10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number	Exact Name of Registrant as Specified in its Charter, Principal Office Address and Telephone Number	State of Incorporation	I.R.S. Employer Identification No
001-06033	United Continental Holdings, Inc.	Delaware	36-2675207
	77 W. Wacker Drive, Chicago, Illinois 60601
	(312) 997-8000
001-11355	United Air Lines, Inc.	Delaware	36-2675206
	77 W. Wacker Drive, Chicago, Illinois 60601
	(312) 997-8000
001-10323	Continental Airlines, Inc.	Delaware	74-2099724
	1600 Smith Street, Dept HQSEO, Houston, Texas 77002
	(713) 324-2950

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 that the 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  ¨	United Air Lines, Inc.	Yes  x    No ¨
Continental Airlines, Inc.	Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

United Continental Holdings, Inc.	Yes  x    No  ¨	United Air Lines, Inc.	Yes  x    No  ¨
Continental Airlines, Inc.	Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

United Continental Holdings, Inc.	Large accelerated filer  x	Accelerated filer  ¨	Non-accelerated filer  ¨	Smaller reporting company  ¨
United Air Lines, Inc.	Large accelerated filer  ¨	Accelerated filer  ¨	Non-accelerated filer  x	Smaller reporting company  ¨
Continental Airlines, Inc.	Large accelerated filer  ¨	Accelerated filer  ¨	Non-accelerated filer  x	Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

United Continental Holdings, Inc.	Yes  ¨    No  x
United Air Lines, Inc.	Yes  ¨    No  x
Continental Airlines, Inc.	Yes  ¨    No  x

The number of shares outstanding of each of the issuer’s classes of common stock as of July 15, 2011 is shown below:

United Continental Holdings, Inc.	330,773,503 shares of common stock ($0.01 par value)
United Air Lines, Inc.	205 (100% owned by United Continental Holdings, Inc.) There is no market for United Air Lines, Inc. common stock.
Continental Airlines, Inc.	1,000 (100% owned by United Continental Holdings, Inc.) There is no market for Continental Airlines, Inc. common stock.

OMISSION OF CERTAIN INFORMATION

This combined Form 10-Q is separately filed by United Continental Holdings, Inc., United Air Lines, Inc. and Continental Airlines, Inc. United Air Lines, Inc. and Continental Airlines, Inc. meet the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and are therefore filing this form with the reduced disclosure format allowed under that General Instruction.

United Continental Holdings, Inc.

United Air Lines, Inc.

Continental Airlines, Inc.

Report on Form 10-Q

For the Quarter Ended June 30, 2011

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
United Continental Holdings, Inc.:
Statements of Consolidated Operations		3
Consolidated Balance Sheets		4
Condensed Statements of Consolidated Cash Flows		6
United Air Lines, Inc.:
Statements of Consolidated Operations		7
Consolidated Balance Sheets		8
Condensed Statements of Consolidated Cash Flows		10
Continental Airlines, Inc.:
Statements of Consolidated Operations		11
Consolidated Balance Sheets		12
Condensed Statements of Consolidated Cash Flows		14
Combined Notes to Condensed Consolidated Financial Statements (United Continental Holdings, Inc., United Air Lines, Inc. and Continental Airlines, Inc.)		15
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		37
Item 3. Quantitative and Qualitative Disclosures About Market Risk		53
Item 4. Controls and Procedures		53
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		55
Item 1A. Risk Factors		55
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		57
Item 6. Exhibits		57
Signatures		58
Exhibit Index		59

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

UNITED CONTINENTAL HOLDINGS, INC.

STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)

(In millions, except per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Operating revenue:
Passenger:
Mainline	$	6,864		$	3,532			12,627		$	6,401
Regional		1,742			962			3,166			1,750
Total passenger revenue		8,606			4,494			15,793			8,151
Cargo		316			190			599			347
Special revenue item (Note 1)		107			—			107			—
Other operating revenue		780			477			1,512			904
		9,809			5,161			18,011			9,402
Operating expenses:
Aircraft fuel		3,227			1,486			5,899			2,693
Salaries and related costs		1,916			1,061			3,722			2,051
Regional capacity purchase		615			405			1,188			793
Landing fees and other rent		502			271			975			528
Aircraft maintenance materials and outside repairs		444			245			883			467
Depreciation and amortization		385			223			773			444
Distribution expenses		375			198			725			370
Aircraft rent		252			81			505			162
Special charges (Note 10)		146			106			223			124
Other operating expenses		1,139			644			2,276			1,253
		9,001			4,720			17,169			8,885
Operating income		808			441			842			517
Nonoperating income (expense):
Interest expense		(250	)		(178	)		(504	)		(363	)
Interest income		5			2			9			3
Interest capitalized		8			3			14			5
Miscellaneous, net		(29	)		3			(30	)		28
		(266	)		(170	)		(511	)		(327	)
Income before income taxes		542			271			331			190
Income tax expense (benefit)		4			(2	)		6			(1	)
Net income	$	538		$	273		$	325		$	191
Earnings per share, basic	$	1.63		$	1.62		$	0.98		$	1.14
Earnings per share, diluted	$	1.39		$	1.29		$	0.88		$	0.96

See accompanying Combined Notes to Condensed Consolidated Financial Statements.

3

UNITED CONTINENTAL HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except shares)

	(Unaudited)
	June 30, 2011			December 31, 2010
ASSETS
Current assets:
Cash and cash equivalents	$	7,519		$	8,069
Short-term investments		1,060			611
Total unrestricted cash, cash equivalents and short-term investments		8,579			8,680
Restricted cash		46			37
Receivables, less allowance for doubtful accounts (2011 — $6; 2010 — $6)		1,863			1,613
Aircraft fuel, spare parts and supplies, less obsolescence allowance (2011 — $74; 2010 — $64)		508			466
Deferred income taxes		622			591
Prepaid expenses and other		773			658
		12,391			12,045
Operating property and equipment:
Owned—
Flight equipment		15,618			15,181
Other property and equipment		2,993			2,890
		18,611			18,071
Less — accumulated depreciation and amortization		(3,421	)		(2,858	)
		15,190			15,213
Purchase deposits for flight equipment		304			230
Capital leases—
Flight equipment		1,474			1,741
Other property and equipment		221			217
		1,695			1,958
Less — accumulated amortization		(499	)		(456	)
		1,196			1,502
		16,690			16,945
Other assets:
Goodwill		4,523			4,523
Intangibles, less accumulated amortization (2011 — $587; 2010 — $504)		4,815			4,917
Restricted cash, cash equivalents and investments		358			350
Investments		101			103
Other, net		816			715
		10,613			10,608
	$	39,694		$	39,598

(continued on next page)

4

UNITED CONTINENTAL HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except shares)

	(Unaudited)
	June 30, 2011			December 31, 2010
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Advance ticket sales	$	4,497		$	2,998
Frequent flyer deferred revenue		2,491			2,582
Accounts payable		1,999			1,805
Accrued salaries and benefits		1,229			1,470
Current maturities of long-term debt		1,389			2,411
Current maturities of capital leases		138			252
Other		1,019			1,127
		12,762			12,645
Long-term debt		11,101			11,434
Long-term obligations under capital leases		970			1,036
Other liabilities and deferred credits:
Frequent flyer deferred revenue		3,355			3,491
Postretirement benefit liability		2,383			2,344
Pension liability		1,458			1,473
Advanced purchase of miles		1,545			1,159
Deferred income taxes		1,618			1,585
Lease fair value adjustment, net		1,246			1,371
Other		1,314			1,333
		12,919			12,756
Commitments and contingencies
Stockholders’ equity:
Preferred stock		—			—
Common stock at par, $0.01 par value; authorized 1,000,000,000 shares; outstanding 330,766,357 and 327,922,565 shares at June 30, 2011 and December 31, 2010, respectively		3			3
Additional capital invested		7,106			7,071
Accumulated deficit		(5,378	)		(5,703	)
Stock held in treasury, at cost		(31	)		(31	)
Accumulated other comprehensive income		242			387
		1,942			1,727
	$	39,694		$	39,598

See accompanying Combined Notes to Condensed Consolidated Financial Statements.

5

UNITED CONTINENTAL HOLDINGS, INC.

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)

(In millions)

	Six Months Ended June 30,
	2011			2010
Cash Flows from Operating Activities:
Net income	$	325		$	191
Adjustments to reconcile net income to net cash provided (used) by operating activities —
Depreciation and amortization		773			444
Amortization of debt and lease fair value adjustment		(119	)		8
Special items, non-cash portion (Notes 1 and 10)		(48	)		90
Increase in advance ticket sales		1,499			808
Decrease in frequent flyer deferred revenue and advanced purchase of miles		(89	)		(60	)
Increase in receivables		(387	)		(324	)
Increase in accounts payable		202			123
Increase in other current assets		(251	)		(83	)
Increase (decrease) in other accrued liabilities		(224	)		90
Net change in fuel hedge cash collateral		(29	)		4
Other, net		106			65
Net cash provided by operating activities		1,758			1,356
Cash Flows from Investing Activities:
Capital expenditures		(350	)		(124	)
Aircraft purchase deposits paid, net		(70	)		(42	)
(Increase) decrease in restricted cash		(20	)		43
Proceeds from sale of property and equipment		54			25
Purchases of short-term investments, net		(443	)		—
Other, net		—			3
Net cash used in investing activities		(829	)		(95	)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt		142			1,995
Payments of long-term debt		(1,477	)		(1,274	)
Principal payments under capital leases		(176	)		(93	)
Other, net		32			(25	)
Net cash provided by (used in) financing activities		(1,479	)		603
Increase (decrease) in cash and cash equivalents during the period		(550	)		1,864
Cash and cash equivalents at beginning of the period		8,069			3,042
Cash and cash equivalents at end of the period	$	7,519		$	4,906
Investing and Financing Activities Not Affecting Cash:
Property and equipment acquired through the issuance of debt	$	97		$	—
Reclassification of debt to advanced purchases of miles		(270	)		—
Reclassification of debt discount to other assets		60			—
8% Contingent Senior Unsecured Notes, net of discount		49			—
Interest paid in kind on UAL 6% Senior Notes		18			17

See accompanying Combined Notes to Condensed Consolidated Financial Statements.

6

UNITED AIR LINES, INC.

STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)

(In millions)

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Operating revenue:
Passenger:
Mainline	$	3,745		$	3,532		$	6,884		$	6,401
Regional		1,046			962			1,937			1,750
Total passenger revenue		4,791			4,494			8,821			8,151
Cargo		191			190			358			347
Special revenue item (Note 1)		88			—			88			—
Other operating revenue		500			479			979			908
		5,570			5,163			10,246			9,406
Operating expenses:
Aircraft fuel		1,833			1,486			3,345			2,693
Salaries and related costs		1,038			1,061			2,025			2,051
Regional capacity purchase		401			405			783			793
Landing fees and other rent		275			271			527			528
Aircraft maintenance materials and outside repairs		290			245			582			467
Depreciation and amortization		229			223			456			444
Distribution expenses		199			198			386			370
Aircraft rent		80			81			161			162
Special charges (Note 10)		90			106			164			124
Other operating expenses		698			644			1,372			1,252
		5,133			4,720			9,801			8,884
Operating income		437			443			445			522
Nonoperating income (expense):
Interest expense		(159	)		(173	)		(327	)		(353	)
Interest income		3			2			5			3
Interest capitalized		3			3			6			5
Miscellaneous, net		(3	)		4			(8	)		29
		(156	)		(164	)		(324	)		(316	)
Income before income taxes		281			279			121			206
Income tax benefit		—			(2	)		—			(1	)
Net income	$	281		$	281		$	121		$	207

See accompanying Combined Notes to Condensed Consolidated Financial Statements.

7

UNITED AIR LINES, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except shares)

	(Unaudited)
	June 30, 2011			December 31, 2010
ASSETS
Current assets:
Cash and cash equivalents	$	4,107		$	4,665
Short-term investments		155			—
Total unrestricted cash, cash equivalents and short-term investments		4,262			4,665
Restricted cash		46			37
Receivables, net of allowance for doubtful accounts (2011 — $5; 2010 — $5)		1,103			1,004
Aircraft fuel, spare parts and supplies, less obsolescence allowance (2011 — $67; 2010 — $61)		243			321
Receivables from related parties		193			135
Deferred income taxes		350			373
Prepaid expenses and other		513			366
		6,710			6,901
Operating property and equipment:
Owned—
Flight equipment		9,021			8,718
Other property and equipment		2,161			2,086
		11,182			10,804
Less — accumulated depreciation and amortization		(3,032	)		(2,717	)
		8,150			8,087
Purchase deposits for flight equipment		54			51
Capital leases—
Flight equipment		1,474			1,741
Other property and equipment		52			49
		1,526			1,790
Less — accumulated amortization		(489	)		(453	)
		1,037			1,337
		9,241			9,475
Other assets:
Intangibles, less accumulated amortization (2011 — $503; 2010 — $473)		2,313			2,343
Restricted cash		198			190
Investments		96			97
Other, net		602			622
		3,209			3,252
	$	19,160		$	19,628

(continued on next page)

8

UNITED AIR LINES, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except shares)

	(Unaudited)
	June 30, 2011			December 31, 2010
LIABILITIES AND STOCKHOLDER’S DEFICIT
Current liabilities:
Advance ticket sales	$	2,451		$	1,536
Frequent flyer deferred revenue		1,540			1,703
Accounts payable		1,161			907
Accrued salaries and benefits		772			938
Current maturities of long-term debt		635			1,546
Current maturities of capital leases		135			249
Related party payables		61			63
Other		751			950
		7,506			7,892
Long-term debt		5,468			5,480
Long-term obligations under capital leases		792			858
Other liabilities and deferred credits:
Frequent flyer deferred revenue		2,184			2,321
Postretirement benefit liability		2,121			2,091
Pension liability		100			101
Advanced purchase of miles		1,275			1,159
Deferred income taxes		708			731
Other		956			972
		7,344			7,375
Commitments and contingencies
Stockholder’s deficit:
Common stock at par, $5 par value; authorized 1,000 shares; outstanding 205 shares at both June 30, 2011 and December 31, 2010		—			—
Additional capital invested		3,428			3,421
Accumulated deficit		(5,368	)		(5,489	)
Accumulated other comprehensive income (loss)		(10	)		91
		(1,950	)		(1,977	)
	$	19,160		$	19,628

See accompanying Combined Notes to Condensed Consolidated Financial Statements.

9

UNITED AIR LINES, INC.

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)

(In millions)

	Six Months Ended June 30,
	2011			2010
Cash Flows from Operating Activities:
Net income	$	121		$	207
Adjustments to reconcile net income to net cash provided (used) by operating activities—
Depreciation and amortization		456			444
Amortization of debt and lease fair value adjustment		8			8
Special items, non-cash portion (Notes 1 and 10)		(28	)		90
Increase in advance ticket sales		915			808
Decrease in frequent flyer deferred revenue and advanced purchase of miles		(180	)		(60	)
Increase in receivables		(257	)		(324	)
Increase in accounts payable		251			123
Increase in other current assets		(77	)		(100	)
Increase (decrease) in other accrued liabilities		(231	)		88
Net change in fuel hedge cash collateral		(29	)		4
Other, net		93			64
Net cash provided by operating activities		1,042			1,352
Cash Flows from Investing Activities:
Capital expenditures		(222	)		(124	)
Purchases of short-term investments, net		(153	)		—
Aircraft purchase deposits paid, net		(3	)		(42	)
(Increase) decrease in restricted cash		(20	)		43
Proceeds from sale of property and equipment		1			25
Other, net		—			3
Net cash used in investing activities		(397	)		(95	)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt		—			1,995
Payments of long-term debt		(1,037	)		(1,273	)
Principal payments under capital leases		(175	)		(93	)
Other, net		9			(22	)
Net cash provided by (used in) financing activities		(1,203	)		607
Increase (decrease) in cash and cash equivalents during the period		(558	)		1,864
Cash and cash equivalents at beginning of the period		4,665			3,036
Cash and cash equivalents at end of the period	$	4,107		$	4,900
Investing and Financing Activities Not Affecting Cash:
8% Contingent Senior Unsecured Notes, net of discount	$	49		$	—
Interest paid in kind on UAL 6% Senior Notes		18			17

See accompanying Combined Notes to Condensed Consolidated Financial Statements.

10

CONTINENTAL AIRLINES, INC.

STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)

(In millions, except per share amounts)

	Successor			Predecessor			Successor			Predecessor
	Three Months Ended June 30, 2011			Three Months Ended June 30, 2010			Six Months Ended June 30, 2011			Six Months Ended June 30, 2010
Operating revenue:
Passenger:
Mainline	$	3,118		$	2,635		$	5,741		$	4,892
Regional		696			616			1,229			1,117
Total passenger revenue		3,814			3,251			6,970			6,009
Cargo		126			111			241			213
Special revenue item (Note 1)		19			—			19			—
Other operating revenue		325			329			612			632
		4,284			3,691			7,842			6,854
Operating expenses:
Aircraft fuel		1,394			992			2,554			1,865
Salaries and related costs		864			822			1,669			1,618
Regional capacity purchase		214			205			406			402
Landing fees and other rent		228			215			448			428
Aircraft maintenance materials and outside repairs		154			131			303			273
Depreciation and amortization		156			122			317			256
Distribution expenses		177			161			340			306
Aircraft rent		173			230			345			459
Special charges (Note 10)		56			24			59			34
Other operating expenses		494			460			998			934
		3,910			3,362			7,439			6,575
Operating income		374			329			403			279
Nonoperating income (expense):
Interest expense		(88	)		(92	)		(171	)		(187	)
Interest income		2			2			4			4
Interest capitalized		4			6			8			13
Miscellaneous, net		(28	)		(12	)		(35	)		(21	)
		(110	)		(96	)		(194	)		(191	)
Income before income taxes		264			233			209			88
Income taxes		2			—			4			1
Net income	$	262		$	233		$	205		$	87
Earnings per share, basic				$	1.67					$	0.62
Earnings per share, diluted				$	1.46					$	0.60

See accompanying Combined Notes to Condensed Consolidated Financial Statements.

11

CONTINENTAL AIRLINES, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except shares)

	Successor
	(Unaudited)
	June 30, 2011			December 31, 2010
ASSETS
Current assets:
Cash and cash equivalents	$	3,406		$	3,398
Short-term investments		904			611
Total unrestricted cash, cash equivalents and short-term investments		4,310			4,009
Receivables, net of allowance for doubtful accounts (2011 — $1; 2010 — $1)		760			609
Aircraft fuel, spare parts and supplies, less obsolescence allowance (2011 — $7; 2010 — $3)		265			246
Deferred income taxes		273			225
Receivables from related parties		—			3
Prepaid expenses and other		262			185
		5,870			5,277
Operating property and equipment:
Owned—
Flight equipment		6,597			6,463
Other property and equipment		832			804
		7,429			7,267
Less — accumulated depreciation and amortization		(389	)		(141	)
		7,040			7,126
Purchase deposits for flight equipment		250			178
Capital leases — other property and equipment		168			168
Less — accumulated amortization		(10	)		(3	)
		158			165
		7,448			7,469
Other assets:
Goodwill		4,523			4,523
Intangibles, less accumulated amortization (2011 — $84; 2010 — $31)		2,504			2,575
Restricted cash, cash equivalents and investments		160			160
Other, net		413			375
		7,600			7,633
	$	20,918		$	20,379

(continued on next page)

12

CONTINENTAL AIRLINES, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except shares)

	Successor
	(Unaudited)
	June 30, 2011		December 31, 2010
LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
Advance ticket sales	$	2,046	$	1,463
Frequent flyer deferred revenue		951		879
Accounts payable		840		902
Accrued salaries and benefits		457		532
Current maturities of long-term debt		754		865
Related party payables		42		—
Current maturities of capital leases		3		3
Other		285		236
		5,378		4,880
Long-term debt		5,219		5,536
Long-term obligations under capital leases		178		178
Other liabilities and deferred credits:
Frequent flyer deferred revenue		1,170		1,170
Postretirement benefit liability		262		253
Pension liability		1,357		1,372
Lease fair value adjustment, net		1,250		1,374
Advanced purchase of miles		270		—
Deferred income taxes		834		784
Other		500		522
		5,643		5,475
Commitments and contingencies
Stockholder’s equity:
Common stock at par, $0.01 par value; authorized and outstanding 1,000 shares at both June 30, 2011 and December 31, 2010		—		—
Additional capital invested		4,144		4,115
Retained earnings (accumulated deficit)		110		(95	)
Accumulated other comprehensive income		246		290
		4,500		4,310
	$	20,918	$	20,379

See accompanying Combined Notes to Condensed Consolidated Financial Statements.

13

CONTINENTAL AIRLINES, INC.

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)

(In millions)

	Successor			Predecessor
	Six Months Ended June 30, 2011			Six Months Ended June 30, 2010
Cash Flows from Operating Activities:
Net income	$	205		$	87
Adjustments to reconcile net income to net cash provided (used) by operating activities—
Depreciation and amortization		317			256
Special items, non-cash portion (Notes 1 and 10)		(20	)		16
Amortization of debt and lease fair value adjustment		(127	)		—
Increase in advance ticket sales		583			654
Increase in frequent flyer deferred revenue and advanced purchase of miles		91			98
Increase in receivables		(185	)		(180	)
Increase (decrease) in accounts payable		(11	)		116
Increase in other current assets		(133	)		(184	)
Increase (decrease) in other accrued liabilities		(34	)		118
Other, net		30			20
Net cash provided by operating activities		716			1,001
Cash Flows from Investing Activities:
Capital expenditures		(127	)		(148	)
Aircraft purchase deposits paid, net		(67	)		(84	)
Proceeds from sale of property and equipment		52			25
Purchases of short-term investments, net		(291	)		(124	)
Other, net		1			(3	)
Net cash used in investing activities		(432	)		(334	)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt		142			225
Payments of long-term debt		(440	)		(411	)
Other, net		22			20
Net cash used in financing activities		(276	)		(166	)
Increase in cash and cash equivalents during the period		8			501
Cash and cash equivalents at beginning of the period		3,398			2,546
Cash and cash equivalents at end of the period	$	3,406		$	3,047
Investing and Financing Activities Not Affecting Cash:
Property and equipment acquired through the issuance of debt	$	97		$	—
Reclassification of debt to advanced purchases of miles		(270	)		—
Reclassification of debt discount to other assets		60			—

See accompanying Combined Notes to Condensed Consolidated Financial Statements.

14

UNITED CONTINENTAL HOLDINGS, INC.,

UNITED AIR LINES, INC. AND CONTINENTAL AIRLINES, INC.

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

United Continental Holdings, Inc. (together with its consolidated subsidiaries, “UAL”) is a holding company and its principal, wholly-owned subsidiaries are United Air Lines, Inc. (together with its consolidated subsidiaries, “United”) and, effective October 1, 2010, Continental Airlines, Inc. (together with its consolidated subsidiaries, “Continental”). All significant intercompany transactions are eliminated.

This Quarterly Report on Form 10-Q is a combined report of UAL, United and Continental. We sometimes use the words “we,” “our,” “us,” and the “Company” for disclosures that relate to all of UAL, United and Continental Successor (defined below). As UAL consolidates United for financial statement purposes, disclosures that relate to United activities also apply to UAL; and, effective October 1, 2010, disclosures that relate to Continental Successor activities also apply to UAL. When appropriate, UAL, United and Continental are named specifically for their related activities and disclosures.

Continental Acquisition Accounting. As a result of the application of the acquisition method of accounting, Continental’s financial statements prior to October 1, 2010 are not comparable with Continental’s financial statements for periods on or after October 1, 2010. References to “Successor” refer to Continental on or after October 1, 2010, after giving effect to the application of acquisition accounting. References to “Predecessor” refer to Continental prior to October 1, 2010.

Interim Financial Statements. The UAL, United and Continental unaudited condensed consolidated financial statements shown here have been prepared as required by the U.S. Securities and Exchange Commission (the “SEC”). Some information and footnote disclosures normally included in financial statements that comply with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as permitted by the SEC. The financial statements include all adjustments, including normal recurring adjustments and other adjustments, which are considered necessary for a fair presentation of the Company’s financial position and results of operations. Certain prior year amounts have been reclassified to conform to the current year’s presentation. The significant reclassifications are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 (the “2010 Annual Report”). These reclassifications were made to conform the financial statement presentation of United and Continental. These financial statements should be read together with the information included in the 2010 Annual Report.

NOTE 1 - NEW ACCOUNTING PRONOUNCEMENTS

Multiple-Deliverable Revenue Arrangements

Frequent Flyer Awards. United and Continental have loyalty programs to increase customer loyalty. Program participants earn mileage credits (“miles”) by flying on United, Continental and certain other participating airlines. Program participants can also earn miles through purchases from other non-airline partners that participate in the Company’s loyalty programs. We sell miles to these partners, which include retail merchants, credit card issuers, hotels and car rental companies, among others. Miles can be redeemed for free, discounted or upgraded air travel and non-travel awards. The Company records its obligation for future award redemptions using a deferred revenue model.

In the case of the sale of air transportation services, the Company recognizes a portion of the ticket sales as revenue when the air transportation occurs and defers a portion of the ticket sale that represents the fair value of the miles, as described further below. In the case of miles sold to third parties, historically we have had two primary revenue elements: marketing and air transportation.

The adoption of the Accounting Standards Update 2009-13, “Multiple-Deliverable Revenue Arrangements—a consensus of the FASB Emerging Issues Task Force” (“ASU 2009-13”), as described below, resulted in the revision of the accounting for certain aspects of the frequent flyer accounting.

Passenger Tickets

Effective January 1, 2011, the Company began applying the provisions of ASU 2009-13, which resulted in a change to the Company’s accounting for passenger ticket sales that include the issuance of miles that may be redeemed for free travel or other products or services at a future date. Under the Company’s accounting policy prior to January 1, 2011, the Company estimated the weighted average fair value of miles that were issued in connection with the sale of air transportation. The fair value of the miles was deferred and the residual amount of ticket proceeds was recognized as revenue at the time the air transportation was provided.

15

Effective January 1, 2011, the Company began applying the new guidance to determine the estimated selling price of the air transportation and miles as if each element were sold on a separate basis and allocating the total consideration to each of these elements on a pro rata basis. The estimated selling price of miles is computed using an estimated weighted average equivalent ticket value that is adjusted by a sales discount that considers a number of factors, including ultimate fulfillment expectations associated with miles sold in flight transactions to various customer groups.

As a result of the prospective adoption, the new accounting policy was only applied to new sales of air transportation in 2011. Generally, as compared to the historical accounting policy, for passenger tickets sold with miles earned, the new accounting policy decreases the value of miles that the Company records as deferred revenue and increases the passenger revenue recorded at the time air transportation is provided. Due to the average period from purchase of air transportation to the provision of air transportation, the new accounting policy was only applicable to a portion of the Company’s multiple element ticket transactions recorded during the three and six months ended June 30, 2011. The application of the new accounting method resulted in the following increases to revenue (in millions, except per share amounts):

	Three Months Ended June 30, 2011						Six Months Ended June 30, 2011
	UAL		United		Continental		UAL		United		Continental
Revenue	$	106	$	66	$	40	$	161	$	104	$	57
Per basic share	$	0.32					$	0.49
Per diluted share	$	0.27					$	0.42

We estimate that application of the new accounting method in the remaining half of 2011 will increase UAL’s revenue as compared to revenue that would have been recorded under the historical method of accounting. The Company cannot reliably estimate the impact of ASU 2009-13 on its future revenue, because the impact depends on many factors, including the volume of air transportation sales with mileage credit components.

Co-branded Credit Card Partner Mileage Sales

United and Continental each had significant contracts to sell frequent flyer miles to their co-branded credit card partner, Chase Bank USA, N.A. (“Chase”). Miles can be redeemed for free, discounted or upgraded air travel and non-travel awards. On June 9, 2011, these contracts were modified and the Company entered into one agreement with Chase (the “Co-Brand Agreement”). The Company applied the provisions of ASU 2009-13 to the Co-Brand Agreement as a materially modified contract.

Under the Co-Brand Agreement and ASU 2009-13, we have identified five elements in the agreement: air transportation; use of the United brand and access to frequent flyer member lists; advertising; baggage services; and airport lounge usage. The fair value of the elements is determined using management’s estimated selling price of each element. The objective of using estimated selling price based methodology is to determine the price at which we would transact a sale if the product or service were sold on a stand-alone basis. Accordingly, we determine our best estimate of selling price considering multiple inputs and methods including, but not limited to, discounted cash flows, brand value, volume discounts, published selling prices, number of miles awarded and number of miles redeemed. The Company estimated the selling prices and volumes over the term of the modified agreement in order to determine the allocation of proceeds to each of the multiple elements to be delivered.

The new guidance changed the allocation of arrangement consideration to the number of units of accounting; however, the pattern and timing of revenue recognition for those units did not change. The Company records passenger revenue related to the air transportation element when the transportation is delivered. The other elements are generally recognized as other operating revenue when earned.

The application of the new accounting standard decreases the value of the air transportation deliverables related to the Co-Brand Agreement that the Company records as deferred revenue (and ultimately passenger revenue when redeemed awards are flown) and increases the value primarily of the marketing-related deliverables recorded in other revenue at the time these marketing-related deliverables are provided. Other than the effects disclosed in the “Special Revenue Item” section below, the impact of adoption of ASU 2009-13 did not have a significant impact on revenue during the second quarter of 2011 as compared to revenue that would have been recognized under the Company’s historical accounting method.

While revenue recognition is subject to fluctuation based on credit card sale volumes and frequent flyer redemption patterns, the Company expects, as a result of the Co-Brand Agreement, that other revenue will increase by approximately $70 million per quarter, with passenger revenue reduced by approximately $20 million per quarter for the remainder of the year. These estimates are subject to variability primarily depending on the volume of future transactions.

16

Pending new or materially modified contracts after January 1, 2011, certain other non-airline partners who participate in the loyalty programs and to which we sell miles remain subject to our historical residual accounting method.

Special Revenue Item

The transition provisions of ASU 2009-13 require that the Company’s existing deferred revenue balance be adjusted retroactively to reflect the value of any undelivered element remaining at the date of contract modification as if we had been applying ASU 2009-13 since the Co-Brand Agreement contract initiation. We applied this transition provision by revaluing the undelivered transportation element using its new estimated selling price as determined in connection with the contract modification. This estimated selling price was lower than the rate at which the undelivered element had been deferred under the previous contracts and recorded the following one-time non-cash adjustment to decrease frequent flyer deferred revenue and increase special revenue (in millions):

	Three Months Ended June 30, 2011						Six Months Ended June 30, 2011
	UAL		United		Continental		UAL		United		Continental
Special revenue item	$	107	$	88	$	19	$	107	$	88	$	19
Per basic share	$	0.32					$	0.33
Per diluted share	$	0.27					$	0.28

17

NOTE 2 - EARNINGS PER SHARE

The table below represents the computation of UAL basic and diluted earnings per share amounts and the number of securities that have been excluded from the computation of diluted earnings per share amounts, because they were antidilutive (in millions, except per share amounts):

	Three Months Ended June 30,					Six Months Ended June 30,
	2011			2010		2011			2010
UAL basic earnings per share:
Net income	$	538		$	273	$	325		$	191
Less: Income allocable to participating securities		(2	)		—		(1	)		—
Earnings available to common stockholders	$	536		$	273	$	324		$	191
Basic weighted average shares outstanding		330			168		329			168
Earnings per share, basic	$	1.63		$	1.62	$	0.98		$	1.14
UAL diluted earnings per share:
Earnings available to common stockholders	$	536		$	273		324		$	191
Effect of UAL 4.5% Senior Limited-Subordination Convertible Notes		11			21		—			—
Effect of Continental 4.5% Convertible Notes		2			—		4			—
Effect of UAL 5% Senior Convertible Notes		—			4		—			—
Effect of Continental 6% Convertible Junior Subordinated Debentures		4			—		—			—
Effect of UAL 6% Senior Convertible Notes		5			5		9			10
Earnings available to common stockholders including the effect of dilutive securities	$	558		$	303	$	337		$	201
UAL diluted shares outstanding:
Basic weighted average shares outstanding		330			168		329			168
Effect of employee stock options		1			2		2			1
Effect of UAL 4.5% Senior Limited-Subordination Convertible Notes		13			22		—			—
Effect of Continental 4.5% Convertible Notes		12			—		12			—
Effect of UAL 5% Senior Convertible Notes		—			3		—			—
Effect of Continental 6% Convertible Junior Subordinated Debentures		4			—		—			—
Effect of UAL 6% Senior Convertible Notes		40			40		40			40
Diluted weighted average shares outstanding		400			235		383			209
Earnings per share, diluted	$	1.39		$	1.29	$	0.88		$	0.96
UAL potentially dilutive shares excluded from diluted per share amounts:
Restricted stock and stock options		7			5		6			6
UAL 4.5% Senior Limited-Subordination Convertible Notes		—			—		18			22
Continental 6% Convertible Junior Subordinated Debentures		—			—		4			—
UAL 5% Senior Convertible Notes (Note 9)		—			—		—			3

UAL’s 6% Senior Notes due 2031, with a principal amount of $633 million as of June 30, 2011, are callable at any time at 100% of par value and can be redeemed with either cash or shares of UAL common stock, or a combination thereof, at UAL’s option. These notes are not included in the diluted earnings per share calculation as it is UAL’s intent to redeem these notes with cash, if UAL were to redeem the notes. During the second quarter of 2011, UAL repurchased at par value approximately $570 million of the $726 million outstanding principal amount of its 4.5% Senior Limited-Subordination Convertible Notes due 2021 with cash after the notes were put to UAL by the noteholders. The dilutive effect of the 4.5% Senior Limited-Subordination Convertible Notes due 2021 was excluded in the diluted earnings per share calculations for the three and six months ended June 30, 2011 from the date notice was given of the Company’s intent to pay the notes put to it in cash up to the repurchase date.

18

The table below represents the computation of Continental Predecessor’s basic and diluted earnings per share amounts (in millions, except per share amounts):

	Three Months Ended June 30,		Six Months Ended June 30,
	2010		2010
Continental Predecessor basic earnings per share:
Earnings available to common stockholders	$	233	$	87
Basic weighted average shares outstanding		140		139
Earnings per share, basic	$	1.67	$	0.62
Continental Predecessor diluted earnings per share:
Earnings available to common stockholders	$	233	$	87
Effect of 5% Convertible Notes		4		—
Effect of 6% Convertible Junior Subordinated Debentures		3		—
Effect of 4.5% Convertible Notes		3		5
Earnings available to common stockholders including the effect of dilutive securities	$	243	$	92
Continental Predecessor diluted shares outstanding:
Basic weighted average shares outstanding		140		139
5% Convertible Notes		9		—
6% Convertible Junior Subordinated Debentures		4		—
4.5% Convertible Notes		12		12
Employee stock options		2		2
Diluted weighted average shares outstanding		167		153
Earnings per share, diluted	$	1.46	$	0.60
Continental Predecessor potentially dilutive shares excluded from diluted per share amounts:
5% Convertible Notes		—		9
6% Convertible Junior Subordinated Debentures		—		4
Employee stock options		1		1

NOTE 3 - INCOME TAXES

Our effective tax rates differ from the federal statutory rate of 35% primarily due to the following: changes in the valuation allowance, expenses that are not deductible for federal income tax purposes, and foreign and state income taxes. We are required to provide a valuation allowance for our deferred tax assets in excess of deferred tax liabilities because we have concluded that it is more likely than not that such deferred tax assets will ultimately not be realized.

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NOTE 4 - EMPLOYEE BENEFIT PLANS

Defined Benefit Pension and Other Postretirement Benefit Plans. The Company’s net periodic benefit cost includes the following components (in millions):

	Pension Benefits Three Months Ended June 30,						Other Postretirement Benefits Three Months Ended June 30,
	2011			2010			2011			2010
UAL
Service cost	$	23		$	2		$	12		$	8
Interest cost		45			3			32			29
Expected return on plan assets		(35	)		(3	)		—			(1	)
Amortization of unrecognized gain and prior service cost		(7	)		(1	)		(1	)		(3	)
Net periodic benefit costs	$	26		$	1		$	43		$	33
United
Service cost	$	2		$	2		$	8		$	8
Interest cost		3			3			28			29
Expected return on plan assets		(3	)		(3	)		—			(1	)
Amortization of unrecognized gain and prior service cost		(1	)		(1	)		—			(3	)
Net periodic benefit costs	$	1		$	1		$	36		$	33
Continental (a)
Service cost	$	21		$	16		$	4		$	3
Interest cost		42			40			4			3
Expected return on plan assets		(32	)		(28	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		(6	)		25			(1	)		4
Net periodic benefit costs	$	25		$	53		$	7		$	10

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

20

	Pension Benefits Six Months Ended June 30,						Other Postretirement Benefits Six Months Ended June 30,
	2011			2010			2011			2010
UAL
Service cost	$	44		$	3		$	24		$	15
Interest cost		89			5			63			58
Expected return on plan assets		(69	)		(5	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		(12	)		(1	)		(1	)		(6	)
Net periodic benefit costs	$	52		$	2		$	85		$	66
United
Service cost	$	3		$	3		$	17		$	15
Interest cost		5			5			56			58
Expected return on plan assets		(5	)		(5	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		(1	)		(1	)		—			(6	)
Net periodic benefit costs	$	2		$	2		$	72		$	66
Continental (a)
Service cost	$	41		$	33		$	7		$	5
Interest cost		84			79			7			7
Expected return on plan assets		(64	)		(55	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		(11	)		49			(1	)		8
Net periodic benefit costs	$	50		$	106		$	13		$	20

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

During the six months ended June 30, 2011, Continental contributed $71 million to its tax-qualified defined benefit pension plans. Continental contributed an additional $33 million to its tax-qualified defined benefit pension plans in July 2011.

Share-Based Compensation. In February 2011, UAL granted share-based compensation awards pursuant to the United Continental Holdings, Inc. 2008 Incentive Compensation Plan. These share-based compensation awards include approximately 0.5 million shares of restricted stock that vest pro-rata over three years on the anniversary of the grant date. These awards also include approximately 3.0 million performance-based restricted stock units (“RSUs”) (equivalent to approximately 1.9 million RSUs at the target performance level), consisting of approximately 1.2 million RSUs that vest based on UAL’s return on invested capital for the period beginning January 1, 2011 and ending December 31, 2013 and 1.8 million RSUs that vest based on the achievement of merger-related goals. Vesting of a portion of the merger incentive RSUs is based on the achievement of certain merger-related milestones and vesting of the remainder of the merger incentive RSUs is based on the achievement of revenue and cost synergies over a three-year performance period ending December 31, 2013. The RSUs will be settled in cash. If the specified performance conditions are achieved, cash payments will be made shortly after the end of the performance period or achievement of the specified merger milestone, as applicable, based on the fair market value of UAL common stock. The Company accounts for the performance-based RSUs as liability awards. The table below presents information related to share-based compensation expense (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Share-based compensation expense	$	14	$	8	$	27	$	21

	June 30, 2011		December 31, 2010
Unrecognized share-based compensation expense	$	63	$	43

21

Profit Sharing Plans. Effective for 2011, substantially all employees participate in profit sharing plans, which pay 15% of total pre-tax earnings, excluding special items and stock compensation expense, to eligible employees when pre-tax profit excluding special items, profit sharing expense and stock-based compensation program expense exceeds $10 million. Eligible U.S. co-workers in each participating work group will receive a profit sharing payout using a formula based on the ratio of each qualified co-worker’s annual eligible earnings to the eligible earnings of all qualified co-workers in all domestic workgroups. The international profit sharing plan utilizes the same profit sharing payout percentage that is paid out to eligible U.S. co-workers. UAL recorded profit sharing and related payroll tax expense of $90 million in the three and six months ended June 30, 2011. Profit sharing expense is recorded as a component of salaries and related costs in the consolidated statements of operations.

During 2010, United and Continental maintained separate employee profit sharing plans for the employees of each respective subsidiary. During the three and six months ended June 30, 2010, United and Continental Predecessor recorded profit sharing and related payroll tax expense of $63 million and $19 million, respectively.

22

NOTE 5 - FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The table below presents disclosures about the financial assets and financial liabilities measured at fair value on a recurring basis in the Company’s financial statements as of June 30, 2011 and December 31, 2010 (in millions):

	June 30, 2011											December 31, 2010
	Total			Level 1		Level 2			Level 3			Total			Level 1		Level 2			Level 3
	UAL
Cash and cash equivalents	$	7,519		$	7,519	$	—		$	—		$	8,069		$	8,069	$	—		$	—
Short-term investments:
Auction rate securities		121			—		—			121			119			—		—			119
CDARS		196			196		—			—			45			45		—			—
Asset-backed securities		224			224		—			—			258			258		—			—
Corporate debt		397			397		—			—			135			135		—			—
U.S. government and agency notes		47			47		—			—			39			39		—			—
Other fixed income securities		75			75		—			—			15			15		—			—
EETC		65			—		—			65			66			—		—			66
Fuel derivatives, net		191			—		191			—			375			—		375			—
Foreign currency derivatives		(3	)		—		(3	)		—			(7	)		—		(7	)		—
Restricted cash (a)		160			160		—			—			160			160		—			—
	United (a)
Cash and cash equivalents	$	4,107		$	4,107	$	—		$	—		$	4,665		$	4,665	$	—		$	—
Short-term investments:
Asset-backed securities		23			23		—			—			—			—		—			—
Corporate debt		124			124		—			—			—
U.S. government and agency notes		5			5		—			—			—			—		—			—
Other fixed income securities		3			3		—			—
EETC		65			—		—			65			66			—		—			66
Fuel derivatives, net		138			—		138			—			277			—		277			—
	Continental Successor
Cash and cash equivalents	$	3,406		$	3,406	$	—		$	—		$	3,398		$	3,398	$	—		$	—
Short-term investments:
Auction rate securities		121			—		—			121			119			—		—			119
CDARS		196			196		—			—			45			45		—			—
Asset-backed securities		201			201		—			—			258			258		—			—
Corporate debt		273			273		—			—			135			135		—			—
U.S. government and agency notes		41			41		—			—			39			39		—			—
Other fixed income securities		72			72		—			—			15			15		—			—
Fuel derivatives, net		53			—		53			—			98			—		98			—
Foreign currency derivatives		(3	)		—		(3	)		—			(7	)		—		(7	)		—
Restricted cash		160			160		—			—			160			160		—			—
Convertible debt derivative asset		251			—		—			251			286			—		—			286
Convertible debt option liability		(143	)		—		—			(143	)		(164	)		—		—			(164	)

(a) United’s restricted cash is recorded at cost.

23

The tables below present disclosures about the activity for “Level Three” financial assets and financial liabilities for the three and six months ended June 30 (in millions):

	Three Months Ended June 30,
	2011				2010
UAL (a)	Auction  Rate Securities		EETC		EETC
Balance at March 31	$	120	$	63	$	58
Settlements		—		—		—
Reported in earnings - unrealized		1		—		—
Reported in other comprehensive income		—		2		3
Balance at June 30	$	121	$	65	$	61

(a) For 2010, amounts also represent United. For 2011, United’s only Level Three recurring measurements are the above EETCs.

	Six Months Ended June 30,
	2011					2010
UAL (a)	Auction  Rate Securities		EETC			EETC
Balance at January 1	$	119	$	66		$	51
Settlements		—		(2	)		(2	)
Reported in earnings - unrealized		1		—			—
Reported in other comprehensive income		1		1			12
Balance at June 30	$	121	$	65		$	61

(a) For 2010, amounts also represent United. For 2011, United’s only Level Three recurring measurements are the above EETCs.

Continental	Successor - 2011								Predecessor - 2010
	Auction Rate Securities		Convertible Debt Supplemental Derivative Asset (a)			Convertible Debt Conversion Option Liability (a)			Auction Rate Securities			Auction Rate Securities  Put Right
Balance at March 31	$	120	$	262		$	(152	)	$	164		$	16
Sales		—		—			—			(64	)		—
Gains (losses):
Reported in earnings:
Realized		—		—			—			17			(16	)
Unrealized		1		(11	)		9			—			—
Reported in other comprehensive income		—		—			—			—			—
Balance at June 30	$	121	$	251		$	(143	)	$	117		$	—

(a) These derivatives are not designated as hedges. The Convertible Debt Supplemental Derivative Asset is classified in “Other Asset - Other, net”, and the Convertible Debt Conversion Option Liability is classified in “Other liabilities and deferred credits - Other” in Continental’s consolidated balance sheets. The earnings impact is classified in “Nonoperating income (expense) - Miscellaneous, net” in Continental’s statements of consolidated operations.

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Continental	Successor - 2011								Predecessor - 2010
	Auction Rate Securities		Convertible Debt Supplemental Derivative Asset (a)			Convertible Debt Conversion Option Liability (a)			Auction Rate Securities			Auction Rate Securities Put Right
Balance at January 1	$	119	$	286		$	(164	)	$	201		$	20
Sales		—		—			—			(106	)		—
Gains (losses):
Reported in earnings:
Realized		—		—			—			23			(21	)
Unrealized		1		(35	)		21			—			1
Reported in other comprehensive income (loss)		1		—			—			(1	)		—
Balance at June 30	$	121	$	251		$	(143	)	$	117		$	—

(a) These derivatives are not designated as hedges. The Convertible Debt Supplemental Derivative Asset is classified in “Other Asset - Other, net”, and the Convertible Debt Conversion Option Liability is classified in “Other liabilities and deferred credits - Other” in Continental’s consolidated balance sheets. The earnings impact is classified in “Nonoperating income (expense) - Miscellaneous, net” in Continental’s statements of consolidated operations.

As of June 30, 2011, Continental’s auction rate securities, which had a par value of $145 million and unrealized gains of $2 million, were variable-rate debt instruments with contractual maturities generally greater than ten years and with interest rates that reset every 7, 28 or 35 days, depending on the terms of the particular instrument. These securities are secured by pools of student loans guaranteed by state-designated guaranty agencies and reinsured by the U.S. government. All of the auction rate securities that Continental holds are senior obligations under the applicable indentures authorizing the issuance of the securities.

During the first six months of 2010, Continental Predecessor sold, at par, auction rate securities having a par value of $106 million. Certain of these auction rate securities were subject to a put right granted to Continental by an institution permitting Continental to sell to the institution certain auction rate securities at their full par value. Continental classified the auction rate securities underlying the put right as trading securities and elected the fair value option under applicable accounting standards for the put right, with changes in the fair value of the put right and the underlying auction rate securities recognized in earnings currently. Continental recognized gains on the sales using the specific identification method. The gains were substantially offset by the cancellation of the related put rights. The net gains are included in miscellaneous nonoperating income (expense) in the Continental Predecessor statement of consolidated operations and were not material.

As of June 30, 2011, United’s enhanced equipment trust certificate (“EETC”) securities, which were repurchased in open market transactions in 2007, have an amortized cost basis of $68 million and unrealized losses of $3 million. As of June 30, 2011, these securities have been in an unrealized loss position for a period of over twelve months. However, United has not recognized an impairment loss in earnings related to these securities because it does not intend or expect to be required to sell the securities and expects to recover the entire amortized cost basis. All changes in the fair value of these investments have been classified within accumulated other comprehensive income.

The Continental Successor debt-related derivatives presented in the table above relate to (a) supplemental indenture agreements that provide that Continental’s convertible debt, which was previously convertible into shares of Continental common stock, is convertible into shares of UAL common stock upon the terms and conditions specified in the indentures, and (b) the embedded conversion options in Continental’s convertible debt that are required to be separated and accounted for as though they are free-standing derivatives as a result of the Continental debt becoming convertible into the common stock of a different reporting entity. These derivatives are reported in Continental’s separate financial statements and eliminated in consolidation for UAL. See the Company’s 2010 Annual Report for additional information.

