTHEREUNDER. OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.Supplemental Agreement No. 11toPurchase Agreement No. 3860betweenThe Boeing CompanyandUnited Airlines, Inc.Relating to Boeing Model 787 AircraftUAL-PA-3860SA-11 Page 1BOEING / UNITED AIRLINES, INC. PROPRIETARYTHIS SUPPLEMENTAL AGREEMENT No. 11 (SA-11), entered into as of December 12, 2018, by and between THEBOEING COMPANY (Boeing) and UNITED AIRLINES, INC. (Customer);WHEREAS, the parties hereto entered into Purchase Agreement No. 3860 dated September 27, 2012, as amended andsupplemented (Purchase Agreement), relating to the purchase and sale of Boeing model 787 aircraft (Aircraft). This SupplementalAgreement is an amendment to the Purchase Agreement;The parties to the Purchase Agreement have agreed to *** of *** 787‑*** Aircraft;NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties agree to amend the PurchaseAgreement as follows:1.Table of Contents.The “Table of Contents” is deleted in its entirety and replaced with the attached “Table of Contents” (identified by “SA-11”).2.Tables.Table 1A entitled “787-*** Aircraft with GENX-1B*** Engines Delivery, Description, Price and ***” is deleted in its entiretyand replaced with the attached similarly titled “Table 1A” (identified by “SA-11”) to reflect *** of *** 787-*** Aircraft .3.Miscellaneous.3.1. Boeing and Customer agree that *** by Customer as the *** under this SA-11 and shall be *** in accordance withLetter Agreement UAL-LA-1808318R1.The Purchase Agreement will be deemed to be supplemented to the extent herein provided as of the date hereof and as sosupplemented will continue in full force and effect.UAL-PA-3860SA-11 Page 2BOEING / UNITED AIRLINES, INC. PROPRIETARYEXECUTED IN DUPLICATE as of the day and year first written above.THE BOEING COMPANY UNITED AIRLINES, INC./s/ Irma L. Krueger /s/ Gerald LadermanSignature Signature Irma L. Krueger Gerald LadermanPrinted Name Printed Name Attorney-in-Fact Executive Vice President and Chief Financial OfficerTitle Title UAL-PA-3860SA-11 Page 3BOEING / UNITED AIRLINES, INC. PROPRIETARYTABLE OF CONTENTSARTICLESSA NUMBERArticle 1.Quantity, Model and DescriptionSA-1Article 2.Delivery ScheduleSA-1Article 3.PriceSA-1Article 4.PaymentSA-1Article 5.Additional TermsSA-1TABLE 1787-*** Aircraft Delivery, Description, Price and ***SA-71A.787-*** with GENX-1B*** Engines Aircraft InformationTableSA-11EXHIBITS A2*787-*** Aircraft ConfigurationSA-9A3.787-*** Aircraft ConfigurationSA-9B.Aircraft Delivery Requirements and Responsibilities * - Note: There is no Exhibit A1 in this Purchase Agreement SUPPLEMENTAL EXHIBITS AE1.***/Airframe and *** Features BFE1.BFE Variables for the 787-*** AircraftSA-7CS1.Customer Support Document EE1.Engine ***/Engine Warranty *** SLP1.Service Life Policy Components P.A. 3860 TABLE OF CONTENTS, Page 1 of 4 SA-11BOEING / UNITED AIRLINES, INC. PROPRIETARYTABLE OF CONTENTS, CONTINUEDLETTER AGREEMENTSSA NUMBERUAL-PA-03860-LA-1209247787 e-Enabling UAL-PA-03860-LA-1209264Open Configuration Matters Completed: No longer applicableSA-9UAL-PA-03860-LA-1209409Spare Parts Initial Provisioning UAL-PA-03860-LA-1209410Special Matters Relating to COTS Software and End UserLicense Agreements UAL-PA-03860-LA-1209411Special Terms – Seats and In-flight Entertainment UAL-PA-03860-LA-1209417Model 787 Post-Delivery Software & Data Loading CONFIDENTIAL LETTER AGREEMENTS UAL-PA-03860-LA-1209236R1Model ***SA-1 Attachment A, 787-*** Airframe Pricing of *** Aircraftwith General Electric GEnx-1B***SA-1 Attachment B, 787-*** with General Electric GEnx-1B***SA-1 Attachment C, 787-*** with General Electric GEnx-1B***SA-1UAL-PA-03860-LA-1209412Spare Parts Commitment UAL-PA-03860-LA-1209413R3Special MattersSA-9UAL-PA-03860-LA-1209413A1R3Special Matters – Amendment 1SA-7UAL-PA-03860-LA-1209414Other Special Matters UAL-PA-03860-LA-1209413A1Other Special Matters - Amendment 1SA-1UAL-PA-03860-LA-1209416R1Promotional SupportSA-2UAL-PA-03860-LA-1209430*** UAL-PA-03860-LA-1209429*** P.A. 3860 TABLE OF CONTENTS, Page 2 of 4 SA-11BOEING / UNITED AIRLINES, INC. PROPRIETARYTABLE OF CONTENTS, CONTINUEDCONFIDENTIAL LETTER AGREEMENTS, continuedSA NUMBER6-1162-ELP-0794*** Program- *** 6-1162-ELP-0795*** Program- Boeing *** UAL-PA-03860-LA-1301368*** (787-***)SA-1UAL-PA-03860-LA-1301373787-*** Aircraft Open Configuration and Other MattersSA-1UAL-PA-03860-LA-1301375R1Provisions Relating to Customer’s *** for 787‑*** AircraftSA-7UAL-PA-03860-LA-1301377787-***SA-1UAL-PA-03860-LA-1301377A1787-*** – Amendment 1SA-4UAL-PA-03860-LA-1301380787-*** Program LaunchSA-1UAL-PA-03860-LA-1500017***SA-4UAL-PA-03860-LA-1500059Installation of Cabin Systems EquipmentSA-4UAL-PA-03860-LA-1703319Privileged and Confidential MattersSA-8UAL-PA-03860-LA-1802899Assignment MattersSA-9UAL-PA-03860-LA-1802900*** Rights for Certain 787 AircraftSA-9P.A. 3860 TABLE OF CONTENTS, Page 3 of 4 SA-11BOEING/UNITED AIRLINES, INC. PROPRIETARYSUPPLEMENTAL AGREEMENTSDATED AS OFSupplemental Agreement No. 1 . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . June 17, 2013Supplemental Agreement No. 2 . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . December 16, 2013Supplemental Agreement No. 3 . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . July 22, 2014Supplemental Agreement No. 4 . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . January 14, 2015Supplemental Agreement No. 5 . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . May 12, 2015Supplemental Agreement No. 6 . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . December 31, 2015Supplemental Agreement No. 7 . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . March 7, 2016Supplemental Agreement No. 8 . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . June 7, 2017Supplemental Agreement No. 9 . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . May 31, 2018Supplemental Agreement No. 10 . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . November 1, 2018Supplemental Agreement No. 11 . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . December 12, 2018P.A. 3860 TABLE OF CONTENTS, Page 4 of 4 SA-11BOEING / UNITED AIRLINES, INC. PROPRIETARYTable 1A to Purchase Agreement No. 3860787-*** Aircraft with GENX-1B*** Engines Delivery, Description, Price and ***(787-***/GE/***)Airframe Model/MTOW:787-****** pounds# Detail Specification: ***Engine Model/Thrust:GENX-1B***1*** pounds Airframe Price Base Year/***Formula: ******Airframe Price: $*** Engine Price Base Year/*** Formula: ********* Features: $*** Airframe *** Data: Sub-Total of Airframe and Features: $*** Base Year Index (ECI): ***Engine Price (Per Aircraft) : $***1 Base Year Index (CPI): ***Aircraft Basic Price (ExcludingBFE/SPE): $*** Engine *** Data: Buyer Furnished Equipment (BFE)Estimate: $*** Base Year Index (ECI): ***In-Flight Entertainment (IFE)Estimate: $*** Base Year Index (CPI): *** # ofAircraftDeliveryDateNumber ofAircraft***Factor(Airframe)***Factor(Engine)See footnote for*** forecastbeing usedSerialNumber +*** Estimate***Base Price PerA/P*** Per Aircraft (Amts. Due/*** Prior toDelivery):*********************************************$***$***$***$***$*** Total:*** 1 Pursuant to GE agreement: GEnx-1B***. * ** *** Factors *** # ***. Aircraft are eligible for the provisions of Letter Agreement UAL-PA-03860- LA-1301375R1 entitled "Provisions Relating to Customer's *** for 787-*** Aircaft" + Serial Numbers Identified are for informational purposes only and subject to change APR-109147BOEING / UNITED AIRLINES PROPRIETARY787-*** with GE Engine Table 1A (SA-11), Page 1Exhibit 21 United Continental Holdings, Inc. and United Airlines, Inc. Subsidiaries(as of February 28, 2019)EntityJurisdiction of Incorporation United Continental Holdings, Inc.Delaware Wholly-owned subsidiaries*: United Airlines, Inc.Delaware ● Air Wis Services, Inc.Wisconsin ● Air Wisconsin, Inc.Delaware ● Domicile Management Services, Inc. **Delaware ● Air Micronesia, LLC.Delaware ● CAL Cargo, S.A. de C.V.**Mexico ● CALFINCO Inc.Delaware ● Century Casualty CompanyVermont ● Continental Airlines de Mexico, S.A.**Mexico ● Continental Airlines Domain Name LimitedEngland ● Continental Airlines Finance Trust IIDelaware ● Continental Airlines Fuel Purchasing Group, LLCDelaware ● Continental Airlines, Inc. Supplemental Retirement Plan for Pilots Trust Agreement Delaware ● Continental Airlines Purchasing Holdings LLCDelaware ● Continental Airlines Purchasing Services LLC**Delaware ● Continental Express, Inc.Delaware ● Covia LLCDelaware ● Mileage Plus Holdings, LLCDelaware ● MPH I, Inc.Delaware ● Mileage Plus Marketing, Inc.Delaware ● Mileage Plus, Inc.Delaware ● Presidents Club of Guam, Inc.Delaware ● UABSPL Holdings, Inc.Delaware ● UAL Benefits Management, Inc.