The table below presents the carrying values and estimated fair values of financial instruments not presented in the tables above as of June 30, 2011 and December 31, 2010 (in millions):

	June 30, 2011				December 31, 2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
UAL debt	$	12,490	$	13,304	$	13,845	$	14,995
United debt		6,103		6,216		7,026		7,350
Continental Successor debt		5,973		6,133		6,401		6,663

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Fair value of the financial instruments included in the tables above was determined as follows:

Description	Fair Value Methodology
Cash, Cash Equivalents, Investments and Restricted Cash	The carrying amounts approximate fair value because of the short-term maturity of these assets and liabilities. These assets have maturities of less than one year except for the EETCs, auction rate securities and corporate debt.
	Fair value is based on either (a) the trading prices of the investment or similar instruments, or (b) an income approach, which uses valuation techniques to convert future amounts into a single present amount based on current market expectations about those future amounts when observable trading prices are not available.
Fuel Derivatives	Derivative contracts are privately negotiated contracts and are not exchange traded. Fair value measurements are estimated with option pricing models that employ observable inputs. Inputs to the valuation models include contractual terms, market prices, yield curves, fuel price curves and measures of volatility, among others.
Foreign Currency Derivatives	Fair value is determined with a formula utilizing observable inputs. Significant inputs to the valuation models include contractual terms, risk-free interest rates and forward exchange rates.
Debt	Fair values were based on either market prices or the discounted amount of future cash flows using our current incremental rate of borrowing for similar liabilities.
Convertible Debt Derivative Asset and Option Liability	The Company used a binomial lattice model to value the conversion options and the supplemental derivative assets. Significant binomial model inputs that are not objectively determinable include volatility and discount rate.

NOTE 6 - HEDGING ACTIVITIES

Aircraft Fuel Hedges. The Company has a risk management strategy to hedge a portion of its price risk related to projected aircraft fuel requirements. The Company periodically enters into derivative contracts to mitigate the adverse financial impact of potential increases in the price of fuel. The Company does not enter into derivative instruments for non-risk management purposes. Prior to April 1, 2010, United’s fuel hedges were not accounted for as fair value or cash flow hedges under accounting principles related to hedge accounting. Effective April 1, 2010, United designated substantially all of its outstanding fuel derivative contracts, which settle in periods subsequent to June 30, 2010, as cash flow hedges under applicable accounting standards. In addition, substantially all new fuel derivative contracts entered into subsequent to April 1, 2010 were designated as cash flow hedges.

For fuel derivative instruments designated as cash flow hedges, the Company records the effective portion of periodic changes in the fair value of the derivatives in accumulated other comprehensive income (loss) (“AOCI”) until the underlying fuel is consumed and recorded in fuel expense. Hedge ineffectiveness results when the change in the fair value of the derivative instrument exceeds the change in the value of the Company’s expected future cash outlay to purchase and consume fuel. To the extent that the periodic changes in the fair value of the derivatives are not effective, that ineffectiveness is recorded to miscellaneous nonoperating income (expense) in the statements of consolidated operations. Nonoperating income (expense) for the three and six months ended June 30, 2011 includes $34 million and $31 million, respectively, of expense resulting from ineffectiveness caused by a decrease in fuel hedge values in excess of the decrease in aircraft fuel prices during the quarter. The impact is concentrated in the fuel hedges entered into by Continental as a result of the redesignation of Continental’s fuel hedge portfolio under cash flow hedge accounting as of April 1, 2011 when the portfolio was fully integrated with United’s fuel hedge portfolio. This redesignation deferred certain gains on these contracts that will be recognized as part of fuel expense as these positions settle in the future, and therefore any impact is expected to be neutral to earnings over the full term of each contract, assuming current fuel prices.

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The Company records each derivative instrument as a derivative asset or liability (on a gross basis) in its consolidated balance sheets and, accordingly, records any related collateral on a gross basis.

As of June 30, 2011, our projected fuel requirements for the remainder of 2011 were hedged as follows:

	Maximum Price					Minimum Price
	% of Expected Consumption			Weighted Average  Price (per gallon)		% of Expected Consumption			Weighted Average  Price (per gallon)
UAL
Heating oil collars		15	%	$	3.32		15	%	$	2.65
Heating oil call options		4			2.41		N/A			N/A
Heating oil swaps		3			2.24		3			2.24
West Texas Intermediate (“WTI”) crude oil call options		13			2.32		N/A			N/A
WTI crude oil swaps		11			2.17		11			2.17
Aircraft fuel call options		4			3.15		N/A			N/A
Aircraft fuel swaps		1			3.14		1			3.14
Total		51	%				30	%

As of June 30, 2011, United and Continental had hedged projected fuel requirements for the remainder of 2011 of 54% and 44%, respectively, consistent with the hedged instruments and underlyings presented in the table above for UAL. As of June 30, 2011, UAL, United and Continental had also hedged 13%, 16% and 8%, respectively, of projected first half 2012 fuel consumption.

The following tables present information about the financial statement classification of the Company’s derivatives (in millions):

Derivatives designated as hedges		June 30, 2011						December 31, 2010
	Balance Sheet Location	UAL		United		Continental Successor		UAL		United		Continental Successor
Assets:
Fuel contracts due within one year	Receivables	$	194	$	141	$	53	$	375	$	277	$	98
Liabilities:
Fuel contracts due within one year	Other Current Liabilities	$	3	$	3	$	—	$	—	$	—	$	—

Fuel contracts	Amount of Gain (Loss) Recognized in AOCI on  Derivatives (Effective portion)						Gain (Loss) Reclassified from AOCI into Income (Fuel Expense) (Effective Portion)					Amount of Gain  (Loss) Recognized in Income  (Nonoperating Expense) (Ineffective Portion)
	Three Months Ended June 30,						Three Months Ended June 30,					Three Months Ended June 30,
	2011			2010			2011		2010			2011			2010
UAL	$	(231	)	$	(146	)	$	278	$	—		$	(34	)	$	(3	)
United		(149	)		(146	)		213		—			(7	)		(3	)
Continental (a)		(82	)		(53	)		65		(9	)		(27	)		(2	)

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

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Fuel contracts	Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective portion)					Gain (Loss) Reclassified from AOCI into Income (Fuel Expense) (Effective Portion)					Amount of Gain (Loss) Recognized in Income (Nonoperating Expense) (Ineffective Portion)
	Six Months Ended June 30,					Six Months Ended June 30,					Six Months Ended June 30,
	2011		2010			2011		2010			2011			2010
UAL	$	293	$	(146	)	$	432	$	—		$	(31	)	$	(3	)
United		236		(146	)		338		—			(5	)		(3	)
Continental (a)		57		(37	)		94		(6	)		(26	)		(2	)

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

Derivative Credit Risk and Fair Value

The Company is exposed to credit losses in the event of nonperformance by counterparties to its derivative instruments. While the Company records derivative instruments on a gross basis, the Company monitors its net derivative position with each counterparty to monitor credit risk. Based on the fair value of our fuel derivative instruments, our counterparties may require us to post collateral when the price of the underlying commodity decreases, and we may require our counterparties to provide us with collateral when the price of the underlying commodity increases. The following table presents information related to the Company’s derivative credit risk as of June 30, 2011 (in millions):

	UAL			United			Continental
Net derivative asset with counterparties	$	191		$	138		$	53
Collateral held by the Company (a)		(31	)		(31	)		—
Collateral posted by the Company		—			—			—
Potential loss related to the failure of the Company’s counterparties to perform (b)		160			107			53

(a) Classified as an other current liability.

(b) Based on fair value at June 30, 2011 and collateral held.

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NOTE 7 - COMPREHENSIVE INCOME (LOSS)

Total comprehensive income (loss) for the three and six months ended June 30 included the following (in millions):

	UAL						United						Continental Successor (a)			Continental Predecessor (a)
Three Months Ended June 30,	2011			2010			2011			2010			2011			2010
Net income	$	538		$	273		$	281		$	281		$	262		$	233
Other comprehensive income (loss) adjustments, before tax:
Investments		2			3			2			3			—			—
Fuel derivative financial instruments:
Reclassification into earnings		(278	)		—			(213	)		—			(65	)		9
Change in fair value		(231	)		(146	)		(149	)		(146	)		(82	)		(53	)
Employee benefit plans:
Amortization of net actuarial (gains) losses		(8	)		(3	)		(1	)		(3	)		(7	)		21
Amortization of prior service cost		—			—			—			—			—			8
Other		1			(3	)		—			(4	)		1			(3	)
Comprehensive loss adjustments, before tax		(514	)		(149	)		(361	)		(150	)		(153	)		(18	)
Total comprehensive income (loss) (a)	$	24		$	124		$	(80	)	$	131		$	109		$	215

(a) There were no income tax effects for either period due to the recording of valuation allowance.

	UAL						United						Continental Successor (a)			Continental Predecessor (a)
Six Months Ended June 30,	2011			2010			2011			2010			2011			2010
Net income	$	325		$	191		$	121		$	207		$	205		$	87
Other comprehensive income (loss) adjustments, before tax:
Investments		3			12			1			12			2			—
Fuel derivative financial instruments:
Reclassification into earnings		(432	)		—			(338	)		—			(94	)		6
Change in fair value		293			(146	)		236			(146	)		57			(37	)
Employee benefit plans:
Amortization of net actuarial (gains) losses		(13	)		(6	)		(1	)		(6	)		(12	)		41
Amortization of prior service cost		—			—			—			—			—			16
Other		4			(4	)		1			(4	)		3			(3	)
Comprehensive income (loss) adjustments, before tax		(145	)		(144	)		(101	)		(144	)		(44	)		23
Total comprehensive income (a)	$	180		$	47		$	20		$	63		$	161		$	110

(a) There were no income tax effects for either period due to the recording of valuation allowance.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

General Guarantees and Indemnifications. In the normal course of business, the Company enters into numerous real estate leasing and aircraft financing arrangements that have various guarantees included in the contracts. These guarantees are primarily in the form of indemnities under which the Company typically indemnifies the lessors and any tax/financing parties against tort liabilities that arise out of the use, occupancy, operation or maintenance of the leased premises or financed aircraft. Currently, the Company believes that any future payments required under these guarantees or indemnities would be immaterial, as most tort liabilities and related indemnities are covered by insurance (subject to deductibles). Additionally, certain leased premises such as fueling 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 leased premises.

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Legal and Environmental Contingencies. The Company has certain contingencies resulting from litigation and claims incident to the ordinary course of business. Management believes, after considering a number of factors, including (but not limited to) the information currently available, the views of legal counsel, the nature of contingencies to which the Company is subject and prior experience, that the ultimate disposition of these contingencies will not materially affect the Company’s consolidated financial position or results of operations.

The Company records liabilities for legal and environmental claims when a loss is probable and reasonably estimable. These amounts are recorded based on the Company’s assessments of the likelihood of their eventual disposition. The amounts of these liabilities could increase or decrease in the near term, based on revisions to estimates relating to the various claims.

The Company believes that it will have no financial exposure for claims arising out of the events of September 11, 2001 in light of the provisions of the Air Transportation Safety and System Stabilization Act of 2001 limiting claimants’ recoveries to insurance proceeds, the resolution of the majority of the wrongful death and personal injury cases by settlement and the withdrawal of all related proofs of claim from UAL Corporation’s Chapter 11 bankruptcy protection.

Trans-Atlantic Joint Venture. Under the revenue-sharing joint venture agreement covering trans-Atlantic routes, payments among participants are based on a formula that compares current period unit revenue performance on trans-Atlantic routes to a historic period or “baseline,” which is reset annually. The payments are calculated on a quarterly basis and are subject to a cap. UAL recorded a decrease in passenger revenue of $44 million related to its estimated revenue sharing obligations through the six months ended June 30, 2011.

Contingent Senior Unsecured Notes. UAL would be obligated under an indenture to issue to the Pension Benefit Guaranty Corporation (“PBGC”) up to $500 million aggregate principal amount of 8% Contingent Senior Notes (the “8% Notes”) in up to eight equal tranches of $62.5 million if certain financial triggering events occur (with each tranche issued no later than 45 days following the end of any applicable fiscal year). A triggering event occurs when UAL’s EBITDAR, as defined in the 8% Notes indenture, exceeds $3.5 billion over the prior 12 months ending June 30 or December 31 of any applicable fiscal year. The twelve month measurement periods began with the fiscal year ended December 31, 2009 and will end with the fiscal year ending December 31, 2017. As of June 30, 2011, a triggering event under the 8% Notes indenture occurred and, as a result, UAL is obligated to issue one tranche of $62.5 million of the 8% Notes no later than February 14, 2012. This tranche will mature June 30, 2026, with interest accruing from the triggering event measurement date at a rate of 8% per annum that is payable in cash in semi-annual installments starting June 30, 2012. The tranche of 8% Notes will be callable, at UAL’s option, at any time at par, plus accrued and unpaid interest. UAL recorded a liability for the fair value of the $62.5 million tranche in the second quarter of 2011, which totaled $49 million. This $49 million charge is being classified as an integration cost as the financial results of UAL, excluding Continental’s results, would not have resulted in a triggering event under the indenture (see Note 10). The amount recorded is net of a discount applied to the future principal and interest payments using market interest rates for similar structured notes. This is the first such occurrence of UAL’s obligation to issue a tranche of 8% Notes.

Commitments. The table below summarizes the Company’s commitments as of June 30, 2011, which primarily relate to the acquisition of aircraft and related spare engines, aircraft improvements and include other commitments primarily to acquire information technology services and assets (in millions):

	UAL		United		Continental Successor
Last Six Months of 2011	$	517	$	178	$	339
2012		1,451		145		1,306
2013		925		59		866
2014		1,089		96		993
2015		1,533		377		1,156
After 2015		7,503		6,837		666
	$	13,018	$	7,692	$	5,326

United Aircraft Commitments. As of June 30, 2011, United had firm commitments to purchase 25 Boeing 787 aircraft and 25 Airbus A350XWB aircraft for delivery from 2016 through 2019. United also has purchase options for 42 Airbus A319 and A320 aircraft and purchase rights for 50 Boeing 787 aircraft and 50 Airbus A350XWB aircraft.

United has secured considerable backstop financing commitments from its aircraft and engine manufacturers, subject to certain customary conditions. However, there is no guarantee that United will be able to obtain any or all of the backstop financing, or any other financing, for the aircraft and engines on acceptable terms when necessary or at all.

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Continental Aircraft Commitments. As of June 30, 2011, Continental had firm commitments to purchase 83 new aircraft (58 Boeing 737 aircraft and 25 Boeing 787 aircraft) scheduled for delivery from August 2011 through 2016. Continental took delivery of three Boeing 737 aircraft in the first six months of 2011 and is currently scheduled to take delivery of one additional Boeing 737 aircraft in the remainder of 2011. Continental also has options to purchase 89 additional Boeing aircraft.

Continental has a financing commitment for the Boeing 737 aircraft scheduled for delivery in August 2011 but does not have backstop financing or any other financing currently in place for the other Boeing aircraft on order. Further financing will be necessary to satisfy Continental’s capital commitments for its firm order aircraft and other related capital expenditures. Continental can provide no assurance that backstop financing or any other financing not already in place for aircraft deliveries will be available to Continental on acceptable terms when necessary or at all.

Credit Card Processing Agreements. United and Continental have agreements with financial institutions that process customer credit card transactions for the sale of air travel and other services. Under certain of United’s and Continental’s credit card processing agreements, the financial institutions either require, or under certain circumstances have the right to require, that United and Continental maintain a reserve equal to a portion of advance ticket sales that have been processed by that financial institution, but for which United and Continental have not yet provided the air transportation (referred to as “relevant advance ticket sales”).

Under United’s and Continental’s new combined credit card processing agreement with JPMorgan Chase Bank, N.A. (“JPMorgan Chase”) and Paymentech, LLC, United and Continental are required to provide a cash reserve, determined based on the amount of unrestricted cash, cash equivalents and short-term investments (“unrestricted cash balance”) held by United and Continental. If United’s and Continental’s unrestricted cash balance is at or more than $3.5 billion as of any calendar month-end measurement date, the required cash reserve will be $25 million. However, if United’s and Continental’s unrestricted cash balance is less than $3.5 billion, their required reserve will increase to a percentage of relevant advance ticket sales as summarized in the following table:

Total Unrestricted Cash Balance of United and Continental	Required% of Relevant  Advance Ticket Sales (a)
Less than $3.5 billion		25	%
Less than $3.0 billion		50	%

(a) Represents percentage of advance ticket sales generated by bankcard transactions. As of June 30, 2011, approximately 50% of the combined company’s advance ticket sales is generated from bankcard transactions.

Based on United’s and Continental’s June 30, 2011 unrestricted cash balance, United and Continental were not required to provide cash collateral above the $25 million reserve balance. If the Company is required to post additional cash collateral under the new combined JPMorgan Chase credit card processing agreement as a result of an increase in the required reserve amount, Continental will be required to post additional collateral under its credit card processing agreement with American Express that could be significant.

An increase in the future reserve requirements and the posting of a significant amount of cash collateral as provided by the terms of any of the Company’s material credit card processing agreements could materially reduce the Company’s liquidity. See Note 17 of the 2010 Annual Report for additional information on the Company’s other credit card processing agreements.

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Guarantees and Off-Balance Sheet Financing. In the Company’s financing transactions that include loans, the Company typically agrees to reimburse lenders for any reduced returns with respect to the loans due to any change in capital requirements and, in the case of loans in which the interest rate is based on the London Interbank Offered Rate (“LIBOR”), for certain other increased costs that the lenders incur in carrying these loans as a result of any change in law, subject in most cases to certain mitigation obligations of the lenders. The following table contains information related to the Company’s outstanding debt at June 30, 2011 (in millions):

	UAL		United		Continental
Floating rate debt (a)	$	3,182	$	2,250	$	932
Fixed rate debt (a)		444		213		231
Carrying value of loans/leases from non-U.S. entities (b)		3,499		2,461		1,038

(a) Remaining terms of up to nine years, subject to these increased cost provisions.

(b) Remaining terms of up to 9 years; the Company bears 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 customary exclusions.

United has guaranteed interest and principal payments on $270 million of the Denver International Airport bonds, which are due in 2032 unless United elects not to extend its equipment and ground lease, in which case the bonds are due in 2023. The bonds were issued in two tranches - approximately $170 million aggregate principal amount of 5.25% discount bonds and $100 million aggregate principal amount of 5.75% premium bonds. The related lease obligation is accounted for as an operating lease with the associated expense recorded on a straight-line basis resulting in ratable accrual of the final $270 million lease obligation over the expected lease term through 2032.

Continental is contingently liable for US Airways’ obligations under a lease agreement between US Airways and the Port Authority of New York and New Jersey related to the East End Terminal at LaGuardia Airport. These obligations include the payment of ground rentals to the Port Authority and the payment of other rentals in respect of the full amounts owed on special facilities revenue bonds issued by the Port Authority having an outstanding par amount of $95 million at June 30, 2011, and a final scheduled maturity in 2015. If US Airways defaults on these obligations, Continental would be obligated to cure the default and would have the right to occupy the terminal after US Airways’ interest in the lease had been terminated.

Continental is the lessee of real property under long-term leases at a number of airports where it is also the guarantor of approximately $1.7 billion of underlying debt and interest thereon. These leases are typically with municipalities or other governmental entities, which are excluded from the consolidation requirements concerning variable interest entities. To the extent Continental’s lease and related guarantee are with a separate legal entity other than a governmental entity, Continental is not the primary beneficiary because the lease terms are consistent with market terms at the inception of the lease and the lease does not include a residual value guarantee, fixed-price purchase option or similar feature. The leasing arrangements associated with approximately $1.5 billion of these obligations are accounted for as operating leases, and the leasing arrangements associated with approximately $190 million of these obligations are accounted for as capital leases.

Credit Facilities. United has a $255 million revolving loan commitment, which matures on February 1, 2012, available under its Amended and Restated Revolving Credit, Term Loan and Guaranty Agreement, dated as of February 2, 2007 (the “Amended Credit Facility”). United used $226 million and $253 million of the commitment capacity for letters of credit at June 30, 2011 and December 31, 2010, respectively. Unless this revolving loan commitment is amended or replaced, these letters of credit will be required to be backed with cash collateral by the fourth quarter of 2011. Through a separate arrangement, United has an additional $150 million available under an unused credit facility that expires in the fourth quarter of 2011.

Labor Negotiations. As of June 30, 2011, UAL and its subsidiaries had approximately 83,000 active employees, of whom approximately 74% were represented by various U.S. labor organizations. United and Continental had approximately 82% and 63%, respectively, of their active employees represented by various U.S. labor organizations. United has been in negotiations for amended collective bargaining agreements with all of its unions since 2009. Consistent with commitments contained in its current labor contracts, United has filed for mediation assistance in conjunction with four of its six unions - the Air Line Pilots Association (“ALPA”), the Association of Flight Attendants - Communication Workers of America (“AFA”), the International Association of Machinists (“IAM”) and the Aerospace Workers and the Professional Airline Flight Control Association. The only collective bargaining agreement at Continental that is amendable is with the pilot group.

After the Company’s May 2010 merger announcement, ALPA opted to suspend negotiations at both United and Continental to focus on joint negotiations for a new collective bargaining agreement that would apply to the combined company. United and Continental reached agreement with ALPA on a Transition and Process Agreement that provides a framework for conducting pilot operations for the two employee groups until the parties reach agreement on a joint collective bargaining agreement and the carriers obtain a single operating certificate. In August 2010, United and Continental began joint negotiations with ALPA and those negotiations are presently ongoing. In December 2010, ALPA and the Company jointly applied to the National Mediation Board (the “NMB”) for mediation assistance for the joint pilot and flight instructor negotiations.

In June 2011, United’s maintenance technicians and related employees represented by the International Brotherhood of Teamsters (the “Teamsters”) voted against a tentative agreement on a proposed collective bargaining agreement. The Company has since filed with the NMB to proceed with mediated negotiations for a joint collective bargaining agreement for all Teamsters-represented mechanic and related employees. The joint agreement would cover approximately 8,650 active mechanic and related employees located throughout the United States.

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Certain unions have filed applications seeking single carrier findings by the NMB for purposes of union representation. When the NMB determines that United and Continental are considered a single carrier, the NMB may order an election if there is a difference in union representation between the employee groups. Until the union representation issues are resolved, the incumbent unions will continue to represent those employee groups they currently represent. In December 2010, ALPA filed for a single carrier finding with the NMB although there is no dispute as to which union represents the pilot groups. There has been no decision on this filing to date. In January 2011, the IAM filed two separate applications seeking single carrier findings by the NMB for fleet service and stores/stock clerk employees. On April 28, 2011, the NMB issued its determination that a single carrier existed for fleet service employees at United and Continental, and on June 13, 2011, the NMB authorized an election for fleet service employees to elect a common representative. This election began on July 7, 2011 and will end on August 11, 2011. On July 2, 2011, the NMB extended the certification of the IAM to stores/stock clerk employees for the combined company due to the larger number of IAM-represented employees at United as compared to Continental.

In January 2011, the AFA filed a single carrier request with the NMB for United and Continental flight attendants. In April 2011, the NMB ruled that United and Continental are now operating as a single carrier for union representation of flight attendants which permitted the NMB to begin the union representation election process for that group. An election was held for the flight attendants and, on June 30, 2011, the NMB certified the AFA as the representative of flight attendants at the combined company. On July 2, 2011, the International Federation of Professional and Technical Engineers filed for a single carrier finding for purposes of union representation among the engineers and related employees at the combined company.

The outcome of labor negotiations may materially impact the Company’s future financial results. However, it is too early in the process to assess the timing or magnitude of the impact, if any.

IAH Terminal B Redevelopment Project. In May 2011, UAL, in partnership with the Houston Airport System, announced that it is expected to begin construction of the first phase of a $1 billion terminal improvement project for Terminal B at Bush Intercontinental Airport (“IAH”) by the end of 2011. UAL’s initial commitment is to construct the first phase of the currently anticipated three-phase project that will create a new Terminal B south concourse dedicated to domestic regional jet operations. UAL’s cost of construction of phase one of the project is currently estimated to be approximately $100 million and is expected to be funded by special facilities bonds issued by the City of Houston, which bonds would be guaranteed by UAL and/or one of its subsidiaries and would be payable from the rentals paid by UAL or one of its subsidiaries under a special facilities lease agreement with the City of Houston, or cash. Construction of the remaining phases of the project will be based on demand over the next 7 to 10 years, with phase one currently expected to be completed in late 2013.

Based on a qualitative assessment of the IAH Terminal B Redevelopment Project, given the expectation that UAL and/or one of its subsidiaries would guarantee the special facilities bonds, and the requirement that UAL or one of its subsidiaries fund cost overruns with no stated limits would result in the Company paying more than 90% of the total project costs at a given time, UAL or one of its subsidiaries will be considered the owner of the property during the construction period. Because, for accounting purposes, UAL or one of its subsidiaries would also be considered the owner of the construction project upon its completion, the construction project will be treated as a financing transaction such that the property and related financing will remain on UAL’s consolidated balance sheet.

NOTE 9 - DEBT AND ADVANCED PURCHASE OF MILES

As of June 30, 2011, a substantial portion of our assets are pledged as collateral for our debt. These assets principally consist of aircraft and the related spare parts and engines, route authorities and, in the case of United, loyalty program intangible assets. As of June 30, 2011, UAL, United and Continental were in compliance with their respective debt covenants.

5% Convertible Notes. In the first quarter of 2011, UAL repurchased all of its $150 million face value 5% Senior Convertible Notes due in 2021 with cash after substantially all of the notes were put to UAL by the noteholders.

4.5% Senior Limited-Subordinated Convertible Notes. In the second quarter of 2011, UAL repurchased at par value approximately $570 million of the $726 million outstanding principal amount of its 4.5% Senior Limited-Subordination Convertible Notes due 2021 with cash after the notes were put to UAL by the noteholders. The remaining $156 million outstanding principal amount of the notes was reclassified from current maturities of long-term debt to long-term debt at June 30, 2011.

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Contingent Senior Unsecured Notes PBGC. As of June 30, 2011, UAL is obligated under the 8% Notes indenture to issue to the PBGC $62.5 million aggregate principal amount of 8% Notes no later than February 14, 2012. UAL recorded a liability for the fair value of the non-cash obligation of approximately $49 million in its condensed consolidated balance sheet at June 30, 2011. See Note 8 of this report for additional information on the 8% Notes.

Chase Co-Brand Agreement. United and Continental each had significant contracts to sell frequent flyer miles to Chase through their separate co-branded agreements. As a result of the contract modification of these co-brand agreements, Continental’s pre-purchased credit and debit card miles liabilities that had been accounted for as long-term debt were reclassified to advanced purchase of miles as the terms related to the miles have been changed such that the pre-purchased miles no longer meet the definition of debt. As a result, Continental’s long-term debt decreased $210 million, advanced purchase of miles increased $270 million and other assets increased $60 million.

In July 2011, UAL sold an additional $165 million of pre-purchased miles to Chase and Continental rolled the remaining balance of the pre-paid miles under its previously existing co-branded agreement into the Co-Brand Agreement when it terminated its debit card co-brand agreement with Chase. UAL has the right, but is not required, to repurchase the pre-purchased miles from Chase during the term of the agreement. The Co-Brand Agreement contains termination penalties that may require United and Continental to make certain payments and repurchase outstanding pre-purchased miles in cases such as the Company’s insolvency, bankruptcy, false representations or other material breaches. The Company will record these amounts as advanced purchase of miles in the non-current liabilities section of the Company’s condensed consolidated balance sheets.

The obligations of the UAL, United, Continental and Mileage Plus Holdings, LLC to Chase under the Co-Brand Agreement are joint and several. Certain of United’s obligations under the Co-Brand Agreement in an amount not more than $850 million are secured by a junior lien in all collateral pledged by United under its Amended Credit Facility. All of Continental’s obligations under the Co-Brand Agreement are secured by a junior lien in all collateral pledged by Continental to secure its 6.750% Senior Secured Notes due 2015. United also provides a first priority lien to Chase on its MileagePlus assets to secure certain of its obligations under the Co-Brand Agreement and its obligations under the new combined credit card processing agreement among Continental, United, Paymentech, LLC and JPMorgan Chase. After Continental’s OnePass Program is terminated on December 31, 2011, certain of the OnePass Program assets will be added as collateral to such MileagePlus assets. See Note 1 of this report for additional information related to the Co-Brand Agreement.

NOTE 10 - SPECIAL ITEMS

Special Revenue Item. As discussed in Note 1, during the second quarter of 2011, the Company modified the previously existing United and Continental co-branded credit card agreements with Chase as a result of the merger. This modification resulted in the following one-time adjustment to decrease frequent flyer deferred revenue and increase special revenue in accordance with ASU 2009-13 for the three and six months ended June 30, 2011 as follows (in millions):

	UAL		United		Continental
Special revenue item	$	107	$	88	$	19

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Special Charges. For the three and six months ended June 30, special charges consisted of the following (in millions):

	Three Months Ended June 30,						Six Months Ended June 30,
2011	UAL		United		Continental Successor		UAL			United		Continental Successor
Integration-related costs	$	145	$	90	$	55	$	224		$	164	$	60
Aircraft-related charges (gains), net		1		—		1		(1	)		—		(1	)
Total	$	146	$	90	$	56	$	223		$	164	$	59
2010	UAL		United		Continental Predecessor		UAL			United		Continental Predecessor
Aircraft-related charges, net	$	73	$	73	$	—	$	90		$	90	$	6
Merger-related costs		28		28		18		28			28		18
Other		5		5		6		6			6		10
Total	$	106	$	106	$	24	$	124		$	124	$	34

Integration-related costs include costs to terminate certain service contracts that will not be used by the Company, costs to write-off system assets that are no longer used or planned to be used by the Company, payments to third-party consultants to assist with integration planning and organization design, severance related costs primarily associated with administrative headcount reductions, relocation and training, and compensation costs related to the systems integration. In addition, as of June 30, 2011, UAL is obligated under the 8% Notes indenture to issue to the PBGC $62.5 million aggregate principal amount of 8% Notes no later than February 14, 2012. UAL recorded a liability for the fair value of the obligation of approximately $49 million as described above in Notes 8 and 9. This is being classified as an integration-related cost as the financial results of UAL, excluding Continental’s results, would not have resulted in a triggering event under the 8% Notes indenture. Other special charges include gains and losses on the disposal of aircraft and related spare parts.

During the three and six months ended June 30, 2010, the charges related to UAL and United in the table above primarily related to asset impairment charges incurred as a result of a decrease in the value of certain aircraft-related assets. During the three and six months ended June 30, 2010, Continental Predecessor’s charges presented in the table above primarily consisted of aircraft-related charges related to grounded Boeing 737-300 aircraft, which is net of gains on the sale of two Boeing 737-500 aircraft. Merger-related costs related to third-party costs incurred for legal, finance, advisory, accounting and consultant fees and communication costs.

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Accrual Activity

Activity related to the accruals for severance and medical costs and future lease payments on permanently grounded aircraft is as follows (in millions):

2011 Activity	Severance /  Medical Costs			Permanently Grounded Aircraft
UAL
Balance at December 31, 2010	$	102		$	41
Increase (decrease) in accrual		(4	)		1
Payments		(28	)		(8	)
Balance at June 30, 2011	$	70		$	34
United
Balance at December 31, 2010	$	42		$	41
Increase in accrual		15			1
Payments		(17	)		(8	)
Balance at June 30, 2011	$	40		$	34
Continental - Successor
Balance at December 31, 2010	$	60
Decrease in accrual		(19	)
Payments		(11	)
Balance at June 30, 2011	$	30

The severance-related accrual as of June 30, 2011, which primarily relates to the integration of United and Continental, is expected to be paid through 2012. Lease payments for grounded aircraft are expected to be paid through 2013.

2010 Activity	Severance/ Medical Costs			Permanently Grounded Aircraft
UAL
Balance at December 31, 2009	$	45		$	83
Payments		(22	)		(24	)
Balance at June 30, 2010	$	23		$	59
United
Balance at December 31, 2009	$	45		$	83
Payments		(22	)		(24	)
Balance at June 30, 2010	$	23		$	59
Continental - Predecessor
Balance at December 31, 2009	$	14
Increase in accrual		2
Payments		(10	)
Balance at June 30, 2010	$	6

NOTE 11 - SUBSEQUENT EVENTS

In July 2011, UAL repaid and extinguished at par value $106 million principal amount outstanding of equipment notes due July 2012 and floating rate debt due December 2011 secured by a total of 21 aircraft.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Overview

United Continental Holdings, Inc. (together with its consolidated subsidiaries, “UAL”) is a holding company and its principal, wholly-owned subsidiaries are United Air Lines, Inc. (together with its consolidated subsidiaries, “United”) and, effective October 1, 2010, Continental Airlines, Inc. (together with its consolidated subsidiaries, “Continental”). We sometimes use the words “we,” “our,” “us,” and the “Company” in this Form 10-Q for disclosures that relate to all of UAL, United and Continental.

This Quarterly Report on Form 10-Q is a combined report of UAL, United, and Continental including their respective consolidated financial statements. As UAL consolidates United and Continental for financial statement purposes, disclosures that relate to United activities also apply to UAL and, effective October 1, 2010, disclosures that relate to Continental Successor activities also apply to UAL, unless otherwise noted. When appropriate, UAL, United and Continental are named specifically for their related activities and disclosures.

United and Continental transport people and cargo through their mainline operations, which utilize full-sized jet aircraft, and regional operations, which utilize smaller aircraft that are operated under contract by United Express, Continental Express and Continental Connection carriers. United and Continental together serve virtually every major market around the world, either directly or through participation in the Star Alliance^®, the world’s largest airline network. Based on annual flight schedules as of July 1, 2011, the Company offers approximately 5,700 daily departures to 375 destinations through its United and Continental subsidiaries and their regional affiliates.

Second Quarter Financial Highlights

• UAL’s second quarter 2011 net income was $577 million, or $1.49 diluted earnings per share, excluding $39 million of net special items. On a GAAP basis, UAL’s second quarter 2011 net income was $538 million, or $1.39 diluted loss per share.

• UAL’s passenger revenue increased 6.6% during the second quarter of 2011 as compared to the second quarter of 2010, excluding the impact of Continental’s operations following the close of the merger.

• Offsetting the improvement in revenue was a 23.4% year-over-year increase in UAL’s second quarter 2011 fuel cost, excluding the impact of the merger. This increase was primarily due to a 24.2% increase in the price of fuel.

• UAL’s operating income was $808 million during the second quarter of 2011, resulting in an operating margin of 8.2%.

• UAL’s unrestricted cash, cash equivalents and short-term investments totaled $8.6 billion at June 30, 2011.

• UAL made scheduled debt and net capital lease payments of $1.0 billion, including $570 million of the $726 million UAL 4.5% Senior Limited-Subordination Convertible Notes due 2021.

• Profit sharing and related payroll tax expense accruals through the six months ended June 30, 2011 amounted to $90 million.

Second Quarter Operational Highlights

• UAL’s consolidated traffic and capacity decreased 1.0% and 0.8%, respectively, during the second quarter of 2011 as compared to the second quarter of 2010.

• For the quarter ended June 30, 2011, United and Continental recorded a U.S. Department of Transportation on-time arrival rate of 77.8% and 74.2%, respectively, and a completion factor of 98.6% and 99.7%, respectively.

Outlook

Due to significant increases in fuel prices, UAL plans to reduce consolidated capacity from its previous 2011 projections by reducing flight frequencies, indefinitely postponing the start of flights to certain markets and exiting less profitable routes. As compared to 2010 pro-forma capacity, UAL expects its full-year 2011 consolidated capacity to be roughly flat year-over-year, its full-year 2011 international capacity to be up 2% to 3% and full-year 2011 domestic capacity to be down 2% to 3% year-over-year. UAL is also analyzing the removal of certain less fuel-efficient aircraft from its fleet and will be taking other cost-saving measures.

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Integration

While United and Continental continued to operate as two separate airlines, the Company made progress toward integrating products, services and policies during the quarter. United’s and Continental’s check-in and ticket counter facilities are now co-located at 46 airports, and nearly half of the total fleet, or 601 aircraft, including the first Boeing 747-400, are now repainted in the new United livery. During the quarter, the Company announced that MileagePlus will be the loyalty program for the combined company beginning in 2012. Moving to a single loyalty program will be a significant milestone in the integration of the two airlines.

RESULTS OF OPERATIONS

The following discussion provides an analysis of UAL’s results of operations and reasons for material changes therein for the three and six months ended June 30, 2011 as compared to the corresponding period in 2010.

To provide a more meaningful comparison of UAL’s 2011 financial performance to 2010, we have quantified the increases relating to our operating results that are due to the inclusion of Continental’s operations after the merger date. The increases due to the merger, presented in the tables below, represent actual Continental results for the second quarter and first six months of 2011, net of eliminations. Intercompany transactions were immaterial.

Second Quarter 2011 Compared to Second Quarter 2010

UAL recorded net income of $538 million in the second quarter of 2011 as compared to net income of $273 million in the second quarter of 2010. Excluding special items, UAL had net income of $577 million in the second quarter of 2011 as compared to net income of $430 million in the second quarter of 2010. See “Reconciliation of GAAP to non-GAAP Financial Measures” at the end of this item for additional information related to non-GAAP financial measures. We consider a key measure of our performance to be operating income, which was $808 million for the second quarter of 2011, as compared to $441 million for the second quarter of 2010. Significant components of our operating results for the three months ended June 30 are as follows (in millions, except percentage changes):

	2011			2010			$ Change			$ Increase Due to Merger			Increase (Decrease) Excluding Merger Impact			% Change Excluding Merger Impact
Operating Revenue	$	9,809		$	5,161		$	4,648		$	4,284		$	364			7.1
Operating Expenses		9,001			4,720			4,281			3,910			371			7.9
Operating Income		808			441			367			374			(7	)		(1.6	)
Nonoperating Expense		(266	)		(170	)		(96	)		(110	)		14			(8.2	)
Income Tax Expense (Benefit)		4			(2	)		6			2			4			NM
Net Income	$	538		$	273		$	265		$	262		$	3			1.1

NM - Not meaningful

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Certain consolidated statistical information for UAL’s operations for the three months ended June 30 is as follows:

	2011 (a)			2010			Change			Increase due to Merger			Change Excluding Merger Impact			% Change Excluding Merger Impact
Passengers (thousands) (b)		37,000			21,324			15,676			16,835			(1,159	)		(5.4	)
Revenue passenger miles (“RPMs”) (millions) (c)		54,245			30,646			23,599			23,901			(302	)		(1.0	)
Available seat miles (“ASMs”) (millions) (d)		65,006			36,365			28,641			28,944			(303	)		(0.8	)
Passenger load factor (e)		84.1	%		84.3	%		(0.2	) pts.		(a	)		(a	)		N/A
Passenger revenue per available seat mile (“PRASM”) (cents)		13.29			12.36			0.93			(a	)		(a	)		7.5
Average yield per revenue passenger mile (cents) (f)		15.79			14.66			1.13			(a	)		(a	)		7.7
Cost per available seat mile (“CASM”) (cents)		14.23			12.98			1.25			(a	)		(a	)		9.6
Average price per gallon of fuel, including fuel taxes	$	3.03		$	2.44		$	0.59			(a	)		(a	)		24.2
Fuel gallons consumed (millions)		1,043			610			433			439			(6	)		(1.0	)
Average full-time equivalent employees		81,100			42,700			38,400			38,600			(200	)		(0.5	)

(a) The per unit measures in the 2011 period represent United only measures to provide a better comparison to 2010 due to the impact of the merger.

(b) The number of revenue passengers measured by each flight segment flown.

(c) The number of scheduled miles flown by revenue passengers.

(d) The number of seats available for passengers multiplied by the number of scheduled miles those seats are flown.

(e) Revenue passenger miles divided by available seat miles.

(f) The average passenger revenue received for each revenue passenger mile flown.

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Operating Revenue

The table below shows year-over-year comparisons by type of operating revenues for the three months ended June 30 (in millions, except for percentage changes):

	2011		2010		$ Change		$ Increase due to Merger		$ Change Excluding Merger Impact			% Change Excluding Merger Impact
Passenger—Mainline	$	6,864	$	3,532	$	3,332	$	3,118	$	214			6.1
Passenger—Regional		1,742		962		780		696		84			8.7
Total passenger revenue		8,606		4,494		4,112		3,814		298			6.6
Cargo		316		190		126		126		—			—
Special revenue item		107		—		107		19		88			100.0
Other operating revenue		780		477		303		325		(22	)		(4.6	)
	$	9,809	$	5,161	$	4,648	$	4,284	$	364			7.1

The table below presents selected passenger revenues and operating data, excluding merger impacts, broken out by geographic region, expressed as second quarter year-over-year changes:

	Domestic			Pacific			Atlantic			Latin			Total Mainline			Regional			Consolidated
Increase (decrease) from 2010:
Passenger revenue (in millions)	$	46		$	31		$	79		$	58		$	214		$	84		$	298
Passenger revenue		2.4	%		4.0	%		10.7	%		49.9	%		6.0	%		8.8	%		6.6	%
Average fare per passenger		12.1	%		8.8	%		6.0	%		(3.6	)%		12.8	%		13.8	%		12.8	%
Yield (a)		7.8	%		5.9	%		7.0	%		4.8	%		7.5	%		7.5	%		7.7	%
PRASM		9.4	%		4.7	%		5.8	%		(0.3	)%		7.3	%		7.5	%		7.5	%
Average length of aircraft flight (miles)		6.3	%		0.7	%		(16.7	)%		2.0	%		(4.7	)%		6.6	%		(4.2	)%
Passengers		(8.6	)%		(4.5	)%		4.4	%		55.5	%		(6.0	)%		(4.4	)%		(5.4	)%
RPMs		(5.0	)%		(1.8	)%		3.5	%		43.1	%		(1.3	)%		1.1	%		(1.0	)%
ASMs		(6.4	)%		(0.7	)%		4.6	%		50.4	%		(1.2	)%		1.2	%		(0.8	)%
Passenger load factor (points)		1.2			(0.9	)		(0.9	)		(3.8	)		(0.1	)		(0.1	)		(0.1	)

(a) Yield is a measure of the average price paid per passenger mile, which is calculated by dividing passenger revenue by RPMs.

Excluding the impact of the merger, consolidated passenger revenue in the second quarter of 2011 increased approximately $298 million as compared to the year-ago period primarily due to improved pricing as consolidated average fare per passenger and yield increased by 12.8% and 7.7%, respectively. The increase in pricing was due to strengthening economic conditions and capacity discipline. Higher volumes of both business travelers and international premium cabin passengers drove improvements in both average fare per passenger and yield. The average fare per passenger also increased in the 2011 period, as compared to the 2010 period, due to a number of fare increases implemented in response to higher fuel prices.

Effective January 1, 2011, UAL adopted the provisions of ASU 2009-13, which increased UAL passenger revenue associated with passenger ticket sales that include the issuance of frequent flyer mileage credits by approximately $106 million in the second quarter of 2011 as compared to the year-ago period, consisting of $66 million and $40 million for United and Continental, respectively, as compared to passenger revenue that would have been recorded under the historical method of accounting. During the second quarter of 2011, UAL modified the previously existing United and Continental co-branded credit card agreements with Chase as a result of the merger. This contract modification resulted in a one-time adjustment of $107 million, consisting of $88 million and $19 million for United and Continental, respectively, to decrease the deferred revenue balance and increase special revenue in accordance with ASU 2009-13. See Note 1 to the financial statements included in Part I, Item 1 of this report for additional information related to this accounting pronouncement.

Due to the decline in demand for travel to Japan following the March 11, 2011 earthquake and tsunami, UAL’s second quarter consolidated passenger revenue was impacted by approximately $100 million.

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Excluding the impact of the merger, other operating revenue in the second quarter of 2011 decreased approximately $22 million, or 5%, due to a decline in the number of passengers from which bag fees were being collected.

Operating Expenses

The table below includes data related to UAL’s operating expenses for the three months ended June 30 (in millions, except for percentage changes):

	2011		2010		$ Change		$ Increase due to Merger		$ Change Excluding Merger Impact			% Change Excluding Merger Impact
Aircraft fuel	$	3,227	$	1,486	$	1,741	$	1,394	$	347			23.4
Salaries and related costs		1,916		1,061		855		864		(9	)		(0.8	)
Regional capacity purchase		615		405		210		214		(4	)		(1.0	)
Landing fees and other rent		502		271		231		228		3			1.1
Aircraft maintenance materials and outside repairs		444		245		199		154		45			18.4
Depreciation and amortization		385		223		162		156		6			2.7
Distribution expenses		375		198		177		177		—			—
Aircraft rent		252		81		171		173		(2	)		(2.5	)
Special charges		146		106		40		56		(16	)		NM
Other operating expenses		1,139		644		495		494		1			0.2
	$	9,001	$	4,720	$	4,281	$	3,910	$	371			7.9

Excluding the impact of the merger, aircraft fuel expense increased $347 million, or 23%, year-over-year due to a 44% increase in fuel prices, which was partially offset by a year-over-year increase in fuel hedge gains. As of June 30, 2011, UAL, including United and Continental, had $101 million in unrealized fuel hedge gains recorded as a component of AOCI. Such gains will be recognized in earnings within the next twelve months if the gains are not reversed through changes in market prices prior to expiration of the contracts. The table below presents the significant changes in aircraft fuel cost per gallon in the three month period ended June 30, 2011 as compared to the year-ago period, excluding merger impacts. See Note 6 to the financial statements in Part I, Item 1 of this report for additional details regarding fuel hedge gains.

	(In millions)								Average price per gallon
	2011			2010		% Change			2011			2010		% Change
Fuel purchase cost	$	2,046		$	1,435		42.6		$	3.39		$	2.35		44.3
Fuel hedge (gains) losses		(213	)		51		NM			(0.36	)		0.09		NM
Total aircraft fuel expense	$	1,833		$	1,486		23.4		$	3.03		$	2.44		24.2
Total fuel consumption (gallons)		604			610		(1.0	)

Excluding the impact of the merger, aircraft maintenance materials and outside repairs increased $45 million, or 18%, in the second quarter of 2011 as compared to the year-ago period primarily due to increased rates on aircraft maintenance and the timing of airframe routine maintenance work.

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Details of UAL’s special charges include the following for the three months ended June 30 (in millions):

	2011		2010
Aircraft-related charges, net	$	1	$	73
Merger-related costs		—		28
Integration-related costs		145		—
Other		—		5
Total special charges	$	146	$	106

In the second quarter of 2011, UAL’s special charges of $146 million primarily relate to the integration of United’s and Continental’s operations, as further described in Note 10 to the financial statements included in Part I, Item 1 of this report. In the second quarter of 2010, UAL recorded asset impairments of $73 million which primarily relate to the decrease in value of aircraft-related assets and $28 million of merger-related costs.

Nonoperating Income (Expense). The following table illustrates the year-over-year dollar and percentage changes in UAL’s nonoperating income (expense) for the three months ended June 30 (in millions, except for percentage changes):

							Favorable/(Unfavorable)
	2011			2010			$ Change			$ Merger Impact			$ Change Excluding Merger Impact			% Change Excluding Merger Impact
Interest expense	$	(250	)	$	(178	)	$	(72	)	$	(88	)	$	16			9.0
Interest income		5			2			3			2			1			50.0
Interest capitalized		8			3			5			4			1			33.3
Miscellaneous, net		(29	)		3			(32	)		(28	)		(4	)		NM
Total	$	(266	)	$	(170	)	$	(96	)	$	(110	)	$	14			(8.2	)

Excluding the impact of the merger, interest expense decreased $16 million in the second quarter of 2011, or 9%, compared to the year-ago period primarily due to a decrease in debt outstanding during the second quarter of 2011 as compared to debt outstanding during the year-ago period.

During the second quarter of 2011, miscellaneous, net included fuel hedge ineffectiveness of $34 million primarily resulting from a decrease in fuel hedge values in excess of the decrease in aircraft fuel prices during the quarter, which is concentrated in the fuel hedges entered into by Continental as a result of the re-designation of Continental’s fuel hedge portfolio under cash flow hedge accounting as of April 1, 2011 when the portfolio was fully integrated with United’s fuel hedge portfolio.

Income Taxes. Our effective tax rates differ from the federal statutory rate of 35% primarily due to the following: changes in the valuation allowance, expenses that are not deductible for federal income tax purposes, and foreign and state income taxes. We are required to provide a valuation allowance for our deferred tax assets in excess of deferred tax liabilities because management has concluded that it is more likely than not that such deferred tax assets will ultimately not be realized.

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First Six Months 2011 Compared to First Six Months 2010

UAL recorded net income of $325 million in the first six months of 2011 as compared to net income of $191 million in the first six months of 2010. Excluding special items, UAL had net income of $441 million in the first six months of 2011 as compared to net income of $338 million in the first six months of 2010. See “Reconciliation of GAAP to non-GAAP Financial Measures” at the end of this item for additional information related to non-GAAP financial measures. We consider a key measure of our performance to be operating income, which was $842 million for the first six months of 2011, as compared to $517 million for the first six months of 2010. Significant components of our operating results for the six months ended June 30 are as follows (in millions, except percentage changes):

	2011			2010			$ Change			$ Increase Due to Merger			Increase (Decrease) Excluding Merger Impact			%  Change Excluding Merger Impact
Operating Revenue	$	18,011		$	9,402		$	8,609		$	7,842		$	767			8.2
Operating Expenses		17,169			8,885			8,284			7,439			845			9.5
Operating Income		842			517			325			403			(78	)		(15.1	)
Nonoperating Expense		(511	)		(327	)		(184	)		(194	)		10			(3.1	)
Income Tax Expense (Benefit)		6			(1	)		7			4			3			NM
Net Income (Loss)	$	325		$	191		$	134		$	205		$	(71	)		(37.2	)

NM - Not meaningful

Certain consolidated statistical information for UAL’s operations for the six months ended June 30 is as follows:

	2011 (a)			2010			Change			Increase due to Merger			Change Excluding Merger Impact			% Change Excluding Merger Impact
Passengers (thousands) (b)		69,589			40,142			29,447			31,330			(1,883	)		(4.7	)
Revenue passenger miles (“RPMs”) (millions) (c)		101,209			57,126			44,083			44,563			(480	)		(0.8	)
Available seat miles (“ASMs”) (millions) (d)		125,178			69,314			55,864			55,791			73			0.1
Passenger load factor (e)		81.6	%		82.4	%		(0.8	)pts.		(a	)		(a	)		N/A
Passenger revenue per available seat mile (“PRASM”) (cents)		12.71			11.76			0.95			(a	)		(a	)		8.1
Average yield per revenue passenger mile (cents) (f)		15.57			14.27			1.30			(a	)		(a	)		9.1
Cost per available seat mile (“CASM”) (cents)		14.13			12.82			1.31			(a	)		(a	)		10.2
Average price per gallon of fuel, including fuel taxes	$	2.88		$	2.33		$	0.55			(a	)		(a	)		23.6
Fuel gallons consumed (millions)		2,003			1,158			845			843			2			0.2
Average full-time equivalent employees		81,700			42,800			38,900			39,000			(100	)		(0.2	)

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(a) The per unit measures in the 2011 period represent United only measures to provide a better comparison to 2010 due to the impact of the merger.

(b) The number of revenue passengers measured by each flight segment flown.

(c) The number of scheduled miles flown by revenue passengers.

(d) The number of seats available for passengers multiplied by the number of scheduled miles those seats are flown.

(e) Revenue passenger miles divided by available seat miles.

(f) The average passenger revenue received for each revenue passenger mile flown.

Operating Revenue

The table below shows year-over-year comparisons by type of operating revenues for the six months ended June 30 (in millions, except for percentage changes):

	2011		2010		$ Change		$ Increase due to Merger		$ Change Excluding Merger Impact			%  Change Excluding Merger Impact
Passenger—Mainline	$	12,627	$	6,401	$	6,226	$	5,741	$	485			7.6
Passenger—Regional		3,166		1,750		1,416		1,229		187			10.7
Total passenger revenue		15,793		8,151		7,642		6,970		672			8.2
Cargo		599		347		252		241		11			3.2
Special revenue item		107		—		107		19		88			100.0
Other operating revenue		1,512		904		608		612		(4	)		(0.4	)
	$	18,011	$	9,402	$	8,609	$	7,842	$	767			8.2

The table below presents selected passenger revenues and operating data, excluding merger impacts, broken out by geographic region, expressed as first six months year-over-year changes:

	Domestic			Pacific			Atlantic			Latin			Total Mainline			Regional			Consolidated
Increase (decrease) from 2010:
Passenger revenue (in millions)	$	124		$	128		$	124		$	109		$	485		$	187		$	672
Passenger revenue		3.6	%		9.0	%		9.7	%		46.6	%		7.5	%		10.7	%		8.2	%
Average fare per passenger		12.6	%		12.8	%		7.4	%		3.6	%		14.1	%		13.7	%		13.6	%
Yield (a)		8.9	%		9.3	%		7.4	%		10.9	%		9.0	%		8.1	%		9.1	%
PRASM		10.2	%		7.2	%		2.9	%		4.7	%		8.0	%		7.5	%		8.1	%
Average length of aircraft flight (miles)		4.4	%		1.1	%		(9.8	)%		0.7	%		(2.5	)%		6.7	%		(2.1	)%
Passengers		(8.1	)%		(3.4	)%		2.2	%		41.4	%		(5.7	)%		(2.7	)%		(4.7	)%
RPMs		(4.9	)%		(0.3	)%		2.2	%		32.1	%		(1.4	)%		2.4	%		(0.8	)%
ASMs		(6.0	)%		1.7	%		6.7	%		40.0	%		(0.4	)%		3.0	%		0.1	%
Passenger load factor (points)		1.0			(1.6	)		(3.4	)		(4.5	)		(0.8	)		(0.4	)		(0.8	)

(a) Yield is a measure of the average price paid per passenger mile, which is calculated by dividing passenger revenue by RPMs.

Excluding the impact of the merger, consolidated passenger revenue in the first six months of 2011 increased approximately $672 million as compared to the year-ago period primarily due to improved pricing as consolidated average fare per passenger and yield increased by 13.6% and 9.1%, respectively. The increase in pricing was due to strengthening economic conditions and capacity discipline. Higher volumes of both business travelers and international premium cabin passengers drove improvements in both average fare per passenger and yield. The average fare per passenger also increased in the 2011 period, as compared to the 2010 period, due to a number of fare increases implemented in response to higher fuel prices.

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Effective January 1, 2011, UAL adopted the provisions of ASU 2009-13, which increased UAL passenger revenue associated with passenger ticket sales that include the issuance of frequent flyer mileage credits by approximately $161 million in the first six months of 2011 as compared to the year-ago period, consisting of $104 million and $57 million for United and Continental, respectively, as compared to passenger revenue that would have been recorded under the historical method of accounting. During the second quarter of 2011, the Company modified the previously existing United and Continental co-branded credit card agreements with Chase as a result of the merger. This contract modification resulted in a one-time adjustment of $107 million, consisting of $88 million and $19 million for United and Continental, respectively, to decrease the deferred revenue balance and increase special revenue in accordance with ASU 2009-13. See Note 1 to the financial statements included in Part I, Item 1 of this report for additional information related to this accounting pronouncement.

Due to the decline in demand for travel to Japan following the March 11, 2011 earthquake and tsunami, UAL’s consolidated passenger revenue for the first six months of 2011 was impacted by approximately $130 million.

Excluding the impact of the merger, cargo revenues increased by $11 million, or 3.2%, in the first six months of 2011 as compared to the first six months of 2010 due to the effects of an improving economy and higher fuel surcharge rates, which were partially offset by lower volume.

Operating Expenses

The table below includes data related to UAL’s operating expenses for the six months ended June 30 (in millions, except for percentage changes):

	2011		2010		$ Change		$ Increase due  to Merger		$ Change  Excluding Merger Impact			% Change Excluding  Merger Impact
Aircraft fuel	$	5,899	$	2,693	$	3,206	$	2,554	$	652			24.2
Salaries and related costs		3,722		2,051		1,671		1,669		2			0.1
Regional capacity purchase		1,188		793		395		406		(11	)		(1.4	)
Landing fees and other rent		975		528		447		448		(1	)		(0.2	)
Aircraft maintenance materials and outside repairs		883		467		416		303		113			24.2
Depreciation and amortization		773		444		329		317		12			2.7
Distribution expenses		725		370		355		340		15			4.1
Aircraft rent		505		162		343		345		(2	)		(1.2	)
Special charges		223		124		99		59		40			NM
Other operating expenses		2,276		1,253		1,023		998		25			2.0
	$	17,169	$	8,885	$	8,284	$	7,439	$	845			9.5

Excluding the impact of the merger, aircraft fuel expense increased $652 million, or 24%, year-over-year due to a 38% increase in fuel prices, which was partially offset by a year-over-year increase in fuel hedge gains. The table below presents the significant changes in aircraft fuel cost per gallon in the six months ended June 30, 2011 as compared to the year-ago period, excluding merger impacts. See Note 6 to the financial statements in Part I, Item 1 of this report for additional details regarding fuel hedge gains.

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	(In millions)							Average price per gallon
	2011			2010		% Change		2011			2010		% Change
Fuel purchase cost	$	3,683		$	2,658		38.6	$	3.17		$	2.30		37.8
Fuel hedge (gains) losses		(338	)		35		NM		(0.29	)		0.03		NM
Total aircraft fuel expense	$	3,345		$	2,693		24.2	$	2.88		$	2.33		23.6
Total fuel consumption (gallons)		1,160			1,158		0.2

Excluding the impact of the merger, aircraft maintenance materials and outside repairs increased $113 million, or 24%, in the second quarter of 2011 as compared to the year-ago period primarily due to increased rates on aircraft maintenance and the timing of airframe routine maintenance work.

Details of UAL’s special charges include the following for the six months ended June 30 (in millions):

	2011			2010
Aircraft-related charges, net	$	(1	)	$	90
Merger-related costs		—			28
Integration-related costs		224			—
Other		—			6
Total special charges	$	223		$	124

In the six months ended June 30, 2011, UAL’s special charges of $223 million primarily relate to the integration of United’s and Continental’s operations, as further described in Note 10 to the financial statements included in Part I, Item 1 of this report. In the six months ended June 30, 2010, UAL recorded asset impairments of $90 million which primarily relate to the decrease in value of aircraft-related assets and $28 million of merger-related costs.

Nonoperating Income (Expense). The following table illustrates the year-over-year dollar and percentage changes in UAL’s nonoperating income (expense) for the six months ended June 30 (in millions, except for percentage changes):

							Favorable/(Unfavorable)
	2011			2010			$ Change			$ Merger Impact			$ Change  Excluding Merger Impact			% Change Excluding  Merger Impact
Interest expense	$	(504	)	$	(363	)	$	(141	)	$	(171	)	$	30			8.3
Interest income		9			3			6			4			2			66.7
Interest capitalized		14			5			9			8			1			20.0
Miscellaneous, net		(30	)		28			(58	)		(35	)		(23	)		(82.1	)
Total	$	(511	)	$	(327	)	$	(184	)	$	(194	)	$	10			(3.1	)

Excluding the impact of the merger, interest expense decreased $30 million, or 8%, compared to the year-ago period primarily due to a decrease in debt outstanding during the first six months of 2011 as compared to debt outstanding during the year-ago period. During the first six months of 2011, miscellaneous, net included fuel hedge ineffectiveness of $31 million primarily resulting from a decrease in fuel hedge values in excess of the decrease in aircraft fuel prices during the three months ended June 30, 2011, which is concentrated in the fuel hedges entered into by Continental as a result of the re-designation of Continental’s fuel hedge portfolio under cash flow hedge accounting as of April 1, 2011 when the portfolio was fully integrated with United’s fuel hedge portfolio.

Excluding the impact of the merger, the unfavorable variance of miscellaneous, net in the first six months of 2011 as compared to the year-ago period was primarily due to the $21 million gain related to the repayment of certain EETC debt instruments during the first six months of 2010.

Income Taxes. Our effective tax rates differ from the federal statutory rate of 35% primarily due to the following: changes in the valuation allowance, expenses that are not deductible for federal income tax purposes, and foreign and state income taxes. We are required to provide a valuation allowance for our deferred tax assets in excess of deferred tax liabilities because management has concluded that it is more likely than not that such deferred tax assets will ultimately not be realized.

46

LIQUIDITY AND CAPITAL RESOURCES

Current Liquidity

As of June 30, 2011, UAL had $8.6 billion in unrestricted cash, cash equivalents and short-term investments, as compared to $8.7 billion at December 31, 2010. At June 30, 2011, UAL also had $404 million of restricted cash and cash equivalents, which is primarily collateral for performance bonds, letters of credit, credit card processing agreements and estimated future workers’ compensation claims.

As is the case with many of our principal competitors, we have a high proportion of debt compared to capital. We have a significant amount of fixed obligations, including debt, aircraft leases and financings, leases of airport property and other facilities and pension funding obligations. At June 30, 2011, UAL had approximately $13.6 billion of debt and capital lease obligations, including $1.5 billion that will become due in the next 12 months. In addition, we have substantial non-cancelable commitments for capital expenditures, including the acquisition of new aircraft and related spare engines.

In the second quarter of 2011, UAL repurchased at par value approximately $570 million of the $726 million outstanding principal amount of its 4.5% Senior Limited-Subordination Convertible Notes due 2021 with cash after the notes were put to UAL by the noteholders. The remaining $156 million outstanding principal amount of the notes were classified as long-term debt at June 30, 2011.

UAL would be obligated under an indenture to issue to the PBGC up to $500 million aggregate principal amount of 8% Notes in up to eight equal tranches of $62.5 million if certain financial triggering events occur (with each tranche issued no later than 45 days following the end of any applicable fiscal year). A triggering event occurs when UAL’s EBITDAR, as defined in the 8% Notes indenture, exceeds $3.5 billion over the prior 12 months ending June 30 or December 31 of any applicable fiscal year. The twelve month measurement periods began with the fiscal year ended December 31, 2009 and will end with the fiscal year ending December 31, 2017. As of June 30, 2011, a triggering event under the 8% Notes indenture occurred and, as a result, UAL is obligated to issue one tranche of $62.5 million of the 8% Notes no later than February 14, 2012. This tranche will mature June 30, 2026, with interest accruing from the triggering event measurement date at a rate of 8% per annum that is payable in cash in semi-annual installments starting June 30, 2012. The tranche of 8% Notes will be callable, at UAL’s option, at any time at par, plus accrued and unpaid interest. UAL recorded a liability for the fair value of the $62.5 million tranche in the second quarter of 2011, which totaled $49 million. This $49 million charge is being classified as an integration cost as the financial results of UAL, excluding Continental’s results, would not have resulted in a triggering event under the 8% Notes indenture. The amount recorded is net of a discount applied to the future principal and interest payments using market interest rates for similar structured notes. This is the first such occurrence of UAL’s obligation to issue a tranche of 8% Notes.

United has a $255 million revolving loan commitment, which matures on February 1, 2012, available under its Amended Credit Facility. As of June 30, 2011, United had used $226 million of the commitment capacity for letters of credit. Unless this revolving loan commitment is amended or replaced, these letters of credit will be required to be backed with cash collateral by the fourth quarter of 2011. Through a separate arrangement, United has an additional $150 million available under an unused credit facility that expires in the fourth quarter of 2011.

As of June 30, 2011, United had firm commitments to purchase 25 Boeing 787 aircraft and 25 Airbus A350XWB aircraft for delivery from 2016 through 2019. United also has purchase options for 42 Airbus A319 and A320 aircraft and purchase rights for 50 Boeing 787 aircraft and 50 Airbus A350XWB aircraft.

United has secured considerable backstop financing commitments from its aircraft and engine manufacturers, subject to certain customary conditions. However, there is no guarantee that United will be able to obtain any or all of the backstop financing, or any other financing, for the aircraft and engines on acceptable terms when necessary or at all.

As of June 30, 2011, Continental had firm commitments to purchase 83 new aircraft (58 Boeing 737 aircraft and 25 Boeing 787 aircraft) scheduled for delivery from August 2011 through 2016. Continental took delivery of three Boeing 737 aircraft in the first six months of 2011 and is currently scheduled to take delivery of one additional Boeing 737 aircraft in the remainder of 2011. Continental also has options to purchase 89 additional Boeing aircraft.

Continental has a financing commitment for the Boeing 737 aircraft scheduled for delivery in August 2011 but does not have backstop financing or any other financing currently in place for the other Boeing aircraft on order. Further financing will be

47

necessary to satisfy Continental’s capital commitments for its firm order aircraft and other related capital expenditures. Continental can provide no assurance that backstop financing or any other financing not already in place for aircraft deliveries will be available to Continental on acceptable terms when necessary or at all.

As of June 30, 2011, a substantial portion of UAL’s assets, principally aircraft, spare engines, aircraft spare parts, route authorities and certain other intangible assets were pledged under various loan and other agreements. The Company has limited undrawn lines of credit and most of our otherwise readily financeable assets are encumbered. The global economic recession severely disrupted the global capital markets, resulting in a diminished availability of financing and a higher cost for financing that was obtainable. Although access to the capital markets has improved, as evidenced by financing transactions in 2010, we cannot give any assurances that we will be able to obtain additional financing or otherwise access the capital markets in the future on acceptable terms (or at all). We must sustain our profitability and/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.

Credit Ratings. As of the filing date of this report, UAL, United and Continental had the following corporate credit ratings:

	S&P	Moody’s	Fitch
UAL	B	B2	B- (outlook positive)
United	B	B2	B- (outlook positive)
Continental	B	B2	B- (outlook positive)

These credit ratings are below investment grade levels. Downgrades from these rating levels, among other things, could restrict the availability, or increase the cost of future financing for the Company, and/or increase the amount of reserves required under the Company’s card processing agreement with JPMorgan Chase and its affiliates, as discussed in Note 8 to the financial statements in Part I, Item 1 of this report.

Sources and Uses of Cash

Operating Activities. UAL’s cash flows provided by operations for the six months ended June 30, 2011 were $1.8 billion compared to $1.4 billion in the same period in 2010. Including the impact of Continental, UAL’s cash flows from operations increased by $402 million for the six months ended June 30, 2011 compared to the same period in 2010. The increase is attributable to an increase in net income and cash flow impact of certain working capital items. The increase is also due to increased future bookings and higher fares related to advance ticket sales. The increase was partially offset by payments of $242 million in United profit sharing and related payroll taxes during the first quarter of 2011.

Investing Activities. UAL’s capital expenditures were $350 million and $124 million in the six months ended June 30, 2011 and 2010, respectively. Capital expenditures for the six months ended June 30, 2011 included $61 million related to the acquisition of six aircraft which were being operated under leases and which were immediately sold to third parties upon acquisition for proceeds of $48 million. UAL’s capital expenditures in the first six months of 2011 were also higher, as compared to the year-ago period, due to the impact of Continental’s capital expenditures and expenditures for integration-related projects. In addition to capital expenditures during the six months ended June 30, 2011, UAL acquired three aircraft through the issuance of debt, as discussed under Financing Activities below. The purchase of short-term investments increased by $443 million in the first six months of 2011 due to the investment of higher cash balances as compared to the year-ago period.

Financing Activities. During the first six months of 2011, UAL made debt and capital lease payments of $1.7 billion. These payments include $150 million related to UAL’s 5% Senior Convertible Notes and $570 million related to UAL’s 4.5% Senior Limited-Subordination Convertible Notes, as discussed in Note 9 to the financial statements in Part I, Item 1 of this report.

UAL received $239 million during the first six months of 2011 from Continental’s December 2010 pass-through trust financing. The proceeds in the first six months of 2011 related to the financing of three new and seven currently owned aircraft. The proceeds related to the seven currently owned aircraft were used for general corporate purposes. As noted in Investing Activities above, the financing proceeds related to the acquisition of three new aircraft are not reflected as a financing activity in the consolidated statement of cash flows as the funds are distributed directly to the aircraft supplier. See the 2010 Annual Report for additional information related to this financing.

In January 2010, United issued the remaining $612 million of equipment notes related to the Series 2009-1 EETCs. Proceeds of $568 million from this financing were used to complete the prepayment of the remaining principal of the equipment notes

48

issued in connection with the Series 2001-1 EETCs and the remaining proceeds of $44 million were primarily used for general corporate purposes. UAL also received cash proceeds of $21 million from the distribution of United’s Series 2001-1 EETC trust assets upon repayment of the note obligations.

In January 2010, United issued the remaining $696 million of equipment notes related to the Series 2009-2 EETCs. Proceeds of $493 million from this financing were used to prepay the remaining principal of the equipment notes issued in connection with the Series 2000-2 EETCs and the remaining proceeds of $203 million were primarily used for general corporate purposes.

Commitments, Contingencies and Liquidity Matters

As described in the Company’s 2010 Annual Report, the Company’s liquidity may be adversely impacted by a variety of factors, including, but not limited to, obligations associated with fuel hedge settlements and related collateral requirements, pension funding obligations, reserve requirements associated with credit card processing agreements, guarantees, commitments and contingencies. See the Company’s 2010 Annual Report and Notes 4, 6 and 8 to the financial statements contained in Part I, Item 1 of this report for information related to these matters.

United and Continental - Results of Operations

United

The following table presents information related to United’s results of operations for the three and six months ended June 30 (in millions, except percentage changes):

	Three Months Ended June  30,									Six Months Ended June 30,
	2011			2010			% Change			2011			2010			% Change
Operating Revenue:
Passenger revenue	$	4,791		$	4,494			6.6		$	8,821		$	8,151			8.2
Special revenue item		88			—			NM			88			—			NM
Cargo and other revenue		691			669			3.3			1,337			1,255			6.5
Total revenue	$	5,570		$	5,163			7.9		$	10,246		$	9,406			8.9
Operating Expenses:
Aircraft fuel	$	1,833		$	1,486			23.4		$	3,345		$	2,693			24.2
Salaries and related costs		1,038			1,061			(2.2	)		2,025			2,051			(1.3	)
Regional capacity purchase		401			405			(1.0	)		783			793			(1.3	)
Landing fees and other rent		275			271			1.5			527			528			(0.2	)
Aircraft maintenance materials and outside repairs		290			245			18.4			582			467			24.6
Depreciation and amortization		229			223			2.7			456			444			2.7
Distribution expenses		199			198			0.5			386			370			4.3
Aircraft rent		80			81			(1.2	)		161			162			(0.6	)
Special charges		90			106			(15.1	)		164			124			32.3
Other operating expenses		698			644			8.4			1,372			1,252			9.6
Total operating expenses	$	5,133		$	4,720			8.8		$	9,801		$	8,884			10.3
Operating income	$	437		$	443			(1.4	)	$	445		$	522			(14.8	)
Nonoperating expense		(156	)		(164	)		(4.9	)		(324	)		(316	)		2.5

United had net income of $281 million and $121 million in the second quarter and first six months of 2011, respectively, as compared to net income of $281 million and $207 million in the second quarter and first six months of 2010, respectively. Excluding the impact of the merger on UAL’s results of operations, United’s results of operations were consistent with UAL’s results discussed above. Prior to the merger, United was UAL’s only significant operating subsidiary. As compared to the second quarter of 2010, United’s consolidated revenue increased $407 million, or 8%, to $5.6 billion for the three months ended June 30, 2011. Similarly, United’s consolidated revenue increased $840 million, or 9%, to $10.2 billion for the six months ended

49

June 30, 2011 as compared to the year-ago period. These increases were primarily due to an improvement in global economic conditions, which in turn resulted in higher average fares, as discussed in UAL’s results of operations above. Average fares were also higher due to fare increases implemented in response to higher fuel prices.

During the second quarter of 2011, the Company modified the United and Continental co-branded credit card agreements with Chase as a result of the merger. This contract modification resulted in a one-time adjustment of $88 million for United to decrease the deferred revenue balance and increase special revenue in accordance with ASU 2009-13. See Note 1 to the financial statements included in Part I, Item 1 of this report for additional information related to this accounting pronouncement.

Aircraft fuel expense increased 23% and 24% in the second quarter and first six months of 2011, respectively, as compared to the year-ago period, which was primarily driven by increased market prices for aircraft fuel, as highlighted in the fuel table in Operating Expenses, above. Fuel hedge (gains) losses were $(213) million and $51 million in the three months ended June 30, 2011 and 2010, respectively, and $(338) million and $35 million for the six months ended June 30, 2011 and 2010, respectively. Hedge gains were higher as a result of increases in the price of fuel above the prices in United’s hedge contracts.

Aircraft maintenance materials and outside repairs increased $45 million, or 18%, in the second quarter of 2011 as compared to the year-ago period, primarily due to increased rates and volume on aircraft maintenance. Similarly, aircraft maintenance materials and outside repairs increased $115 million, or 25%, in the first six months of 2011 as compared to the year-ago period.

Special charges decreased $16 million, or 15%, in the second quarter of 2011 as compared to the year-ago period, primarily due to a decline in asset impairments recorded related to a decrease in the value of aircraft-related assets. Special charges increased $40 million, or 32%, in the first six months of 2011 as compared to the year-ago period, primarily due to costs associated with the integration of United and Continental, as discussed above.

United’s nonoperating expense decreased $8 million, or 5%, in the second quarter of 2011 as compared to the year-ago period, and increased $8 million, or 3%, in the first six months of 2011 as compared to 2010. Excluding the merger impact discussed above, United’s interest expense is consistent with UAL’s interest expense, except for approximately $5 million of interest expense from UAL’s $345 million 6% Senior Convertible Notes due 2029 that are not outstanding at United.

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Continental

As a result of the application of acquisition accounting effective October 1, 2010, the financial statements prior to October 1, 2010 are not comparable with the financial statements after October 1, 2010. The following table presents information related to Continental’s results of operations for the three and six months ended June 30 (in millions, except percentage changes):

	Three Months Ended June 30,									Six Months Ended June 30,
	Successor 2011			Predecessor 2010			% Change			Successor 2011			Predecessor 2010			% Change
Operating Revenue:
Passenger revenue	$	3,814		$	3,251			17.3		$	6,970		$	6,009			16.0
Special revenue item		19			—			NM			19			—			NM
Cargo and other revenue		451			440			2.5			853			845			0.9
Total revenue	$	4,284		$	3,691			16.1		$	7,842		$	6,854			14.4
Operating Expenses:
Aircraft fuel	$	1,394		$	992			40.5		$	2,554		$	1,865			36.9
Salaries and related costs		864			822			5.1			1,669			1,618			3.2
Regional capacity purchase		214			205			4.4			406			402			1.0
Landing fees and other rent		228			215			6.0			448			428			4.7
Aircraft maintenance materials and outside repairs		154			131			17.6			303			273			11.0
Depreciation and amortization		156			122			27.9			317			256			23.8
Distribution expenses		177			161			9.9			340			306			11.1
Aircraft rent		173			230			(24.8	)		345			459			(24.8	)
Special charges		56			24			NM			59			34			NM
Other operating expenses		494			460			7.4			998			934			6.9
Total operating expenses	$	3,910		$	3,362			16.3		$	7,439		$	6,575			13.1
Operating income	$	374		$	329			13.7		$	403		$	279			44.4
Nonoperating expense		(110	)		(96	)		14.6			(194	)		(191	)		1.6

Continental’s operating income and net income in the second quarter of 2011 were $374 million and $262 million, respectively, as compared to operating income and net income of $329 million and $233 million, respectively, in the second quarter of 2010. Similarly, Continental’s operating income and net income in the first six months of 2011 were $403 million and $205 million, respectively, as compared to operating income and net income of $279 million and $87 million, respectively, in the first six months of 2010. These improvements were largely due to the improvement in global economic conditions following the severe recession in 2009, consistent with the improvement in UAL’s and United’s results described above.

During the second quarter of 2011, the Company modified the United and Continental co-branded credit card agreements with Chase as a result of the merger. This contract modification resulted in a one-time adjustment of $19 million for Continental to decrease the deferred revenue balance and increase special revenue in accordance with ASU 2009-13. See Note 1 to the financial statements included in Part I, Item 1 of this report for additional information related to this accounting pronouncement.

Aircraft fuel expense increased approximately 41% and 37% in both the second quarter and first six months as compared to 2010, primarily due to an increase in the market prices of aircraft fuel. Fuel hedge gains were $65 million and $94 million in the second quarter and first six months of 2011, respectively. Similarly, fuel hedge losses were $9 million and $6 million in the second quarter and first six months of 2010, respectively.

Aircraft rent decreased 25% in both the second quarter and first six months of 2011 as compared to 2010, primarily due to the amortization of a lease fair value adjustment which was recorded as part of acquisition accounting.

Continental’s nonoperating expense in both the second quarter and first six months of 2011 includes a net loss of $2 million and $14 million, respectively, associated with marking to market the fair value of Continental’s derivative assets and liabilities related to agreements that provide for Continental’s convertible debt to be settled with UAL common stock. This net loss and the related derivatives are only reflected in the Continental stand-alone financial statements. See Note 5 to the financial statements included in Part I, Item 1 of this report for additional information.

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RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

The non-GAAP financial measures in this report are presented because they provide management and investors the ability to measure and monitor UAL’s performance on a consistent basis. Special items relate to activities that are not central to our ongoing operations. A reconciliation of net income and diluted earnings per share to the non-GAAP financial measure of net income and diluted earnings per share, excluding special items, for the three and six months ended June 30 is as follows (in millions, except per share amounts):

	Three Months Ended June 30,								Six Months Ended June 30,
	Net Income			Diluted Earnings per Share			Net Income		Net Income			Diluted Earnings per Share			Net Income
	2011			2011			2010		2011			2011			2010
Net income - GAAP	$	538		$	1.39		$	273	$	325		$	0.88		$	191
Special revenue item		(107	)		(0.27	)		—		(107	)		(0.28	)		—
Special charges		146			0.37			106		223			0.58			124
Operating non-cash MTM losses		—			—			37		—			—			6
Other items		—			—			14		—			—			17
Net income excluding special items - non-GAAP	$	577		$	1.49		$	430	$	441		$	1.18		$	338

CRITICAL ACCOUNTING POLICIES

See Critical Accounting Policies in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2010 Annual Report for a discussion of the Company’s critical accounting policies. Also see Note 1 to the financial statements included in Part I, Item 1 of this report for a discussion of changes in accounting for revenue due to the adoption of new accounting policies.

FORWARD-LOOKING INFORMATION

Certain statements throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report are forward-looking and thus reflect our current expectations and beliefs with respect to certain current and future events and financial performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to our operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as “expects,” “will,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook” and similar expressions 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 or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot 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, changed circumstances or otherwise, except as required by applicable law.

The Company’s actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: its ability to comply with the terms of its various financing arrangements; the costs and availability of financing; its ability to maintain adequate liquidity; its ability to execute its operational plans; its ability to control its costs, including realizing benefits from its resource optimization efforts, cost reduction initiatives and fleet replacement programs; its ability to utilize its net operating losses; its ability to attract and retain customers; demand for transportation in the markets in which it operates; an outbreak of a disease that affects travel demand or travel behavior; demand for travel and the impact that global economic conditions have on customer travel patterns; excessive taxation and the inability to offset future taxable income; general economic conditions (including interest rates, foreign currency exchange rates, investment or credit market conditions, crude oil prices, costs of aviation fuel and energy refining capacity in relevant markets); its ability to cost-effectively

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hedge against increases in the price of aviation fuel; any potential realized or unrealized gains or losses related to fuel or currency hedging programs; the effects of any hostilities, act of war or terrorist attack; the ability of other air carriers with whom the Company has alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; the costs and availability of aviation and other insurance; the costs associated with security measures and practices; industry consolidation or changes in airline alliances; competitive pressures on pricing and on demand; its capacity decisions and the capacity decisions of its competitors; U.S. or foreign governmental legislation, regulation and other actions (including open skies agreements); labor costs; its ability to maintain satisfactory labor relations and the results of the collective bargaining agreement process with its union groups; any disruptions to operations due to any potential actions by its labor groups; weather conditions; the possibility that expected merger synergies will not be realized or will not be realized within the expected time period; and other risks and uncertainties set forth under Item 1A., Risk Factors of the 2010 Annual Report, as well as other risks and uncertainties set forth from time to time in the reports the Company files with the SEC. Consequently, forward-looking statements should not be regarded as representations or warranties by the Company that such matters will be realized.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There have been no material changes in market risk from the information provided in Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” in our 2010 Annual Report except as follows:

Aircraft Fuel. As of June 30, 2011, UAL’s projected consolidated fuel requirements for the remainder of 2011 were hedged as follows:

	Maximum Price					Minimum Price
	% of Expected Consumption			Weighted Average price (per gallon)		% of Expected Consumption			Weighted Average price (per gallon)
Remainder of 2011
Heating oil collars		15	%	$	3.32		15	%	$	2.65
Heating oil call options		4			2.41		N/A			N/A
Heating oil swaps		3			2.24		3			2.24
WTI crude oil call options		13			2.32		N/A			N/A
WTI crude oil swaps		11			2.17		11			2.17
Aircraft fuel call options		4			3.15		N/A			N/A
Aircraft fuel swaps		1			3.14		1			3.14
Total		51	%				30	%

As of June 30, 2011, UAL had hedged 13% of the projected first half 2012 fuel consumption.

At June 30, 2011, UAL fuel derivatives were in a net asset position of $191 million. See Note 6 to the financial statements included in Part I, Item 1 of this report for additional information related to fuel hedges.

Disclosures for United and Continental are omitted under the reduced disclosure format permitted by General Instruction H (2) of Form 10-Q.

ITEM 4. CONTROLS AND PROCEDURES.

UAL, United and Continental each maintain controls and procedures that are designed to ensure that information required to be disclosed in the reports filed or submitted by UAL, United and Continental to the SEC is recorded, processed, summarized and reported, within the time periods specified by the SEC’s rules and forms, and is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The management of UAL, United and Continental, including the Chief Executive Officer and Chief Financial Officer, performed an evaluation to conclude with reasonable assurance that UAL’s, United’s and Continental’s disclosure controls and procedures were designed and operating effectively to report 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 Chief Executive Officer and the Chief Financial Officer of UAL, United and Continental have concluded that as of June 30, 2011, disclosure controls and procedures of each company were effective.

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Changes in Internal Control over Financial Reporting during the Quarter Ended June 30, 2011

Except as set forth below, during the three months ended June 30, 2011, there were no changes in UAL’s, United’s or Continental’s internal control over financial reporting during their most recent fiscal quarter that materially affected, or is reasonably likely to materially affect, their internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934).

On October 1, 2010, UAL and Continental completed the merger transaction. We are currently integrating policies, processes, employees, technology and operations for the combined company. Management will continue to evaluate our internal control over financial reporting as we execute merger integration activities.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

In addition to the legal proceedings below, UAL, United and Continental are parties to other legal proceedings as described in the Company’s 2010 Annual Report and the Form 10-Q for the quarter ended March 31, 2011.

Litigation Related to the Merger Transaction

On June 29, 2010, forty-nine purported purchasers of airline tickets filed an antitrust lawsuit in the U.S. District Court for the Northern District of California against Continental and UAL Corporation in connection with the merger. The plaintiffs alleged that the merger may substantially lessen competition or tend to create a monopoly in the transportation of airline passengers in the United States and the transportation of airline passengers to and from the United States on international flights, in violation of Section 7 of the Clayton Act. On August 9, 2010, the plaintiffs filed a motion for preliminary injunction pursuant to Section 16 of the Clayton Act, seeking to enjoin the merger. On September 27, 2010, the court denied the plaintiffs’ motion for a preliminary injunction, which allowed the merger to close. After the closing of the merger, the plaintiffs appealed the court’s ruling to the United States Court of Appeals for the Ninth Circuit and moved for a “hold separate” order pending the appeal, which was denied. The Ninth Circuit affirmed the District Court’s denial of the preliminary injunction on May 23, 2011 and, on July 8, 2011, denied the plaintiffs’ motions for rehearing and for rehearing en banc.

ITEM 1A. RISK FACTORS.

See Part I, Item 1A., “Risk Factors,” of the 2010 Annual Report for a detailed discussion of the risk factors affecting UAL, United and Continental. The discussion below includes updates to certain risk factor disclosures included in the 2010 Annual Report, which are in addition to, and not in lieu of, those contained in the 2010 Annual Report.

The Company may be unable to continue to comply with certain covenants in agreements with financial institutions that process customer credit card transactions, which, if not complied with, could materially and adversely affect the Company’s liquidity.

United and Continental have agreements with financial institutions that process customer credit card transactions for the sale of air travel and other services. Under certain of United’s and Continental’s credit card processing agreements, the financial institutions either require, or under certain circumstances have the right to require, that United and Continental maintain a reserve equal to a portion of advance ticket sales that have been processed by that financial institution, but for which United and Continental have not yet provided the air transportation.

Under United’s and Continental’s new combined credit card processing agreement with Paymentech, LLC and JPMorgan Chase, United and Continental are required to provide a cash reserve determined based on the unrestricted cash balance held by United and Continental. If United’s and Continental’s unrestricted cash balance is at or more than $3.5 billion as of any calendar month-end measurement date, the required reserve will remain at $25 million. However, if United’s and Continental’s unrestricted cash balance is less than $3.5 billion, their required reserve will increase to a percentage of relevant advance ticket sales that could be significant. Based on United’s and Continental’s June 30, 2011 unrestricted cash balance, United and Continental were not required to provide cash collateral above the $25 million reserve balance. If Continental is required to post additional cash collateral under the new combined JPMorgan Chase credit card processing agreement as a result of an increase in the required reserve amount, Continental will also be required to post additional collateral under its credit card processing agreement with American Express that could be significant.

Under United’s credit card processing agreement with American Express, in addition to certain other risk protections provided to American Express, United is required to provide reserves based primarily on its unrestricted cash balance and net current exposure as of any calendar month-end measurement date with United’s required reserves increasing to stated percentages of net current exposure that could be significant as United’s unrestricted cash balance falls below certain minimum cash amounts. The agreement with American Express permits United to provide certain replacement collateral in lieu of cash collateral, as long as United’s unrestricted cash balance is above $1.35 billion. Such replacement collateral may be pledged for any amount of the required reserve up to the full amount thereof, with the stated value of such collateral determined according to the agreement. Replacement collateral may be comprised of aircraft, slots and routes, real estate or other collateral as agreed between the parties. Based on United’s unrestricted cash balance at June 30, 2011, United was not required to provide any reserves under this agreement.

An increase in the future reserve requirements and the posting of a significant amount of cash collateral, as provided by the terms of any or all of United’s and Continental’s material credit card processing agreements, could materially reduce the Company’s liquidity. See Note 8 of this report and Note 17 of the 2010 Annual Report for a more detailed discussion of our obligations under the Company’s credit card processing agreements.

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Extensive government regulation could materially increase the Company’s operating costs and restrict its ability to conduct its business.

Airlines are subject to extensive regulatory and legal compliance requirements that result in significant costs and may have adverse effects. Laws, regulations, taxes and airport rates and charges, both domestically and internationally, have been proposed from time to time that could significantly increase the cost of airline operations or reduce airline revenue. The Company cannot provide any assurance that current laws and regulations, or laws or regulations enacted in the future, will not adversely affect its financial condition or results of operations.

Each of United and Continental operates under a certificate of public convenience and necessity issued by the Department of Transportation (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 Federal Aviation Administration (the “FAA”) from time to time also issues directives and other regulations relating to the maintenance and operation of aircraft that require material expenditures or operational restrictions by the Company, and which could include the temporary grounding of an entire aircraft type if the FAA identifies design, manufacturing, maintenance or other issues requiring immediate corrective action. FAA requirements cover, among other things, retirement of older aircraft, security measures, collision avoidance systems, airborne windshear avoidance systems, noise abatement and other environmental concerns, aircraft operation and safety and increased inspections and maintenance procedures to be conducted on older aircraft. These FAA directives or requirements could have a material adverse effect on the Company.

In addition, the Company’s operations may be adversely impacted due to the existing antiquated air traffic control (“ATC”) system utilized by the U.S. government. During peak travel periods in certain markets, the current ATC system’s inability to handle existing travel demand has led to short-term capacity constraints imposed by government agencies and resulted in delays and disruptions of air traffic. In addition, the current system will not be able to effectively handle projected future air traffic growth. Imposition of these ATC constraints on a long-term basis may have a material adverse effect on our results of operations. Failure to update the ATC system in 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 on the Company’s financial condition or results of operations.

The airline industry is subject to extensive federal, state and local taxes and fees that increase the cost of the Company’s operations. In addition to taxes and fees that the Company is currently subject to, proposed taxes and fees are currently pending and if imposed, would increase the Company’s operating expenses.

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 increasingly congested airports in the United States and have been or could be the 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 may limit the Company’s airport access by limiting the number of departure and arrival slots at high density traffic airports, which could affect the Company’s ownership and transfer rights, and local airport authorities may have the ability to control access to certain facilities or the cost of access to its facilities, which could have an adverse effect on the Company’s business. In addition, in 2008, the FAA planned to withdraw and auction a certain number of slots held by airlines at the three primary New York area airports, which the airlines challenged and the FAA terminated in 2009. If the FAA were to plan another auction that survived legal challenge by the airlines, the Company could incur substantial costs to obtain such slots. Further, the Company’s operating costs at airports at which it operates, including the Company’s major hubs, may increase significantly because of capital improvements at such airports that the Company may be required to fund, directly or indirectly. In some circumstances, such costs could be imposed by 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 U.S. carriers to operate international routes is subject to change because the applicable arrangements between the United States and foreign governments may be amended from time to time, or because appropriate slots or facilities may not be made available. The Company currently operates on a number of international routes under government arrangements that limit the number of carriers permitted to operate on the route, the capacity of the carriers providing services on the route, or the number of carriers allowed access to particular airports. If an open skies policy were to be adopted for any of these routes, such an event could have a material adverse impact on the Company’s financial position and results of operations and could result in the impairment of material amounts of related tangible and intangible assets. In addition, competition from revenue-sharing joint ventures and other alliance arrangements by and among other airlines could impair the value of the Company’s business and assets on the open skies routes.

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The Company’s plans to enter into or expand U.S. antitrust immunized alliances and joint ventures on various international routes are subject to receipt of approvals from applicable U.S. federal authorities and obtaining other applicable foreign government clearances or satisfying the necessary applicable regulatory requirements. There can be no assurance that such approvals and clearances will be granted or continued in effect upon further regulatory review or that changes in regulatory requirements or standards can be satisfied.

Many aspects of the Company’s operations are also subject to increasingly stringent federal, state, local and international laws protecting the environment. Future environmental regulatory developments, such as climate change regulations in the United States and abroad could adversely affect operations and increase operating costs in the airline industry. There are certain climate change laws and regulations that have already gone into effect and that apply to the Company, including the European Union Emissions Trading Scheme (subject to legal challenge), the State of California’s cap and trade regulations, environmental taxes for certain international flights, limited greenhouse gas reporting requirements and land-use planning laws which could apply to airports and could affect airlines in certain circumstances. In addition, there is the potential for additional regulatory actions in regard to the emission of greenhouse gases by the aviation industry. The precise nature of future requirements and their applicability to the Company are difficult to predict, but the financial impact to the Company and the aviation industry would likely be adverse and could be significant.

See Item 1, Business-Industry Regulation, in the Company’s 2010 Annual Report for further information on government regulation impacting the Company.

The issuance of UAL’s 8% Contingent Senior Notes could adversely impact the Company’s results of operations, liquidity and financial position.

UAL would be obligated under an indenture to issue to the Pension Benefit Guarantee Corporation (“PBGC”) up to $500 million aggregate principal amount of 8% Contingent Senior Notes (the “8% Notes”) if certain financial triggering events occur. The 8% Notes would be issued in up to eight equal tranches of $62.5 million (with each tranche issued no later than 45 days following the end of any applicable fiscal year). A triggering event occurs when UAL’s EBITDAR (as defined in the 8% Notes indenture) exceeds $3.5 billion over the prior twelve months ending June 30 or December 31 of any applicable fiscal year. The twelve-month measurement periods began with the fiscal year ended December 31, 2009 and will end with the fiscal year ending December 31, 2017.

If the issuance of a tranche would cause a default under any other securities then existing, UAL may satisfy its obligations with respect to such tranche by issuing UAL common stock having a market value equal to $62.5 million. Each issued tranche will mature 15 years from its respective triggering event date, with interest payable in cash in semi-annual installments, and will be callable, at UAL’s option, at any time at par, plus accrued and unpaid interest. Because Continental’s EBITDAR will be included in the calculation for periods subsequent to the closing of the merger, the merger increases the likelihood that all or a portion of the 8% Notes will be issued, as well as the likelihood that the timing of any such issuances would be accelerated.

As of June 30, 2011, a triggering event occurred under the 8% Notes indenture and, as a result, UAL is obligated to issue one tranche of $62.5 million of the 8% Notes to the PBGC no later than February 14, 2012. This is the first such tranche of 8% Notes to be issued by UAL under the 8% Notes indenture. Because the issuance of subsequent tranches of the 8% Notes is based upon future operating results, UAL cannot predict whether future issuances will occur or the timing of any such issuances. The first issuance and any future issuances of the 8% Notes could adversely impact the Company’s results of operations because of increased charges to earnings for the principal amount of the notes issued and increased interest expense related to the 8% Notes. Issuance of such notes could adversely impact the Company’s liquidity due to increased cash required to meet interest and principal payments.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 6. EXHIBITS.

A list of exhibits included as part of this Form 10-Q is set forth in an Exhibit Index that immediately precedes the exhibits.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature for each undersigned company shall be deemed to relate only to matters having reference to such company or its subsidiaries.

	United Continental Holdings, Inc.
	(Registrant)
Date: July 25, 2011	By:	/s/ Zane C. Rowe
		Zane C. Rowe Executive Vice President and Chief Financial Officer (principal financial officer)
Date: July 25, 2011	By:	/s/ Chris Kenny
		Chris Kenny Vice President and Controller (principal accounting officer)
	United Air Lines, Inc.
	(Registrant)
Date: July 25, 2011	By:	/s/ Zane C. Rowe
		Zane C. Rowe Executive Vice President and Chief Financial Officer (principal financial officer)
Date: July 25, 2011	By:	/s/ Chris Kenny
		Chris Kenny Vice President and Controller (principal accounting officer)
	Continental Airlines, Inc.
	(Registrant)
Date: July 25, 2011	By:	/s/ Zane C. Rowe
		Zane C. Rowe Executive Vice President and Chief Financial Officer (principal financial officer)
Date: July 25, 2011	By:	/s/ Chris Kenny
		Chris Kenny Vice President and Controller (principal accounting officer)

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EXHIBIT INDEX

†10.1	Separation Agreement, dated April 30, 2011, by and among United Continental Holdings, Inc., United Air Lines, Inc. and R. Keith Halbert
†10.2	Employment Agreement, dated May 1, 2011, by and among United Continental Holdings, Inc., Continental Airlines, Inc. and Robert S. Edwards
†10.3	United Continental Holdings, Inc. 2006 Director Equity Incentive Plan (as amended and restated, effective June 9, 2011)
†10.4	Form of Share Unit Award Notice pursuant to the United Continental Holdings, Inc. 2006 Director Equity Incentive Plan
31.1	Certification of the Principal Executive Officer of UAL Pursuant to 15 U.S.C. 78m(a) or 78o(d) (Section 302 of the Sarbanes-Oxley Act of 2002)
31.2	Certification of the Principal Financial Officer of UAL Pursuant to 15 U.S.C. 78m(a) or 78o(d) (Section 302 of the Sarbanes-Oxley Act of 2002)
31.3	Certification of the Principal Executive Officer of United Pursuant to 15 U.S.C. 78m(a) or 78o(d) (Section 302 of the Sarbanes-Oxley Act of 2002)
31.4	Certification of the Principal Financial Officer of United Pursuant to 15 U.S.C. 78m(a) or 78o(d) (Section 302 of the Sarbanes-Oxley Act of 2002)
31.5	Certification of the Principal Executive Officer of Continental Pursuant to 15 U.S.C. 78m(a) or 78o(d) (Section 302 of the Sarbanes-Oxley Act of 2002)
31.6	Certification of the Principal Financial Officer of Continental Pursuant to 15 U.S.C. 78m(a) or 78o(d) (Section 302 of the Sarbanes-Oxley Act of 2002)
32.1	Certification of the Chief Executive Officer and Chief Financial Officer of UAL Pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)
32.2	Certification of the Chief Executive Officer and Chief Financial Officer of United Pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)
32.3	Certification of the Chief Executive Officer and Chief Financial Officer of Continental Pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)
**101.1	XBRL Instance Document
**101.2	XBRL Taxonomy Extension Schema Document
**101.3	XBRL Taxonomy Extension Calculation Linkbase Document
**101.4	XBRL Taxonomy Extension Definition Linkbase Document
**101.5	XBRL Taxonomy Extension Labels Linkbase Document
**101.6	XBRL Taxonomy Extension Presentation Linkbase Document

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** XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

† Indicates management contract or compensatory plan or arrangement

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EX-10.1

Exhibit 10.1

SEPARATION AGREEMENT

This Separation Agreement (“Agreement”) is entered into by and among UNITED AIR LINES, INC., a Delaware corporation (“Company”), UNITED CONTINENTAL HOLDINGS, INC., a Delaware corporation and the parent company of Company (“UCH”), and R. KEITH HALBERT (“Employee”), and arises out of Employee’s severance from employment with Company on April 30, 2011 (the “Separation Date”). In consideration of the promises contained in this document, the parties agree as follows:

1. Employment Agreement and Flight Benefits. The terms of this Agreement are in addition to the terms contained in that certain Employment Agreement between Employee, UCH, and Company, dated October 1, 2010 (the “Employment Agreement”), and nothing herein shall affect any of Employee’s, Company’s or UCH’s rights or obligations under the Employment Agreement, except as expressly set forth herein. Each of Employee, Company and UCH agree that Employee’s separation from employment with Company shall occur on the Separation Date, shall be treated as a resignation by Employee pursuant to paragraph 2.2 under the Employment Agreement, and shall not constitute an Involuntary Termination or a Good Reason Termination (as such terms are defined in the Employment Agreement). Accordingly, pursuant to Section 4.3 of the Employment Agreement and subject to the restrictions provided therein, Employee (and his spouse and eligible dependents) shall be provided Flight Benefits (as such term is defined in the Employment Agreement) for Employee’s lifetime.