**Delaware ● United Atlantic LP**Delaware ● United Atlantic Services C.V.**Netherlands ● United Atlantic Corporate LLCDelaware ● United Atlantic Corporate Center C.V.**Netherlands ● United Atlantic FinanceCayman Islands ● United Atlantic B.V.Netherlands ● United Atlantic Services LLCDelaware ● United Aviation Fuels CorporationDelaware ● United Airlines Business Services Private Limited**India ● United Ground Express, Inc.Delaware ● United Travel Services, LLCDelaware ● United Vacations, Inc.Delaware*Subsidiaries of United Continental Holdings, Inc. are wholly owned unless otherwise indicated**Domicile Management Services Inc. is 99.9% owned by Air Wis Services, Inc. and 0.1% owned by United Airlines, Inc. CAL Cargo,S.A. de C.V. is 99.99% owned by United Airlines, Inc. and .01% owned by CALFINCO Inc. Continental Airlines de Mexico, S.A. is99.9997% owned by United Airlines, Inc. and .0003% owned by private entities. Continental Airlines Purchasing Services LLC is 99%owned by Continental Airlines Purchasing Holdings LLC and 1% owned by United Airlines, Inc. UAL Benefits Management, Inc. has100% of its Class A Common Stock owned by United Airlines, Inc. and 100% of its Class B Common Stock owned by Health CareServices Corporation. United Atlantic LP is 99.9% owned by United Airlines, Inc. and 0.1% owned by United Atlantic Services LLC.United Atlantic Services C.V. is 99.9% owned by United Atlantic LP and 0.1% owned by United Atlantic Services LLC. United AtlanticCorporate Center C.V. is 99.9% owned by United Atlantic Services C.V. and 0.1% owned by United Atlantic Corporate LLC. UnitedAirlines Business Services Private Limited is 99.99% owned by United Airlines, Inc. and 0.01% owned by UABSPL Holdings, Inc. onbehalf of United Airlines, Inc.Exhibit 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in the following Registration Statements:(1)Registration Statement (Form S-3 No. 333-221865),(2)Registration Statement (Form S-4 No. 333-167801),(3)Registration Statement (Form S-8 No. 333-197815),(4)Registration Statement (Form S-8 No. 333-151778),(5)Registration Statement (Form S-8 No. 333-131434), and(6)Registration Statement (Form S-8 No. 333-218637);of our reports dated February 28, 2019, with respect to the consolidated financial statements of United Continental Holdings, Inc. and the effectiveness ofinternal control over financial reporting of United Continental Holdings, Inc., included in this Annual Report (Form 10-K) of United Continental Holdings,Inc. for the year ended December 31, 2018./s/ Ernst & Young LLPChicago, IllinoisFebruary 28, 2019Exhibit 23.2CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in the Registration Statement (Form S-3 No. 333-221865-01) and in the related Prospectus of our report datedFebruary 28, 2019, with respect to the consolidated financial statements of United Airlines, Inc., included in this Annual Report (Form 10-K) of UnitedAirlines, Inc. for the year ended December 31, 2018./s/ Ernst & Young LLPChicago, IllinoisFebruary 28, 2019Exhibit 31.1Certification of the Principal Executive OfficerPursuant to 15 U.S.C. 78m(a) or 78o(d)(Section 302 of the Sarbanes-Oxley Act of 2002)I, Oscar Munoz, certify that:(1)I have reviewed this annual report on Form 10-K for the period ended December 31, 2018 of United Continental Holdings, Inc. (the "Company");(2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;(3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;(4)The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the Company and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recentfiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materiallyaffect, the Company's internal control over financial reporting; and(5)The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theCompany's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the Company's ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controlover financial reporting. /s/ Oscar MunozOscar MunozChief Executive OfficerDate: February 28, 2019Exhibit 31.2Certification