2. Payments. In addition, Company shall pay Employee the amount of $ 3,000,000 (less applicable taxes). Such amount shall be paid in accordance with the following schedule: (a) $2,034,531 shall be paid in a cash lump sum on the Effective Date (as defined in paragraph 13 of this Agreement), and (b) a total of $965,469 shall be paid in 18 installments (the first 17 of which shall be in the amount of $53,906.25, and the last of which shall be in the amount of $49,062.75) on Company’s normal payroll cycle, as in effect on the date Employee executes this Agreement, with the first installment paid on the first payroll date occurring on or after March 30, 2012.

3. Welfare Benefits. Continuation Coverage (as such term is defined in the Employment Agreement) shall be provided as prescribed in the Employment Agreement, provided, however, that (a) such coverage will commence upon Employee’s Separation Date, notwithstanding that Employee has not incurred an Involuntary Termination, (b) any reference to “Severance Period” with respect to the provision of such Continuation Coverage shall refer to the period beginning on the Separation Date and ending on December 31, 2013, and (c) if the provision of any portion of such Continuation Coverage that consists of medical, dental, vision care and prescription drugs is made through an arrangement that requires Company to impute income to Employee, Company will pay a tax gross-up payment to Employee with respect to such imputed income for each taxable year for which Employee has such imputed income, and such tax gross-up payment shall be made during the month of January following each taxable year to which such imputed income relates.

4. 2011 Incentive Awards. As provided in the applicable incentive award documents and under the terms of the applicable incentive award programs, all of Employee’s outstanding incentive awards that are based on a performance or vesting period that includes the 2011 calendar year or any portion thereof (including but not limited to the 2011 annual incentive award, the merger incentive award, the 2011 restricted stock award, the 2011 performance-based RSU award, and the 2011 long-term relative performance award) will terminate in full as of the Separation Date, and no payment will be required with respect to any such terminated award.

5. Consulting Agreement. Employee agrees to act as a Consultant to UCH and its subsidiaries after the Separation Date in accordance with the Consulting Agreement attached hereto as Exhibit A, which Consulting Agreement shall be executed and delivered by Employee, Company, and UCH contemporaneously with the execution and delivery hereof, with the effectiveness of the Consulting Agreement to occur automatically upon the Effective Date.

6. Confidentiality of Agreement. Employee represents and agrees that he will keep the terms, amount and fact of this Agreement completely confidential, and that he will not hereafter disclose any information concerning this Agreement to anyone, including, but not limited to, any past, present, or prospective employee or applicant for employment of UCH or Company, except as required by law. Notwithstanding the foregoing, Employee may disclose the nature and terms of this Agreement to his legal or financial advisors and reveal its financial terms in credit or loan applications, and the like. The parties agree that this Agreement is not and shall not be construed as an admission of any wrongdoing or liability on the part of either party.

7. Future Cooperation. Employee agrees, upon reasonable notice at any time during his lifetime, to furnish such information and assistance, including but not limited to the provision of informal information, testimony at deposition and/or at trial, to UCH, Company and their affiliates as Company reasonably requests in connection with any potential or actual litigation in which it or any of its affiliates is, or may become, a party. Company shall pay Employee an amount per day of assistance as the parties may reasonably agree, not to exceed an amount equal to Employee’s base salary at Company as of the Separation Date divided by 365, and shall reimburse Employee for his reasonable expenses incurred in connection with rendering such assistance. Any such payment shall made on a regular, periodic basis within 30 days after such services are rendered by Employee or such reimbursable amounts are incurred by Employee; provided, however, that (a) before any such reimbursement shall be made, Employee must submit appropriate evidence of his reimbursable expenses; (b) in no event shall any payments made to Employee under this paragraph be made later than the 15^th day of the third month of the calendar year following the applicable year during which the Employee’s assistance was provided; and (c) any reimbursements provided during one taxable year of Employee may not affect the expenses eligible for reimbursement in any other taxable year of Employee.

8. Restrictive Covenants. Notwithstanding anything to the contrary provided herein, Employee remains subject to all of the restrictive covenants governing confidentiality, non-solicitation, non-competition, and non-disparagement, as provided in Article 5 of the Employment Agreement; provided, however, that the Post-Termination Obligation Period (as defined in the Employment Agreement) shall mean the period beginning on the Separation Date and ending on December 31, 2013.

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9. Acknowledgements. Employee acknowledges and agrees that Employee would not be entitled to certain of the payments and benefits provided for in this Agreement, including those provided in paragraphs 2 and 3 of this Agreement (the “Separation Benefits”), upon Employee’s voluntary termination of employment with Company on the Separation Date in the absence of this Agreement. Employee represents and agrees that he has been (and is hereby) advised to and had the opportunity to thoroughly discuss all aspects of this Agreement with his private attorney, that he has carefully read and fully understands all of the provisions of this Agreement, and that he is knowingly and voluntarily entering into this Agreement.

10. General Release. In consideration of the Separation Benefits, Employee hereby releases and discharges UCH, Company, and each of their subsidiaries and affiliates and their respective stockholders, officers, directors, employees, representatives, agents and attorneys (collectively, “Releasees”) from any and all claims or liabilities, known or unknown, of any kind, including, without limitation, any and all claims and liabilities relating to Employee’s employment by, or services rendered to or for, Company, UCH or any of their subsidiaries or affiliates, or relating to the cessation of such employment or under the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act, Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 1981, the Workers Adjustment and Retraining Notification Act, the Fair Labor Standards Act, the Rehabilitation Act, the Occupational Safety and Health Act, the Employee Retirement Income Security Act (“ERISA”), the Illinois Human Rights Act, the Illinois Wage Payment and Collection Act, the Texas Commission on Human Rights Act, Section 1542 of the California Civil Code, New Jersey’s Conscientious Employee Protection Act, and any other statutory, tort, contract or common law cause of action, other than claims or liabilities arising from a breach by UCH or Company of (a) its obligations under this Agreement or the Consulting Agreement, (b) its post-employment obligations under the Employment Agreement, (c) its obligations under its qualified retirement plans in which Employee participates (the “Qualified Plans”), (d) its obligations under Employee’s outstanding grants of stock options (the “Stock Option Award”), or (e) its obligations under existing agreements governing Employee’s flight benefits relating to other airlines, if any. UCH and Company hereby release Employee from any and all claims or liabilities, known or unknown, of any kind in any way relating to or pertaining to Employee’s employment by, or services rendered to or for, UCH, Company or any of their subsidiaries or affiliates, other than fraud or intentional malfeasance or claims arising from a breach by Employee of (i) this Agreement, the Consulting Agreement, or the Employment Agreement or (ii) Employee’s obligations under the Qualified Plans, under the Stock Option Award, under any other compensation plan or program of UCH or Company, or under existing agreements governing Employee’s flight benefits relating to other airlines, if any. These releases are to be broadly construed in favor of the released persons. The releases in this paragraph do not apply to any rights or claims that may arise after the date of execution of this Agreement by Employee, Company, and UCH. Notwithstanding the foregoing, the post-employment obligations created by this Agreement, the Consulting Agreement, the Employment Agreement, any Qualified Plans,

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Employee’s Stock Option Award, or outstanding awards under any other compensation plan or program of UCH or Company, or under existing agreements governing Employee’s flight benefits relating to other airlines, if any, are not released.

11. Protected Rights. Notwithstanding the foregoing paragraph, Employee is not prohibited from making or asserting (a) any claim or right under state workers’ compensation or unemployment laws, or (b) any claim or right which by law cannot be waived, including rights to file a charge with an administrative agency or to participate in an agency investigation, including but not limited to the right to file a charge or participate in an investigation or proceeding conducted by the Equal Employment Opportunity Commission (“EEOC”). Employee waives, however, the right to recover money if any federal, state or local government agency, including but not limited to the EEOC, pursues a claim on Employee’s behalf or on behalf of a class to which Employee may belong that arises out of or relates to Employee’s employment or severance from employment.

12. Covenant Not to Sue. Employee further agrees that the amounts and covenants contained herein are of greater value than anything to which Employee is already entitled, and Employee affirms that he has not filed, has not caused to be filed, is not presently a party to, and will not file, permit to be filed on his behalf, or become a party to any claim, lawsuit, or arbitration relating to any aspect of his employment or its termination, other than to enforce the provisions of this Agreement, the Employment Agreement, or Employee’s outstanding option grants. Employee understands and agrees that, except for any vested benefits he may have pursuant to ERISA, he will not be entitled to any other compensation beyond that which UCH or Company has agreed to provide herein, in the Employment Agreement, or pursuant to Employee’s outstanding option award. Employee understands that this covenant not to sue is an affirmative promise by Employee not to sue any of the Releasees, which is in addition to the general release of claims in paragraph 10 above. However, nothing in this Agreement affects Employee’s right to challenge the validity of this Agreement under the Age Discrimination in Employment Act. If Employee breaches this Agreement by suing any of the Releasees in violation of this covenant not to sue, Employee understands that (a) the Releasees will be entitled to apply for and receive an injunction to restrain any violation of this paragraph, and (b) Employee will be required to pay the Releasees’ legal costs and expenses, including reasonable attorney fees, associated with defending against the lawsuit and enforcing the terms of this Agreement.

13. Release Revocation Period. Employee has twenty-one (21) days to review and consider this Agreement. If Employee signs and returns this Agreement before the end of the 21-day period, he certifies that his acceptance of a shortened time period is knowing and voluntary, and neither Company nor UCH improperly encouraged Employee to sign through fraud, misrepresentation, a threat to withdraw or alter the offer before the 21-day period expires, or by providing different terms to other employees who sign the release before such time period expires. This Agreement will become effective, enforceable and irrevocable seven days after the date on which Employee signs it (the “Effective Date”). During the seven-day period after Employee signs this Agreement, Employee may revoke this Agreement in writing addressed to

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the undersigned. Of course, if Employee exercises his right to revoke, this Agreement shall be null and void, and he will forfeit his right to receive amounts or other benefits that would otherwise be paid or provided to him hereunder.

14. Injunctive Relief; Fees and Expenses. The parties acknowledge that, in the event of a breach of this Agreement, damages would not provide an adequate remedy and that the non-breaching party may seek specific performance of any provision contained herein. If any party to this Agreement brings legal action to enforce the terms of this Agreement, the party which prevails in such legal action, in addition to the remedy or relief obtained in such action, shall be entitled to recover its or his expenses incurred in connection with such legal action, including without limitation, costs of court and attorneys’ fees. Any reimbursement of expenses to Employee required under this paragraph shall be made by Company upon or as soon as practicable following receipt of supporting documentation reasonably satisfactory to Company (but in any event not later than the close of Employee’s taxable year following the taxable year in which the expense is incurred by Employee); provided, however, that, in no event shall any reimbursement be made prior to the date that is six months after the Separation Date. In no event shall any reimbursement be made to Employee for such expenses incurred after the date that is 10 years after the Separation Date.

15. Withholding of Taxes. Company may withhold all applicable taxes from payments to be made hereunder.

16. Indemnification and Insurance. Employee shall continue to be indemnified for actions taken while employed by Company to the same extent as other former employees of Company at Employee’s job level under Company’s Corporate Charter as in effect on the date hereof, and Employee shall continue to be covered by Company’s directors and officers liability insurance policy as in effect from time to time to the same extent as other former employees of Company at Employee’s job level, each subject to the requirements of the General Corporation Law of the State of Delaware.

17. Assignment; Binding Effect. This Agreement is assignable only by Company or UCH (provided that no such assignment shall relieve Company or UCH of its obligations under this Agreement to Employee), shall inure to the benefit of Company’s or UCH’s assigns, successors, affiliates, and Releasees, and is binding on the parties, their representatives, agents and assigns, and as to Employee, his spouse, heirs, legatees, administrators, and personal representatives, and shall inure to the benefit of Employee’s spouse, estate, heirs, legatees, administrators, and personal representatives.

18. Effect on Employment Agreement. The terms and conditions of this Agreement and the Consulting Agreement constitute an amendment to the Employment Agreement. Except as expressly provided herein, this Agreement will not by implication or otherwise limit, impair, reduce, eliminate or constitute a waiver of, or otherwise affect the rights and remedies of Company, UCH, and Employee pursuant to the terms of the Employment Agreement, and will not alter, modify, amend or in any way affect any terms, conditions,

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obligations and covenants or agreements contained in the Employment Agreement, all of which shall continue in full force and effect except to the extent modified herein. Any modification of this Agreement shall be effective only if it is in writing and signed by the party to be charged.

19. Applicable Law. This Agreement shall be deemed to be made in the State of Illinois. To the extent not preempted by ERISA or other Federal law, the validity, interpretation, and performance of this Agreement in all respects shall be governed by the laws of the State of Illinois without regard to its principles of conflicts of law.

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IN WITNESS WHEREOF, the undersigned have executed this Agreement, to be effective on the Effective Date.

Date of execution by Employee:	EMPLOYEE
5-5-2011	/S/ R. KEITH HALBERT
	R. Keith Halbert
	UNITED CONTINENTAL HOLDINGS, INC.
	By:	/S/ MIKE BONDS
	UNITED AIR LINES, INC.
	By:	/S/ MIKE BONDS

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CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (“Agreement”) is effective as of May 1, 2011 (the “Effective Date”), by and among UNITED AIR LINES, INC., a Delaware corporation (“Company”), UNITED CONTINENTAL HOLDINGS, INC., a Delaware corporation (“UCH” and, together with the Company, “Client,” 77 W. Wacker Drive, HDQLD, Chicago, Illinois 60601, Attention: General Counsel), and R. KEITH HALBERT, [insert personal address] (“Consultant”).

WHEREAS, Client desires to engage Consultant to perform certain service and to create certain work product for Client pursuant to the terms and conditions of this Agreement;

WHEREAS, Consultant desires to accept such engagement on an exclusive basis as described below;

NOW, THEREFORE, in consideration of the promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which Consultant and Client acknowledge, the parties agree as follows:

1. CONSULTANT’S DUTIES AND OBLIGATIONS

1.1 Consultant’s Services. This Agreement is for professional consulting services, to be provided as requested by Client during the period commencing on the Effective Date and ending on December 31, 2013. These professional consulting services shall be rendered solely by Consultant and exclusively for Client for technology integration services relating to Client’s business, as agreed upon between Consultant and Client from time to time (the “Services”). The parties acknowledge and agree that professional rendering of the Services will be provided at a frequency (and to the extent) as requested by Client; provided, however, that Consultant shall not provide more than 1,000 total hours of Services pursuant to this Agreement and provided further that the level of services to be performed pursuant to this Agreement remains permanently decreased to a level equal to 20 percent or less of the average level of services performed by Consultant in his capacity as an employee of Company during the 36-month period ending on April 30, 2011, except for any deviations that may be permitted in accordance with the regulations and other guidance promulgated under section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). The initial Services to be completed are described in Schedule A attached hereto and hereby incorporated into this Agreement by reference. Consultant’s primary points of contact with Client shall be through Brett J. Hart or such other person or persons as Client may designate from time to time.

1.2 Consultant Relationship. Consultant agrees that Consultant’s last day of employment by Client shall be on April 30, 2011, and, commencing on the Effective Date,

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Consultant shall act as an independent contractor and not an employee of Client. Neither Consultant nor Client shall represent directly or indirectly that Consultant is an agent, employee, or legal representative of Client. Consultant shall not have the authority to incur any liabilities or obligations of any kind in the name of or on behalf of Client. In addition, Consultant shall be free at all times to arrange the mode, manner, method and means used by Consultant in the performance of Services. Consultant is not required to maintain any schedule of duties or assignments other than those negotiated between the parties or set forth in Schedule A or amendments thereto. Consultant shall perform the Services diligently and with due care. Client shall provide Consultant with such Confidential Information as is reasonably necessary to allow Consultant to perform the Services.

1.3 Payment. In exchange for the Services, Client will pay Consultant a consulting fee in the amount of $750 per hour worked by Consultant in performing the Services. As soon as reasonably practicable following each calendar month during the period commencing on the Effective Date and ending on December 31, 2013 (a “Completed Month”), but in no event later than the last day of the calendar month following the Completed Month, Consultant shall provide Client with an invoice for the Services performed by Consultant during the Completed Month, and Client shall pay amounts that have been properly invoiced in cash as soon as reasonably practicable following receipt of such invoice (but in no event later that the last day of the second calendar month following the Completed Month). All payments hereunder shall be made in U.S. dollars to an account specified by Consultant in writing to Client.

1.4 Tax Treatment. Consultant and Client agree that Client will treat Consultant as an independent contractor for purposes of all tax laws (local, state and federal) and file forms consistent with that status. Consultant agrees, as an independent contractor, that Consultant is not entitled to unemployment benefits in the event this Agreement terminates, or workers’ compensation benefits in the event that Consultant is injured in any manner while performing obligations under this Agreement. Consultant will be solely responsible to pay any and all local, state and/or federal income, social security and unemployment taxes for Consultant. Except to the extent required by law, Client will not withhold any taxes or prepare W-2 Forms for Consultant, but will provide Consultant with a Form 1099, as required by law in Consultant’s name for any amounts paid directly to Consultant for services provided in any calendar year pursuant to this Agreement.

1.5 No Employee Benefits. Consultant and Client acknowledge and agree that Consultant shall not receive, nor be eligible to receive, any employee benefits from Client pursuant to Consultant’s status under this Agreement, whether or not such benefits are subject to the Employee Retirement Income Security Act. In addition, Consultant, to the full extent permitted by law, waives any and all rights to any employee benefits offered by Client to any of Client’s employees, even if Consultant or any of Consultant’s agents, contractors, or subcontractors is determined or adjudged to be a common law or statutory employee of Client for any purpose. The employee benefits to which this waiver applies include, but are not limited to the following benefits which may currently, or hereafter, be offered by Client under any

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agreement, plan, program, arrangement, or otherwise: health, sickness, accident, dental, life, disability and accidental death and dismemberment coverage, whether insured or self-insured, disability, severance, vacation and other paid time off, child care, tuition benefits, expenses, profit sharing, cafeteria plans, pension, 401(k), all other types of retirement plans or programs, and incentive or bonus compensation plans or programs. This provision shall not adversely affect Consultant’s rights to the Continuation Coverage or Flight Benefits described in the Separation Agreement between Client and Consultant relating to Consultant’s resignation effective as of April 30, 2011 (the “Separation Agreement”).

1.6 Expenses. Client shall reimburse Consultant for all reasonable and appropriately documented out-of-pocket expenses incurred by Consultant during the term of this Agreement that are (a) directly attributable to Consultant’s services for Client and (b) agreed to by Client. During the term of this Agreement, Client will provide Consultant with telephone, fax, and necessary computer and communication devices (as determined by Client), at no cost to Consultant. Any reimbursements provided under this Section shall be made on a regular, periodic basis within 30 days after such expenses are submitted for reimbursement by Consultant; provided, however, that (a) before any such reimbursement shall be made, Consultant must submit appropriate evidence of his reimbursable expenses; (b) in no event shall any reimbursements paid to Consultant under this Section be made later than the last day of Consultant’s taxable year following the taxable year in which the expense was incurred; and (c) any reimbursements provided during one taxable year of Consultant may not affect the expenses eligible for reimbursement in any other taxable year of Consultant.

1.7 Compliance with all Laws and Client Policies. Consultant agrees to comply, at Consultant’s own expense, with all federal, state and local laws, regulations, ordinances, codes and requirements (“Law”) applicable to the performance of the Services under this agreement and to comply with Client policies including Client’s Ethics and Compliance Guidelines. Applicable Laws may include, but are not limited to: all Laws relating to the maintenance in good standing of any and all business license fees required by law with respect to the performance of consulting services, all Laws relating to employment (including, but not limited to, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act, the Fair Labor Standards Act, the Immigration and Reform Control Act of 1986, the Railway Labor Act, the National Labor Relations Act, and the Americans with Disabilities Act, all as may be amended); all Laws relating to safety and health (including, but not limited to the Occupational Safety and Health Act of 1980); all Laws pertaining to the conduct of business in foreign countries (including, but not limited to, the Foreign Corrupt Practices Act); and all Laws relating to the payment of taxes, and required taxes and payments for Consultant (including, but not limited to the Code, and applicable state unemployment insurance and workers’ compensation laws).

1.8 No Present or Future Employment Promise. Consultant acknowledges and understands that Client makes no promise of present or future employment of Consultant, nor any promise regarding the renewal or extension of this Agreement, or future agreements.

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1.9 Exclusive Relationship. Consultant agrees that this is an exclusive arrangement. During the term of this Agreement, Consultant agrees not to provide, or offer to provide, consulting or other advice to, become employed by or serve as an independent contractor for, or serve as a member of the board of directors or in any other capacity for, another air carrier, or any affiliate of another air carrier that competes with Client in any State, territory or protectorate of the United States in which Client is qualified to do business or in any foreign country in which Client has an office, station or branch.

Consultant agrees that the restraints created by the covenants in this Section are no greater than necessary to protect Client’s legitimate interests. Furthermore, Consultant agrees that such covenants of this Section do not hinder, or otherwise cause hardship to Consultant in finding and performing employment elsewhere upon termination of this Agreement. Similarly, Consultant agrees that Client’s need for the protection afforded by the covenants of this Section is not outweighed by either the hardship to Consultant or any injury likely to the public.

Consultant agrees that this Section is ancillary to this Agreement, and acknowledges that the consideration given by Client for this Agreement includes Client’s agreement to provide to Consultant access to the Confidential Information described below.

1.10 Confidentiality, Non-Solicitation, and Non-Competition Restrictions. This Agreement shall have no affect on the rights and obligations of the parties under the confidentiality, non-solicitation, non-competition or other restrictive covenants included in Article 5 of the Employment Agreement between the parties dated effective October 1, 2010 (the “Employment Agreement”). Consultant shall continue to comply with the provisions of the Employment Agreement, as modified by the Separation Agreement, governing such restrictive covenants in accordance with the terms thereof. The restrictions and obligations imposed on Consultant by Articles 2 and 3 hereof are in addition to the restrictive covenants described in the foregoing sentences of this Section 1.10.

2. OWNERSHIP OF INTELLECTUAL PROPERTY

2.1 Intellectual Property. The term “Intellectual Property” shall mean all trade secrets, inventions, designs, developments, devices, methods and processes (whether or not patented or patentable, reduced to practice or included in the Confidential Information, as defined below) and all patents and patent applications related thereto, all copyrights, copyrightable works and mask works (whether or not included in the Confidential Information) and all registrations and applications for registration related thereto, all Confidential Information, and all other proprietary rights contributed to, or conceived, developed, made or created by, Consultant (whether alone or jointly with others) at any time during Consultant’s engagement by Client that: (a) are based on or derive (in whole or in part) from any of Client’s Confidential Information; (b) result from or relate to any work that Consultant performs for Client; or (c) are created using any equipment, supplies, facilities, services or Confidential Information of Client.

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2.2 Ownership. All Intellectual Property is and shall remain the sole and exclusive property of Client. Consultant hereby assigns to Client all right, title and interest in and to the Intellectual Property; provided, however, that, when applicable, Client shall own the copyrights in all copyrightable works included in Intellectual Property pursuant to the “work-made-for-hire” doctrine (rather than by assignment), as such term is defined in the 1976 Copyright Act. Client shall own all Intellectual Property irrespective of any copyright notices or confidentiality legends to the contrary which Consultant may have placed on such works. Consultant shall ensure that all copyright notices and confidentiality legends on all work product authored by Consultant that constitutes Intellectual Property shall conform to Client practices and shall specify Client as the owner of the work.

2.3 Consultant Further Assurances. During the period of Consultant’s engagement by Client and at all times thereafter, Consultant shall promptly execute any and all declarations, assignments, applications and other instruments which Client shall deem necessary to apply for and obtain patents and copyright registrations in any country or otherwise to protect Client’s interest in the Intellectual Property.

3. NON-DISCLOSURE AND NON-USE

3.1 Confidential Information. The term “Confidential Information” shall mean all information (whether or not specifically labeled or identified as confidential), in any form or medium, that is disclosed to, or developed or learned by, Consultant in the performance of the Services for Client and that relates to the business, products, services, research or development of Client or its suppliers, clients or customers. Such Confidential Information shall include, without limitation, the following: (a) business information (including, without limitation, information relating to strategic and staffing plans and practices, business, marketing, promotional and sales plans, practices and programs, training practices and programs, cost, rate and pricing structures and accounting and business methods); (b) identities of, individual requirements of, specific contractual arrangements with, and information about Client suppliers, clients and customers and each of their confidential information, suppliers, clients and customers; (c) compilation of data (including, without limitation, the form or format of information that may comprise or include information otherwise not deemed confidential as provided in the following paragraph) and analyses, processes, methods, techniques, systems, formulas, research, records, reports, manuals, documentation, models, data and data bases relating thereto; (d) computer software (including, without limitation, operating systems, applications and program listings), documentation, data and data bases; and (e) trade secrets, inventions, designs, developments, devices, methods and processes (whether or not patentable or reduced to practice).

Confidential Information shall not include any information that Consultant can demonstrate: (a) has been made publicly known through no wrongful act or breach of obligation of confidentiality; or (b) was rightfully received by Consultant from a third party without a breach of any obligation of confidentiality by such third party.

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3.2 Non-Disclosure. Consultant acknowledges and agrees that Consultant shall have access and contribute to information and materials of a highly sensitive nature (including Confidential Information) and that a purpose of this Agreement is to protect the legitimate business interest of Client therein. Consultant agrees that during the period of Consultant’s engagement by Client and at all times thereafter, unless Consultant first secures the written consent of Client, Consultant shall not use for Consultant or anyone else, and shall not disclose to others, any Confidential Information, except to the extent such use or disclosure is required in the performance of Consultant’s services for Client or by law or court order. Consultant further agrees to use Consultant’s best efforts and utmost diligence to safeguard the Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft.

3.3 Required Disclosures. In the event that Consultant is required by law or court order to disclose any Confidential Information, Consultant: (a) shall notify Client as soon as possible, but in no event later than fifteen (15) business days prior to any such disclosure; (b) shall cooperate with Client to preserve the confidentiality of such Confidential Information consistent with applicable law; and (c) shall use Consultant’s best efforts to limit any such disclosure to the minimum disclosure necessary to comply with such law or court order.

4. TERM / TERMINATION

4.1. Term. The term of this Agreement shall commence on the Effective Date and shall continue until December 31, 2013.

4.2. Termination of Agreement by Either Party; Death or Incapacity of Consultant. Either party may terminate this Agreement before its expiration with or without cause upon 30 days’ advance written notice to the other party. In addition, the Agreement will terminate at the end of the current month of service upon the death or incapacity of Consultant, and no further payments hereunder shall be made to Consultant or Consultant’s estate thereafter, except payment for any unpaid Services rendered by Consultant pursuant to the terms of this Agreement.

4.3. Return of Materials. Upon any termination of Consultant’s engagement by Client for any reason, or at any time requested, Consultant shall promptly deliver to Client all Confidential Information and Intellectual Property in Consultant’s possession and control, and all copies thereof, in whatever form or medium, including without limitation, written records, optical and magnetic media, and all other materials containing any Confidential Information or Intellectual Property.

5. REPRESENTATIONS AND WARRANTIES

Consultant represents and warrants that: (a) Consultant has the full power and authority to enter into this Agreement; (b) Consultant will not breach or violate any other agreement to which Consultant is a party by entering into this Agreement; and (c) none of the Intellectual Property will infringe, misappropriate or otherwise conflict with the proprietary rights of any third party, except as the same may be caused by Client.

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6. GENERAL

6.1. Relationship of Parties. Except as specifically provided herein, no party shall act or represent or hold itself out as having authority to act as agent or partner of any other party or in any way bind or commit any other party to any obligations. Any such act will create a separate liability in the party so acting to any and all third parties and affected thereby. The rights, duties, obligations and liabilities of the parties shall be several and not joint or collective, and nothing contained in this Agreement shall be construed as creating a partnership, joint venture, agency, trust or other association of any kind, each party being individually responsible for its obligation as set forth in this Agreement.

6.2. Assignment. This Agreement may not be assigned by Consultant, except to an entity that is wholly owned and controlled by Consultant, provided that Consultant shall continue to be bound and the Services shall continue to be provided solely by Consultant following any such assignment.

6.3. Notices. Any notices, consents or approvals required or permitted to be given hereunder shall be deemed to be given and sufficient when delivered in writing, first class United States certified or registered letter, return receipt requested, or by overnight delivery or courier service to the respective addresses first written above (or such other address provided by Consultant or Client in accordance with this provision).

6.4. Waiver. The failure of any party to exercise any power or right or to require performance by any other party of any part of this Agreement shall not affect the full right to exercise such power or to require such performance at any time thereafter, nor shall the waiver by any party of a breach of any provision of this Agreement constitute a waiver of any later breach of the same or any other provision. No term or provision of this Agreement shall be deemed waived and no breach excused unless such waiver or consent shall be in writing and signed by the party claimed to have waived or consented.

6.5. Choice of Law. This Agreement shall be governed by and construed in accordance with the domestic laws of the state of Illinois, without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the state of Illinois.

6.6. Reasonableness; Severability. Consultant acknowledges and agrees that the limitations set forth in this Agreement are reasonable with respect to scope, duration, geographic area and otherwise, and are properly required to protect the legitimate business interests of Client. In the event that such limitation is found to be unreasonable by a court of competent jurisdiction, Consultant agrees that the maximum scope, duration, geographical area or other

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limitation as such court shall deem reasonable shall be substituted for the stated duration, scope, geographical area or other limitation, with appropriate modification to Client’s obligations under this Agreement. Furthermore, the provisions of this Agreement shall be severable, and if any provision of this Agreement is held or declared illegal, invalid or unenforceable, the remaining provisions of this Agreement shall not be affected and shall continue in full force and effect to the extent practical.

6.7. Survival. Articles 2, 3, 4, 5 and 6 shall survive any expiration or termination of this Agreement.

6.8. Section Headings. Section headings have been included in this Agreement merely for convenience or reference. They are not to be considered part of, or to be used in interpreting this Agreement.

6.9. Entire Agreement. This Agreement and Schedule A attached hereto and incorporated herein by reference contain the entire agreement between the parties hereto with respect to the subject matter hereof and supersede any previous understandings or agreements, whether written or oral, in respect of such subject matter. The language used in this Agreement shall be deemed to express the mutual intent of the parties, and no rule of strict construction shall be applied to any provision hereunder. This Agreement and Schedule A may only be amended by the parties by a subsequent written agreement executed by the duly authorized representatives.

6.10. Default. Specific Performance. Consultant acknowledges that money damages would not be an adequate remedy for any breach of this Agreement by Consultant, and Client or its affiliates shall be entitled to enforce the provisions of this Agreement by terminating all payments and/or other benefits to Consultant that may be payable to Consultant under this Agreement, the Separation Agreement, and/or the Employment Agreement and to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Agreement but shall be in addition to all remedies available at law or in equity, including the recovery of damages from Consultant and Consultant’s agents. If any party to this Agreement brings legal action to enforce the terms of this Agreement, the party which prevails in such legal action, in addition to the remedy or relief obtained in such action, shall be entitled to recover its or his out-of-pocket expenses incurred in connection with such legal action, including without limitation, costs of court and reasonable attorneys’ fees. Any reimbursement of expenses to Consultant required under this Section shall be made by Company upon or as soon as practicable following receipt of supporting documentation reasonably satisfactory to Company (but in any event not later than the close of Consultant’s taxable year following the taxable year in which the expense is incurred by Consultant); provided, however, that, upon the cessation of the consulting relationship, in no event shall any additional reimbursement be made prior to the date that is six months after the date of such cessation to the extent such payment delay is required under section 409A(a)(2)(B)(i) of the Code. In no event shall any reimbursement be made to Consultant for such expenses incurred after the date that is 10 years after the date of the cessation of the consulting relationship.

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6.11. Counterparts. This Agreement may be signed in counterparts, each containing the signature of only one party, but taken together constituting one and the same instrument.

7. ACKNOWLEDGEMENT

Each party acknowledges and agrees that it has fully read and understands this Agreement, has had the opportunity to discuss this Agreement with their respective attorneys, has had any questions regarding its effect or the meaning of its terms answered to each party’s satisfaction, and, intending to be legally bound hereby, each party has freely and voluntarily executed this Agreement.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the 5 day of May, 2011, and effective upon the Effective Date.

	United Air Lines, Inc.
By:	/S/ MIKE BONDS
Name:	MIKE BONDS
Title:	EVP Human Resources & Labor Relations
	United Continental Holdings, Inc.
By:	/S/ MIKE BONDS
Name:	MIKE BONDS
Title:	EVP Human Resources & Labor Relations
	Consultant
	/S/ R. KEITH HALBERT
	R. Keith Halbert

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SCHEDULE A

Specification of Services:

Consultant shall provide the following services, as directed by Client:

1) Assistance with strategic planning and implementation strategy on information technology matters.

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EX-10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made by and among CONTINENTAL AIRLINES, INC., a Delaware corporation (“Company”), UNITED CONTINENTAL HOLDINGS, INC., a Delaware corporation and the parent company of Company (“UCH”), and ROBERT S. EDWARDS (“Employee”), and is dated and effective as of May 1, 2011 (the “Effective Date”).

W I T N E S S E T H:

WHEREAS, on May 2, 2010, UAL Corporation (“UAL”), Company and JT Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of UAL (“Merger Sub”), entered into an Agreement and Plan of Merger, pursuant to which Merger Sub merged with and into Company (the “Merger”) on October 1, 2010 (the “Merger Closing Date”), and, as a result of which, Company became a wholly-owned subsidiary of UAL (which parent company was renamed UCH); and

WHEREAS, UCH, Company and Employee are parties to that certain Employment Agreement dated as of October 1, 2010 (as amended, the “Existing Agreement”); and

WHEREAS, UCH, Company and Employee desire to enter into this Agreement to replace and supersede the Existing Agreement in its entirety, effective as of the Effective Date.

NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations contained herein, UCH, Company, and Employee agree as follows:

ARTICLE 1: EMPLOYMENT AND DUTIES

1.1 Employment. Company agrees to continue to employ Employee, and Employee agrees to continue to be employed by Company, under the terms and conditions of this Agreement effective as of the Effective Date. Employee agrees to serve in the position assigned pursuant to paragraph 1.2 and to perform diligently and to the best of Employee’s abilities.

1.2 Position. Employee shall serve as Senior Vice President and Chief Information Officer of Company and United Air Lines, Inc., or in such other positions as the parties may agree. Without limiting the foregoing, the parties agree that during the 18-month period following the Effective Date, the Chief Executive Officer of UCH may, in his sole discretion, select another individual to serve as the Chief Information Officer of Company and United Air Lines, Inc., and, in connection with this action, modify Employee’s title and position, provided that Employee shall continue to serve as Senior Vice President following any such action. UCH and Company may assign this Agreement and Employee’s employment to any subsidiary or affiliate of UCH or Company.

ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT

2.1 Term. Unless sooner terminated pursuant to other provisions hereof, Company agrees to employ Employee pursuant to this Agreement for the period beginning on the Effective Date and ending on September 30, 2012 (the “Initial Term”). The term of this Agreement shall be extended automatically for a successive one-year period as of the last day of the Initial Term and as of the last day of each successive one-year period of time thereafter while this Agreement is in effect (each such successive term being referred to as an “Extended Term”) unless at least 90 days before the last day of the Initial Term or any such Extended Term either UCH and Company gives written notice to Employee not to extend the Agreement or Employee gives written notice to UCH and Company not to extend the Agreement. Upon expiration of this Agreement due to provision of written notice by UCH and Company to Employee that the term of this Agreement shall not be extended (a “Company Caused Expiration”), if Employee is not then a party to an employment or other agreement with UCH or a subsidiary thereof that provides Employee with severance benefits upon certain terminations of Employee’s employment with UCH and its subsidiaries, then UCH shall cause Employee to be eligible for severance benefits under a severance plan to be implemented prior to the date of any Company Caused Expiration and thereafter maintained by UCH or a subsidiary thereof subject to the terms and conditions of such plan as in effect on the date of termination of Employee’s employment. The provisions of the preceding sentence shall survive the expiration or earlier termination of this Agreement.

2.2 Right and Notice of Termination. If Company or Employee desires to terminate Employee’s employment at any time prior to expiration of the term of employment, it or Employee may do so by providing written notice to the other party that it or Employee has elected to terminate Employee’s employment and stating the effective date and reason for such termination, provided that no such action shall alter or amend any other provisions hereof.

2.5 Certain Determinations under Section 409A of the Code. For all purposes of this Agreement, Employee shall be considered to have terminated employment with Company when Employee incurs a “separation from service” with Company within the meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the “Code”). However, whether a separation from service has occurred shall be determined based upon a reasonably anticipated permanent reduction in the level of bona fide services to be performed to no more than 20% (or 49% if Employee will no longer serve as an officer of UCH or Company) of the average level of bona fide services provided in the immediately preceding 36 months. Employee hereby agrees to be bound by Company’s determination of its “specified employees” (as defined in Section 409A of the Code).

ARTICLE 3: COMPENSATION AND BENEFITS

3.1 Base Salary. During the period of this Agreement, Employee shall receive an annual base salary equal to $425,000 or such other amount as the parties may agree upon from time to time (“Base Salary”). Employee’s annual Base Salary shall not be reduced by Company without Employee’s consent unless the reduction is (i) a result of a generally applicable reduction imposed on substantially all of the officers of UCH and its affiliates and (ii) an amount proportionate to the base salary reduction for other officers of UCH and its affiliates at substantially the same title or level of Employee. Employee’s Base Salary shall be paid in accordance with Company’s payroll practice for similarly situated employees.

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3.2 Annual and Long-Term Incentive Programs. Employee shall be eligible to participate in the annual incentive compensation program maintained by Company for its similarly situated employees. Employee’s 2011 target opportunity under such program shall be equal to 100% of Employee’s annual base salary earned in 2011. Employee shall be eligible to receive grants under the long term incentive plans maintained by UCH or any affiliate of UCH that is eligible to grant awards to Employee (including stock option, restricted stock and other equity compensation plans and any other long-term incentive plans) at the discretion of the Compensation Committee of the Board of Directors of UCH (the “UCH Board Committee”).

3.3 Other Benefits. Employee shall be allowed to participate in all benefits, plans, policies and programs maintained by UCH or its affiliates for similarly situated employees, including the Officer Travel Policy (as defined in paragraph 4.9). Except as provided in the last sentence of section 4(iii) and section 4(iv) of the Officer Travel Policy, Company shall not change, amend or discontinue Employee’s Flight Benefits (as defined in paragraph 4.9 or as provided for under paragraph 4.3) without Employee’s prior written consent. Upon a Company Caused Expiration, if Employee is not then a party to an employment or other agreement with UCH or a subsidiary thereof that provides Employee with Flight Benefits, then UCH shall provide Employee with Flight Benefits during the period of Employee’s employment with UCH and its subsidiaries following the expiration of this Agreement (which Flight Benefits shall be subject to the same restrictions regarding change, amendment and discontinuance as provided in the preceding sentence). The provisions of the preceding sentence shall survive the expiration or earlier termination of this Agreement.

ARTICLE 4: EFFECT OF TERMINATION

4.1 Effect on Compensation and Accrued Obligations. Upon termination of the employment relationship for any reason, all compensation and all benefits to Employee shall terminate, provided that Company shall pay Employee: (i) the earned but unpaid Base Salary through the Termination Date (as defined in paragraph 4.9); (ii) any annual, long-term, or other incentive award that relates to a completed fiscal year or performance period, as applicable, and is payable (but not yet paid) on or before the Termination Date, which shall be paid in accordance with the terms of such award; (iii) a lump-sum payment in respect of accrued but unused vacation days at Employee’s per-business-day Base Salary rate in effect as of the Termination Date; and (iv) any unpaid expense or other reimbursements due to Employee.

4.2 Involuntary Termination and Good Reason Termination. Upon Employee’s termination of employment which constitutes an Involuntary Termination (as defined in paragraph 4.9) or a Good Reason Termination (as defined in paragraph 4.9), Company shall, subject to the provisions of paragraphs 4.5 and 4.6, also provide Employee the following:

(i) Continuation Coverage for the Severance Period (as defined in paragraph 4.9) for Employee and Employee’s eligible dependents;

(ii) the Termination Payment (as defined in paragraph 4.9);

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(iii) a Pro-Rata Annual Bonus (as defined in paragraph 4.9) if the Termination Date occurs prior to the end of the Initial Term; and

(iv) outplacement services provided by an agency selected by Company at Company’s cost and for a period of 12 months beginning on the date that the release described in paragraph 4.5 becomes effective and irrevocable.

Subject to the provisions of paragraphs 4.5 and 4.6, the Termination Payment shall be paid in a cash lump-sum on the 60th day following the Termination Date. Subject to the provisions of paragraphs 4.5 and 4.6, the Pro-Rata Annual Bonus shall be paid in a cash lump sum to Employee on the date Employee’s annual incentive compensation bonus for the year that includes the Termination Date would have been paid if Employee’s employment hereunder had continued (but in no event earlier than 60 days after the Date of Termination).

4.3 Flight Benefits. Upon Employee’s termination of employment for any reason other than Cause (as defined in paragraph 4.9), whether occurring before, on or after the date of expiration of this Agreement, Company shall, subject to the provisions of paragraph 4.5 (if such termination occurs prior to the expiration of this Agreement) and paragraph 4.6, provide Employee with Flight Benefits for Employee’s lifetime, which Flight Benefits shall not include the benefit described in section 3(vii)(e) of the Officer Travel Policy (relating to an annual gross up amount). The provisions of this paragraph 4.3 shall survive the expiration or earlier termination of this Agreement.

4.4 Incentive Awards. For purposes of the awards Employee held as of the Merger Closing Date that remain outstanding on the Effective Date (the “Outstanding Awards”) under Company’s Long Term Incentive and RSU Programs (the “LTIP/RSU Programs”), any termination of Employee’s employment during the term of this Agreement that constitutes an Involuntary Termination or a Good Reason Termination shall be treated as a “Qualifying Event” under the LTIP/RSU Programs. In addition, if UCH and Company provide written notice to Employee that the term of this Agreement shall not be extended, then, for purposes of the Outstanding Awards, any termination of Employee’s employment occurring after the expiration of the term of this Agreement and prior to the full payment or lapse of such awards (other than (a) for Cause (as defined herein), (b) by Employee under circumstances that do not constitute a Good Reason Termination (as defined herein), or (c) by reason of death or Disability (as defined herein)), shall be treated as a “Qualifying Event” under the LTIP/RSU Programs. Notwithstanding any provision to the contrary in the LTIP/RSU Programs, Employee agrees that payments with respect to Employee’s Outstanding Awards shall be based on Employee’s annual base salary and position as in effect immediately prior to the Merger Closing Date and without regard to any change in such annual base salary or position that occurs on or after the Merger Closing Date. The provisions of this paragraph 4.4 shall survive the expiration or earlier termination of this Agreement and shall not affect Employee’s rights under the LTIP/RSU Programs upon death, disability or retirement.

4.5 Payment Obligations Absolute. Company’s obligation under this Article 4 shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set off, counterclaim, recoupment, defense or other right which Company (including its subsidiaries and affiliates) may have against Employee or anyone else; provided

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that Company obligations under this Article 4 (except upon Employee’s death) shall be subject to Employee’s execution, within 50 days after the Termination Date, of a general release and waiver substantially in the form attached as Exhibit A, which has become irrevocable. Company agrees to execute such form of release and waiver concurrently with the execution thereof by Employee. All amounts payable by Company shall be paid without notice or demand. Employee shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under any provision of this Article 4, and, except as provided in paragraph 4.9 with respect to Continuation Coverage, the obtaining of any such other employment (or the engagement in any endeavor as an independent contractor, sole proprietor, partner, or joint venturer) shall in no event effect any reduction of Company’s obligations under this Article 4.

4.6 Section 409A Compliance. Notwithstanding any provision in this Agreement to the contrary, if any payment or benefit provided for herein would be subject to additional taxes and interest under Section 409A of the Code if Employee’s receipt of such payment or benefit is not delayed until the Section 409A Payment Date (as defined in paragraph 4.9), then such payment or benefit shall not be provided to Employee (or Employee’s estate, if applicable) until the Section 409A Payment Date (and, at that time, Employee shall also receive interest thereon from the date such payment or benefit would have been provided in the absence of this paragraph until the date of receipt of such payment or benefit at the Aa Corporate Bond Rate (as defined in paragraph 4.9)). This paragraph shall not apply to any payment or benefit otherwise described in the preceding sentence if another provision of this Agreement or any other plan or program of UCH or any of its affiliates is intended to cause Employee’s receipt of such payment or benefit to satisfy the requirements of Section 409A(a)(2)(B)(i) of the Code.

4.7 Liquidated Damages. Company and Employee hereby agree that the payments and benefits, if any, pursuant to this Article 4 shall be received by Employee as liquidated damages. Payment of the compensation and benefits to Employee pursuant to paragraph 4.2 shall be deemed to satisfy any corresponding payments to which Employee may otherwise be entitled under any and all severance plans and policies maintained by Company or its affiliates.

4.8 Parachute Payments. Notwithstanding anything to the contrary in this Agreement, if the payments and benefits provided for in this Agreement, together with any other payments and benefits which Employee has the right to receive from UCH, Company and their affiliates (collectively, the “Payments”), would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the payments and benefits provided hereunder and under any other plan, program, agreement or arrangement maintained by UCH, Company or any of their affiliates (“Other Plan”) (provided, however, that, solely with respect to any parachute payment attributable to the Merger, such reference to “Other Plan” shall only include an Other Plan that does not provide Employee with the right to receive an additional payment with respect to any excise tax imposed under Section 4999 of the Code) shall be either (a) reduced (but not below zero) so that the present value of the Payments will be one dollar ($1.00) less than three times Employee’s “base amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of the Payments shall be subject to the excise tax imposed by Section 4999 of the Code or (b) paid in full, whichever produces the better net after-tax position to Employee (and solely for purposes of parachute payments attributable to the Merger, taking into account any applicable excise tax under Section 4999 of the Code, any other applicable taxes and any gross-up payments to Employee under any Other Plan). The reduction of Payments, if any, shall be made by

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reducing the Payments in the reverse order in which the Payments would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time). The determination as to whether any such reduction in the Payments is necessary shall be made by the UCH Board Committee in good faith. If a reduced Payment is made or provided and, through error or otherwise, that Payment, when aggregated with other payments and benefits from Company (or its affiliates) used in determining if a “parachute payment” exists, exceeds one dollar ($1.00) less than three times Employee’s base amount, then Employee shall immediately repay such excess to Company.

4.9 Certain Definitions and Additional Terms. As used herein, the following terms shall have the meanings assigned below:

(i) “Aa Corporate Bond Rate” shall mean the average of the Moody’s daily long-term corporate bond yield averages for Aa-rated corporate bonds published by Moody’s Investors Service, for the three-month period ending on the last day of the second month preceding the Termination Date (or, if such yield information is no longer so published, then the average of the daily corporate bond yields for a comparable sample of Aa-rated corporate bonds of comparable tenor determined in good faith by Company).

(ii) “affiliates” shall mean any entity controlled by, controlling, or under common control with UCH, it being understood that control of an entity shall require the direct or indirect ownership of a majority of the outstanding capital stock of such entity.

(iii) “Cause” shall mean, for purposes of this Agreement, if Employee’s employment is terminated by Company pursuant to any of the following clauses:

(A) gross negligence or willful misconduct in the performance of, or Employee’s abuse of alcohol or drugs rendering Employee unable to perform, the material duties and services required of Employee pursuant to this Agreement;

(B) Employee’s conviction or plea of nolo contendre for any crime involving moral turpitude or a felony;

(C) Employee’s commission of an act of deceit or fraud intended to result in personal and unauthorized enrichment of Employee at UCH’s or Company’s expense; or

(D) Employee’s material breach of a material obligation of Employee to UCH or Company under this Agreement or a material violation of the policies of UCH or Company.

(iv) “Continuation Coverage” shall mean, subject to the limitations described in this paragraph, the continued coverage of Employee and Employee’s eligible dependents under the following welfare benefit plans available to similarly situated employees of Company who have not terminated employment (or the provision of similar benefits, which may include the provision of benefits under one or more insurance policies): medical, dental, term life insurance (in an amount determined in accordance

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with Company policy), vision care, accidental death and dismemberment, and prescription drug. Such coverage shall be provided by Company during the Severance Period at no greater contribution, deductible or co-pay cost to Employee than that applicable to a similarly situated Company employee who has not terminated employment; provided, however, that (1) subject to clause (2) below, the coverage under a particular welfare benefit plan (or the receipt of similar benefits) shall terminate upon Employee’s receipt of similar benefits from a subsequent employer and (2) if Employee (and/or Employee’s eligible dependents) would have otherwise been entitled to retiree medical coverage under a particular welfare benefit plan had Employee voluntarily retired on the Termination Date, then Employee (and/or Employee’s eligible dependents) shall receive such coverage pursuant to the terms of such plan. Continuation Coverage shall be subject to the application of any Medicare or other coordination of benefits provisions under a particular welfare benefit plan. Notwithstanding any provision in this Article 4 to the contrary, Employee (and/or each of Employee’s eligible dependents) shall be entitled upon the expiration of the Severance Period to purchase an additional 18 months of coverage under a group health plan subject to ERISA sections 601 and 608. Such additional coverage will be made available to Employee at COBRA rates. The Continuation Coverage described in this paragraph shall be offered solely as an alternative to any COBRA coverage applicable to any group health plan otherwise available to Employee (and each of Employee’s dependents, if any) within the meaning of ERISA sections 601 and 608. The medical, dental, vision care and prescription drug benefits described in the first sentence of this paragraph shall be provided through an arrangement that satisfies the requirements of Sections 105 and 106 of the Code such that the benefits or reimbursements under such arrangement are not includible in Employee’s income. Company may satisfy this requirement by providing such benefits through an arrangement that requires Company to impute income to Employee, provided that Company will pay a tax gross-up payment to Employee with respect to such imputed income for each taxable year for which Employee has such imputed income, and such tax gross-up payment shall be made during the month of January following each taxable year to which such imputed income relates (or if later, the Section 409A Payment Date).

(v) “Disabled” or “Disability” shall mean Employee becoming incapacitated for a period of at least 180 days by accident, sickness or other circumstance that renders Employee mentally or physically incapable of performing the material duties and services required of Employee hereunder on a full-time basis during such period.

(vi) “Flight Benefits” shall mean the flight benefits provided under the Officer Travel Policy.

(vii) “Good Reason Termination” shall mean Employee’s termination of Employee’s employment under this Agreement for any of the following reasons:

(A) a material diminution in Employee’s authority, duties, or responsibilities from those applicable to Employee as of the Effective Date or as agreed to in writing by the parties, provided however, that during the 18-month period following the Effective Date, the Chief Executive Officer of UCH may select another person to serve as the Chief Information Officer of Company and

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United Air Lines, Inc. and may alter Employee’s reporting structure within UCH and its subsidiaries, and any such change(s) shall not constitute a basis for treating any termination of Employee’s employment as a “Good Reason Termination” pursuant to this clause (vii)(A);

(B) a material diminution in Employee’s Base Salary, except to the extent such diminution in Base Salary is (1) a result of a generally applicable reduction in base salaries imposed on substantially all of the officers of UCH and its affiliates and (2) is an amount proportionate to the salary reduction for other officers of UCH and its affiliates at substantially the same title or level of Employee;

(C) a relocation of Employee’s principal place of employment by more than 50 miles (other than a relocation to the Chicago, Illinois metropolitan area during the Initial Term as a result of the Merger); or

(D) a material breach by Company of any provision of this Agreement.

Notwithstanding the foregoing or any other provision in this Agreement to the contrary, any assertion by Employee of a Good Reason Termination shall not be effective unless all of the following conditions are satisfied:

(w) the conditions described in the preceding sentence giving rise to Employee’s termination of employment must have arisen without Employee’s written consent;

(x) Employee must provide written notice to Company of such condition and Employee’s intent to terminate employment in accordance with paragraph 7.1 within 90 days of the initial existence of the condition;

(y) the condition specified in such notice must remain uncorrected for 30 days after receipt of such notice by Company; and

(z) the date of Employee’s termination of employment must occur within 90 days after the initial existence of the condition specified in such notice.

(viii) “Involuntary Termination” shall mean any termination of Employee’s employment with Company (other than resulting from an assignment of this Agreement as permitted by paragraph 1.2 hereof) which does not result from Employee’s (A) resignation, (B) death, (C) Cause, (D) retirement under Company’s retirement policy or program generally applicable to similarly situated employees of Company, or (E) Disability.

(ix) “Officer Travel Policy” shall mean the United Continental Holdings, Inc. Officer Travel Policy, as in effect on October 1, 2010.

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(x) “Post-Termination Obligation Period” shall mean the lesser of the two-year period commencing on the Termination Date or the Severance Period.

(xi) “Pro-Rata Annual Bonus” shall mean an amount equal to (1) the annual incentive compensation bonus that Employee would have been entitled to receive for the calendar year that includes the Termination Date if Employee’s employment hereunder had continued through year end (such amount to be determined with any subjective or personal performance goals rated at target), multiplied by (2) a fraction, the numerator of which is the number of days Employee was employed hereunder during such year and the denominator of which is the number of days in such year. Notwithstanding the foregoing, if this paragraph applies with respect to an annual bonus that is intended to constitute performance-based compensation within the meaning of, and for purposes of, Section 162(m) of the Code, then this paragraph shall apply with respect to such annual bonus only to the extent the applicable performance criteria have been satisfied as certified by a committee of the Board of Directors of UCH as required under Section 162(m) of the Code.

(xii) “Section 409A Payment Date” shall mean the earlier of (1) the date of Employee’s death or (2) the date which is six months after the Termination Date.

(xiii) “Severance Multiple” shall mean an amount determined as follows: (1) if the Termination Date occurs during the Initial Term, the Severance Multiple shall be 1.5; and (2) if the Termination Date occurs on any date other than as provided in clause (1), then the Severance Multiple shall be 1.0.

(xiv) “Severance Period” shall mean the period determined as follows: (1) if the Termination Date occurs during the Initial Term, the period commencing on the Termination Date and continuing for 30 months; and (2) if the Termination Date occurs on any date other than as provided in clause (1), the period commencing on the Termination Date and continuing for 18 months;

(xv) “Termination Date” shall mean the effective date (if any) of Employee’s termination of employment in accordance with the terms of this Agreement.

(xvi) “Termination Payment” shall mean the Severance Multiple times the sum of (1) Employee’s annual Base Salary as in effect immediately prior to Employee’s termination of employment hereunder, and (2) Employee’s bonus pursuant to the annual, calendar-year bonus award for the year of such termination of employment, based on the target level of performance; provided, however, that if it reasonably expected that Employee will be a “covered employee” within the meaning of Section 162(m) of the Code for the year in which termination of employment occurs, then the amount described in clause (2) shall be equal to the target percentage under Employee’s annual bonus award for the year prior to the year of termination of employment, multiplied by Employee’s Base Salary described in clause (1).

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ARTICLE 5: RESTRICTIVE COVENANTS

5.1 Confidentiality Restrictive Covenants. Employee agrees to be bound by the applicable UCH and Company policies regarding confidentiality, solicitation, competition, and disparagement as set forth in UCH’s and Company’s policy manuals and as may be amended from time to time. Employee shall at all times hold in strict confidence any Proprietary or Confidential Information related to UCH, Company or their subsidiaries and affiliates, except that Employee may disclose such information as required by law, court order, regulation or similar order. For purposes of this Agreement, the term “Proprietary or Confidential Information” shall mean all information relating to UCH, Company, their subsidiaries or affiliates (such as business plans, trade secrets, or financial information of strategic importance to the Company or its subsidiaries or affiliates) that is not generally known in the airline industry, that was learned, discovered, developed, conceived, originated or prepared during Employee’s employment with Company and the disclosure of which would be harmful to the business prospects, financial status or reputation of UCH, Company or their subsidiaries or affiliates at the time of any disclosure by Employee.

The relationship between Employee and UCH and its affiliates is and shall continue to be one in which UCH and its affiliates reposes special trust and confidence in Employee, and one in which Employee has and shall have a fiduciary relationship to UCH and its affiliates. As a result, UCH and its affiliates shall, in the course of Employee’s duties under the Agreement entrust Employee with, and disclose to Employee, Proprietary or Confidential Information. Employee recognizes that Proprietary or Confidential Information has been developed or acquired, or will be developed or acquired, by UCH and its affiliates at great expense, is proprietary to UCH and its affiliates, and is and shall remain the property of UCH and its affiliates. Employee acknowledges the confidentiality of Proprietary or Confidential Information and acknowledges that Employee could not competently perform Employee’s duties under this Agreement without access to such information. Employee acknowledges that any use of Proprietary or Confidential Information by persons not in the employ of UCH and its affiliates would provide said persons an unfair competitive advantage which they would not have without the use of said Proprietary or Confidential Information and that said advantage would cause UCH and its affiliates irreparable harm. Employee further acknowledges that because of this unfair competitive advantage, and UCH’s and its affiliates’ legitimate business interests, which include their need to protect their goodwill and the Proprietary or Confidential Information, Employee has agreed to the post-employment restrictions in paragraph 5.3.

5.2 Non-Solicitation. During Employee’s employment and the Post-Termination Obligation Period, Employee hereby agrees not to, directly or indirectly, solicit or hire or assist any other person or entity in soliciting or hiring any employee of UCH, Company or any of their subsidiaries or affiliates to perform services for any entity (other than UCH, Company or their subsidiaries or affiliates), or attempt to induce any such employee to leave the employ of UCH, Company or their subsidiaries or affiliates.

5.3 Non-Competition. In return for, among other things, Company’s promise to provide the Proprietary or Confidential Information described herein, during Employee’s employment and the Post-Termination Obligation Period, Employee agrees that Employee shall not, without the prior written consent of Company, take a Competitive Position with a

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Competitor. For purposes of this Agreement, (a) “Competitor” means any airline or air carrier or any company affiliated, directly or indirectly, with another airline or air carrier, and (b) “Competitive Position” means becoming employed by, a member of the board of directors of, a consultant to, or to otherwise provide services of any nature to, a Competitor directly or indirectly. After the Termination Date, such non-competition obligations shall apply in any State, territory or protectorate of the United States in which UCH or an affiliate of UCH is qualified to do business or in any foreign country in which UCH or an affiliate of UCH has an office, station or branch as of the Termination Date. Notwithstanding the foregoing, such non-competition obligations shall terminate and be inapplicable if the termination of Employee’s employment with Company constitutes an Involuntary Termination or a Good Reason Termination.

5.4 Non-Disparagement. Employee agrees not to make, or cause to be made, any statement, observation or opinion, or communicate any information (whether oral or written, directly or indirectly) that (a) accuses or implies that UCH, Company or their subsidiaries or affiliates engaged in any wrongful, unlawful or improper conduct, whether relating to Employee’s employment (or the termination thereof), the business or operations of UCH, Company or their subsidiaries or affiliates, or otherwise; or (b) disparages, impugns or in any way reflects adversely upon the business or reputation of UCH, Company or their subsidiaries or affiliates. Nothing herein will be deemed to preclude Employee from providing truthful testimony or information pursuant to subpoena, court order or similar legal process, or instituting and pursuing legal action.

5.5. Injunctive Relief. Employee agrees that it is impossible to measure in money the damages which will accrue to UCH or Company by reason of a failure by Employee to perform any of Employee’s obligations under this Article 5. Accordingly, if UCH, Company or any of their subsidiaries or affiliates institutes any action or proceeding to enforce their rights under this Article 5, to the extent permitted by applicable law, Employee hereby waives the claim or defense that UCH, Company or their affiliates has an adequate remedy at law, and Employee shall not claim that any such remedy at law exists.

5.6 Survival of Article 5. The provisions of this Article 5 shall survive the expiration or earlier termination of this Agreement, except that the provisions of paragraph 5.3 shall survive during Employee’s period of employment and thereafter to the extent provided in this Agreement.

ARTICLE 6: DISPUTE RESOLUTION

Except for any action or proceeding brought pursuant to paragraph 5.5, the parties agree that any dispute arising out of or relating to this Agreement or the formation, breach, termination or validity thereof, will be settled by binding arbitration by a panel of three arbitrators in accordance with the commercial arbitration rules of the American Arbitration Association. The arbitration proceedings will be located in Chicago, Illinois. The arbitrators are not empowered to award damages in excess of compensatory damages and each party irrevocably waives any damages in excess of compensatory damages. Judgment upon any arbitration award may be entered into any court having jurisdiction thereof and the parties consent to the jurisdiction of any court of competent jurisdiction located in the State of Illinois. EMPLOYEE

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ACKNOWLEDGES THAT, BY SIGNING THIS AGREEMENT, EMPLOYEE IS WAIVING ANY RIGHT THAT EMPLOYEE MAY HAVE TO A JURY TRIAL OR, EXCEPT AS EXPRESSLY PROVIDED HEREIN, A COURT TRIAL OF ANY CLAIM ALLEGED BY EMPLOYEE.

ARTICLE 7: MISCELLANEOUS

7.1 Notices. For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to Company or UCH:	United Continental Holdings, Inc.
	77 W. Wacker Drive, HDQLD
	Chicago, Illinois 60601
	Attention: General Counsel
If to Employee:	At the most recent address
	on file with Company

or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices of changes of address shall be effective only upon receipt.

7.2 Applicable Law. This contract is entered into under, and shall be governed for all purposes by, the laws of the State of Illinois.

7.3 No Waiver. No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

7.4 Severability. If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect.

7.5 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

7.6 Withholding of Taxes and Other Employee Deductions. Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling and all other normal employee deductions made with respect to Company’s employees generally.

7.7 Headings. The paragraph headings have been inserted for purposes of convenience and shall not be used for interpretive purposes.

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7.8 Gender and Plurals. Wherever the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely.

7.9 Successors. This Agreement shall be binding upon and inure to the benefit of UCH and Company and any successor of UCH or Company, including without limitation any person, association, or entity which may hereafter acquire or succeed to all or substantially all of the business or assets of UCH or Company by any means whether direct or indirect, by purchase, merger, consolidation, or otherwise. Employee’s rights and obligations under this Agreement are personal and such rights, benefits, and obligations of Employee shall not be voluntarily or involuntarily assigned, alienated, or transferred, whether by operation of law or otherwise, without the prior written consent of Company.

7.10 Entire Agreement. Except as provided in the benefits, plans, and programs referenced in paragraph 3.3 and any awards under Company’s stock incentive plans or programs, long term incentive programs, annual incentive program, or similar plans or programs, this Agreement, as of the Effective Date, will constitute the entire agreement of the parties with regard to the subject matter hereof, and will contain all the covenants, promises, representations, warranties and agreements between the parties with respect to employment of Employee by Company. Effective as of the Effective Date, the Existing Agreement shall automatically terminate and no longer be of any force or effect, and neither party shall have any rights or obligations thereunder. Any modification of this Agreement shall be effective only if it is in writing and signed by the party to be charged.

7.11 Deemed Resignations. Any termination of Employee’s employment shall constitute an automatic resignation of Employee as an officer of UCH, Company and each affiliate of Company or UCH, an automatic resignation from the board of directors, if applicable, of UCH and Company, and an automatic resignation of Employee from the board of directors of any affiliate of Company or UCH, and from the board of directors or similar governing body of any corporation, limited liability company or other entity in which Company, UCH or any affiliate holds an equity interest and with respect to which board or similar governing body Employee serves as Company’s, UCH’s, or such affiliate’s designee or other representative.

[Signatures begin on the following page.]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.

CONTINENTAL AIRLINES, INC.
By:	/s/ Michael P. Bonds
	Michael P. Bonds, Executive Vice President
	Human Resources and Labor Relations
UNITED CONTINENTAL HOLDINGS, INC.
By:	/s/ Michael P. Bonds
	Michael P. Bonds, Executive Vice President
	Human Resources and Labor Relations
“EMPLOYEE”
/s/ Robert S. Edwards
Robert S. Edwards

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Exhibit A

Form of Release Agreement

(to be executed by Company and Employee)

In consideration of the benefits provided by Company to Employee, Employee hereby releases United Continental Holdings, Inc. (“UCH”) and Continental Airlines, Inc. (“Company”) and each of their subsidiaries and affiliates and their respective stockholders, officers, directors, employees, representatives, agents and attorneys from any and all claims or liabilities, known or unknown, of any kind, including, without limitation, any and all claims and liabilities relating to Employee’s employment by, or services rendered to or for, Company, UCH, or any of their subsidiaries or affiliates, or relating to the cessation of such employment or under the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act, Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 1981, the Illinois Human Rights Act, the Illinois Wage Payment and Collection Act, and any other statutory, tort, contract or common law cause of action, other than claims or liabilities arising from a breach by UCH or Company of (i) its post-employment obligations under that certain Employment Agreement dated as of May 1, 2011 among Company, UCH, and Employee (the “Employment Agreement”), (ii) its obligations under its qualified retirements plans in which Employee participates (the “Qualified Plans”), under Employee’s outstanding grants of stock options or restricted stock, under outstanding awards under the long term incentive programs of UCH and Company (the “Incentive Programs”), or under any other compensation plan or program of UCH or Company, or (iii) its obligations under existing agreements governing Employee’s flight benefits relating to other airlines, if any. UCH and Company hereby release Employee from any and all claims or liabilities, known or unknown, of any kind in any way relating to or pertaining to Employee’s employment by, or services rendered to or for, UCH, Company or any of their subsidiaries or affiliates, other than fraud or intentional malfeasance or claims arising from a breach by Employee of the Employment Agreement or of Employee’s obligations under the Qualified Plans, under Employee’s outstanding grants of stock options or restricted stock, under outstanding awards under the Incentive Programs, under any other compensation plan or program of UCH or Company, or under existing agreements governing Employee’s flight benefits relating to other airlines, if any. These releases are to be broadly construed in favor of the released persons. These releases do not apply to any rights or claims that may arise after the date of execution of this Release Agreement by Employee, Company and UCH. Each party agrees that this Release Agreement is not and shall not be construed as an admission of any wrongdoing or liability on the part of any such party. Notwithstanding the foregoing, the post-employment obligations created by the Employment Agreement, the CARP, Employee’s outstanding option grants and grants of restricted stock, outstanding awards under the Incentive Programs, or outstanding awards under any other compensation plan or program of UCH or Company, or under existing agreements governing Employee’s flight benefits relating to other airlines, if any, are not released.

Employee acknowledges that, by Employee’s free and voluntary act of signing below, Employee agrees to all of the terms of this Release Agreement and intends to be legally bound thereby.

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Employee acknowledges that Employee has received a copy of this Release Agreement on [date that Employee receives Release Agreement]. Employee understands that Employee may consider whether to agree to the terms contained herein for a period of [twenty-one] [forty-five] days after the date Employee has received this Release Agreement. Accordingly, Employee may execute this Release Agreement by [date [21] [45] days after Release Agreement is given to Employee], to acknowledge Employee’s understanding of and agreement with the foregoing. [Add if 45 days applies: Employee acknowledges that attached to this Release Agreement are (i) a list of the positions and ages of those employees selected for termination (or participation in the exit incentive or other employment termination program) and (ii) a list of the ages of those employees not selected for termination (or participation in such program).] Employee acknowledges that Employee has been and is hereby advised to consult with an attorney prior to executing this Release Agreement.

This Release Agreement will become effective, enforceable and irrevocable on the eighth day after the date on which it is executed by Employee (the “Effective Date”). During the seven-day period prior to the Effective Date, Employee may revoke Employee’s agreement to accept the terms hereof by serving written notice in accordance with paragraph 7.1 of the Employment Agreement to Company of Employee’s intention to revoke. However, the payments and other Company obligations under Article 4 of the Employment Agreement will be delayed until the Effective Date.

A-2

EX-10.3

Exhibit 10.3

UNITED CONTINENTAL HOLDINGS, INC.

2006 DIRECTOR EQUITY INCENTIVE PLAN

(AS AMENDED AND RESTATED EFFECTIVE JUNE 9, 2011)

1. Description.

(a) Purpose. The purpose of the United Continental Holdings, Inc. 2006 Director Equity Incentive Plan (the “DEIP”) is to attract and retain the services of experienced and knowledgeable non-employee directors by providing such directors with greater flexibility in the form and timing of receipt of compensation for their service on the Board of Directors and an opportunity to obtain a greater proprietary interest in the Company’s long-term success and progress through the receipt of equity-based awards, thereby aligning such directors’ interests more closely with the interests of the Company’s stockholders. The DEIP is intended to be unfunded for tax purposes. For amounts payable under the DEIP that constitute “deferred compensation” within the meaning of Section 409A of the Code, the DEIP is intended to comply in form and operation with the requirements of Section 409A of the Code. The DEIP will be construed and administered in a manner that is consistent with and gives effect to the foregoing.

(b) Effective Date. This DEIP became effective as of the effective date of the confirmed Plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code (the “Effective Date”) and shall remain in effect as long as any Periodic Awards or Accounts under it remain outstanding. This DEIP constitutes an amendment and restatement of the UAL Corporation 2006 Director Equity Incentive Plan, as amended, and is effective as of June 9, 2011.

2. Definitions.

The definitions set forth in this Section 2 apply unless the context otherwise indicates.

(a) Account. “Account” means the bookkeeping account or accounts maintained with respect to a Participant pursuant to Section 6.

(b) Affiliate. “Affiliate” means all persons with whom the Company would be considered a single employer under Section 414(b) or 414(c) of the Code.

(c) Annual Meeting Date. “Annual Meeting Date” means the date on which the annual meeting of the Company’s stockholders is held.

(d) Beneficiary. “Beneficiary” with respect to a Participant is the person designated or otherwise determined under the provisions of Section 7(g) as the distributee of benefits payable after the Participant’s death. A person designated or otherwise determined to be a Beneficiary under the terms of the DEIP has no interest in or right under the DEIP until the Participant in question has died. A person will cease to be a Beneficiary on the day on which all benefits to which such person is entitled under the DEIP have been distributed.

(e) Board. “Board” means the board of directors of the Company.

(f) Broker Exercise Notice. “Broker Exercise Notice” means a written notice pursuant to which a Participant, upon exercise of an Option, irrevocably instructs a broker or dealer to sell a sufficient number of shares or loan a sufficient amount of money to pay all or a portion of the exercise price of the Option and/or any related withholding tax obligations and remit such sums to the Company and directs the Company to deliver stock certificates to be issued upon such exercise directly to such broker or dealer or their nominee.

(g) Cash Account. “Cash Account” means an Account to which deferred amounts are credited pursuant to Section 6(b) and earnings thereon are credited pursuant to Section 6(d)(i) in U.S. dollars.

(h) Cause. “Cause” means dishonesty, fraud, misrepresentation, embezzlement or deliberate injury or attempted injury, in each case related to the Company or any subsidiary or any material breach of any confidentiality agreement entered into with the Company or any subsidiary.

(i) Change in Control. A “Change in Control” means an event described in Section 12, provided such event is an event that qualifies as an event described in Section 409A(a)(2)(A)(v) of the Code.

(j) Code. “Code” means the Internal Revenue Code of 1986, as amended (including, when the context requires, all regulations, interpretations and rulings issued thereunder). Any reference to a specific provision of the Code includes a reference to that provision as it may be amended from time to time and to any successor provision.

(k) Committee. A committee of the Board, provided that, so long as the Company has a class of its equity securities registered under Section 12 of the Exchange Act, such committee will consist solely of two or more members of the Board who are “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act. As of the Effective Date, the “Committee” is the Nominating / Governance Committee of the Board or such other committee or person to whom administrative duties are delegated pursuant to the provisions of Section 16(a), as the context requires.

(l) Company. “Company” means United Continental Holdings, Inc..

(m) Continuity Directors. “Continuity Directors” means (1) those members of the Board who were directors on the date hereof and (2) those members of the Board (other than a director whose initial assumption of office was in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) who were elected or appointed by, or on the nomination or recommendation of, at least a two-thirds majority of the then-existing directors who either were directors on the date hereof or were previously so elected or appointed.

(n) DEIP. “DEIP” means this United Continental Holdings, Inc. 2006 Director Equity Incentive Plan, as from time to time amended or restated.

(o) Director Cash Compensation. “Director Cash Compensation” means all cash amounts payable by the Company to a Qualified Director for his or her services to the Company as a Qualified Director, (i) including, without limitation, the retainers for service on the Board and fees specifically paid for attending regular or special meetings of the Board and Board committees or for acting as the chair of a committee, but (ii) excluding expense allowances or reimbursements and insurance premiums.

(p) Disability. “Disability” means the Qualified Director is “disabled” within the meaning of Section 409A of the Code. Such Disability will be determined by the Committee on the basis of medical evidence satisfactory to it.

(q) Election Period. “Election Period” means a period of one calendar year, commencing on each January 1 and ending on each December 31. In the case of a newly eligible Qualified Director who commences participation in the DEIP following the Effective Date and following the first day of the calendar year, the Election Period is such partial calendar year described in Section 6(b)(ii).

(r) Market Price. “Market Price” means (i) the average of the high and low sale prices of a Share during the regular trading session on a specified date or, if Shares were not then traded, during the regular trading session on the most recent prior date when Shares were traded, all as quoted in The Wall Street Journal reports of New York Stock Exchange - Composite Transactions; or (ii) if the Shares are not so listed, admitted to unlisted trading privileges, or reported on any national exchange or on the Nasdaq National Market, the mean between the lowest and highest reported sales prices as of such date, as reported by the Nasdaq Small Cap Market, OTC Bulletin

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Board, the Bulletin Board Exchange (BBX) or the National Quotation Bureaus, Inc., or other comparable service; or (iii) if the Shares are not so listed or reported, such price as the committee determines in good faith in the exercise of its reasonable discretion.

(s) Option. “Option” means an option to purchase Shares granted to Qualified Directors from time to time pursuant to Section 8.

(t) Participant. “Participant” is a current or former Qualified Director who has been granted Options, Restricted Stock, Stock Appreciation Rights, Share Units and/or Shares under the DEIP and/or to whose Account amounts have been credited pursuant to Section 6 and who has not ceased to be a Participant pursuant to Section 4(d).

(u) Periodic Award. “Periodic Award” means an award described in Section 5(c).

(v) Plan Rules. “Plan Rules” are rules, policies, practices or procedures adopted by the Committee pursuant to Section 16(b), which need not be reflected in a written instrument and may be changed at any time without notice.

(w) Previously Acquired Shares. “Previously Acquired Shares” means Shares that are already owned by the Participant that have been held for the period of time necessary to avoid a charge to the Company’s earnings for financial reporting purposes and that are otherwise acceptable to the Committee.

(x) Prime Rate. “Prime Rate” means the Bloomberg Prime Rate Composite (“Prime Rate by Country US—BB Comp”).

(y) Qualified Director. “Qualified Director” means an individual who is a member of the Board and who is not an employee of the Company or any Affiliate.

(z) Qualified Retirement. A Qualified Director has a “Qualified Retirement” if he or she attained age 60 and has completed five (5) or more continuous years of service as a member of the Board.

(aa) Restricted Stock. “Restricted Stock” has the meaning provided in Section 10.

(bb) Securities Act. “Securities Act” means the Securities Act of 1933, as amended. Any reference to a specific provision of the Securities Act includes a reference to that provision as it may be amended from time to time and to any successor provision.

(cc) Separation from Service. “Separation from Service” means a termination of a Participant’s service with the Company and all Affiliates as a director and non-employee consultant/advisor, provided such termination constitutes a “separation from service” within the meaning of Section 409A of the Code, or such other change in the Participant’s relationship with the Company and all Affiliates that constitutes a “separation from service” within the meaning of Section 409A of the Code.

(dd) Share Account. “Share Account” means an Account to which credits are made pursuant to Sections 5(c) or 6(a), or deferred amounts are credited pursuant to Section 6(b) and/or 6(c) and earnings are credited pursuant to Section 6(d)(ii) in Share Units.

(ee) Share Unit Compensation. “Share Unit Compensation” means the compensation paid to a Qualified Director in the form of credits to his or her Share Account pursuant to Section 6(a).

(ff) Share Unit Grant Date. “Share Unit Grant Date” has the meaning provided in Section 6(a).

(gg) Share Units. “Share Units” means a unit credited to a Participant’s Share Account at the discretion of the Board pursuant to Section 5(c) or Section 6 that represents the economic equivalent of one Share. A Participant will not have any rights as a stockholder with respect to Share Units until the Participant is distributed Shares (if any) pursuant to Section 7.

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(hh) Shares. “Shares” means shares of common stock of the Company $.01 par value per share issued on or after the Effective Date, or such other class or kind of shares or other securities as may be applicable pursuant to Section 3.

(ii) Stock Appreciation Rights. “Stock Appreciation Rights” has the meaning provided in Section 9.

(jj) Unforeseeable Emergency. “Unforeseeable Emergency” means an “unforeseeable emergency” within the meaning of Section 409A of the Code. The existence of an unforeseeable emergency will be determined by the Committee.

3. Shares Subject to Plan.

(a) Maximum Number of Shares Available. Subject to adjustment as provided in paragraph (c), the maximum number of Shares that will be available for issuance or distribution under the DEIP will be 175,000 Shares. The Shares available for issuance or distribution under the DEIP may, at the election of the Committee, be either treasury shares or shares authorized but unissued. If treasury shares are used, all references in the DEIP to the issuance or distribution of Shares will, for corporate law purposes, be deemed to mean the transfer of shares from treasury.

(b) Accounting. Subject to the last sentence of Section 7(a)(iii), Shares that are issued or distributed under the DEIP or that are subject to outstanding Periodic Awards granted or Share Units credited under the DEIP will be applied to reduce the maximum number of Shares remaining available for issuance or distribution under the DEIP. Any Shares that are subject to a Periodic Award granted under the DEIP that lapses, expires, is forfeited or for any reason is terminated unexercised and any Shares that are subject to Share Units in a Share Account that are forfeited will automatically again become available for issuance or distribution under the DEIP. To the extent that the exercise price of any Option or Stock Appreciation Right granted under the DEIP is paid by attestation as to ownership of Previously Acquired Shares, only the number of Shares issued net of the number of Shares attested to will be applied to reduce the maximum number of Shares remaining available for issuance under the DEIP.

(c) Adjustment to Shares and Share Units. In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, divestiture or extraordinary dividend (including a spin-off) or any other similar change in the Company’s corporate structure or the Shares, the Board (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) will make appropriate adjustment (which determination will be conclusive) as to the number and kind of securities or other property (including cash) available for issuance or distribution under the DEIP and as to the number and kind of Share Units credited to Share Accounts and the number and kind of securities as to which Periodic Awards are to be granted and, in order to prevent dilution or enlargement of the rights of Participants holding Options or Stock Appreciation Rights, the number, kind and exercise price of securities subject to outstanding Options and Stock Appreciation Rights.

4. Participation.

(a) Eligibility.

(i) Each individual who is a Qualified Director who is entitled to Share Unit Compensation at any time during a calendar year is eligible to have such credit made to his or her Share Account pursuant to Section 6(a).

(ii) Each individual who is a Qualified Director on the first day of a calendar year is eligible to make deferral elections pursuant to Section 6(b) and/or 6(c) with respect to such calendar year. An individual who becomes a Qualified Director after the first day of a calendar year is eligible to make a deferral election pursuant to Section 6(b) with respect to the remainder of such calendar year. Each individual who has made a valid election pursuant to Section 6(b) or 6(c) and is a Qualified Director at any time during a calendar quarter with respect to which a credit is made pursuant to Section 6(b) or 6(c) shall have such credit made to his or her Account pursuant to such Section 6(b) or 6(c), as the case may be.

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(iii) Each Qualified Director is eligible to receive Periodic Awards pursuant to Section 5(c).

(b) Ceasing to be Eligible. An individual who ceases to be a Qualified Director is not eligible to receive any subsequent Periodic Awards pursuant to Section 5(c) or to make any subsequent elections or receive further credits pursuant to Section 6, other than such credits relating to the period prior to such cessation and, if applicable, earnings credits under Section 6.

(c) Condition of Participation. Each Participant, as a condition of participation in the DEIP, is bound by all the terms and conditions of the DEIP and the Plan Rules, including but not limited to the reserved right of the Company to amend or terminate the DEIP, and must furnish to the Committee such pertinent information, and execute such election forms and other instruments, as the Committee or Plan Rules may require by such dates as the Committee or Plan Rules may establish.

(d) Termination of Participation. An individual will cease to be a Participant as of the date on which he or she is no longer a Qualified Director and his or her outstanding Periodic Awards have been exercised, cancelled, vested or expired and his or her entire Account balances have been distributed.

5. Benefits.

(a) Components of Director Compensation. Qualified Directors who are eligible under Section 4(a) may receive Periodic Awards, Share Unit Compensation and Director Cash Compensation as part of their compensation for services rendered as directors of the Company, all as determined by the Board from time to time. A Qualified Director may defer the receipt of some or all of his or her Director Cash Compensation through credits to his or her Cash Account and/or Share Account, and may defer the receipt of Shares that he or she would otherwise be issued under a Periodic Award through credits to his or her Share Account.

(b) Share Unit Compensation. At the discretion of the Board, each Qualified Director may receive Share Unit Compensation, which is additional annual compensation in the form of credits to the Qualified Director’s Share Account.

(c) Periodic Awards. At the discretion of the Board, a Qualified Director may be granted from time to time one or more equity-based awards, which may include (i) Options, (ii) Restricted Stock, (iii) Stock Appreciation Rights, (iv) Share Units, (v) Shares and/or (vi) other equity-based or equity-related awards. The terms of Options, Restricted Stock and Stock Appreciation Rights are set forth in Sections 8, 9 and 10, respectively.

(d) Deferral Accounts. For each Participant, the Committee will establish and maintain a Cash Account and a Share Account to evidence deferred amounts credited with respect to the Participant pursuant to Section 6. Except as otherwise provided in Section 6(a), each Participant will always have a fully-vested, nonforfeitable right to that portion of his or her Account credited under Sections 6(a), 6(b) and 6(c) and the earnings credits thereon. A Participant’s interest in Share Units reflecting the deferral of receipt of Shares subject to vesting will be nonforfeitable at the times and in the amounts provided under the vesting requirements established in the Periodic Award.

(e) Receipt of Shares in Lieu of Director Cash Compensation. A Qualified Director may elect to forego receipt of all or any portion of the Director Cash Compensation payable to him or her for any period and instead receive whole Shares of equivalent value to the Director Cash Compensation so foregone. An election under this Section 5(e) will be valid only if it is in writing, signed by the Qualified Director, filed with the Committee before receipt of the Director Cash Compensation and otherwise in accordance with Plan Rules. Once in effect, an election under this Section 5(e) shall remain in effect until it is revised or revoked in accordance with Plan Rules. The number of whole Shares to be distributed to the Qualified Director by reason of an election under this Section 5(e) shall be equal to the quotient of (i) the dollar amount of the Director Cash Compensation the Qualified Director has elected to have paid to him or her in Shares, divided by (ii) the Market Price as of the date on which the Director Cash Compensation would otherwise have been payable to the Qualified Director. The Market Price of any fractional Share shall be paid to the Qualified Director in cash.

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6. Participant Share Unit Compensation and Deferral Accounts.

(a) Share Unit Compensation. The amount of the Qualified Director’s Share Unit Compensation to be credited to his or her Share Account will be expressed in U.S. dollars and determined from time to time by the Board. A Qualified Director’s Share Account will be credited pursuant to this section on the date specified by the Board (“Share Unit Grant Date”) with the number of whole and fractional Share Units equal to the quotient of: (i) the dollar amount of the Share Unit Compensation allocated to such Qualified Director , divided by (ii) the Market Price on the Share Unit Grant Date. Share Unit Compensation credited to a Qualified Director’s Share Account may be subject to vesting over such period as set by the Board, not to exceed ten years. The Board may specify that Share Unit Compensation shall only be settled in cash (in which case such credits shall not result in any reduction in Shares available under the accounting provisions set forth in Section 3(b)) and the Board may further specify that any such cash payments are not eligible for deferral pursuant to the remaining provisions of this Section 6 or Section 7.

(b) Deferral of Director Cash Compensation. Elective deferrals of Director Cash Compensation will be made in accordance with the following rules:

(i) Election to Defer Director Cash Compensation. Each Qualified Director may elect, in accordance with this Section 6(b) and Plan Rules, to defer the receipt of all or a portion of his or her Director Cash Compensation relating to services performed and Director Cash Compensation earned during an Election Period. The Committee will credit his or her Cash Account and/or Share Account with the amount of compensation the Qualified Director elected to defer. Any such deferral election will automatically apply to the Participant’s Director Cash Compensation, as the amount of such Director Cash Compensation is adjusted from time to time.

(ii) Time of Filing Election. A deferral election pursuant to this Section 6(b) will not be effective unless it is made on a properly completed election form received by the Committee before the first day of the Election Period to which the deferral election relates or, in the case of an individual who first becomes a Qualified Director on or after the first day of the calendar year, within 30 days after the date such individual becomes a Qualified Director. Any election made under this clause (ii) will apply only to Director Cash Compensation payable for services performed after the effective date of the election, with a proportionate reduction (determined on the basis of calendar days) in any payment due for a service period that includes services performed before the effective date of the election.

(iii) Allocation of Deferral. In conjunction with each deferral election made pursuant to this Section 6(b), a Qualified Director shall elect, in accordance with and subject to Plan Rules, how the deferral is to be allocated (in increments of ten percent only) among his or her Cash Account and Share Account. The sum of such percentages must not exceed 100 percent. Any portion of the deferral for which no election is made will be allocated to the Qualified Director’s Cash Account.

(iv) Credits. Director Cash Compensation deferred pursuant to this Section 6(b) will be credited to a Qualified Director’s Cash Account and/or Share Account, as elected, as of the last day of each calendar quarter. Such credits to the Qualified Director’s Cash Account will be in United States dollars equal to the amount of the deferral allocated to such Account. Credits to a Qualified Director’s Share Account will be the number of whole and fractional Share Units determined by dividing the United States dollar amount of the deferral allocated to the Share Account by the Market Price of a Share on the last day of the calendar quarter.

(v) Succeeding Election Periods. Unless the election is revoked pursuant to clause (vii), a deferral election made pursuant to this section will remain in effect until the last day of the calendar year in which it is revoked or modified in accordance with Plan Rules. The Qualified Director may change his or her deferral by delivering a new deferral election not later than the day before the first Election Period to which the new deferral election relates.

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(vi) Irrevocability. Except as provided in clause (vii), a deferral election made pursuant to this Section 6(b) for an Election Period is irrevocable after the latest date by which the deferral election is required to be given to the Committee for such Election Period.

(vii) Revocation. Any deferral election made under Section 6(b) by a Participant who receives a distribution pursuant to Section 7(b) will be revoked to the extent the Participant satisfies the requirements of Section 7(b) and Plan Rules, and no further amounts will be deferred until the Qualified Director makes a new, effective deferral election under Section 6(b).

(viii) Code Section 409A. An election, or revocation of an election, under this Section 6(b) shall be permitted only if it complies with the requirements of Section 409A of the Code.

(c) Deferral of Restricted Stock or Shares Issuable Under Periodic Awards. Each Qualified Director may elect, in accordance with this Section 6(c) and Plan Rules, to defer receipt of all or a portion of the Shares or Restricted Stock issuable pursuant to a Periodic Award granted under the DEIP, other than on account of an Option or Stock Appreciation Right.

(i) Time of Filing Election. A deferral election made pursuant to this Section 6(c) will not be effective unless it is made on a properly completed election form received by the Committee before the first day of the Election Period to which the deferral election relates or, in the case of an individual who first becomes a Qualified Director on or after the first day of the Election Period, within 30 days after the date such individual becomes a Qualified Director. Any election made under this clause applies to the Qualified Director’s receipt of Restricted Stock or Shares relating to services performed after the effective date of the election.

(ii) Credits. Deferral of the receipt of Shares pursuant to this Section 6(c) will be credited to the Qualified Director’s Share Account as of the day of the issuance of the Award of Restricted Stock or Shares, as the case may be. The number of Share Units credited to the Qualified Director’s Share Account will equal the number of Shares otherwise issuable following the grant of the Periodic Award of Restricted Stock or Shares, as the case may be.

(iii) Succeeding Election Periods. Unless the election is revoked pursuant to clause (v), a deferral election made pursuant to this section will remain in effect until the last day of the calendar year in which it is revoked or modified in accordance with Plan Rules. The Qualified Director may change his or her deferral by delivering a new deferral election not later than the day before the first Election Period to which the new deferral election relates.

(iv) Irrevocability. Except as provided in clause (v), a deferral election made pursuant to this Section 6(c) that is in effect for an Election Period is irrevocable after the latest date by which the deferral election is required to be given to the Committee for such Election Period.

(v) Revocation. Any deferral election made under Section 6(c) by a Participant who receives a distribution pursuant to Section 7(b) will be revoked to the extent the Participant satisfies the requirements of Section 7(b) and Plan Rules, and no further amounts will be deferred until the Qualified Director makes a new, effective deferral election under Section 6(c).

(vi) Code Section 409A. An election, or revocation of an election, under this Section 6(c), shall be permitted only if it complies with the requirements of Section 409A of the Code.

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(d) Earnings Credits.

(i) Cash Accounts. As of the last day of each calendar quarter, and before any credits have been made pursuant to Section 6 on such date, a Participant’s Cash Account will be credited with interest, calculated on the balance in the Cash Account as of the last day of the immediately preceding calendar quarter at the Prime Rate in effect on such date.

(ii) Share Accounts. A Participant’s Share Account will be credited as of the date on which dividends are paid on Shares with that number of whole and fractional Share Units determined by dividing the dollar amount of the dividends that would have been payable to the Participant if the number of Share Units credited to the Participant’s Share Account on the record date for such dividend payment had then been Shares registered in the name of such Participant by the Market Price of a Share on the date as of which the credit is made. Unless otherwise determined by the Board in connection with the declaration of such dividend, and Share Units credited to a Participant’s Share Account shall only be settled in cash.

7. Distributions.

(a) Distribution of Accounts Following Separation from Service.

(i) Distribution Elections.

(A) Initial Election. Subject to Sections 7(b), 7(c) and 7(h), a Participant may elect, in accordance with Plan Rules and subject to Section 409A of the Code, the manner of distribution (as described in clause (ii)) or the time of distribution (as defined in clause (iv)), provided such election, as it relates to deferrals under Section 6(b) or (c), is made no later than the date of the related deferral election and, as it relates to Share Unit Compensation credited under Section 6(a), is made no later than the close of the calendar year preceding the calendar year during which the services giving rise to such compensation are performed, or, in the case of an individual who first becomes a Qualified Director on or after the first day of the calendar year, within 30 days after the date such individual becomes a Qualified Director. Notwithstanding the foregoing, the Board may specify that Share Unit Compensation credited under Section 6(a) with respect to a specific Share Unit Grant Date is not subject to deferral, in which case distributions with respect to such Share Unit Compensation shall be subject to distribution as specified by the Board.

(B) Redeferral Election. A Participant may elect to change the time and manner of his or her distribution provided (X) the Participant elects, in accordance with Plan Rules and subject to Section 409A of the Code, at least twelve (12) months prior to the date that the Participant’s first scheduled payment was to begin, (Y) the election may not take effect until at least 12 months after the date on which the election is made, and (Z) the election defers the first payment at least five (5) years beyond the date payment otherwise would have been made.

(ii) Form of Distribution. A Participant’s Cash Account and Share Account will be distributed as provided in this Section 7(a) in a lump sum payment unless the Participant has elected, as provided in Section 7(a)(i), to receive his or her distribution in the form of annual installment payments for a period of not more than 10 years.

(iii) Medium of Distribution. Any distribution from a Participant’s Cash Account will be made in cash. Subject to Section 14 and except as otherwise set forth in this Section 7(a)(iii), any distribution from a Participant’s Share Account will be made in whole Shares only, rounded up to the next whole Share. Notwithstanding anything to the contrary in the immediately preceding sentence, the Board shall be permitted to provide that Share Units will be settled in cash. Accordingly, to the extent that the terms of any award of Share Units credited to a Participant’s Share Account requires that such Share Units be settled in cash instead of in Shares, then any distribution from such Participant’s Share Account with respect to such Share Units shall be made in cash in an amount equal to the Market Price of a Share on the date of distribution multiplied by the number of Share Units (including any fraction thereof), provided that the Board may specify in the terms of the award that another amount

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in cash will be distributed in respect of such Share Units. To the extent that the Board specifies that Share Units will be settled in cash, the medium of distribution set forth in the immediately preceding sentence shall override any provision of this Plan to the contrary requiring the distribution of such Share Units to be made in Shares. Share Units settled in cash will not reduce the number of Shares available under the DEIP as set forth in Section 3(a).

(iv) Time of Distribution. Unless a Participant has elected in accordance with Section 7(a)(i) to defer commencement of distribution until a specified date, or unless the Board has specified in accordance with Section 7(a)(i) that Share Unit Compensation credited under Section 6(a) with respect to a specific Share Unit Grant Date will be distributed at a specified time, distribution to a Participant will be made (if in a lump sum) or will commence (if in installments) in January of the year following the year in which the Participant experiences a Separation from Service. Distributions upon a specified date will be made, or will commence, as soon as administratively practicable following such specified date, but no later than the end of the calendar year in which the specified date occurs or, if later, the 15^th day of the third month following the specified date. If a lump sum distribution from a Participant’s Share Account would otherwise be made after the record date for a dividend but before the payment date for such dividend, the distribution of the dividend will be made as soon as administratively practicable after the earnings credit has been made to the Share Account pursuant to Section 6(d) on the payment date of the dividend, but in no event later than the end of the calendar year in which the payment date of the dividend occurs or, if later, the 15^th day of the third month following the payment date for such dividend.

(v) Amount of Distribution for Cash Account.

(A) Lump Sum. The amount of a lump sum payment from a Participant’s Cash Account will be equal to the balance of the Cash Account as of the time of the distribution.

(B) Installments. The amount of each installment payment from a Participant’s Cash Account will be determined by dividing the balance of the Cash Account as of the distribution date for such installment payment by the total number of remaining payments (including the current payment).

(vi) Amount of Distribution for Share Account.

(A) Lump Sum. A lump sum distribution from a Participant’s Share Account will consist of the number of Shares equal to the number of Share Units credited to the Share Account as of the time of distribution, rounded up to the next whole Share.

(B) Installments. Each installment distribution from a Participant’s Share Account will consist of the number of Shares determined by dividing the number of whole Share Units credited to the Share Account as of the distribution date for such installment distribution by the total number of remaining payments (including the current payment) and rounding the quotient to the next whole Share.

(b) Distribution Due to Unforeseeable Emergency. Notwithstanding any distribution election by a Participant to the contrary, except as set forth in this Section 7(b), a distribution will be made to a Participant from his or her Account if the Participant submits a written distribution request to the Committee and the Committee determines that the Participant has experienced an Unforeseeable Emergency. The amount of the distribution may not exceed the amount reasonably necessary to satisfy the Unforeseeable Emergency and may include the amount necessary to pay taxes, as determined by the Committee. Payments made on account of an Unforeseeable Emergency will not be made to the extent that such Unforeseeable Emergency is or may be relieved through reimbursement or compensation by insurance or otherwise, by liquidation of the Participant’s assets (to the extent that such liquidation itself would not cause severe financial hardship) or by cessation of deferrals under Section 6(b) and/or 6(c), provided that determination of such limitations is consistent with the requirements of Section 409A of the Code. Any distribution pursuant to this Section 7(b) will be made by the end of the calendar year in which the event giving rise to the Unforeseeable Emergency occurs or, if later, within 90 days of the occurrence of such event and in the form of a lump sum payment that is in cash from the Cash Account and in Shares from the Share Account (rounded up to the next whole Share). Any distribution pursuant to this Section 7(b) will be made first from the Participant’s Cash Account and then from the Participant’s Share Account.

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(c) Small Benefits.