of the Principal Financial OfficerPursuant to 15 U.S.C. 78m(a) or 78o(d)(Section 302 of the Sarbanes-Oxley Act of 2002)I, Gerald Laderman, certify that:(1)I have reviewed this annual report on Form 10-K for the period ended December 31, 2018 of United Continental Holdings, Inc. (the "Company");(2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;(3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;(4)The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the Company and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recentfiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materiallyaffect, the Company's internal control over financial reporting; and(5)The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theCompany's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the Company's ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controlover financial reporting. /s/ Gerald LadermanGerald Laderman Executive Vice President and Chief Financial OfficerDate: February 28, 2019Exhibit 31.3Certification of the Principal Executive OfficerPursuant to 15 U.S.C. 78m(a) or 78o(d)(Section 302 of the Sarbanes-Oxley Act of 2002)I, Oscar Munoz, certify that:(1)I have reviewed this annual report on Form 10-K for the period ended December 31, 2018 of United Airlines, Inc. (the "Company");(2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;(3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;(4)The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the Company and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recentfiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materiallyaffect, the Company's internal control over financial reporting; and(5)The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theCompany's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the Company's ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controlover financial reporting. /s/ Oscar MunozOscar MunozChief Executive OfficerDate: February 28, 2019Exhibit 31.4Certification of the Principal Financial OfficerPursuant to 15 U.S.C. 78m(a) or 78o(d)(Section 302 of the Sarbanes-Oxley Act of 2002)I, Gerald Laderman, certify that:(1)I have reviewed this annual report on Form 10-K for the period ended December 31, 2018 of United Airlines, Inc. (the "Company");(2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;(3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;(4)The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the Company and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recentfiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materiallyaffect, the Company's internal control over financial reporting; and(5)The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theCompany's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the Company's ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controlover financial reporting. /s/ Gerald LadermanGerald Laderman Executive Vice President and Chief Financial OfficerDate: February 28, 2019Exhibit 32.1Certification of United Continental Holdings, Inc.Pursuant to 18 U.S.C. 1350(Section 906 of the Sarbanes-Oxley Act of 2002)Each undersigned officer certifies that to the best of his knowledge based on a review of the annual report on Form 10-K for the period endedDecember 31, 2018 of United Continental Holdings, Inc. (the "Report"):(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of UnitedContinental Holdings, Inc.Date: February 28, 2019 /s/ Oscar MunozOscar MunozChief Executive Officer /s/ Gerald LadermanGerald LadermanExecutive Vice President and Chief Financial OfficerExhibit 32.2Certification of United Airlines, Inc.Pursuant to 18 U.S.C. 1350(Section 906 of the Sarbanes-Oxley Act of 2002)Each undersigned officer certifies that to the best of his knowledge based on a review of the annual report on Form 10-K for the period endedDecember 31, 2018 of United Airlines, Inc. (the "Report"):(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of UnitedAirlines, Inc.Date: February 28, 2019 /s/ Oscar MunozOscar MunozChief Executive Officer /s/ Gerald LadermanGerald LadermanExecutive Vice President and Chief Financial Officer

Continue reading text version or see original annual report in PDF format above