(i) Cash Account. If the balance of the Cash Account of a Participant who has experienced a Separation from Service is $2,500 or less on the day of any installment distribution pursuant to Section 7(a)(v)(B), such remaining balance and any cash account balance of a plan of the Company’s that is required to be aggregated with this Plan under Treasury Regulation Section 1.409A-1(c)(2) shall be distributed to the Participant, as soon as administratively practicable, in the form of a lump sum distribution. Each installment distribution to a Participant who has experienced a Separation from Service will be at least $2,500 or such smaller amount that equals the balance of the Participant’s Cash Account.

(ii) Share Account. If the balance of the Share Account of a Participant who has experienced a Separation from Service is fewer than 100 Share units as of the day of any installment distribution pursuant to Section 7(a)(v)(B), such remaining balance and any share account balance of a plan of the Company’s that is required to be aggregated with this Plan under Treasury Regulation Section 1.409A-1(c)(2) shall be distributed to the Participant, as soon as administratively practicable, in the form of a lump sum distribution, that will consist of the number of Shares equal to the number of Share Units credited to the Share Account as of that date and the number of share units credited to a share account of any plan required to be aggregated with this Plan, rounded up to the next whole Share. Each installment distribution to a Participant who has experienced a Separation from Service must be at least 100 Share Units or such smaller number of Share Units that remains in the Participant’s Share Account.

(iii) Any lump sum distribution pursuant to Sections 7(c)(i) and 7(c)(ii) shall not exceed the applicable dollar amount under Code Section 402(g).

(d) Payment in Event of Incapacity. If any individual entitled to receive any payment under the DEIP is, in the judgment of the Committee, physically, mentally or legally incapable of receiving or acknowledging receipt of the payment, and no legal representative has been appointed for the individual, the Committee may (but is not required to) cause the payment to be made to any one or more of the following as may be chosen by the Committee: the Beneficiary (in the case of the incapacity of a Participant); the institution maintaining the individual; a custodian for the individual under the Uniform Transfers to Minors Act of any state; or the individual’s spouse, child, parent, or other relative by blood or marriage. The Committee is not required to see to the proper application of any such payment, and the payment completely discharges all claims under the DEIP against the Company, and the DEIP to the extent of the payment.

(e) Reduction of Account Balance. The balance of the Cash or Share Account from which a distribution is made will be reduced, as of the date of the distribution, by the cash amount or number of Shares distributed, as the case may be.

(f) Distribution to a Beneficiary. Following a Participant’s death, the balances of the Participant’s Cash and Share Accounts will be distributed to the Participant’s Beneficiary in a lump sum payment whether or not payments had commenced to the Participant in the form of installments prior to his or her death. Any distribution from a Participant’s Cash Account will be made in cash and any distribution from a Participant’s Share Account will be made in whole Shares, rounded up to the next whole Share. Distributions will be subject to the following:

(i) Time. Distribution to a Beneficiary will be made by the end of the calendar year of the Participant’s death or, if later, within 90 days of the Participant’s death; provided that if a distribution from the Participant’s Share Account would otherwise be made after the record date for a dividend but before the payment date for such dividend, the distribution of the dividend will be made as soon as administratively practicable after the earnings credit has been made to the Share Account pursuant to Section 6(d) on the payment date of the dividend, but in no event later than the end of the calendar year in which the payment date of the dividend occurs or, if later, the 15^th day of the third month following the payment date for such dividend.

(ii) Amount. The amount of the lump sum payment from a Participant’s Cash Account will be equal to the sum of the balances of the Cash Account on the date of distribution. A lump sum distribution from a Participant’s Share Account will consist of the number of Shares equal to the number of Share Units credited to the Share Account, rounded up to the next whole Share.

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(g) Beneficiary Designation.

(i) Each Participant may designate, in accordance with Plan Rules, one or more primary Beneficiaries or alternative Beneficiaries to receive all or a specified part of the balance of his or her Cash or Share Accounts after his or her death. The Participant may change or revoke any such designation from time to time without notice or consent from any person. No such designation, change or revocation is effective unless completed and received by the Committee during the Participant’s lifetime.

(ii) Any portion of a Participant’s Cash and Share Accounts for which the Participant fails to designate a Beneficiary, revokes a Beneficiary designation without naming another Beneficiary or designates one or more Beneficiaries, none of whom survives the Participant or exists at the time in question, will be paid to the Participant’s surviving spouse or, if the Participant is not survived by a spouse, to the representative of the Participant’s estate.

(iii) The automatic Beneficiaries specified above and, unless the designation otherwise specifies, the Beneficiaries designated by the Participant, become fixed as of the Participant’s death so that, if a Beneficiary survives the Participant but dies before the receipt of the payment due such Beneficiary, the payment will be made to the representative of such Beneficiary’s estate. Any designation of a Beneficiary by name that is accompanied by a description of the relationship or only by a statement of relationship to the Participant is effective only to designate the person or persons standing in such relationship to the Participant at the Participant’s death.

(h) Modification of Time and Manner of Payment. Notwithstanding the foregoing, the Committee in its sole and absolute discretion, may distribute all balances in the Cash Account or Share Account to the Participant in a lump sum as of any date but only if and to the extent permitted under Section 409A of the Code. Nothing herein shall be construed to grant a Participant the right to elect a modification of the time or manner for receiving payments hereunder, including on account of termination of the Plan.

8. Options.

All Options granted by the Board under the DEIP will be governed by the following terms and conditions:

(a) Non-Statutory Options. All Options granted under the DEIP will be non-statutory stock options not entitled to special tax treatment under Section 422 of the Internal Revenue Code of 1986, as amended to date and as may be amended from time to time (the “Code”).

(b) Option Exercise Price. The exercise price per Share purchasable under an Option granted under the DEIP will be not less than 100% of the Market Price on the date of grant of the Option.

(c) Exercisability of Options. Each Option granted under the DEIP will be immediately exercisable, unless the Award notice provides otherwise.

(d) Duration of Options; Effect of Cessation as Director. Except as provided in Section 11, each Option granted under the DEIP will terminate ten years after its Date of Grant. If the Participant ceases to serve as a director on the Board for any reason other than a Qualified Retirement, then the Option will remain exercisable until the earlier of the expiration of five years after the date the Participant ceased to serve as a director of the Company or the remaining term of the Option. If the Participant ceases to serve as a director on the Board or account of a Qualified Retirement all Options will become immediately exercisable in full and will remain exercisable in full until the expiration of the Option.

(e) Manner of Option Exercise. An Option granted under the DEIP may be exercised by a Participant in whole or in part from time to time, subject to the conditions contained in the DEIP, by delivering in person, by facsimile or electronic transmission or through the mail notice of exercise to the Company at its principal executive office, and by paying in full the total exercise price for the Shares to be purchased in accordance with paragraph (f). Such notice will specify the particular Option that is being exercised (by the date of grant and total number of Shares subject to the Option) and the number of Shares with respect to which the Option is being exercised.

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(f) Payment of Exercise Price. The total purchase price of the shares to be purchased upon exercise of an Option granted under the DEIP will be paid entirely in cash (including check, bank draft or money order); provided, however, that the Committee, in its sole discretion and upon terms and conditions established by the Committee, may allow such payments to be made, in whole or in part, by tender of a Broker Exercise Notice, by tender, or attestation as to ownership, of Previously Acquired Shares, or by a combination of such methods. For purposes of such payment, Previously Acquired Shares tendered or covered by an attestation will be valued at the Market Price on the exercise date.

(g) Restrictions on Transfer.

(i) Except pursuant to testamentary will or the laws of descent and distribution or as otherwise expressly permitted by clauses (ii) or (iii) below, no right or interest of any Participant in an Option granted under the DEIP prior to the exercise of such Option will be assignable or transferable, or subjected to any lien, during the lifetime of the Participant, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise.

(ii) A Participant will be entitled to designate a beneficiary to receive an Option granted under the DEIP upon such Participant’s death, and in the event of a Participant’s death, payment of any amounts due under the DEIP will be made to, and exercise of any Options (to the extent permitted pursuant to Section 15) may be made by, the Participant’s legal representatives, heirs and legatees.

(iii) A Participant who is a director of the Company will be entitled to transfer all or a portion of an Option granted under the DEIP, other than for value, to such Participant’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, any person sharing such Participant’s household (other than a tenant or employee), a trust in which any of the foregoing have more than fifty percent of the beneficial interests, a foundation in which any of the foregoing (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than fifty percent of the voting interests. Any permitted transferee will remain subject to all the terms and conditions applicable to the Participant prior to the transfer. A permitted transfer may be conditioned upon such requirements as the Committee may, in its sole discretion, determine, including, but not limited to execution and/or delivery of appropriate acknowledgements, opinion of counsel, or other documents by the transferee.

(h) Rights as a Stockholder. No Participant will have any rights as a stockholder with respect to any Shares covered by an Option granted under the DEIP until the Participant has exercised such Option, paid the exercise price and become the holder of record of such Shares, and, except as otherwise provided in Section 3(c), no adjustments will be made for dividends or other distributions or other rights as to which there is a record date preceding the date the Participant becomes the holder of record of such Shares.

9. Stock Appreciation Rights.

A Stock Appreciation Right may be granted by the Board to the holder of any Option granted hereunder. In addition, a Stock Appreciation Right may be granted independently of and without relation to any Option. Stock Appreciation Rights shall be subject to such terms and conditions consistent with the DEIP as the Board shall impose from time to time including the following:

(a) A Stock Appreciation Right may be granted with respect to an Option at the time of its grant or at any time thereafter.

(b) Each Stock Appreciation Right will entitle the Participant to elect to receive in cash up to 100% of the appreciation in Market Price of the Shares subject thereto up to the date the Stock Appreciation Right is exercised. In the case of a Stock Appreciation Right issued in relation to an Option, such appreciation will be measured from the Option’s exercise price. In the case of a Stock Appreciation Right issued independently of any Option, the appreciation shall be measured from not less than the Market Price of a Share on the date the Stock Appreciation Right is granted.

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(c) The Committee shall have the discretion to satisfy a Participant’s right to receive the amount of cash as determined in Section 9(b), in whole or in part, by the delivery of Shares valued as of the date of the Participant’s election.

(d) In the event a Participant experiences a Separation from Service:

(i) by reason of death or Disability, all outstanding Stock Appreciation Rights then held by the Participant will become immediately exercisable in full and will remain exercisable for a period of twelve (12) months after such Separation from Service (but in no event after the expiration date of any such Stock Appreciation Right);

(ii) by reason of a Qualified Retirement, all outstanding Stock Appreciation Rights then held by the Participant will become immediately exercisable in full and will remain exercisable in full until the expiration date of any such Stock Appreciation Rights; or

(iii) for reasons other than death, Disability or Qualified Retirement, all outstanding Stock Appreciation Rights then held by the Participant will, to the extent exercisable as of the date of Separation from Service, remain exercisable in full for a period of three (3) months after such Separation from Service (but in no event after the expiration date of any such Stock Appreciation Right); and Stock Appreciation Rights not exercisable as of such Separation from Service will terminate and be forfeited.

10. Restricted Stock.

The Board may grant a Periodic Award of Restricted Stock to Participants with the following terms and conditions.

(a) During the Restricted Period (as defined in paragraph (b)), a Participant shall not sell, assign, exchange, transfer, pledge, hypothecate or otherwise dispose of or encumber any of the Restricted Stock. Upon grant of the Award of Restricted Stock, however, Participant shall thereupon be a stockholder with respect to all Shares subject to the Award and shall have all the rights of a stockholder with respect to such Shares, including the right to vote such Shares and to receive all dividends and other distributions.

(b) The term “Restricted Period” shall mean any period as set by the Board, not to exceed ten years, ending upon such conditions as the Board may deem appropriate, including, without limitation, achievement of certain goals and/or that the Participant has remained in continuous service as a member of the Board of the Company for a certain period.

(c) To enforce the restrictions referred to in this Section 10, the Board may place a legend on the stock certificates for the Shares referring to such restrictions and may require the Participant, until the restrictions have lapsed, to keep the stock certificates, together with duly endorsed stock powers, in the custody of the Company or its transfer agent, or to maintain evidence of stock ownership, together with duly endorsed stock powers, in a certificateless book-entry stock account with the Company’s transfer agent.

(d) In the event a Participant experiences a Separation from Service:

(i) by reason of death, Disability or Qualified Retirement, all Restricted Stock then held by the Participant will become fully vested; or

(ii) for reasons other than death, Disability or Qualified Retirement, all Restricted Stock then held by Participant that has not vested as of such Separation from Service will be terminated and forfeited.

11. Effects of Actions Constituting Cause.

(a) Notwithstanding anything in the DEIP to the contrary, if a Participant is determined by the Board, acting in its sole discretion, to have committed any action which would constitute Cause as defined in Section 2(h), irrespective of whether such action or the Board’s determination occurs before or after such Participant ceases to

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serve as a director of the Company, all rights of the Participant under the DEIP attributable to unexercised Options or Stock Appreciation Rights or unvested Share Units, Emergence Awards or Periodic Awards of Restricted Stock and any agreements or notices evidencing any Share Units, Emergence Awards or Periodic Awards then held by the Participant will terminate and be forfeited without notice of any kind.

(b) Benefits attributable to amounts credited to a Participant’s Account pursuant to Section 6 which are vested and any earnings credited with respect to such vested amounts will not be forfeited.

12. Change in Control.

(a) A “Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:

(i) there is consummated a merger or consolidation to which the Company or any Subsidiary of the Company is a party if the merger or consolidation would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof ) less than 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation;

(ii) the direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) in the aggregate of securities of the Company representing 25% or more of the total combined voting power of the Company’s then issued and outstanding securities is acquired by any person or entity, or group of associated persons or entities acting in concert; provided, however, that for purposes hereof, the following acquisitions shall not constitute a Change in Control: (1) any acquisition by the Company or any of its Subsidiaries, (2) any acquisition by any employee benefit plan (or related trust or fiduciary) sponsored or maintained by the Company or any corporation controlled by the Company, (3) any acquisition by an underwriter temporarily holding securities pursuant to an offering of such securities, (4) any acquisition by a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company and (5) any acquisition in connection with a merger or acquisition which, pursuant to paragraph (A) above, does not constitute a Change in Control;

(iii) there is consummated a transaction contemplated by an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 80% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership in the Company immediately prior to such sale;

(iv) the stockholders of the Company approve any plan or proposal for the liquidation of the Company; or

(v) the occurrence within any 24-month or shorter period of a change in the composition of the Board such that the Continuity Directors cease for any reason to constitute at least a majority of the Board.

(b) Cash Payment. If a Change in Control of the Company occurs, then the Board, without the consent of any Participant affected thereby, may determine to the extent permitted by Section 409A of the Code (for amounts subject to Section 409A) that some or all Participants holding outstanding Options and/or Stock Appreciation Rights granted under the DEIP will receive, with respect to some or all of the Shares subject to such Options or Stock Appreciation Rights, as of the effective date of any Change in Control of the Company, cash in an amount equal to the excess of the Market Price of such Shares immediately prior to the effective date of such Change in Control of the Company over the exercise price per share of such Options or Stock Appreciation Rights. Any outstanding Options and/or Stock Appreciation Rights, in lieu of which a cash payment is made pursuant to this Section 12(b), shall terminate and be forfeited upon such cash payment.

(c) Acceleration of Vesting. If a Change in Control of the Company occurs, then (i) all Options and

14

Stock Appreciation Rights will become immediately exercisable in full and will remain exercisable in accordance with their terms; (ii) all Restricted Stock will become immediately fully vested and nonforfeitable; and (iii) the Participant’s deferral Accounts will become immediately fully vested and non-forfeitable.

(d) Acceleration of Payment. If a Change in Control of the Company occurs, then all deferred amounts credited to a Participant’s Cash Account and Share Account will become immediately due and payable to the Participant. Any such payments will be made no later than the end of the year in which the Change in Control occurs, or if later, the 15^th day of the third month following the Change in Control event.

13. Source of Payments; Nature of Interest.

(a) Source of Payments. The Company is responsible for paying, from its general assets, any benefits attributable to a Participant’s Account.

(b) Status of DEIP. Nothing contained in the DEIP is to be construed as providing for assets to be held for the benefit of any Participant or any other person or persons to whom benefits are to be paid pursuant to the terms of the DEIP, the Participant’s or other person’s only interest under the DEIP being the right to receive the benefits set forth herein. Until such time as Shares are distributed to a Participant, Beneficiary of a deceased Participant or other person, he or she has no rights as a shareholder with respect to any Share Units credited to a Share Account pursuant to the DEIP. To the extent that the Participant or any other person acquires a right to receive benefits under the DEIP, such right is no greater than the right of any unsecured general creditor of the Company.

(c) Non-Assignability of Benefits. The benefits payable under the DEIP and the right to receive future benefits under the DEIP may not be anticipated, alienated, sold, transferred, assigned, pledged, encumbered, or subjected to any charge or legal process.

14. Securities Law and Other Restrictions.

Notwithstanding any other provision of the DEIP or any agreements entered into pursuant to the DEIP to the contrary, the Company is not required to issue or distribute any Shares under the DEIP, and a Participant or distributee may not sell, assign, transfer or otherwise dispose of Shares issued or distributed pursuant to the DEIP, unless (a) there is in effect with respect to such Shares a registration statement under the Securities Act and any applicable securities laws of a state or foreign jurisdiction or an exemption from such registration under the Securities Act and applicable state or foreign securities laws, and (b) there has been obtained any other consent, approval or permit from any other regulatory body which the Company, in its sole discretion, deems necessary or advisable. The Company may condition such issuance, distribution, sale or transfer upon the receipt of any representations or agreements from the parties involved, and the placement of any legends on certificates representing Shares, as may be deemed necessary or advisable by the Company in order to comply with such securities law or other restrictions.

15. Amendment or Termination.

(a) Amendment.

(i) The Company reserves the right to amend the DEIP at any time to any extent that it may deem advisable. To be effective, an amendment must be stated in a written instrument approved in advance or ratified by the Board and executed in the name of the Company by its Chief Executive Officer or President and attested by the Secretary or an Assistant Secretary.

(ii) An amendment adopted in accordance with Section 15(a) is binding on all interested parties as of the effective date stated in the amendment; provided, however, that no amendment will have any retroactive effect so as to deprive any Participant, or the Beneficiary of a deceased Participant, of any benefit to which he or she is entitled under the terms of the DEIP in effect immediately prior to the effective date of the amendment, determined as if such Participant had terminated service as a director immediately prior to the effective date of the amendment.

15

(iii) Without limiting Section 15(a), the Company reserves the right to amend the DEIP to change the method of determining the earnings credited to Participants’ Accounts pursuant to Section 6(d) and to apply such new method not only with respect to the portion of the Accounts attributable to credits made after the date on which such amendment is adopted but also with respect to the portion of the Accounts attributable to credits made prior to the date on which such amendment is adopted and regardless of whether such new method would result in materially lower earnings credits than the old method.

(iv) The provisions of the DEIP in effect at the termination of a Participant’s service as a director will, except as otherwise expressly provided by a subsequent amendment, continue to apply to such Participant.

(b) Termination. The Company reserves the right to terminate the DEIP at any time. The DEIP will terminate as of the date specified by the Company in a written instrument by its authorized officers to the Committee, adopted in the manner of an amendment. Upon the termination of the DEIP, Participant Accounts will continue to be paid in accordance with the provisions of Section 7, subject to acceleration of distributions as permitted by Section 7(h) and Treasury Regulation Section 1.409A-3(j)(4)(ix). No termination, suspension or amendment of the DEIP may adversely affect any outstanding Periodic Award without the consent of the affected Participant; provided, however, that this sentence will not impair the right of the Board to take whatever action it deems appropriate under Section 3(c), 8, 9, 10 and 12(b) of the DEIP. Options and Stock Appreciation Rights outstanding upon termination of the DEIP may continue to be exercised in accordance with their terms.

16. Administration.

(a) Committee. The general administration of the DEIP and the duty to carry out its provisions will be vested in the Committee or such other Board committee as may be subsequently designated as the Committee by the Board. Such Committee may delegate such duty or any portion thereof to a named person and may from time to time revoke such authority and delegate it to another person.

(b) Plan Rules and Regulations. The Committee has the discretionary power and authority to make such Plan Rules as the Committee determines to be consistent with the terms, and advisable in connection with the administration, of the DEIP and to modify or rescind any such Plan Rules. In addition, the Committee has the discretionary power and authority to limit or modify application of DEIP provisions and Plan Rules as the Committee determines to be advisable to facilitate tax deferral treatment (or accommodate the unavailability thereof) for Options granted to, or amounts credited with respect to, non-U.S. resident Participants.

(c) Discretion. The Committee has the sole discretionary power and authority to make all determinations necessary for administration of the DEIP, except those determinations that the DEIP requires others to make, and to construe, interpret, apply and enforce the provisions of the DEIP and Plan Rules whenever necessary to carry out its intent and purpose and to facilitate its administration, including, without limitation, the discretionary power and authority to remedy ambiguities, inconsistencies, omissions and erroneous benefit calculations. In the exercise of its discretionary power and authority, the Committee will treat all similarly situated persons uniformly.

(d) Specialist’s Assistance. The Committee may retain such actuarial, accounting, legal, clerical and other services as may reasonably be required in the administration of the DEIP, and may pay reasonable compensation for such services. All costs of administering the DEIP will be paid by the Company.

(e) Indemnification. The Company agrees to indemnify and hold harmless, to the extent permitted by law, each director, officer and employee of the Company and any subsidiary or affiliate of the Company against any and all liabilities, losses, costs and expenses (including legal fees) of every kind and nature that may be imposed on, incurred by, or asserted against such person at any time by reason of such person’s services in connection with the DEIP, but only if such person did not act dishonestly or in bad faith or in willful violation of the law or regulations under which such liability, loss, cost or expense arises. The Company has the right, but not the obligation, to select counsel and control the defense and settlement of any action for which a person may be entitled to indemnification under this provision.

16

17. Miscellaneous.

(a) Other Benefits. Neither amounts deferred nor amounts paid pursuant to the DEIP constitute salary or compensation for the purpose of computing benefits under any other benefit plan, practice, policy or procedure of the Company unless otherwise expressly provided thereunder.

(b) No Warranties Regarding Treatment. The Company makes no warranties regarding the tax treatment to any person of any deferrals or payments made pursuant to the DEIP, and each Participant will hold the Committee and the Company and their officers, directors, employees, agents and advisors harmless from any liability resulting from any tax position taken in good faith in connection with the DEIP.

(c) No Rights to Continued Service Created. Neither the establishment of or participation in the DEIP gives any individual the right to continued service on the Board or limits the right of the Company or its stockholders to terminate or modify the terms and conditions of service of such individual on the Board or otherwise deal with any individual without regard to the effect that such action might have on him or her with respect to the DEIP.

(d) Successors. Except as otherwise expressly provided in the DEIP, all obligations of the Company under the DEIP are binding on any successor to the Company whether the successor is the result of a direct or indirect purchase, merger, consolidation or otherwise of all of the business and/or assets of the Company.

(e) Governing Law. Questions pertaining to the construction, validity, effect and enforcement of the DEIP will be determined in accordance with the internal, substantive laws of the State of Delaware without regard to the conflict of laws rules of the State of Delaware or any other jurisdiction.

(f) Headings. The headings of sections are included solely for convenience of reference; if there exists any conflict between such headings and the text of the DEIP, the text will control.

IN WITNESS WHEREOF, the Company has duly executed this DEIP effective as of the date first written above.

UNITED CONTINENTAL HOLDINGS, INC.
By:	/s/ JEFFERY A. SMISEK
	Name:	Jeffery A. Smisek
	Title:	President and Chief Executive Officer

Attested:
UNITED CONTINENTAL HOLDINGS, INC.
By:	/s/ BRETT J. HART
	Name:	Brett J. Hart
	Title:	Senior Vice President, General Counsel and Secretary

17

EX-10.4

Exhibit 10.4

SHARE UNIT AWARD NOTICE

Share Unit Award Notice under the United Continental Holdings, Inc. 2006 Director Equity Incentive Plan, as amended (the “Plan”) dated as of                     , between United Continental Holdings, Inc., a Delaware corporation (the “Company”), and                     .

This Share Unit Award Notice (the “Award Notice”) sets forth the terms and conditions of an award of                      share units (the “Award”) that are subject to the terms and conditions specified herein (“Share Units”) and that are granted to you under the Plan. This award constitutes an unfunded and unsecured promise of the Company to deliver (or cause to be delivered to you), subject to the terms of this Award Notice, a cash payment for each Share Unit as set forth in Section 3 below.

SECTION 1. The Plan. This Award is made pursuant to the Plan, all the terms of which are hereby incorporated in this Award Notice. In the event of any conflict between the terms of the Plan and the terms of this Award Notice, the terms of the Plan shall govern.

SECTION 2. Definitions. Capitalized terms used in this Award Notice that are not defined in this Award Notice have the meanings as used or defined in the Plan.

SECTION 3. Delivery of Cash Pursuant to Settlement of Share Units. Your rights to the Share Units vest in accordance with the terms established by the Board on the date of grant. This award vests on [insert vesting date or schedule] (the “Vesting Date”). The Share Units, including any Share Units credited to your Share Account for dividends in accordance with Section 6(d)(ii) of the Plan, shall be settled in cash. On the Vesting Date, you shall receive a lump sum cash payment equal to the Market Price of a Share on the Vesting Date multiplied by the number of Share Units (including any fraction thereof) that vest on such Vesting Date. Upon settlement, the Share Units shall be extinguished and such number of Share Units will no longer be considered to be held by you for any purpose.

SECTION 4. Voting Rights; Dividends. You do not have any of the rights of a stockholder with respect to the Share Units granted to you pursuant to this Award Notice. Your Share Account will be credited with additional Share Units as of the date on which dividends, if any, are paid, in accordance with Section 6(d)(ii) of the Plan.

SECTION 5. Successors and Assigns of the Company. The terms and conditions of this Award Notice shall be binding upon and shall inure to the benefit of the Company and its successors and assigns.

SECTION 6. Committee Discretion. The Committee shall have full and plenary discretion with respect to any actions to be taken or determinations to be made in connection with this Award Notice, and its determinations shall be final, binding and conclusive.

SECTION 7. Amendment of this Award Notice. The Committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate this Award Notice prospectively or retroactively; provided, however, that, except as set

forth in Section 15 of the Plan, any such waiver, amendment, alteration, suspension, discontinuance, cancelation or termination that would materially and adversely impair your rights under this Award Notice shall not to that extent be effective without your consent (it being understood, notwithstanding the foregoing proviso, that this Award Notice and the Share Units shall be subject to the provisions of Section 3(c) of the Plan).

EX-31.1

Exhibit 31.1

Certification of the Principal Executive Officer

Pursuant to 15 U.S.C. 78m(a) or 78o(d)

(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Jeffery A. Smisek, certify that:

(1) I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2011 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 the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial 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 in Exchange 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, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, 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 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external 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 the effectiveness 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 recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, 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 the Company’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 reasonably likely 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 control over financial reporting.

/s/ Jeffery A. Smisek

Jeffery A. Smisek

President and Chief Executive Officer

Date: July 25, 2011

61

EX-31.2

Exhibit 31.2

Certification of the Principal Financial Officer

Pursuant to 15 U.S.C. 78m(a) or 78o(d)

(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Zane C. Rowe, certify that:

(1) I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2011 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 the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial 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 in Exchange 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, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, 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 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external 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 the effectiveness 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 recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, 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 the Company’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 reasonably likely 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 control over financial reporting.

/s/ Zane C. Rowe

Zane C. Rowe

Executive Vice President and

Chief Financial Officer

Date: July 25, 2011

62

EX-31.3

Exhibit 31.3

Certification of the Principal Executive Officer

Pursuant to 15 U.S.C. 78m(a) or 78o(d)

(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Jeffery A. Smisek, certify that:

(1) I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2011 of United Air Lines, 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 the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial 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 in Exchange 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, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, 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 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external 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 the effectiveness 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 recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, 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 the Company’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 reasonably likely 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 control over financial reporting.

/s/ Jeffery A. Smisek

Jeffery A. Smisek

Chairman, President and

Chief Executive Officer

Date: July 25, 2011

63

EX-31.4

Exhibit 31.4

Certification of the Principal Financial Officer

Pursuant to 15 U.S.C. 78m(a) or 78o(d)

(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Zane C. Rowe, certify that:

(1) I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2011 of United Air Lines, 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 the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial 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 in Exchange 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, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, 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 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external 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 the effectiveness 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 recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, 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 the Company’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 reasonably likely 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 control over financial reporting.

/s/ Zane C. Rowe

Zane C. Rowe

Executive Vice President and

Chief Financial Officer

Date: July 25, 2011

64

EX-31.5

Exhibit 31.5

Certification of the Principal Executive Officer

Pursuant to 15 U.S.C. 78m(a) or 78o(d)

(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Jeffery A. Smisek, certify that:

(1) I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2011 of Continental 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 the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial 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 in Exchange 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, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, 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 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external 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 the effectiveness 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 recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, 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 the Company’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 reasonably likely 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 control over financial reporting.

/s/ Jeffery A. Smisek

Jeffery A. Smisek

Chairman, President and

Chief Executive Officer

Date: July 25, 2011

65

EX-31.6

Exhibit 31.6

Certification of the Principal Financial Officer

Pursuant to 15 U.S.C. 78m(a) or 78o(d)

(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Zane C. Rowe, certify that:

(1) I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2011 of Continental 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 the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial 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 in Exchange 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, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, 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 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external 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 the effectiveness 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 recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, 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 the Company’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 reasonably likely 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 control over financial reporting.

/s/ Zane C. Rowe

Zane C. Rowe

Executive Vice President and

Chief Financial Officer

Date: July 25, 2011

66

EX-32.1

Exhibit 32.1

Certification 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 quarterly report on Form 10-Q for the period ended June 30, 2011 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 United Continental Holdings, Inc.

Date: July 25, 2011

/s/ Jeffery A. Smisek

Jeffery A. Smisek

President and Chief Executive Officer

/s/ Zane C. Rowe

Zane C. Rowe

Executive Vice President and

Chief Financial Officer

67

EX-32.2

Exhibit 32.2

Certification of United Air Lines, 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 quarterly report on Form 10-Q for the period ended June 30, 2011 of United Air Lines, 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 United Air Lines, Inc.

Date: July 25, 2011

/s/ Jeffery A. Smisek

Jeffery A. Smisek

Chairman, President and

Chief Executive Officer

/s/ Zane C. Rowe

Zane C. Rowe

Executive Vice President and

Chief Financial Officer

68

EX-32.3

Exhibit 32.3

Certification of Continental 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 quarterly report on Form 10-Q for the period ended June 30, 2011 of Continental 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 Continental Airlines, Inc.

Date: July 25, 2011

/s/ Jeffery A. Smisek

Jeffery A. Smisek

Chairman, President and

Chief Executive Officer

/s/ Zane C. Rowe

Zane C. Rowe

Executive Vice President and

Chief Financial Officer

69

XML



Document and Entity Information	6 Months Ended
	Jun. 30, 2011	Jul. 15, 2011
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Entity Registrant Name	United Continental Holdings, Inc.
Trading Symbol	ual
Entity Central Index Key	0000100517
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
United Continental Holdings Inc [Member]
Entity Common Stock, Shares Outstanding		330,773,503
United Airlines Inc [Member]
Entity Registrant Name	United Air Lines Inc.
Entity Central Index Key	0000101001
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		205
Continental Airlines Inc [Member]
Entity Registrant Name	Continental Airlines Inc./ DE/
Entity Central Index Key	0000319687
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		1,000

XML



Financial Instruments and Fair Value Measurements

6 Months Ended

Jun. 30, 2011

Financial Instruments and Fair Value Measurements

NOTE 5 - FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The table below presents disclosures about the financial assets and financial liabilities measured at fair value on a recurring basis in the Company's financial statements as of June 30, 2011 and December 31, 2010 (in millions):

	June 30, 2011											December 31, 2010
	Total			Level 1		Level 2			Level 3			Total			Level 1		Level 2			Level 3
	UAL
Cash and cash equivalents	$	7,519		$	7,519	$	—		$	—		$	8,069		$	8,069	$	—		$	—
Short-term investments:
Auction rate securities		121			—		—			121			119			—		—			119
CDARS		196			196		—			—			45			45		—			—
Asset-backed securities		224			224		—			—			258			258		—			—
Corporate debt		397			397		—			—			135			135		—			—
U.S. government and agency notes		47			47		—			—			39			39		—			—
Other fixed income securities		75			75		—			—			15			15		—			—
EETC		65			—		—			65			66			—		—			66
Fuel derivatives, net		191			—		191			—			375			—		375			—
Foreign currency derivatives		(3	)		—		(3	)		—			(7	)		—		(7	)		—
Restricted cash (a)		160			160		—			—			160			160		—			—
	United (a)
Cash and cash equivalents	$	4,107		$	4,107	$	—		$	—		$	4,665		$	4,665	$	—		$	—
Short-term investments:
Asset-backed securities		23			23		—			—			—			—		—			—
Corporate debt		124			124		—			—			—
U.S. government and agency notes		5			5		—			—			—			—		—			—
Other fixed income securities		3			3		—			—
EETC		65			—		—			65			66			—		—			66
Fuel derivatives, net		138			—		138			—			277			—		277			—
	Continental Successor
Cash and cash equivalents	$	3,406		$	3,406	$	—		$	—		$	3,398		$	3,398	$	—		$	—
Short-term investments:
Auction rate securities		121			—		—			121			119			—		—			119
CDARS		196			196		—			—			45			45		—			—
Asset-backed securities		201			201		—			—			258			258		—			—
Corporate debt		273			273		—			—			135			135		—			—
U.S. government and agency notes		41			41		—			—			39			39		—			—
Other fixed income securities		72			72		—			—			15			15		—			—
Fuel derivatives, net		53			—		53			—			98			—		98			—
Foreign currency derivatives		(3	)		—		(3	)		—			(7	)		—		(7	)		—
Restricted cash		160			160		—			—			160			160		—			—
Convertible debt derivative asset		251			—		—			251			286			—		—			286
Convertible debt option liability		(143	)		—		—			(143	)		(164	)		—		—			(164	)

(a) United's restricted cash is recorded at cost.

The tables below present disclosures about the activity for "Level Three" financial assets and financial liabilities for the three and six months ended June 30 (in millions):

	Three Months Ended June 30,
	2011				2010
UAL (a)	Auction  Rate Securities		EETC		EETC
Balance at March 31	$	120	$	63	$	58
Settlements		—		—		—
Reported in earnings - unrealized		1		—		—
Reported in other comprehensive income		—		2		3
Balance at June 30	$	121	$	65	$	61

(a) For 2010, amounts also represent United. For 2011, United's only Level Three recurring measurements are the above EETCs.

	Six Months Ended June 30,
	2011					2010
UAL (a)	Auction  Rate Securities		EETC			EETC
Balance at January 1	$	119	$	66		$	51
Settlements		—		(2	)		(2	)
Reported in earnings - unrealized		1		—			—
Reported in other comprehensive income		1		1			12
Balance at June 30	$	121	$	65		$	61

(a) For 2010, amounts also represent United. For 2011, United's only Level Three recurring measurements are the above EETCs.

Continental	Successor - 2011								Predecessor - 2010
	Auction Rate Securities		Convertible Debt Supplemental Derivative Asset (a)			Convertible Debt Conversion Option Liability (a)			Auction Rate Securities			Auction Rate Securities  Put Right
Balance at March 31	$	120	$	262		$	(152	)	$	164		$	16
Sales		—		—			—			(64	)		—
Gains (losses):
Reported in earnings:
Realized		—		—			—			17			(16	)
Unrealized		1		(11	)		9			—			—
Reported in other comprehensive income		—		—			—			—			—
Balance at June 30	$	121	$	251		$	(143	)	$	117		$	—

(a) These derivatives are not designated as hedges. The Convertible Debt Supplemental Derivative Asset is classified in "Other Asset - Other, net", and the Convertible Debt Conversion Option Liability is classified in "Other liabilities and deferred credits - Other" in Continental's consolidated balance sheets. The earnings impact is classified in "Nonoperating income (expense) - Miscellaneous, net" in Continental's statements of consolidated operations.

Continental	Successor - 2011								Predecessor - 2010
	Auction Rate Securities		Convertible Debt Supplemental Derivative Asset (a)			Convertible Debt Conversion Option Liability (a)			Auction Rate Securities			Auction Rate Securities Put Right
Balance at January 1	$	119	$	286		$	(164	)	$	201		$	20
Sales		—		—			—			(106	)		—
Gains (losses):
Reported in earnings:
Realized		—		—			—			23			(21	)
Unrealized		1		(35	)		21			—			1
Reported in other comprehensive income (loss)		1		—			—			(1	)		—
Balance at June 30	$	121	$	251		$	(143	)	$	117		$	—

(a) These derivatives are not designated as hedges. The Convertible Debt Supplemental Derivative Asset is classified in "Other Asset - Other, net", and the Convertible Debt Conversion Option Liability is classified in "Other liabilities and deferred credits - Other" in Continental's consolidated balance sheets. The earnings impact is classified in "Nonoperating income (expense) - Miscellaneous, net" in Continental's statements of consolidated operations.

As of June 30, 2011, Continental's auction rate securities, which had a par value of $145 million and unrealized gains of $2 million, were variable-rate debt instruments with contractual maturities generally greater than ten years and with interest rates that reset every 7, 28 or 35 days, depending on the terms of the particular instrument. These securities are secured by pools of student loans guaranteed by state-designated guaranty agencies and reinsured by the U.S. government. All of the auction rate securities that Continental holds are senior obligations under the applicable indentures authorizing the issuance of the securities.

During the first six months of 2010, Continental Predecessor sold, at par, auction rate securities having a par value of $106 million. Certain of these auction rate securities were subject to a put right granted to Continental by an institution permitting Continental to sell to the institution certain auction rate securities at their full par value. Continental classified the auction rate securities underlying the put right as trading securities and elected the fair value option under applicable accounting standards for the put right, with changes in the fair value of the put right and the underlying auction rate securities recognized in earnings currently. Continental recognized gains on the sales using the specific identification method. The gains were substantially offset by the cancellation of the related put rights. The net gains are included in miscellaneous nonoperating income (expense) in the Continental Predecessor statement of consolidated operations and were not material.

As of June 30, 2011, United's enhanced equipment trust certificate ("EETC") securities, which were repurchased in open market transactions in 2007, have an amortized cost basis of $68 million and unrealized losses of $3 million. As of June 30, 2011, these securities have been in an unrealized loss position for a period of over twelve months. However, United has not recognized an impairment loss in earnings related to these securities because it does not intend or expect to be required to sell the securities and expects to recover the entire amortized cost basis. All changes in the fair value of these investments have been classified within accumulated other comprehensive income.

The Continental Successor debt-related derivatives presented in the table above relate to (a) supplemental indenture agreements that provide that Continental's convertible debt, which was previously convertible into shares of Continental common stock, is convertible into shares of UAL common stock upon the terms and conditions specified in the indentures, and (b) the embedded conversion options in Continental's convertible debt that are required to be separated and accounted for as though they are free-standing derivatives as a result of the Continental debt becoming convertible into the common stock of a different reporting entity. These derivatives are reported in Continental's separate financial statements and eliminated in consolidation for UAL. See the Company's 2010 Annual Report for additional information.

The table below presents the carrying values and estimated fair values of financial instruments not presented in the tables above as of June 30, 2011 and December 31, 2010 (in millions):

	June 30, 2011				December 31, 2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
UAL debt	$	12,490	$	13,304	$	13,845	$	14,995
United debt		6,103		6,216		7,026		7,350
Continental Successor debt		5,973		6,133		6,401		6,663

Fair value of the financial instruments included in the tables above was determined as follows:

Description	Fair Value Methodology
Cash, Cash Equivalents, Investments and Restricted Cash	The carrying amounts approximate fair value because of the short-term maturity of these assets and liabilities. These assets have maturities of less than one year except for the EETCs, auction rate securities and corporate debt.
	Fair value is based on either (a) the trading prices of the investment or similar instruments, or (b) an income approach, which uses valuation techniques to convert future amounts into a single present amount based on current market expectations about those future amounts when observable trading prices are not available.
Fuel Derivatives	Derivative contracts are privately negotiated contracts and are not exchange traded. Fair value measurements are estimated with option pricing models that employ observable inputs. Inputs to the valuation models include contractual terms, market prices, yield curves, fuel price curves and measures of volatility, among others.
Foreign Currency Derivatives	Fair value is determined with a formula utilizing observable inputs. Significant inputs to the valuation models include contractual terms, risk-free interest rates and forward exchange rates.
Debt	Fair values were based on either market prices or the discounted amount of future cash flows using our current incremental rate of borrowing for similar liabilities.
Convertible Debt Derivative Asset and Option Liability	The Company used a binomial lattice model to value the conversion options and the supplemental derivative assets. Significant binomial model inputs that are not objectively determinable include volatility and discount rate.

United Airlines Inc [Member]

Financial Instruments and Fair Value Measurements

NOTE 5 - FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The table below presents disclosures about the financial assets and financial liabilities measured at fair value on a recurring basis in the Company's financial statements as of June 30, 2011 and December 31, 2010 (in millions):

	June 30, 2011											December 31, 2010
	Total			Level 1		Level 2			Level 3			Total			Level 1		Level 2			Level 3
	UAL
Cash and cash equivalents	$	7,519		$	7,519	$	—		$	—		$	8,069		$	8,069	$	—		$	—
Short-term investments:
Auction rate securities		121			—		—			121			119			—		—			119
CDARS		196			196		—			—			45			45		—			—
Asset-backed securities		224			224		—			—			258			258		—			—
Corporate debt		397			397		—			—			135			135		—			—
U.S. government and agency notes		47			47		—			—			39			39		—			—
Other fixed income securities		75			75		—			—			15			15		—			—
EETC		65			—		—			65			66			—		—			66
Fuel derivatives, net		191			—		191			—			375			—		375			—
Foreign currency derivatives		(3	)		—		(3	)		—			(7	)		—		(7	)		—
Restricted cash (a)		160			160		—			—			160			160		—			—
	United (a)
Cash and cash equivalents	$	4,107		$	4,107	$	—		$	—		$	4,665		$	4,665	$	—		$	—
Short-term investments:
Asset-backed securities		23			23		—			—			—			—		—			—
Corporate debt		124			124		—			—			—
U.S. government and agency notes		5			5		—			—			—			—		—			—
Other fixed income securities		3			3		—			—
EETC		65			—		—			65			66			—		—			66
Fuel derivatives, net		138			—		138			—			277			—		277			—
	Continental Successor
Cash and cash equivalents	$	3,406		$	3,406	$	—		$	—		$	3,398		$	3,398	$	—		$	—
Short-term investments:
Auction rate securities		121			—		—			121			119			—		—			119
CDARS		196			196		—			—			45			45		—			—
Asset-backed securities		201			201		—			—			258			258		—			—
Corporate debt		273			273		—			—			135			135		—			—
U.S. government and agency notes		41			41		—			—			39			39		—			—
Other fixed income securities		72			72		—			—			15			15		—			—
Fuel derivatives, net		53			—		53			—			98			—		98			—
Foreign currency derivatives		(3	)		—		(3	)		—			(7	)		—		(7	)		—
Restricted cash		160			160		—			—			160			160		—			—
Convertible debt derivative asset		251			—		—			251			286			—		—			286
Convertible debt option liability		(143	)		—		—			(143	)		(164	)		—		—			(164	)

(a) United's restricted cash is recorded at cost.

The tables below present disclosures about the activity for "Level Three" financial assets and financial liabilities for the three and six months ended June 30 (in millions):

	Three Months Ended June 30,
	2011				2010
UAL (a)	Auction  Rate Securities		EETC		EETC
Balance at March 31	$	120	$	63	$	58
Settlements		—		—		—
Reported in earnings - unrealized		1		—		—
Reported in other comprehensive income		—		2		3
Balance at June 30	$	121	$	65	$	61

(a) For 2010, amounts also represent United. For 2011, United's only Level Three recurring measurements are the above EETCs.

	Six Months Ended June 30,
	2011					2010
UAL (a)	Auction  Rate Securities		EETC			EETC
Balance at January 1	$	119	$	66		$	51
Settlements		—		(2	)		(2	)
Reported in earnings - unrealized		1		—			—
Reported in other comprehensive income		1		1			12
Balance at June 30	$	121	$	65		$	61

(a) For 2010, amounts also represent United. For 2011, United's only Level Three recurring measurements are the above EETCs.

Continental	Successor - 2011								Predecessor - 2010
	Auction Rate Securities		Convertible Debt Supplemental Derivative Asset (a)			Convertible Debt Conversion Option Liability (a)			Auction Rate Securities			Auction Rate Securities  Put Right
Balance at March 31	$	120	$	262		$	(152	)	$	164		$	16
Sales		—		—			—			(64	)		—
Gains (losses):
Reported in earnings:
Realized		—		—			—			17			(16	)
Unrealized		1		(11	)		9			—			—
Reported in other comprehensive income		—		—			—			—			—
Balance at June 30	$	121	$	251		$	(143	)	$	117		$	—

(a) These derivatives are not designated as hedges. The Convertible Debt Supplemental Derivative Asset is classified in "Other Asset - Other, net", and the Convertible Debt Conversion Option Liability is classified in "Other liabilities and deferred credits - Other" in Continental's consolidated balance sheets. The earnings impact is classified in "Nonoperating income (expense) - Miscellaneous, net" in Continental's statements of consolidated operations.

Continental	Successor - 2011								Predecessor - 2010
	Auction Rate Securities		Convertible Debt Supplemental Derivative Asset (a)			Convertible Debt Conversion Option Liability (a)			Auction Rate Securities			Auction Rate Securities Put Right
Balance at January 1	$	119	$	286		$	(164	)	$	201		$	20
Sales		—		—			—			(106	)		—
Gains (losses):
Reported in earnings:
Realized		—		—			—			23			(21	)
Unrealized		1		(35	)		21			—			1
Reported in other comprehensive income (loss)		1		—			—			(1	)		—
Balance at June 30	$	121	$	251		$	(143	)	$	117		$	—

(a) These derivatives are not designated as hedges. The Convertible Debt Supplemental Derivative Asset is classified in "Other Asset - Other, net", and the Convertible Debt Conversion Option Liability is classified in "Other liabilities and deferred credits - Other" in Continental's consolidated balance sheets. The earnings impact is classified in "Nonoperating income (expense) - Miscellaneous, net" in Continental's statements of consolidated operations.

As of June 30, 2011, Continental's auction rate securities, which had a par value of $145 million and unrealized gains of $2 million, were variable-rate debt instruments with contractual maturities generally greater than ten years and with interest rates that reset every 7, 28 or 35 days, depending on the terms of the particular instrument. These securities are secured by pools of student loans guaranteed by state-designated guaranty agencies and reinsured by the U.S. government. All of the auction rate securities that Continental holds are senior obligations under the applicable indentures authorizing the issuance of the securities.

During the first six months of 2010, Continental Predecessor sold, at par, auction rate securities having a par value of $106 million. Certain of these auction rate securities were subject to a put right granted to Continental by an institution permitting Continental to sell to the institution certain auction rate securities at their full par value. Continental classified the auction rate securities underlying the put right as trading securities and elected the fair value option under applicable accounting standards for the put right, with changes in the fair value of the put right and the underlying auction rate securities recognized in earnings currently. Continental recognized gains on the sales using the specific identification method. The gains were substantially offset by the cancellation of the related put rights. The net gains are included in miscellaneous nonoperating income (expense) in the Continental Predecessor statement of consolidated operations and were not material.

As of June 30, 2011, United's enhanced equipment trust certificate ("EETC") securities, which were repurchased in open market transactions in 2007, have an amortized cost basis of $68 million and unrealized losses of $3 million. As of June 30, 2011, these securities have been in an unrealized loss position for a period of over twelve months. However, United has not recognized an impairment loss in earnings related to these securities because it does not intend or expect to be required to sell the securities and expects to recover the entire amortized cost basis. All changes in the fair value of these investments have been classified within accumulated other comprehensive income.

The Continental Successor debt-related derivatives presented in the table above relate to (a) supplemental indenture agreements that provide that Continental's convertible debt, which was previously convertible into shares of Continental common stock, is convertible into shares of UAL common stock upon the terms and conditions specified in the indentures, and (b) the embedded conversion options in Continental's convertible debt that are required to be separated and accounted for as though they are free-standing derivatives as a result of the Continental debt becoming convertible into the common stock of a different reporting entity. These derivatives are reported in Continental's separate financial statements and eliminated in consolidation for UAL. See the Company's 2010 Annual Report for additional information.

The table below presents the carrying values and estimated fair values of financial instruments not presented in the tables above as of June 30, 2011 and December 31, 2010 (in millions):

	June 30, 2011				December 31, 2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
UAL debt	$	12,490	$	13,304	$	13,845	$	14,995
United debt		6,103		6,216		7,026		7,350
Continental Successor debt		5,973		6,133		6,401		6,663

Fair value of the financial instruments included in the tables above was determined as follows:

Description	Fair Value Methodology
Cash, Cash Equivalents, Investments and Restricted Cash	The carrying amounts approximate fair value because of the short-term maturity of these assets and liabilities. These assets have maturities of less than one year except for the EETCs, auction rate securities and corporate debt.
	Fair value is based on either (a) the trading prices of the investment or similar instruments, or (b) an income approach, which uses valuation techniques to convert future amounts into a single present amount based on current market expectations about those future amounts when observable trading prices are not available.
Fuel Derivatives	Derivative contracts are privately negotiated contracts and are not exchange traded. Fair value measurements are estimated with option pricing models that employ observable inputs. Inputs to the valuation models include contractual terms, market prices, yield curves, fuel price curves and measures of volatility, among others.
Foreign Currency Derivatives	Fair value is determined with a formula utilizing observable inputs. Significant inputs to the valuation models include contractual terms, risk-free interest rates and forward exchange rates.
Debt	Fair values were based on either market prices or the discounted amount of future cash flows using our current incremental rate of borrowing for similar liabilities.
Convertible Debt Derivative Asset and Option Liability	The Company used a binomial lattice model to value the conversion options and the supplemental derivative assets. Significant binomial model inputs that are not objectively determinable include volatility and discount rate.

Continental Airlines Inc [Member]

Financial Instruments and Fair Value Measurements

NOTE 5 - FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The table below presents disclosures about the financial assets and financial liabilities measured at fair value on a recurring basis in the Company's financial statements as of June 30, 2011 and December 31, 2010 (in millions):

	June 30, 2011											December 31, 2010
	Total			Level 1		Level 2			Level 3			Total			Level 1		Level 2			Level 3
	UAL
Cash and cash equivalents	$	7,519		$	7,519	$			$			$	8,069		$	8,069	$			$
Short-term investments:
Auction rate securities		121								121			119								119
CDARS		196			196								45			45
Asset-backed securities		224			224								258			258
Corporate debt		397			397								135			135
U.S. government and agency notes		47			47								39			39
Other fixed income securities		75			75								15			15
EETC		65								65			66								66
Fuel derivatives, net		191					191						375					375
Foreign currency derivatives		(3	)				(3	)					(7	)				(7	)
Restricted cash (a)		160			160								160			160
	United (a)
Cash and cash equivalents	$	4,107		$	4,107	$			$			$	4,665		$	4,665	$			$
Short-term investments:
Asset-backed securities		23			23
Corporate debt		124			124
U.S. government and agency notes		5			5
Other fixed income securities		3			3
EETC		65								65			66								66
Fuel derivatives, net		138					138						277					277
	Continental Successor
Cash and cash equivalents	$	3,406		$	3,406	$			$			$	3,398		$	3,398	$			$
Short-term investments:
Auction rate securities		121								121			119								119
CDARS		196			196								45			45
Asset-backed securities		201			201								258			258
Corporate debt		273			273								135			135
U.S. government and agency notes		41			41								39			39
Other fixed income securities		72			72								15			15
Fuel derivatives, net		53					53						98					98
Foreign currency derivatives		(3	)				(3	)					(7	)				(7	)
Restricted cash		160			160								160			160
Convertible debt derivative asset		251								251			286								286
Convertible debt option liability		(143	)							(143	)		(164	)							(164	)

(a) United's restricted cash is recorded at cost.

The tables below present disclosures about the activity for "Level Three" financial assets and financial liabilities for the three and six months ended June 30 (in millions):

	Three Months Ended June 30,
	2011				2010
UAL (a)	Auction  Rate Securities		EETC		EETC
Balance at March 31	$	120	$	63	$	58
Settlements
Reported in earnings - unrealized		1
Reported in other comprehensive income				2		3
Balance at June 30	$	121	$	65	$	61

(a) For 2010, amounts also represent United. For 2011, United's only Level Three recurring measurements are the above EETCs.

	Six Months Ended June 30,
	2011					2010
UAL (a)	Auction  Rate Securities		EETC			EETC
Balance at January 1	$	119	$	66		$	51
Settlements				(2	)		(2	)
Reported in earnings - unrealized		1
Reported in other comprehensive income		1		1			12
Balance at June 30	$	121	$	65		$	61

(a) For 2010, amounts also represent United. For 2011, United's only Level Three recurring measurements are the above EETCs.

Continental	Successor - 2011								Predecessor - 2010
	Auction Rate Securities		Convertible Debt Supplemental Derivative Asset (a)			Convertible Debt Conversion Option Liability (a)			Auction Rate Securities			Auction Rate Securities  Put Right
Balance at March 31	$	120	$	262		$	(152	)	$	164		$	16
Sales										(64	)
Gains (losses):
Reported in earnings:
Realized										17			(16	)
Unrealized		1		(11	)		9
Reported in other comprehensive income
Balance at June 30	$	121	$	251		$	(143	)	$	117		$

(a) These derivatives are not designated as hedges. The Convertible Debt Supplemental Derivative Asset is classified in "Other Asset - Other, net", and the Convertible Debt Conversion Option Liability is classified in "Other liabilities and deferred credits - Other" in Continental's consolidated balance sheets. The earnings impact is classified in "Nonoperating income (expense) - Miscellaneous, net" in Continental's statements of consolidated operations.

Continental	Successor - 2011								Predecessor - 2010
	Auction Rate Securities		Convertible Debt Supplemental Derivative Asset (a)			Convertible Debt Conversion Option Liability (a)			Auction Rate Securities			Auction Rate Securities Put Right
Balance at January 1	$	119	$	286		$	(164	)	$	201		$	20
Sales										(106	)
Gains (losses):
Reported in earnings:
Realized										23			(21	)
Unrealized		1		(35	)		21						1
Reported in other comprehensive income (loss)		1								(1	)
Balance at June 30	$	121	$	251		$	(143	)	$	117		$

(a) These derivatives are not designated as hedges. The Convertible Debt Supplemental Derivative Asset is classified in "Other Asset - Other, net", and the Convertible Debt Conversion Option Liability is classified in "Other liabilities and deferred credits - Other" in Continental's consolidated balance sheets. The earnings impact is classified in "Nonoperating income (expense) - Miscellaneous, net" in Continental's statements of consolidated operations.

As of June 30, 2011, Continental's auction rate securities, which had a par value of $145 million and unrealized gains of $2 million, were variable-rate debt instruments with contractual maturities generally greater than ten years and with interest rates that reset every 7, 28 or 35 days, depending on the terms of the particular instrument. These securities are secured by pools of student loans guaranteed by state-designated guaranty agencies and reinsured by the U.S. government. All of the auction rate securities that Continental holds are senior obligations under the applicable indentures authorizing the issuance of the securities.

During the first six months of 2010, Continental Predecessor sold, at par, auction rate securities having a par value of $106 million. Certain of these auction rate securities were subject to a put right granted to Continental by an institution permitting Continental to sell to the institution certain auction rate securities at their full par value. Continental classified the auction rate securities underlying the put right as trading securities and elected the fair value option under applicable accounting standards for the put right, with changes in the fair value of the put right and the underlying auction rate securities recognized in earnings currently. Continental recognized gains on the sales using the specific identification method. The gains were substantially offset by the cancellation of the related put rights. The net gains are included in miscellaneous nonoperating income (expense) in the Continental Predecessor statement of consolidated operations and were not material.

As of June 30, 2011, United's enhanced equipment trust certificate ("EETC") securities, which were repurchased in open market transactions in 2007, have an amortized cost basis of $68 million and unrealized losses of $3 million. As of June 30, 2011, these securities have been in an unrealized loss position for a period of over twelve months. However, United has not recognized an impairment loss in earnings related to these securities because it does not intend or expect to be required to sell the securities and expects to recover the entire amortized cost basis. All changes in the fair value of these investments have been classified within accumulated other comprehensive income.

The Continental Successor debt-related derivatives presented in the table above relate to (a) supplemental indenture agreements that provide that Continental's convertible debt, which was previously convertible into shares of Continental common stock, is convertible into shares of UAL common stock upon the terms and conditions specified in the indentures, and (b) the embedded conversion options in Continental's convertible debt that are required to be separated and accounted for as though they are free-standing derivatives as a result of the Continental debt becoming convertible into the common stock of a different reporting entity. These derivatives are reported in Continental's separate financial statements and eliminated in consolidation for UAL. See the Company's 2010 Annual Report for additional information.

The table below presents the carrying values and estimated fair values of financial instruments not presented in the tables above as of June 30, 2011 and December 31, 2010 (in millions):

	June 30, 2011				December 31, 2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
UAL debt	$	12,490	$	13,304	$	13,845	$	14,995
United debt		6,103		6,216		7,026		7,350
Continental Successor debt		5,973		6,133		6,401		6,663

Fair value of the financial instruments included in the tables above was determined as follows:

Description	Fair Value Methodology
Cash, Cash Equivalents, Investments and Restricted Cash	The carrying amounts approximate fair value because of the short-term maturity of these assets and liabilities. These assets have maturities of less than one year except for the EETCs, auction rate securities and corporate debt.
	Fair value is based on either (a) the trading prices of the investment or similar instruments, or (b) an income approach, which uses valuation techniques to convert future amounts into a single present amount based on current market expectations about those future amounts when observable trading prices are not available.
Fuel Derivatives	Derivative contracts are privately negotiated contracts and are not exchange traded. Fair value measurements are estimated with option pricing models that employ observable inputs. Inputs to the valuation models include contractual terms, market prices, yield curves, fuel price curves and measures of volatility, among others.
Foreign Currency Derivatives	Fair value is determined with a formula utilizing observable inputs. Significant inputs to the valuation models include contractual terms, risk-free interest rates and forward exchange rates.
Debt	Fair values were based on either market prices or the discounted amount of future cash flows using our current incremental rate of borrowing for similar liabilities.
Convertible Debt Derivative Asset and Option Liability	The Company used a binomial lattice model to value the conversion options and the supplemental derivative assets. Significant binomial model inputs that are not objectively determinable include volatility and discount rate.

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Hedging Activities

6 Months Ended

Jun. 30, 2011

Hedging Activities

NOTE 6 - HEDGING ACTIVITIES

Aircraft Fuel Hedges. The Company has a risk management strategy to hedge a portion of its price risk related to projected aircraft fuel requirements. The Company periodically enters into derivative contracts to mitigate the adverse financial impact of potential increases in the price of fuel. The Company does not enter into derivative instruments for non-risk management purposes. Prior to April 1, 2010, United's fuel hedges were not accounted for as fair value or cash flow hedges under accounting principles related to hedge accounting. Effective April 1, 2010, United designated substantially all of its outstanding fuel derivative contracts, which settle in periods subsequent to June 30, 2010, as cash flow hedges under applicable accounting standards. In addition, substantially all new fuel derivative contracts entered into subsequent to April 1, 2010 were designated as cash flow hedges.

For fuel derivative instruments designated as cash flow hedges, the Company records the effective portion of periodic changes in the fair value of the derivatives in accumulated other comprehensive income (loss) ("AOCI") until the underlying fuel is consumed and recorded in fuel expense. Hedge ineffectiveness results when the change in the fair value of the derivative instrument exceeds the change in the value of the Company's expected future cash outlay to purchase and consume fuel. To the extent that the periodic changes in the fair value of the derivatives are not effective, that ineffectiveness is recorded to miscellaneous nonoperating income (expense) in the statements of consolidated operations. Nonoperating income (expense) for the three and six months ended June 30, 2011 includes $34 million and $31 million, respectively, of expense resulting from ineffectiveness caused by a decrease in fuel hedge values in excess of the decrease in aircraft fuel prices during the quarter. The impact is concentrated in the fuel hedges entered into by Continental as a result of the redesignation of Continental's fuel hedge portfolio under cash flow hedge accounting as of April 1, 2011 when the portfolio was fully integrated with United's fuel hedge portfolio. This redesignation deferred certain gains on these contracts that will be recognized as part of fuel expense as these positions settle in the future, and therefore any impact is expected to be neutral to earnings over the full term of each contract, assuming current fuel prices.

The Company records each derivative instrument as a derivative asset or liability (on a gross basis) in its consolidated balance sheets and, accordingly, records any related collateral on a gross basis.

As of June 30, 2011, our projected fuel requirements for the remainder of 2011 were hedged as follows:

	Maximum Price					Minimum Price
	% of Expected Consumption			Weighted Average  Price (per gallon)		% of Expected Consumption			Weighted Average  Price (per gallon)
UAL
Heating oil collars		15	%	$	3.32		15	%	$	2.65
Heating oil call options		4			2.41		N/A			N/A
Heating oil swaps		3			2.24		3			2.24
West Texas Intermediate ("WTI") crude oil call options		13			2.32		N/A			N/A
WTI crude oil swaps		11			2.17		11			2.17
Aircraft fuel call options		4			3.15		N/A			N/A
Aircraft fuel swaps		1			3.14		1			3.14
Total		51	%				30	%

As of June 30, 2011, United and Continental had hedged projected fuel requirements for the remainder of 2011 of 54% and 44%, respectively, consistent with the hedged instruments and underlyings presented in the table above for UAL. As of June 30, 2011, UAL, United and Continental had also hedged 13%, 16% and 8%, respectively, of projected first half 2012 fuel consumption.

The following tables present information about the financial statement classification of the Company's derivatives (in millions):

Derivatives designated as hedges		June 30, 2011						December 31, 2010
	Balance Sheet Location	UAL		United		Continental Successor		UAL		United		Continental Successor
Assets:
Fuel contracts due within one year	Receivables	$	194	$	141	$	53	$	375	$	277	$	98
Liabilities:
Fuel contracts due within one year	Other Current Liabilities	$	3	$	3	$	—	$	—	$	—	$	—

Fuel contracts	Amount of Gain (Loss) Recognized in AOCI on  Derivatives (Effective portion)						Gain (Loss) Reclassified from AOCI into Income (Fuel Expense) (Effective Portion)					Amount of Gain  (Loss) Recognized in Income  (Nonoperating Expense) (Ineffective Portion)
	Three Months Ended June 30,						Three Months Ended June 30,					Three Months Ended June 30,
	2011			2010			2011		2010			2011			2010
UAL	$	(231	)	$	(146	)	$	278	$	—		$	(34	)	$	(3	)
United		(149	)		(146	)		213		—			(7	)		(3	)
Continental (a)		(82	)		(53	)		65		(9	)		(27	)		(2	)

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

Fuel contracts	Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective portion)					Gain (Loss) Reclassified from AOCI into Income (Fuel Expense) (Effective Portion)					Amount of Gain (Loss) Recognized in Income (Nonoperating Expense) (Ineffective Portion)
	Six Months Ended June 30,					Six Months Ended June 30,					Six Months Ended June 30,
	2011		2010			2011		2010			2011			2010
UAL	$	293	$	(146	)	$	432	$	—		$	(31	)	$	(3	)
United		236		(146	)		338		—			(5	)		(3	)
Continental (a)		57		(37	)		94		(6	)		(26	)		(2	)

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

Derivative Credit Risk and Fair Value

The Company is exposed to credit losses in the event of nonperformance by counterparties to its derivative instruments. While the Company records derivative instruments on a gross basis, the Company monitors its net derivative position with each counterparty to monitor credit risk. Based on the fair value of our fuel derivative instruments, our counterparties may require us to post collateral when the price of the underlying commodity decreases, and we may require our counterparties to provide us with collateral when the price of the underlying commodity increases. The following table presents information related to the Company's derivative credit risk as of June 30, 2011 (in millions):

	UAL			United			Continental
Net derivative asset with counterparties	$	191		$	138		$	53
Collateral held by the Company (a)		(31	)		(31	)		—
Collateral posted by the Company		—			—			—
Potential loss related to the failure of the Company's counterparties to perform (b)		160			107			53

(a) Classified as an other current liability.

(b) Based on fair value at June 30, 2011 and collateral held.

United Airlines Inc [Member]

Hedging Activities

NOTE 6 - HEDGING ACTIVITIES

Aircraft Fuel Hedges. The Company has a risk management strategy to hedge a portion of its price risk related to projected aircraft fuel requirements. The Company periodically enters into derivative contracts to mitigate the adverse financial impact of potential increases in the price of fuel. The Company does not enter into derivative instruments for non-risk management purposes. Prior to April 1, 2010, United's fuel hedges were not accounted for as fair value or cash flow hedges under accounting principles related to hedge accounting. Effective April 1, 2010, United designated substantially all of its outstanding fuel derivative contracts, which settle in periods subsequent to June 30, 2010, as cash flow hedges under applicable accounting standards. In addition, substantially all new fuel derivative contracts entered into subsequent to April 1, 2010 were designated as cash flow hedges.

For fuel derivative instruments designated as cash flow hedges, the Company records the effective portion of periodic changes in the fair value of the derivatives in accumulated other comprehensive income (loss) ("AOCI") until the underlying fuel is consumed and recorded in fuel expense. Hedge ineffectiveness results when the change in the fair value of the derivative instrument exceeds the change in the value of the Company's expected future cash outlay to purchase and consume fuel. To the extent that the periodic changes in the fair value of the derivatives are not effective, that ineffectiveness is recorded to miscellaneous nonoperating income (expense) in the statements of consolidated operations. Nonoperating income (expense) for the three and six months ended June 30, 2011 includes $34 million and $31 million, respectively, of expense resulting from ineffectiveness caused by a decrease in fuel hedge values in excess of the decrease in aircraft fuel prices during the quarter. The impact is concentrated in the fuel hedges entered into by Continental as a result of the redesignation of Continental's fuel hedge portfolio under cash flow hedge accounting as of April 1, 2011 when the portfolio was fully integrated with United's fuel hedge portfolio. This redesignation deferred certain gains on these contracts that will be recognized as part of fuel expense as these positions settle in the future, and therefore any impact is expected to be neutral to earnings over the full term of each contract, assuming current fuel prices.

The Company records each derivative instrument as a derivative asset or liability (on a gross basis) in its consolidated balance sheets and, accordingly, records any related collateral on a gross basis.

As of June 30, 2011, our projected fuel requirements for the remainder of 2011 were hedged as follows:

	Maximum Price					Minimum Price
	% of Expected Consumption			Weighted Average  Price (per gallon)		% of Expected Consumption			Weighted Average  Price (per gallon)
UAL
Heating oil collars		15	%	$	3.32		15	%	$	2.65
Heating oil call options		4			2.41		N/A			N/A
Heating oil swaps		3			2.24		3			2.24
West Texas Intermediate ("WTI") crude oil call options		13			2.32		N/A			N/A
WTI crude oil swaps		11			2.17		11			2.17
Aircraft fuel call options		4			3.15		N/A			N/A
Aircraft fuel swaps		1			3.14		1			3.14
Total		51	%				30	%

As of June 30, 2011, United and Continental had hedged projected fuel requirements for the remainder of 2011 of 54% and 44%, respectively, consistent with the hedged instruments and underlyings presented in the table above for UAL. As of June 30, 2011, UAL, United and Continental had also hedged 13%, 16% and 8%, respectively, of projected first half 2012 fuel consumption.

The following tables present information about the financial statement classification of the Company's derivatives (in millions):

Derivatives designated as hedges		June 30, 2011						December 31, 2010
	Balance Sheet Location	UAL		United		Continental Successor		UAL		United		Continental Successor
Assets:
Fuel contracts due within one year	Receivables	$	194	$	141	$	53	$	375	$	277	$	98
Liabilities:
Fuel contracts due within one year	Other Current Liabilities	$	3	$	3	$	—	$	—	$	—	$	—

Fuel contracts	Amount of Gain (Loss) Recognized in AOCI on  Derivatives (Effective portion)						Gain (Loss) Reclassified from AOCI into Income (Fuel Expense) (Effective Portion)					Amount of Gain  (Loss) Recognized in Income  (Nonoperating Expense) (Ineffective Portion)
	Three Months Ended June 30,						Three Months Ended June 30,					Three Months Ended June 30,
	2011			2010			2011		2010			2011			2010
UAL	$	(231	)	$	(146	)	$	278	$	—		$	(34	)	$	(3	)
United		(149	)		(146	)		213		—			(7	)		(3	)
Continental (a)		(82	)		(53	)		65		(9	)		(27	)		(2	)

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

Fuel contracts	Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective portion)					Gain (Loss) Reclassified from AOCI into Income (Fuel Expense) (Effective Portion)					Amount of Gain (Loss) Recognized in Income (Nonoperating Expense) (Ineffective Portion)
	Six Months Ended June 30,					Six Months Ended June 30,					Six Months Ended June 30,
	2011		2010			2011		2010			2011			2010
UAL	$	293	$	(146	)	$	432	$	—		$	(31	)	$	(3	)
United		236		(146	)		338		—			(5	)		(3	)
Continental (a)		57		(37	)		94		(6	)		(26	)		(2	)

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

Derivative Credit Risk and Fair Value

The Company is exposed to credit losses in the event of nonperformance by counterparties to its derivative instruments. While the Company records derivative instruments on a gross basis, the Company monitors its net derivative position with each counterparty to monitor credit risk. Based on the fair value of our fuel derivative instruments, our counterparties may require us to post collateral when the price of the underlying commodity decreases, and we may require our counterparties to provide us with collateral when the price of the underlying commodity increases. The following table presents information related to the Company's derivative credit risk as of June 30, 2011 (in millions):

	UAL			United			Continental
Net derivative asset with counterparties	$	191		$	138		$	53
Collateral held by the Company (a)		(31	)		(31	)		—
Collateral posted by the Company		—			—			—
Potential loss related to the failure of the Company's counterparties to perform (b)		160			107			53

(a) Classified as an other current liability.

(b) Based on fair value at June 30, 2011 and collateral held.

Continental Airlines Inc [Member]

Hedging Activities

NOTE 6 - HEDGING ACTIVITIES

Aircraft Fuel Hedges. The Company has a risk management strategy to hedge a portion of its price risk related to projected aircraft fuel requirements. The Company periodically enters into derivative contracts to mitigate the adverse financial impact of potential increases in the price of fuel. The Company does not enter into derivative instruments for non-risk management purposes. Prior to April 1, 2010, United's fuel hedges were not accounted for as fair value or cash flow hedges under accounting principles related to hedge accounting. Effective April 1, 2010, United designated substantially all of its outstanding fuel derivative contracts, which settle in periods subsequent to June 30, 2010, as cash flow hedges under applicable accounting standards. In addition, substantially all new fuel derivative contracts entered into subsequent to April 1, 2010 were designated as cash flow hedges.

For fuel derivative instruments designated as cash flow hedges, the Company records the effective portion of periodic changes in the fair value of the derivatives in accumulated other comprehensive income (loss) ("AOCI") until the underlying fuel is consumed and recorded in fuel expense. Hedge ineffectiveness results when the change in the fair value of the derivative instrument exceeds the change in the value of the Company's expected future cash outlay to purchase and consume fuel. To the extent that the periodic changes in the fair value of the derivatives are not effective, that ineffectiveness is recorded to miscellaneous nonoperating income (expense) in the statements of consolidated operations. Nonoperating income (expense) for the three and six months ended June 30, 2011 includes $34 million and $31 million, respectively, of expense resulting from ineffectiveness caused by a decrease in fuel hedge values in excess of the decrease in aircraft fuel prices during the quarter. The impact is concentrated in the fuel hedges entered into by Continental as a result of the redesignation of Continental's fuel hedge portfolio under cash flow hedge accounting as of April 1, 2011 when the portfolio was fully integrated with United's fuel hedge portfolio. This redesignation deferred certain gains on these contracts that will be recognized as part of fuel expense as these positions settle in the future, and therefore any impact is expected to be neutral to earnings over the full term of each contract, assuming current fuel prices.

The Company records each derivative instrument as a derivative asset or liability (on a gross basis) in its consolidated balance sheets and, accordingly, records any related collateral on a gross basis.

As of June 30, 2011, our projected fuel requirements for the remainder of 2011 were hedged as follows:

	Maximum Price					Minimum Price
	% of Expected Consumption			Weighted Average  Price (per gallon)		% of Expected Consumption			Weighted Average  Price (per gallon)
UAL
Heating oil collars		15	%	$	3.32		15	%	$	2.65
Heating oil call options		4			2.41		N/A			N/A
Heating oil swaps		3			2.24		3			2.24
West Texas Intermediate ("WTI") crude oil call options		13			2.32		N/A			N/A
WTI crude oil swaps		11			2.17		11			2.17
Aircraft fuel call options		4			3.15		N/A			N/A
Aircraft fuel swaps		1			3.14		1			3.14
Total		51	%				30	%

As of June 30, 2011, United and Continental had hedged projected fuel requirements for the remainder of 2011 of 54% and 44%, respectively, consistent with the hedged instruments and underlyings presented in the table above for UAL. As of June 30, 2011, UAL, United and Continental had also hedged 13%, 16% and 8%, respectively, of projected first half 2012 fuel consumption.

The following tables present information about the financial statement classification of the Company's derivatives (in millions):

Derivatives designated as hedges		June 30, 2011						December 31, 2010
	Balance Sheet Location	UAL		United		Continental Successor		UAL		United		Continental Successor
Assets:
Fuel contracts due within one year	Receivables	$	194	$	141	$	53	$	375	$	277	$	98
Liabilities:
Fuel contracts due within one year	Other Current Liabilities	$	3	$	3	$	—	$	—	$	—	$	—

Fuel contracts	Amount of Gain (Loss) Recognized in AOCI on  Derivatives (Effective portion)						Gain (Loss) Reclassified from AOCI into Income (Fuel Expense) (Effective Portion)					Amount of Gain  (Loss) Recognized in Income  (Nonoperating Expense) (Ineffective Portion)
	Three Months Ended June 30,						Three Months Ended June 30,					Three Months Ended June 30,
	2011			2010			2011		2010			2011			2010
UAL	$	(231	)	$	(146	)	$	278	$	—		$	(34	)	$	(3	)
United		(149	)		(146	)		213		—			(7	)		(3	)
Continental (a)		(82	)		(53	)		65		(9	)		(27	)		(2	)

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

Fuel contracts	Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective portion)					Gain (Loss) Reclassified from AOCI into Income (Fuel Expense) (Effective Portion)					Amount of Gain (Loss) Recognized in Income (Nonoperating Expense) (Ineffective Portion)
	Six Months Ended June 30,					Six Months Ended June 30,					Six Months Ended June 30,
	2011		2010			2011		2010			2011			2010
UAL	$	293	$	(146	)	$	432	$	—		$	(31	)	$	(3	)
United		236		(146	)		338		—			(5	)		(3	)
Continental (a)		57		(37	)		94		(6	)		(26	)		(2	)

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

Derivative Credit Risk and Fair Value

The Company is exposed to credit losses in the event of nonperformance by counterparties to its derivative instruments. While the Company records derivative instruments on a gross basis, the Company monitors its net derivative position with each counterparty to monitor credit risk. Based on the fair value of our fuel derivative instruments, our counterparties may require us to post collateral when the price of the underlying commodity decreases, and we may require our counterparties to provide us with collateral when the price of the underlying commodity increases. The following table presents information related to the Company's derivative credit risk as of June 30, 2011 (in millions):

	UAL			United			Continental
Net derivative asset with counterparties	$	191		$	138		$	53
Collateral held by the Company (a)		(31	)		(31	)		—
Collateral posted by the Company		—			—			—
Potential loss related to the failure of the Company's counterparties to perform (b)		160			107			53

(a) Classified as an other current liability.

(b) Based on fair value at June 30, 2011 and collateral held.

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Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2011

Comprehensive Income (Loss)

NOTE 7 - COMPREHENSIVE INCOME (LOSS)

Total comprehensive income (loss) for the three and six months ended June 30 included the following (in millions):

	UAL						United						Continental Successor (a)			Continental Predecessor (a)
Three Months Ended June 30,	2011			2010			2011			2010			2011			2010
Net income	$	538		$	273		$	281		$	281		$	262		$	233
Other comprehensive income (loss) adjustments, before tax:
Investments		2			3			2			3			—			—
Fuel derivative financial instruments:
Reclassification into earnings		(278	)		—			(213	)		—			(65	)		9
Change in fair value		(231	)		(146	)		(149	)		(146	)		(82	)		(53	)
Employee benefit plans:
Amortization of net actuarial (gains) losses		(8	)		(3	)		(1	)		(3	)		(7	)		21
Amortization of prior service cost		—			—			—			—			—			8
Other		1			(3	)		—			(4	)		1			(3	)
Comprehensive loss adjustments, before tax		(514	)		(149	)		(361	)		(150	)		(153	)		(18	)
Total comprehensive income (loss) (a)	$	24		$	124		$	(80	)	$	131		$	109		$	215

(a) There were no income tax effects for either period due to the recording of valuation allowance.

	UAL						United						Continental Successor (a)			Continental Predecessor (a)
Six Months Ended June 30,	2011			2010			2011			2010			2011			2010
Net income	$	325		$	191		$	121		$	207		$	205		$	87
Other comprehensive income (loss) adjustments, before tax:
Investments		3			12			1			12			2			—
Fuel derivative financial instruments:
Reclassification into earnings		(432	)		—			(338	)		—			(94	)		6
Change in fair value		293			(146	)		236			(146	)		57			(37	)
Employee benefit plans:
Amortization of net actuarial (gains) losses		(13	)		(6	)		(1	)		(6	)		(12	)		41
Amortization of prior service cost		—			—			—			—			—			16
Other		4			(4	)		1			(4	)		3			(3	)
Comprehensive income (loss) adjustments, before tax		(145	)		(144	)		(101	)		(144	)		(44	)		23
Total comprehensive income (a)	$	180		$	47		$	20		$	63		$	161		$	110

(a) There were no income tax effects for either period due to the recording of valuation allowance.

United Airlines Inc [Member]

Comprehensive Income (Loss)

NOTE 7 - COMPREHENSIVE INCOME (LOSS)

Total comprehensive income (loss) for the three and six months ended June 30 included the following (in millions):

	UAL						United						Continental Successor (a)			Continental Predecessor (a)
Three Months Ended June 30,	2011			2010			2011			2010			2011			2010
Net income	$	538		$	273		$	281		$	281		$	262		$	233
Other comprehensive income (loss) adjustments, before tax:
Investments		2			3			2			3			—			—
Fuel derivative financial instruments:
Reclassification into earnings		(278	)		—			(213	)		—			(65	)		9
Change in fair value		(231	)		(146	)		(149	)		(146	)		(82	)		(53	)
Employee benefit plans:
Amortization of net actuarial (gains) losses		(8	)		(3	)		(1	)		(3	)		(7	)		21
Amortization of prior service cost		—			—			—			—			—			8
Other		1			(3	)		—			(4	)		1			(3	)
Comprehensive loss adjustments, before tax		(514	)		(149	)		(361	)		(150	)		(153	)		(18	)
Total comprehensive income (loss) (a)	$	24		$	124		$	(80	)	$	131		$	109		$	215

(a) There were no income tax effects for either period due to the recording of valuation allowance.

	UAL						United						Continental Successor (a)			Continental Predecessor (a)
Six Months Ended June 30,	2011			2010			2011			2010			2011			2010
Net income	$	325		$	191		$	121		$	207		$	205		$	87
Other comprehensive income (loss) adjustments, before tax:
Investments		3			12			1			12			2			—
Fuel derivative financial instruments:
Reclassification into earnings		(432	)		—			(338	)		—			(94	)		6
Change in fair value		293			(146	)		236			(146	)		57			(37	)
Employee benefit plans:
Amortization of net actuarial (gains) losses		(13	)		(6	)		(1	)		(6	)		(12	)		41
Amortization of prior service cost		—			—			—			—			—			16
Other		4			(4	)		1			(4	)		3			(3	)
Comprehensive income (loss) adjustments, before tax		(145	)		(144	)		(101	)		(144	)		(44	)		23
Total comprehensive income (a)	$	180		$	47		$	20		$	63		$	161		$	110

(a) There were no income tax effects for either period due to the recording of valuation allowance.

Continental Airlines Inc [Member]

Comprehensive Income (Loss)

NOTE 7 - COMPREHENSIVE INCOME (LOSS)

Total comprehensive income (loss) for the three and six months ended June 30 included the following (in millions):

	UAL						United						Continental Successor (a)			Continental Predecessor (a)
Three Months Ended June 30,	2011			2010			2011			2010			2011			2010
Net income	$	538		$	273		$	281		$	281		$	262		$	233
Other comprehensive income (loss) adjustments, before tax:
Investments		2			3			2			3			—			—
Fuel derivative financial instruments:
Reclassification into earnings		(278	)		—			(213	)		—			(65	)		9
Change in fair value		(231	)		(146	)		(149	)		(146	)		(82	)		(53	)
Employee benefit plans:
Amortization of net actuarial (gains) losses		(8	)		(3	)		(1	)		(3	)		(7	)		21
Amortization of prior service cost		—			—			—			—			—			8
Other		1			(3	)		—			(4	)		1			(3	)
Comprehensive loss adjustments, before tax		(514	)		(149	)		(361	)		(150	)		(153	)		(18	)
Total comprehensive income (loss) (a)	$	24		$	124		$	(80	)	$	131		$	109		$	215

(a) There were no income tax effects for either period due to the recording of valuation allowance.

	UAL						United						Continental Successor (a)			Continental Predecessor (a)
Six Months Ended June 30,	2011			2010			2011			2010			2011			2010
Net income	$	325		$	191		$	121		$	207		$	205		$	87
Other comprehensive income (loss) adjustments, before tax:
Investments		3			12			1			12			2			—
Fuel derivative financial instruments:
Reclassification into earnings		(432	)		—			(338	)		—			(94	)		6
Change in fair value		293			(146	)		236			(146	)		57			(37	)
Employee benefit plans:
Amortization of net actuarial (gains) losses		(13	)		(6	)		(1	)		(6	)		(12	)		41
Amortization of prior service cost		—			—			—			—			—			16
Other		4			(4	)		1			(4	)		3			(3	)
Comprehensive income (loss) adjustments, before tax		(145	)		(144	)		(101	)		(144	)		(44	)		23
Total comprehensive income (a)	$	180		$	47		$	20		$	63		$	161		$	110

(a) There were no income tax effects for either period due to the recording of valuation allowance.

XML



Commitments and Contingencies

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies

NOTE 8 - COMMITMENTS AND CONTINGENCIES

General Guarantees and Indemnifications. In the normal course of business, the Company enters into numerous real estate leasing and aircraft financing arrangements that have various guarantees included in the contracts. These guarantees are primarily in the form of indemnities under which the Company typically indemnifies the lessors and any tax/financing parties against tort liabilities that arise out of the use, occupancy, operation or maintenance of the leased premises or financed aircraft. Currently, the Company believes that any future payments required under these guarantees or indemnities would be immaterial, as most tort liabilities and related indemnities are covered by insurance (subject to deductibles). Additionally, certain leased premises such as fueling 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 leased premises.

Legal and Environmental Contingencies. The Company has certain contingencies resulting from litigation and claims incident to the ordinary course of business. Management believes, after considering a number of factors, including (but not limited to) the information currently available, the views of legal counsel, the nature of contingencies to which the Company is subject and prior experience, that the ultimate disposition of these contingencies will not materially affect the Company's consolidated financial position or results of operations.

The Company records liabilities for legal and environmental claims when a loss is probable and reasonably estimable. These amounts are recorded based on the Company's assessments of the likelihood of their eventual disposition. The amounts of these liabilities could increase or decrease in the near term, based on revisions to estimates relating to the various claims.

The Company believes that it will have no financial exposure for claims arising out of the events of September 11, 2001 in light of the provisions of the Air Transportation Safety and System Stabilization Act of 2001 limiting claimants' recoveries to insurance proceeds, the resolution of the majority of the wrongful death and personal injury cases by settlement and the withdrawal of all related proofs of claim from UAL Corporation's Chapter 11 bankruptcy protection.

Trans-Atlantic Joint Venture. Under the revenue-sharing joint venture agreement covering trans-Atlantic routes, payments among participants are based on a formula that compares current period unit revenue performance on trans-Atlantic routes to a historic period or "baseline," which is reset annually. The payments are calculated on a quarterly basis and are subject to a cap. UAL recorded a decrease in passenger revenue of $44 million related to its estimated revenue sharing obligations through the six months ended June 30, 2011.

Contingent Senior Unsecured Notes. UAL would be obligated under an indenture to issue to the Pension Benefit Guaranty Corporation ("PBGC") up to $500 million aggregate principal amount of 8% Contingent Senior Notes (the "8% Notes") in up to eight equal tranches of $62.5 million if certain financial triggering events occur (with each tranche issued no later than 45 days following the end of any applicable fiscal year). A triggering event occurs when UAL's EBITDAR, as defined in the 8% Notes indenture, exceeds $3.5 billion over the prior 12 months ending June 30 or December 31 of any applicable fiscal year. The twelve month measurement periods began with the fiscal year ended December 31, 2009 and will end with the fiscal year ending December 31, 2017. As of June 30, 2011, a triggering event under the 8% Notes indenture occurred and, as a result, UAL is obligated to issue one tranche of $62.5 million of the 8% Notes no later than February 14, 2012. This tranche will mature June 30, 2026, with interest accruing from the triggering event measurement date at a rate of 8% per annum that is payable in cash in semi-annual installments starting June 30, 2012. The tranche of 8% Notes will be callable, at UAL's option, at any time at par, plus accrued and unpaid interest. UAL recorded a liability for the fair value of the $62.5 million tranche in the second quarter of 2011, which totaled $49 million. This $49 million charge is being classified as an integration cost as the financial results of UAL, excluding Continental's results, would not have resulted in a triggering event under the indenture (see Note 10). The amount recorded is net of a discount applied to the future principal and interest payments using market interest rates for similar structured notes. This is the first such occurrence of UAL's obligation to issue a tranche of 8% Notes.

Commitments. The table below summarizes the Company's commitments as of June 30, 2011, which primarily relate to the acquisition of aircraft and related spare engines, aircraft improvements and include other commitments primarily to acquire information technology services and assets (in millions):

	UAL		United		Continental Successor
Last Six Months of 2011	$	517	$	178	$	339
2012		1,451		145		1,306
2013		925		59		866
2014		1,089		96		993
2015		1,533		377		1,156
After 2015		7,503		6,837		666
	$	13,018	$	7,692	$	5,326

United Aircraft Commitments. As of June 30, 2011, United had firm commitments to purchase 25 Boeing 787 aircraft and 25 Airbus A350XWB aircraft for delivery from 2016 through 2019. United also has purchase options for 42 Airbus A319 and A320 aircraft and purchase rights for 50 Boeing 787 aircraft and 50 Airbus A350XWB aircraft.

United has secured considerable backstop financing commitments from its aircraft and engine manufacturers, subject to certain customary conditions. However, there is no guarantee that United will be able to obtain any or all of the backstop financing, or any other financing, for the aircraft and engines on acceptable terms when necessary or at all.

Continental Aircraft Commitments. As of June 30, 2011, Continental had firm commitments to purchase 83 new aircraft (58 Boeing 737 aircraft and 25 Boeing 787 aircraft) scheduled for delivery from August 2011 through 2016. Continental took delivery of three Boeing 737 aircraft in the first six months of 2011 and is currently scheduled to take delivery of one additional Boeing 737 aircraft in the remainder of 2011. Continental also has options to purchase 89 additional Boeing aircraft.

Continental has a financing commitment for the Boeing 737 aircraft scheduled for delivery in August 2011 but does not have backstop financing or any other financing currently in place for the other Boeing aircraft on order. Further financing will be necessary to satisfy Continental's capital commitments for its firm order aircraft and other related capital expenditures. Continental can provide no assurance that backstop financing or any other financing not already in place for aircraft deliveries will be available to Continental on acceptable terms when necessary or at all.

Credit Card Processing Agreements. United and Continental have agreements with financial institutions that process customer credit card transactions for the sale of air travel and other services. Under certain of United's and Continental's credit card processing agreements, the financial institutions either require, or under certain circumstances have the right to require, that United and Continental maintain a reserve equal to a portion of advance ticket sales that have been processed by that financial institution, but for which United and Continental have not yet provided the air transportation (referred to as "relevant advance ticket sales").

Under United's and Continental's new combined credit card processing agreement with JPMorgan Chase Bank, N.A. ("JPMorgan Chase") and Paymentech, LLC, United and Continental are required to provide a cash reserve, determined based on the amount of unrestricted cash, cash equivalents and short-term investments ("unrestricted cash balance") held by United and Continental. If United's and Continental's unrestricted cash balance is at or more than $3.5 billion as of any calendar month-end measurement date, the required cash reserve will be $25 million. However, if United's and Continental's unrestricted cash balance is less than $3.5 billion, their required reserve will increase to a percentage of relevant advance ticket sales as summarized in the following table:

Total Unrestricted Cash Balance of United and Continental	Required% of Relevant  Advance Ticket Sales (a)
Less than $3.5 billion		25	%
Less than $3.0 billion		50	%

(a) Represents percentage of advance ticket sales generated by bankcard transactions. As of June 30, 2011, approximately 50% of the combined company's advance ticket sales is generated from bankcard transactions.

Based on United's and Continental's June 30, 2011 unrestricted cash balance, United and Continental were not required to provide cash collateral above the $25 million reserve balance. If the Company is required to post additional cash collateral under the new combined JPMorgan Chase credit card processing agreement as a result of an increase in the required reserve amount, Continental will be required to post additional collateral under its credit card processing agreement with American Express that could be significant.

An increase in the future reserve requirements and the posting of a significant amount of cash collateral as provided by the terms of any of the Company's material credit card processing agreements could materially reduce the Company's liquidity. See Note 17 of the 2010 Annual Report for additional information on the Company's other credit card processing agreements.

Guarantees and Off-Balance Sheet Financing. In the Company's financing transactions that include loans, the Company typically agrees to reimburse lenders for any reduced returns with respect to the loans due to any change in capital requirements and, in the case of loans in which the interest rate is based on the London Interbank Offered Rate ("LIBOR"), for certain other increased costs that the lenders incur in carrying these loans as a result of any change in law, subject in most cases to certain mitigation obligations of the lenders. The following table contains information related to the Company's outstanding debt at June 30, 2011 (in millions):

	UAL		United		Continental
Floating rate debt (a)	$	3,182	$	2,250	$	932
Fixed rate debt (a)		444		213		231
Carrying value of loans/leases from non-U.S. entities (b)		3,499		2,461		1,038

(a) Remaining terms of up to nine years, subject to these increased cost provisions.

(b) Remaining terms of up to 9 years; the Company bears 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 customary exclusions.

United has guaranteed interest and principal payments on $270 million of the Denver International Airport bonds, which are due in 2032 unless United elects not to extend its equipment and ground lease, in which case the bonds are due in 2023. The bonds were issued in two tranches - approximately $170 million aggregate principal amount of 5.25% discount bonds and $100 million aggregate principal amount of 5.75% premium bonds. The related lease obligation is accounted for as an operating lease with the associated expense recorded on a straight-line basis resulting in ratable accrual of the final $270 million lease obligation over the expected lease term through 2032.

Continental is contingently liable for US Airways' obligations under a lease agreement between US Airways and the Port Authority of New York and New Jersey related to the East End Terminal at LaGuardia Airport. These obligations include the payment of ground rentals to the Port Authority and the payment of other rentals in respect of the full amounts owed on special facilities revenue bonds issued by the Port Authority having an outstanding par amount of $95 million at June 30, 2011, and a final scheduled maturity in 2015. If US Airways defaults on these obligations, Continental would be obligated to cure the default and would have the right to occupy the terminal after US Airways' interest in the lease had been terminated.

Continental is the lessee of real property under long-term leases at a number of airports where it is also the guarantor of approximately $1.7 billion of underlying debt and interest thereon. These leases are typically with municipalities or other governmental entities, which are excluded from the consolidation requirements concerning variable interest entities. To the extent Continental's lease and related guarantee are with a separate legal entity other than a governmental entity, Continental is not the primary beneficiary because the lease terms are consistent with market terms at the inception of the lease and the lease does not include a residual value guarantee, fixed-price purchase option or similar feature. The leasing arrangements associated with approximately $1.5 billion of these obligations are accounted for as operating leases, and the leasing arrangements associated with approximately $190 million of these obligations are accounted for as capital leases.

Credit Facilities. United has a $255 million revolving loan commitment, which matures on February 1, 2012, available under its Amended and Restated Revolving Credit, Term Loan and Guaranty Agreement, dated as of February 2, 2007 (the "Amended Credit Facility"). United used $226 million and $253 million of the commitment capacity for letters of credit at June 30, 2011 and December 31, 2010, respectively. Unless this revolving loan commitment is amended or replaced, these letters of credit will be required to be backed with cash collateral by the fourth quarter of 2011. Through a separate arrangement, United has an additional $150 million available under an unused credit facility that expires in the fourth quarter of 2011.

Labor Negotiations. As of June 30, 2011, UAL and its subsidiaries had approximately 83,000 active employees, of whom approximately 74% were represented by various U.S. labor organizations. United and Continental had approximately 82% and 63%, respectively, of their active employees represented by various U.S. labor organizations. United has been in negotiations for amended collective bargaining agreements with all of its unions since 2009. Consistent with commitments contained in its current labor contracts, United has filed for mediation assistance in conjunction with four of its six unions - the Air Line Pilots Association ("ALPA"), the Association of Flight Attendants - Communication Workers of America ("AFA"), the International Association of Machinists ("IAM") and the Aerospace Workers and the Professional Airline Flight Control Association. The only collective bargaining agreement at Continental that is amendable is with the pilot group.

After the Company's May 2010 merger announcement, ALPA opted to suspend negotiations at both United and Continental to focus on joint negotiations for a new collective bargaining agreement that would apply to the combined company. United and Continental reached agreement with ALPA on a Transition and Process Agreement that provides a framework for conducting pilot operations for the two employee groups until the parties reach agreement on a joint collective bargaining agreement and the carriers obtain a single operating certificate. In August 2010, United and Continental began joint negotiations with ALPA and those negotiations are presently ongoing. In December 2010, ALPA and the Company jointly applied to the National Mediation Board (the "NMB") for mediation assistance for the joint pilot and flight instructor negotiations.

In June 2011, United's maintenance technicians and related employees represented by the International Brotherhood of Teamsters (the "Teamsters") voted against a tentative agreement on a proposed collective bargaining agreement. The Company has since filed with the NMB to proceed with mediated negotiations for a joint collective bargaining agreement for all Teamsters-represented mechanic and related employees. The joint agreement would cover approximately 8,650 active mechanic and related employees located throughout the United States.

Certain unions have filed applications seeking single carrier findings by the NMB for purposes of union representation. When the NMB determines that United and Continental are considered a single carrier, the NMB may order an election if there is a difference in union representation between the employee groups. Until the union representation issues are resolved, the incumbent unions will continue to represent those employee groups they currently represent. In December 2010, ALPA filed for a single carrier finding with the NMB although there is no dispute as to which union represents the pilot groups. There has been no decision on this filing to date. In January 2011, the IAM filed two separate applications seeking single carrier findings by the NMB for fleet service and stores/stock clerk employees. On April 28, 2011, the NMB issued its determination that a single carrier existed for fleet service employees at United and Continental, and on June 13, 2011, the NMB authorized an election for fleet service employees to elect a common representative. This election began on July 7, 2011 and will end on August 11, 2011. On July 2, 2011, the NMB extended the certification of the IAM to stores/stock clerk employees for the combined company due to the larger number of IAM-represented employees at United as compared to Continental.

In January 2011, the AFA filed a single carrier request with the NMB for United and Continental flight attendants. In April 2011, the NMB ruled that United and Continental are now operating as a single carrier for union representation of flight attendants which permitted the NMB to begin the union representation election process for that group. An election was held for the flight attendants and, on June 30, 2011, the NMB certified the AFA as the representative of flight attendants at the combined company. On July 2, 2011, the International Federation of Professional and Technical Engineers filed for a single carrier finding for purposes of union representation among the engineers and related employees at the combined company.

The outcome of labor negotiations may materially impact the Company's future financial results. However, it is too early in the process to assess the timing or magnitude of the impact, if any.

IAH Terminal B Redevelopment Project. In May 2011, UAL, in partnership with the Houston Airport System, announced that it is expected to begin construction of the first phase of a $1 billion terminal improvement project for Terminal B at Bush Intercontinental Airport ("IAH") by the end of 2011. UAL's initial commitment is to construct the first phase of the currently anticipated three-phase project that will create a new Terminal B south concourse dedicated to domestic regional jet operations. UAL's cost of construction of phase one of the project is currently estimated to be approximately $100 million and is expected to be funded by special facilities bonds issued by the City of Houston, which bonds would be guaranteed by UAL and/or one of its subsidiaries and would be payable from the rentals paid by UAL or one of its subsidiaries under a special facilities lease agreement with the City of Houston, or cash. Construction of the remaining phases of the project will be based on demand over the next 7 to 10 years, with phase one currently expected to be completed in late 2013.

Based on a qualitative assessment of the IAH Terminal B Redevelopment Project, given the expectation that UAL and/or one of its subsidiaries would guarantee the special facilities bonds, and the requirement that UAL or one of its subsidiaries fund cost overruns with no stated limits would result in the Company paying more than 90% of the total project costs at a given time, UAL or one of its subsidiaries will be considered the owner of the property during the construction period. Because, for accounting purposes, UAL or one of its subsidiaries would also be considered the owner of the construction project upon its completion, the construction project will be treated as a financing transaction such that the property and related financing will remain on UAL's consolidated balance sheet.

United Airlines Inc [Member]

Commitments and Contingencies

NOTE 8 - COMMITMENTS AND CONTINGENCIES

General Guarantees and Indemnifications. In the normal course of business, the Company enters into numerous real estate leasing and aircraft financing arrangements that have various guarantees included in the contracts. These guarantees are primarily in the form of indemnities under which the Company typically indemnifies the lessors and any tax/financing parties against tort liabilities that arise out of the use, occupancy, operation or maintenance of the leased premises or financed aircraft. Currently, the Company believes that any future payments required under these guarantees or indemnities would be immaterial, as most tort liabilities and related indemnities are covered by insurance (subject to deductibles). Additionally, certain leased premises such as fueling 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 leased premises.

Legal and Environmental Contingencies. The Company has certain contingencies resulting from litigation and claims incident to the ordinary course of business. Management believes, after considering a number of factors, including (but not limited to) the information currently available, the views of legal counsel, the nature of contingencies to which the Company is subject and prior experience, that the ultimate disposition of these contingencies will not materially affect the Company's consolidated financial position or results of operations.

The Company records liabilities for legal and environmental claims when a loss is probable and reasonably estimable. These amounts are recorded based on the Company's assessments of the likelihood of their eventual disposition. The amounts of these liabilities could increase or decrease in the near term, based on revisions to estimates relating to the various claims.

The Company believes that it will have no financial exposure for claims arising out of the events of September 11, 2001 in light of the provisions of the Air Transportation Safety and System Stabilization Act of 2001 limiting claimants' recoveries to insurance proceeds, the resolution of the majority of the wrongful death and personal injury cases by settlement and the withdrawal of all related proofs of claim from UAL Corporation's Chapter 11 bankruptcy protection.

Trans-Atlantic Joint Venture. Under the revenue-sharing joint venture agreement covering trans-Atlantic routes, payments among participants are based on a formula that compares current period unit revenue performance on trans-Atlantic routes to a historic period or "baseline," which is reset annually. The payments are calculated on a quarterly basis and are subject to a cap. UAL recorded a decrease in passenger revenue of $44 million related to its estimated revenue sharing obligations through the six months ended June 30, 2011.

Contingent Senior Unsecured Notes. UAL would be obligated under an indenture to issue to the Pension Benefit Guaranty Corporation ("PBGC") up to $500 million aggregate principal amount of 8% Contingent Senior Notes (the "8% Notes") in up to eight equal tranches of $62.5 million if certain financial triggering events occur (with each tranche issued no later than 45 days following the end of any applicable fiscal year). A triggering event occurs when UAL's EBITDAR, as defined in the 8% Notes indenture, exceeds $3.5 billion over the prior 12 months ending June 30 or December 31 of any applicable fiscal year. The twelve month measurement periods began with the fiscal year ended December 31, 2009 and will end with the fiscal year ending December 31, 2017. As of June 30, 2011, a triggering event under the 8% Notes indenture occurred and, as a result, UAL is obligated to issue one tranche of $62.5 million of the 8% Notes no later than February 14, 2012. This tranche will mature June 30, 2026, with interest accruing from the triggering event measurement date at a rate of 8% per annum that is payable in cash in semi-annual installments starting June 30, 2012. The tranche of 8% Notes will be callable, at UAL's option, at any time at par, plus accrued and unpaid interest. UAL recorded a liability for the fair value of the $62.5 million tranche in the second quarter of 2011, which totaled $49 million. This $49 million charge is being classified as an integration cost as the financial results of UAL, excluding Continental's results, would not have resulted in a triggering event under the indenture (see Note 10). The amount recorded is net of a discount applied to the future principal and interest payments using market interest rates for similar structured notes. This is the first such occurrence of UAL's obligation to issue a tranche of 8% Notes.

Commitments. The table below summarizes the Company's commitments as of June 30, 2011, which primarily relate to the acquisition of aircraft and related spare engines, aircraft improvements and include other commitments primarily to acquire information technology services and assets (in millions):

	UAL		United		Continental Successor
Last Six Months of 2011	$	517	$	178	$	339
2012		1,451		145		1,306
2013		925		59		866
2014		1,089		96		993
2015		1,533		377		1,156
After 2015		7,503		6,837		666
	$	13,018	$	7,692	$	5,326

United Aircraft Commitments. As of June 30, 2011, United had firm commitments to purchase 25 Boeing 787 aircraft and 25 Airbus A350XWB aircraft for delivery from 2016 through 2019. United also has purchase options for 42 Airbus A319 and A320 aircraft and purchase rights for 50 Boeing 787 aircraft and 50 Airbus A350XWB aircraft.

United has secured considerable backstop financing commitments from its aircraft and engine manufacturers, subject to certain customary conditions. However, there is no guarantee that United will be able to obtain any or all of the backstop financing, or any other financing, for the aircraft and engines on acceptable terms when necessary or at all.

Continental Aircraft Commitments. As of June 30, 2011, Continental had firm commitments to purchase 83 new aircraft (58 Boeing 737 aircraft and 25 Boeing 787 aircraft) scheduled for delivery from August 2011 through 2016. Continental took delivery of three Boeing 737 aircraft in the first six months of 2011 and is currently scheduled to take delivery of one additional Boeing 737 aircraft in the remainder of 2011. Continental also has options to purchase 89 additional Boeing aircraft.

Continental has a financing commitment for the Boeing 737 aircraft scheduled for delivery in August 2011 but does not have backstop financing or any other financing currently in place for the other Boeing aircraft on order. Further financing will be necessary to satisfy Continental's capital commitments for its firm order aircraft and other related capital expenditures. Continental can provide no assurance that backstop financing or any other financing not already in place for aircraft deliveries will be available to Continental on acceptable terms when necessary or at all.

Credit Card Processing Agreements. United and Continental have agreements with financial institutions that process customer credit card transactions for the sale of air travel and other services. Under certain of United's and Continental's credit card processing agreements, the financial institutions either require, or under certain circumstances have the right to require, that United and Continental maintain a reserve equal to a portion of advance ticket sales that have been processed by that financial institution, but for which United and Continental have not yet provided the air transportation (referred to as "relevant advance ticket sales").

Under United's and Continental's new combined credit card processing agreement with JPMorgan Chase Bank, N.A. ("JPMorgan Chase") and Paymentech, LLC, United and Continental are required to provide a cash reserve, determined based on the amount of unrestricted cash, cash equivalents and short-term investments ("unrestricted cash balance") held by United and Continental. If United's and Continental's unrestricted cash balance is at or more than $3.5 billion as of any calendar month-end measurement date, the required cash reserve will be $25 million. However, if United's and Continental's unrestricted cash balance is less than $3.5 billion, their required reserve will increase to a percentage of relevant advance ticket sales as summarized in the following table:

Total Unrestricted Cash Balance of United and Continental	Required% of Relevant  Advance Ticket Sales (a)
Less than $3.5 billion		25	%
Less than $3.0 billion		50	%

(a) Represents percentage of advance ticket sales generated by bankcard transactions. As of June 30, 2011, approximately 50% of the combined company's advance ticket sales is generated from bankcard transactions.

Based on United's and Continental's June 30, 2011 unrestricted cash balance, United and Continental were not required to provide cash collateral above the $25 million reserve balance. If the Company is required to post additional cash collateral under the new combined JPMorgan Chase credit card processing agreement as a result of an increase in the required reserve amount, Continental will be required to post additional collateral under its credit card processing agreement with American Express that could be significant.

An increase in the future reserve requirements and the posting of a significant amount of cash collateral as provided by the terms of any of the Company's material credit card processing agreements could materially reduce the Company's liquidity. See Note 17 of the 2010 Annual Report for additional information on the Company's other credit card processing agreements.

Guarantees and Off-Balance Sheet Financing. In the Company's financing transactions that include loans, the Company typically agrees to reimburse lenders for any reduced returns with respect to the loans due to any change in capital requirements and, in the case of loans in which the interest rate is based on the London Interbank Offered Rate ("LIBOR"), for certain other increased costs that the lenders incur in carrying these loans as a result of any change in law, subject in most cases to certain mitigation obligations of the lenders. The following table contains information related to the Company's outstanding debt at June 30, 2011 (in millions):

	UAL		United		Continental
Floating rate debt (a)	$	3,182	$	2,250	$	932
Fixed rate debt (a)		444		213		231
Carrying value of loans/leases from non-U.S. entities (b)		3,499		2,461		1,038

(a) Remaining terms of up to nine years, subject to these increased cost provisions.

(b) Remaining terms of up to 9 years; the Company bears 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 customary exclusions.

United has guaranteed interest and principal payments on $270 million of the Denver International Airport bonds, which are due in 2032 unless United elects not to extend its equipment and ground lease, in which case the bonds are due in 2023. The bonds were issued in two tranches - approximately $170 million aggregate principal amount of 5.25% discount bonds and $100 million aggregate principal amount of 5.75% premium bonds. The related lease obligation is accounted for as an operating lease with the associated expense recorded on a straight-line basis resulting in ratable accrual of the final $270 million lease obligation over the expected lease term through 2032.

Continental is contingently liable for US Airways' obligations under a lease agreement between US Airways and the Port Authority of New York and New Jersey related to the East End Terminal at LaGuardia Airport. These obligations include the payment of ground rentals to the Port Authority and the payment of other rentals in respect of the full amounts owed on special facilities revenue bonds issued by the Port Authority having an outstanding par amount of $95 million at June 30, 2011, and a final scheduled maturity in 2015. If US Airways defaults on these obligations, Continental would be obligated to cure the default and would have the right to occupy the terminal after US Airways' interest in the lease had been terminated.

Continental is the lessee of real property under long-term leases at a number of airports where it is also the guarantor of approximately $1.7 billion of underlying debt and interest thereon. These leases are typically with municipalities or other governmental entities, which are excluded from the consolidation requirements concerning variable interest entities. To the extent Continental's lease and related guarantee are with a separate legal entity other than a governmental entity, Continental is not the primary beneficiary because the lease terms are consistent with market terms at the inception of the lease and the lease does not include a residual value guarantee, fixed-price purchase option or similar feature. The leasing arrangements associated with approximately $1.5 billion of these obligations are accounted for as operating leases, and the leasing arrangements associated with approximately $190 million of these obligations are accounted for as capital leases.

Credit Facilities. United has a $255 million revolving loan commitment, which matures on February 1, 2012, available under its Amended and Restated Revolving Credit, Term Loan and Guaranty Agreement, dated as of February 2, 2007 (the "Amended Credit Facility"). United used $226 million and $253 million of the commitment capacity for letters of credit at June 30, 2011 and December 31, 2010, respectively. Unless this revolving loan commitment is amended or replaced, these letters of credit will be required to be backed with cash collateral by the fourth quarter of 2011. Through a separate arrangement, United has an additional $150 million available under an unused credit facility that expires in the fourth quarter of 2011.

Labor Negotiations. As of June 30, 2011, UAL and its subsidiaries had approximately 83,000 active employees, of whom approximately 74% were represented by various U.S. labor organizations. United and Continental had approximately 82% and 63%, respectively, of their active employees represented by various U.S. labor organizations. United has been in negotiations for amended collective bargaining agreements with all of its unions since 2009. Consistent with commitments contained in its current labor contracts, United has filed for mediation assistance in conjunction with four of its six unions - the Air Line Pilots Association ("ALPA"), the Association of Flight Attendants - Communication Workers of America ("AFA"), the International Association of Machinists ("IAM") and the Aerospace Workers and the Professional Airline Flight Control Association. The only collective bargaining agreement at Continental that is amendable is with the pilot group.

After the Company's May 2010 merger announcement, ALPA opted to suspend negotiations at both United and Continental to focus on joint negotiations for a new collective bargaining agreement that would apply to the combined company. United and Continental reached agreement with ALPA on a Transition and Process Agreement that provides a framework for conducting pilot operations for the two employee groups until the parties reach agreement on a joint collective bargaining agreement and the carriers obtain a single operating certificate. In August 2010, United and Continental began joint negotiations with ALPA and those negotiations are presently ongoing. In December 2010, ALPA and the Company jointly applied to the National Mediation Board (the "NMB") for mediation assistance for the joint pilot and flight instructor negotiations.

In June 2011, United's maintenance technicians and related employees represented by the International Brotherhood of Teamsters (the "Teamsters") voted against a tentative agreement on a proposed collective bargaining agreement. The Company has since filed with the NMB to proceed with mediated negotiations for a joint collective bargaining agreement for all Teamsters-represented mechanic and related employees. The joint agreement would cover approximately 8,650 active mechanic and related employees located throughout the United States.

Certain unions have filed applications seeking single carrier findings by the NMB for purposes of union representation. When the NMB determines that United and Continental are considered a single carrier, the NMB may order an election if there is a difference in union representation between the employee groups. Until the union representation issues are resolved, the incumbent unions will continue to represent those employee groups they currently represent. In December 2010, ALPA filed for a single carrier finding with the NMB although there is no dispute as to which union represents the pilot groups. There has been no decision on this filing to date. In January 2011, the IAM filed two separate applications seeking single carrier findings by the NMB for fleet service and stores/stock clerk employees. On April 28, 2011, the NMB issued its determination that a single carrier existed for fleet service employees at United and Continental, and on June 13, 2011, the NMB authorized an election for fleet service employees to elect a common representative. This election began on July 7, 2011 and will end on August 11, 2011. On July 2, 2011, the NMB extended the certification of the IAM to stores/stock clerk employees for the combined company due to the larger number of IAM-represented employees at United as compared to Continental.

In January 2011, the AFA filed a single carrier request with the NMB for United and Continental flight attendants. In April 2011, the NMB ruled that United and Continental are now operating as a single carrier for union representation of flight attendants which permitted the NMB to begin the union representation election process for that group. An election was held for the flight attendants and, on June 30, 2011, the NMB certified the AFA as the representative of flight attendants at the combined company. On July 2, 2011, the International Federation of Professional and Technical Engineers filed for a single carrier finding for purposes of union representation among the engineers and related employees at the combined company.

The outcome of labor negotiations may materially impact the Company's future financial results. However, it is too early in the process to assess the timing or magnitude of the impact, if any.

IAH Terminal B Redevelopment Project. In May 2011, UAL, in partnership with the Houston Airport System, announced that it is expected to begin construction of the first phase of a $1 billion terminal improvement project for Terminal B at Bush Intercontinental Airport ("IAH") by the end of 2011. UAL's initial commitment is to construct the first phase of the currently anticipated three-phase project that will create a new Terminal B south concourse dedicated to domestic regional jet operations. UAL's cost of construction of phase one of the project is currently estimated to be approximately $100 million and is expected to be funded by special facilities bonds issued by the City of Houston, which bonds would be guaranteed by UAL and/or one of its subsidiaries and would be payable from the rentals paid by UAL or one of its subsidiaries under a special facilities lease agreement with the City of Houston, or cash. Construction of the remaining phases of the project will be based on demand over the next 7 to 10 years, with phase one currently expected to be completed in late 2013.

Based on a qualitative assessment of the IAH Terminal B Redevelopment Project, given the expectation that UAL and/or one of its subsidiaries would guarantee the special facilities bonds, and the requirement that UAL or one of its subsidiaries fund cost overruns with no stated limits would result in the Company paying more than 90% of the total project costs at a given time, UAL or one of its subsidiaries will be considered the owner of the property during the construction period. Because, for accounting purposes, UAL or one of its subsidiaries would also be considered the owner of the construction project upon its completion, the construction project will be treated as a financing transaction such that the property and related financing will remain on UAL's consolidated balance sheet.

Continental Airlines Inc [Member]

Commitments and Contingencies

NOTE 8 - COMMITMENTS AND CONTINGENCIES

General Guarantees and Indemnifications. In the normal course of business, the Company enters into numerous real estate leasing and aircraft financing arrangements that have various guarantees included in the contracts. These guarantees are primarily in the form of indemnities under which the Company typically indemnifies the lessors and any tax/financing parties against tort liabilities that arise out of the use, occupancy, operation or maintenance of the leased premises or financed aircraft. Currently, the Company believes that any future payments required under these guarantees or indemnities would be immaterial, as most tort liabilities and related indemnities are covered by insurance (subject to deductibles). Additionally, certain leased premises such as fueling 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 leased premises.

Legal and Environmental Contingencies. The Company has certain contingencies resulting from litigation and claims incident to the ordinary course of business. Management believes, after considering a number of factors, including (but not limited to) the information currently available, the views of legal counsel, the nature of contingencies to which the Company is subject and prior experience, that the ultimate disposition of these contingencies will not materially affect the Company's consolidated financial position or results of operations.

The Company records liabilities for legal and environmental claims when a loss is probable and reasonably estimable. These amounts are recorded based on the Company's assessments of the likelihood of their eventual disposition. The amounts of these liabilities could increase or decrease in the near term, based on revisions to estimates relating to the various claims.

The Company believes that it will have no financial exposure for claims arising out of the events of September 11, 2001 in light of the provisions of the Air Transportation Safety and System Stabilization Act of 2001 limiting claimants' recoveries to insurance proceeds, the resolution of the majority of the wrongful death and personal injury cases by settlement and the withdrawal of all related proofs of claim from UAL Corporation's Chapter 11 bankruptcy protection.

Trans-Atlantic Joint Venture. Under the revenue-sharing joint venture agreement covering trans-Atlantic routes, payments among participants are based on a formula that compares current period unit revenue performance on trans-Atlantic routes to a historic period or "baseline," which is reset annually. The payments are calculated on a quarterly basis and are subject to a cap. UAL recorded a decrease in passenger revenue of $44 million related to its estimated revenue sharing obligations through the six months ended June 30, 2011.

Contingent Senior Unsecured Notes. UAL would be obligated under an indenture to issue to the Pension Benefit Guaranty Corporation ("PBGC") up to $500 million aggregate principal amount of 8% Contingent Senior Notes (the "8% Notes") in up to eight equal tranches of $62.5 million if certain financial triggering events occur (with each tranche issued no later than 45 days following the end of any applicable fiscal year). A triggering event occurs when UAL's EBITDAR, as defined in the 8% Notes indenture, exceeds $3.5 billion over the prior 12 months ending June 30 or December 31 of any applicable fiscal year. The twelve month measurement periods began with the fiscal year ended December 31, 2009 and will end with the fiscal year ending December 31, 2017. As of June 30, 2011, a triggering event under the 8% Notes indenture occurred and, as a result, UAL is obligated to issue one tranche of $62.5 million of the 8% Notes no later than February 14, 2012. This tranche will mature June 30, 2026, with interest accruing from the triggering event measurement date at a rate of 8% per annum that is payable in cash in semi-annual installments starting June 30, 2012. The tranche of 8% Notes will be callable, at UAL's option, at any time at par, plus accrued and unpaid interest. UAL recorded a liability for the fair value of the $62.5 million tranche in the second quarter of 2011, which totaled $49 million. This $49 million charge is being classified as an integration cost as the financial results of UAL, excluding Continental's results, would not have resulted in a triggering event under the indenture (see Note 10). The amount recorded is net of a discount applied to the future principal and interest payments using market interest rates for similar structured notes. This is the first such occurrence of UAL's obligation to issue a tranche of 8% Notes.

Commitments. The table below summarizes the Company's commitments as of June 30, 2011, which primarily relate to the acquisition of aircraft and related spare engines, aircraft improvements and include other commitments primarily to acquire information technology services and assets (in millions):

	UAL		United		Continental Successor
Last Six Months of 2011	$	517	$	178	$	339
2012		1,451		145		1,306
2013		925		59		866
2014		1,089		96		993
2015		1,533		377		1,156
After 2015		7,503		6,837		666
	$	13,018	$	7,692	$	5,326

United Aircraft Commitments. As of June 30, 2011, United had firm commitments to purchase 25 Boeing 787 aircraft and 25 Airbus A350XWB aircraft for delivery from 2016 through 2019. United also has purchase options for 42 Airbus A319 and A320 aircraft and purchase rights for 50 Boeing 787 aircraft and 50 Airbus A350XWB aircraft.

United has secured considerable backstop financing commitments from its aircraft and engine manufacturers, subject to certain customary conditions. However, there is no guarantee that United will be able to obtain any or all of the backstop financing, or any other financing, for the aircraft and engines on acceptable terms when necessary or at all.

Continental Aircraft Commitments. As of June 30, 2011, Continental had firm commitments to purchase 83 new aircraft (58 Boeing 737 aircraft and 25 Boeing 787 aircraft) scheduled for delivery from August 2011 through 2016. Continental took delivery of three Boeing 737 aircraft in the first six months of 2011 and is currently scheduled to take delivery of one additional Boeing 737 aircraft in the remainder of 2011. Continental also has options to purchase 89 additional Boeing aircraft.

Continental has a financing commitment for the Boeing 737 aircraft scheduled for delivery in August 2011 but does not have backstop financing or any other financing currently in place for the other Boeing aircraft on order. Further financing will be necessary to satisfy Continental's capital commitments for its firm order aircraft and other related capital expenditures. Continental can provide no assurance that backstop financing or any other financing not already in place for aircraft deliveries will be available to Continental on acceptable terms when necessary or at all.

Credit Card Processing Agreements. United and Continental have agreements with financial institutions that process customer credit card transactions for the sale of air travel and other services. Under certain of United's and Continental's credit card processing agreements, the financial institutions either require, or under certain circumstances have the right to require, that United and Continental maintain a reserve equal to a portion of advance ticket sales that have been processed by that financial institution, but for which United and Continental have not yet provided the air transportation (referred to as "relevant advance ticket sales").

Under United's and Continental's new combined credit card processing agreement with JPMorgan Chase Bank, N.A. ("JPMorgan Chase") and Paymentech, LLC, United and Continental are required to provide a cash reserve, determined based on the amount of unrestricted cash, cash equivalents and short-term investments ("unrestricted cash balance") held by United and Continental. If United's and Continental's unrestricted cash balance is at or more than $3.5 billion as of any calendar month-end measurement date, the required cash reserve will be $25 million. However, if United's and Continental's unrestricted cash balance is less than $3.5 billion, their required reserve will increase to a percentage of relevant advance ticket sales as summarized in the following table:

Total Unrestricted Cash Balance of United and Continental	Required% of Relevant  Advance Ticket Sales (a)
Less than $3.5 billion		25	%
Less than $3.0 billion		50	%

(a) Represents percentage of advance ticket sales generated by bankcard transactions. As of June 30, 2011, approximately 50% of the combined company's advance ticket sales is generated from bankcard transactions.

Based on United's and Continental's June 30, 2011 unrestricted cash balance, United and Continental were not required to provide cash collateral above the $25 million reserve balance. If the Company is required to post additional cash collateral under the new combined JPMorgan Chase credit card processing agreement as a result of an increase in the required reserve amount, Continental will be required to post additional collateral under its credit card processing agreement with American Express that could be significant.

An increase in the future reserve requirements and the posting of a significant amount of cash collateral as provided by the terms of any of the Company's material credit card processing agreements could materially reduce the Company's liquidity. See Note 17 of the 2010 Annual Report for additional information on the Company's other credit card processing agreements.

Guarantees and Off-Balance Sheet Financing. In the Company's financing transactions that include loans, the Company typically agrees to reimburse lenders for any reduced returns with respect to the loans due to any change in capital requirements and, in the case of loans in which the interest rate is based on the London Interbank Offered Rate ("LIBOR"), for certain other increased costs that the lenders incur in carrying these loans as a result of any change in law, subject in most cases to certain mitigation obligations of the lenders. The following table contains information related to the Company's outstanding debt at June 30, 2011 (in millions):

	UAL		United		Continental
Floating rate debt (a)	$	3,182	$	2,250	$	932
Fixed rate debt (a)		444		213		231
Carrying value of loans/leases from non-U.S. entities (b)		3,499		2,461		1,038

(a) Remaining terms of up to nine years, subject to these increased cost provisions.

(b) Remaining terms of up to 9 years; the Company bears 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 customary exclusions.

United has guaranteed interest and principal payments on $270 million of the Denver International Airport bonds, which are due in 2032 unless United elects not to extend its equipment and ground lease, in which case the bonds are due in 2023. The bonds were issued in two tranches - approximately $170 million aggregate principal amount of 5.25% discount bonds and $100 million aggregate principal amount of 5.75% premium bonds. The related lease obligation is accounted for as an operating lease with the associated expense recorded on a straight-line basis resulting in ratable accrual of the final $270 million lease obligation over the expected lease term through 2032.

Continental is contingently liable for US Airways' obligations under a lease agreement between US Airways and the Port Authority of New York and New Jersey related to the East End Terminal at LaGuardia Airport. These obligations include the payment of ground rentals to the Port Authority and the payment of other rentals in respect of the full amounts owed on special facilities revenue bonds issued by the Port Authority having an outstanding par amount of $95 million at June 30, 2011, and a final scheduled maturity in 2015. If US Airways defaults on these obligations, Continental would be obligated to cure the default and would have the right to occupy the terminal after US Airways' interest in the lease had been terminated.

Continental is the lessee of real property under long-term leases at a number of airports where it is also the guarantor of approximately $1.7 billion of underlying debt and interest thereon. These leases are typically with municipalities or other governmental entities, which are excluded from the consolidation requirements concerning variable interest entities. To the extent Continental's lease and related guarantee are with a separate legal entity other than a governmental entity, Continental is not the primary beneficiary because the lease terms are consistent with market terms at the inception of the lease and the lease does not include a residual value guarantee, fixed-price purchase option or similar feature. The leasing arrangements associated with approximately $1.5 billion of these obligations are accounted for as operating leases, and the leasing arrangements associated with approximately $190 million of these obligations are accounted for as capital leases.

Credit Facilities. United has a $255 million revolving loan commitment, which matures on February 1, 2012, available under its Amended and Restated Revolving Credit, Term Loan and Guaranty Agreement, dated as of February 2, 2007 (the "Amended Credit Facility"). United used $226 million and $253 million of the commitment capacity for letters of credit at June 30, 2011 and December 31, 2010, respectively. Unless this revolving loan commitment is amended or replaced, these letters of credit will be required to be backed with cash collateral by the fourth quarter of 2011. Through a separate arrangement, United has an additional $150 million available under an unused credit facility that expires in the fourth quarter of 2011.

Labor Negotiations. As of June 30, 2011, UAL and its subsidiaries had approximately 83,000 active employees, of whom approximately 74% were represented by various U.S. labor organizations. United and Continental had approximately 82% and 63%, respectively, of their active employees represented by various U.S. labor organizations. United has been in negotiations for amended collective bargaining agreements with all of its unions since 2009. Consistent with commitments contained in its current labor contracts, United has filed for mediation assistance in conjunction with four of its six unions - the Air Line Pilots Association ("ALPA"), the Association of Flight Attendants - Communication Workers of America ("AFA"), the International Association of Machinists ("IAM") and the Aerospace Workers and the Professional Airline Flight Control Association. The only collective bargaining agreement at Continental that is amendable is with the pilot group.

After the Company's May 2010 merger announcement, ALPA opted to suspend negotiations at both United and Continental to focus on joint negotiations for a new collective bargaining agreement that would apply to the combined company. United and Continental reached agreement with ALPA on a Transition and Process Agreement that provides a framework for conducting pilot operations for the two employee groups until the parties reach agreement on a joint collective bargaining agreement and the carriers obtain a single operating certificate. In August 2010, United and Continental began joint negotiations with ALPA and those negotiations are presently ongoing. In December 2010, ALPA and the Company jointly applied to the National Mediation Board (the "NMB") for mediation assistance for the joint pilot and flight instructor negotiations.

In June 2011, United's maintenance technicians and related employees represented by the International Brotherhood of Teamsters (the "Teamsters") voted against a tentative agreement on a proposed collective bargaining agreement. The Company has since filed with the NMB to proceed with mediated negotiations for a joint collective bargaining agreement for all Teamsters-represented mechanic and related employees. The joint agreement would cover approximately 8,650 active mechanic and related employees located throughout the United States.

Certain unions have filed applications seeking single carrier findings by the NMB for purposes of union representation. When the NMB determines that United and Continental are considered a single carrier, the NMB may order an election if there is a difference in union representation between the employee groups. Until the union representation issues are resolved, the incumbent unions will continue to represent those employee groups they currently represent. In December 2010, ALPA filed for a single carrier finding with the NMB although there is no dispute as to which union represents the pilot groups. There has been no decision on this filing to date. In January 2011, the IAM filed two separate applications seeking single carrier findings by the NMB for fleet service and stores/stock clerk employees. On April 28, 2011, the NMB issued its determination that a single carrier existed for fleet service employees at United and Continental, and on June 13, 2011, the NMB authorized an election for fleet service employees to elect a common representative. This election began on July 7, 2011 and will end on August 11, 2011. On July 2, 2011, the NMB extended the certification of the IAM to stores/stock clerk employees for the combined company due to the larger number of IAM-represented employees at United as compared to Continental.

In January 2011, the AFA filed a single carrier request with the NMB for United and Continental flight attendants. In April 2011, the NMB ruled that United and Continental are now operating as a single carrier for union representation of flight attendants which permitted the NMB to begin the union representation election process for that group. An election was held for the flight attendants and, on June 30, 2011, the NMB certified the AFA as the representative of flight attendants at the combined company. On July 2, 2011, the International Federation of Professional and Technical Engineers filed for a single carrier finding for purposes of union representation among the engineers and related employees at the combined company.

The outcome of labor negotiations may materially impact the Company's future financial results. However, it is too early in the process to assess the timing or magnitude of the impact, if any.

IAH Terminal B Redevelopment Project. In May 2011, UAL, in partnership with the Houston Airport System, announced that it is expected to begin construction of the first phase of a $1 billion terminal improvement project for Terminal B at Bush Intercontinental Airport ("IAH") by the end of 2011. UAL's initial commitment is to construct the first phase of the currently anticipated three-phase project that will create a new Terminal B south concourse dedicated to domestic regional jet operations. UAL's cost of construction of phase one of the project is currently estimated to be approximately $100 million and is expected to be funded by special facilities bonds issued by the City of Houston, which bonds would be guaranteed by UAL and/or one of its subsidiaries and would be payable from the rentals paid by UAL or one of its subsidiaries under a special facilities lease agreement with the City of Houston, or cash. Construction of the remaining phases of the project will be based on demand over the next 7 to 10 years, with phase one currently expected to be completed in late 2013.

Based on a qualitative assessment of the IAH Terminal B Redevelopment Project, given the expectation that UAL and/or one of its subsidiaries would guarantee the special facilities bonds, and the requirement that UAL or one of its subsidiaries fund cost overruns with no stated limits would result in the Company paying more than 90% of the total project costs at a given time, UAL or one of its subsidiaries will be considered the owner of the property during the construction period. Because, for accounting purposes, UAL or one of its subsidiaries would also be considered the owner of the construction project upon its completion, the construction project will be treated as a financing transaction such that the property and related financing will remain on UAL's consolidated balance sheet.

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Debt and Advanced Purchase of Miles

6 Months Ended

Jun. 30, 2011

Debt and Advance Purchase of Miles

NOTE 9 - DEBT AND ADVANCED PURCHASE OF MILES

As of June 30, 2011, a substantial portion of our assets are pledged as collateral for our debt. These assets principally consist of aircraft and the related spare parts and engines, route authorities and, in the case of United, loyalty program intangible assets. As of June 30, 2011, UAL, United and Continental were in compliance with their respective debt covenants.

5% Convertible Notes. In the first quarter of 2011, UAL repurchased all of its $150 million face value 5% Senior Convertible Notes due in 2021 with cash after substantially all of the notes were put to UAL by the noteholders.

4.5% Senior Limited-Subordinated Convertible Notes. In the second quarter of 2011, UAL repurchased at par value approximately $570 million of the $726 million outstanding principal amount of its 4.5% Senior Limited-Subordination Convertible Notes due 2021 with cash after the notes were put to UAL by the noteholders. The remaining $156 million outstanding principal amount of the notes was reclassified from current maturities of long-term debt to long-term debt at June 30, 2011.

Contingent Senior Unsecured Notes PBGC. As of June 30, 2011, UAL is obligated under the 8% Notes indenture to issue to the PBGC $62.5 million aggregate principal amount of 8% Notes no later than February 14, 2012. UAL recorded a liability for the fair value of the non-cash obligation of approximately $49 million in its condensed consolidated balance sheet at June 30, 2011. See Note 8 of this report for additional information on the 8% Notes.

Chase Co-Brand Agreement. United and Continental each had significant contracts to sell frequent flyer miles to Chase through their separate co-branded agreements. As a result of the contract modification of these co-brand agreements, Continental's pre-purchased credit and debit card miles liabilities that had been accounted for as long-term debt were reclassified to advanced purchase of miles as the terms related to the miles have been changed such that the pre-purchased miles no longer meet the definition of debt. As a result, Continental's long-term debt decreased $210 million, advanced purchase of miles increased $270 million and other assets increased $60 million.

In July 2011, UAL sold an additional $165 million of pre-purchased miles to Chase and Continental rolled the remaining balance of the pre-paid miles under its previously existing co-branded agreement into the Co-Brand Agreement when it terminated its debit card co-brand agreement with Chase. UAL has the right, but is not required, to repurchase the pre-purchased miles from Chase during the term of the agreement. The Co-Brand Agreement contains termination penalties that may require United and Continental to make certain payments and repurchase outstanding pre-purchased miles in cases such as the Company's insolvency, bankruptcy, false representations or other material breaches. The Company will record these amounts as advanced purchase of miles in the non-current liabilities section of the Company's condensed consolidated balance sheets.

The obligations of the UAL, United, Continental and Mileage Plus Holdings, LLC to Chase under the Co-Brand Agreement are joint and several. Certain of United's obligations under the Co-Brand Agreement in an amount not more than $850 million are secured by a junior lien in all collateral pledged by United under its Amended Credit Facility. All of Continental's obligations under the Co-Brand Agreement are secured by a junior lien in all collateral pledged by Continental to secure its 6.750% Senior Secured Notes due 2015. United also provides a first priority lien to Chase on its MileagePlus assets to secure certain of its obligations under the Co-Brand Agreement and its obligations under the new combined credit card processing agreement among Continental, United, Paymentech, LLC and JPMorgan Chase. After Continental's OnePass Program is terminated on December 31, 2011, certain of the OnePass Program assets will be added as collateral to such MileagePlus assets. See Note 1 of this report for additional information related to the Co-Brand Agreement.

United Airlines Inc [Member]

Debt and Advance Purchase of Miles

NOTE 9 - DEBT AND ADVANCED PURCHASE OF MILES

As of June 30, 2011, a substantial portion of our assets are pledged as collateral for our debt. These assets principally consist of aircraft and the related spare parts and engines, route authorities and, in the case of United, loyalty program intangible assets. As of June 30, 2011, UAL, United and Continental were in compliance with their respective debt covenants.

5% Convertible Notes. In the first quarter of 2011, UAL repurchased all of its $150 million face value 5% Senior Convertible Notes due in 2021 with cash after substantially all of the notes were put to UAL by the noteholders.

4.5% Senior Limited-Subordinated Convertible Notes. In the second quarter of 2011, UAL repurchased at par value approximately $570 million of the $726 million outstanding principal amount of its 4.5% Senior Limited-Subordination Convertible Notes due 2021 with cash after the notes were put to UAL by the noteholders. The remaining $156 million outstanding principal amount of the notes was reclassified from current maturities of long-term debt to long-term debt at June 30, 2011.

Contingent Senior Unsecured Notes PBGC. As of June 30, 2011, UAL is obligated under the 8% Notes indenture to issue to the PBGC $62.5 million aggregate principal amount of 8% Notes no later than February 14, 2012. UAL recorded a liability for the fair value of the non-cash obligation of approximately $49 million in its condensed consolidated balance sheet at June 30, 2011. See Note 8 of this report for additional information on the 8% Notes.

Chase Co-Brand Agreement. United and Continental each had significant contracts to sell frequent flyer miles to Chase through their separate co-branded agreements. As a result of the contract modification of these co-brand agreements, Continental's pre-purchased credit and debit card miles liabilities that had been accounted for as long-term debt were reclassified to advanced purchase of miles as the terms related to the miles have been changed such that the pre-purchased miles no longer meet the definition of debt. As a result, Continental's long-term debt decreased $210 million, advanced purchase of miles increased $270 million and other assets increased $60 million.

In July 2011, UAL sold an additional $165 million of pre-purchased miles to Chase and Continental rolled the remaining balance of the pre-paid miles under its previously existing co-branded agreement into the Co-Brand Agreement when it terminated its debit card co-brand agreement with Chase. UAL has the right, but is not required, to repurchase the pre-purchased miles from Chase during the term of the agreement. The Co-Brand Agreement contains termination penalties that may require United and Continental to make certain payments and repurchase outstanding pre-purchased miles in cases such as the Company's insolvency, bankruptcy, false representations or other material breaches. The Company will record these amounts as advanced purchase of miles in the non-current liabilities section of the Company's condensed consolidated balance sheets.

The obligations of the UAL, United, Continental and Mileage Plus Holdings, LLC to Chase under the Co-Brand Agreement are joint and several. Certain of United's obligations under the Co-Brand Agreement in an amount not more than $850 million are secured by a junior lien in all collateral pledged by United under its Amended Credit Facility. All of Continental's obligations under the Co-Brand Agreement are secured by a junior lien in all collateral pledged by Continental to secure its 6.750% Senior Secured Notes due 2015. United also provides a first priority lien to Chase on its MileagePlus assets to secure certain of its obligations under the Co-Brand Agreement and its obligations under the new combined credit card processing agreement among Continental, United, Paymentech, LLC and JPMorgan Chase. After Continental's OnePass Program is terminated on December 31, 2011, certain of the OnePass Program assets will be added as collateral to such MileagePlus assets. See Note 1 of this report for additional information related to the Co-Brand Agreement.

Continental Airlines Inc [Member]

Debt and Advance Purchase of Miles

NOTE 9 - DEBT AND ADVANCED PURCHASE OF MILES

As of June 30, 2011, a substantial portion of our assets are pledged as collateral for our debt. These assets principally consist of aircraft and the related spare parts and engines, route authorities and, in the case of United, loyalty program intangible assets. As of June 30, 2011, UAL, United and Continental were in compliance with their respective debt covenants.

5% Convertible Notes. In the first quarter of 2011, UAL repurchased all of its $150 million face value 5% Senior Convertible Notes due in 2021 with cash after substantially all of the notes were put to UAL by the noteholders.

4.5% Senior Limited-Subordinated Convertible Notes. In the second quarter of 2011, UAL repurchased at par value approximately $570 million of the $726 million outstanding principal amount of its 4.5% Senior Limited-Subordination Convertible Notes due 2021 with cash after the notes were put to UAL by the noteholders. The remaining $156 million outstanding principal amount of the notes was reclassified from current maturities of long-term debt to long-term debt at June 30, 2011.

Contingent Senior Unsecured Notes PBGC. As of June 30, 2011, UAL is obligated under the 8% Notes indenture to issue to the PBGC $62.5 million aggregate principal amount of 8% Notes no later than February 14, 2012. UAL recorded a liability for the fair value of the non-cash obligation of approximately $49 million in its condensed consolidated balance sheet at June 30, 2011. See Note 8 of this report for additional information on the 8% Notes.

Chase Co-Brand Agreement. United and Continental each had significant contracts to sell frequent flyer miles to Chase through their separate co-branded agreements. As a result of the contract modification of these co-brand agreements, Continental's pre-purchased credit and debit card miles liabilities that had been accounted for as long-term debt were reclassified to advanced purchase of miles as the terms related to the miles have been changed such that the pre-purchased miles no longer meet the definition of debt. As a result, Continental's long-term debt decreased $210 million, advanced purchase of miles increased $270 million and other assets increased $60 million.

In July 2011, UAL sold an additional $165 million of pre-purchased miles to Chase and Continental rolled the remaining balance of the pre-paid miles under its previously existing co-branded agreement into the Co-Brand Agreement when it terminated its debit card co-brand agreement with Chase. UAL has the right, but is not required, to repurchase the pre-purchased miles from Chase during the term of the agreement. The Co-Brand Agreement contains termination penalties that may require United and Continental to make certain payments and repurchase outstanding pre-purchased miles in cases such as the Company's insolvency, bankruptcy, false representations or other material breaches. The Company will record these amounts as advanced purchase of miles in the non-current liabilities section of the Company's condensed consolidated balance sheets.

The obligations of the UAL, United, Continental and Mileage Plus Holdings, LLC to Chase under the Co-Brand Agreement are joint and several. Certain of United's obligations under the Co-Brand Agreement in an amount not more than $850 million are secured by a junior lien in all collateral pledged by United under its Amended Credit Facility. All of Continental's obligations under the Co-Brand Agreement are secured by a junior lien in all collateral pledged by Continental to secure its 6.750% Senior Secured Notes due 2015. United also provides a first priority lien to Chase on its MileagePlus assets to secure certain of its obligations under the Co-Brand Agreement and its obligations under the new combined credit card processing agreement among Continental, United, Paymentech, LLC and JPMorgan Chase. After Continental's OnePass Program is terminated on December 31, 2011, certain of the OnePass Program assets will be added as collateral to such MileagePlus assets. See Note 1 of this report for additional information related to the Co-Brand Agreement.

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Special Items

6 Months Ended

Jun. 30, 2011

Special Items

NOTE 10 - SPECIAL ITEMS

Special Revenue Item. As discussed in Note 1, during the second quarter of 2011, the Company modified the previously existing United and Continental co-branded credit card agreements with Chase as a result of the merger. This modification resulted in the following one-time adjustment to decrease frequent flyer deferred revenue and increase special revenue in accordance with ASU 2009-13 for the three and six months ended June 30, 2011 as follows (in millions):

	UAL		United		Continental
Special revenue item	$	107	$	88	$	19

Special Charges. For the three and six months ended June 30, special charges consisted of the following (in millions):

	Three Months Ended June 30,						Six Months Ended June 30,
2011	UAL		United		Continental Successor		UAL			United		Continental Successor
Integration-related costs	$	145	$	90	$	55	$	224		$	164	$	60
Aircraft-related charges (gains), net		1		—		1		(1	)		—		(1	)
Total	$	146	$	90	$	56	$	223		$	164	$	59
2010	UAL		United		Continental Predecessor		UAL			United		Continental Predecessor
Aircraft-related charges, net	$	73	$	73	$	—	$	90		$	90	$	6
Merger-related costs		28		28		18		28			28		18
Other		5		5		6		6			6		10
Total	$	106	$	106	$	24	$	124		$	124	$	34

Integration-related costs include costs to terminate certain service contracts that will not be used by the Company, costs to write-off system assets that are no longer used or planned to be used by the Company, payments to third-party consultants to assist with integration planning and organization design, severance related costs primarily associated with administrative headcount reductions, relocation and training, and compensation costs related to the systems integration. In addition, as of June 30, 2011, UAL is obligated under the 8% Notes indenture to issue to the PBGC $62.5 million aggregate principal amount of 8% Notes no later than February 14, 2012. UAL recorded a liability for the fair value of the obligation of approximately $49 million as described above in Notes 8 and 9. This is being classified as an integration-related cost as the financial results of UAL, excluding Continental's results, would not have resulted in a triggering event under the 8% Notes indenture. Other special charges include gains and losses on the disposal of aircraft and related spare parts.

During the three and six months ended June 30, 2010, the charges related to UAL and United in the table above primarily related to asset impairment charges incurred as a result of a decrease in the value of certain aircraft-related assets. During the three and six months ended June 30, 2010, Continental Predecessor's charges presented in the table above primarily consisted of aircraft-related charges related to grounded Boeing 737-300 aircraft, which is net of gains on the sale of two Boeing 737-500 aircraft. Merger-related costs related to third-party costs incurred for legal, finance, advisory, accounting and consultant fees and communication costs.

Accrual Activity

Activity related to the accruals for severance and medical costs and future lease payments on permanently grounded aircraft is as follows (in millions):

2011 Activity	Severance /  Medical Costs			Permanently Grounded Aircraft
UAL
Balance at December 31, 2010	$	102		$	41
Increase (decrease) in accrual		(4	)		1
Payments		(28	)		(8	)
Balance at June 30, 2011	$	70		$	34
United
Balance at December 31, 2010	$	42		$	41
Increase in accrual		15			1
Payments		(17	)		(8	)
Balance at June 30, 2011	$	40		$	34
Continental - Successor
Balance at December 31, 2010	$	60
Decrease in accrual		(19	)
Payments		(11	)
Balance at June 30, 2011	$	30

The severance-related accrual as of June 30, 2011, which primarily relates to the integration of United and Continental, is expected to be paid through 2012. Lease payments for grounded aircraft are expected to be paid through 2013.

2010 Activity	Severance/ Medical Costs			Permanently Grounded Aircraft
UAL
Balance at December 31, 2009	$	45		$	83
Payments		(22	)		(24	)
Balance at June 30, 2010	$	23		$	59
United
Balance at December 31, 2009	$	45		$	83
Payments		(22	)		(24	)
Balance at June 30, 2010	$	23		$	59
Continental - Predecessor
Balance at December 31, 2009	$	14
Increase in accrual		2
Payments		(10	)
Balance at June 30, 2010	$	6

United Airlines Inc [Member]

Special Items

NOTE 10 - SPECIAL ITEMS

Special Revenue Item. As discussed in Note 1, during the second quarter of 2011, the Company modified the previously existing United and Continental co-branded credit card agreements with Chase as a result of the merger. This modification resulted in the following one-time adjustment to decrease frequent flyer deferred revenue and increase special revenue in accordance with ASU 2009-13 for the three and six months ended June 30, 2011 as follows (in millions):

	UAL		United		Continental
Special revenue item	$	107	$	88	$	19

Special Charges. For the three and six months ended June 30, special charges consisted of the following (in millions):

	Three Months Ended June 30,						Six Months Ended June 30,
2011	UAL		United		Continental Successor		UAL			United		Continental Successor
Integration-related costs	$	145	$	90	$	55	$	224		$	164	$	60
Aircraft-related charges (gains), net		1		—		1		(1	)		—		(1	)
Total	$	146	$	90	$	56	$	223		$	164	$	59
2010	UAL		United		Continental Predecessor		UAL			United		Continental Predecessor
Aircraft-related charges, net	$	73	$	73	$	—	$	90		$	90	$	6
Merger-related costs		28		28		18		28			28		18
Other		5		5		6		6			6		10
Total	$	106	$	106	$	24	$	124		$	124	$	34

Integration-related costs include costs to terminate certain service contracts that will not be used by the Company, costs to write-off system assets that are no longer used or planned to be used by the Company, payments to third-party consultants to assist with integration planning and organization design, severance related costs primarily associated with administrative headcount reductions, relocation and training, and compensation costs related to the systems integration. In addition, as of June 30, 2011, UAL is obligated under the 8% Notes indenture to issue to the PBGC $62.5 million aggregate principal amount of 8% Notes no later than February 14, 2012. UAL recorded a liability for the fair value of the obligation of approximately $49 million as described above in Notes 8 and 9. This is being classified as an integration-related cost as the financial results of UAL, excluding Continental's results, would not have resulted in a triggering event under the 8% Notes indenture. Other special charges include gains and losses on the disposal of aircraft and related spare parts.

During the three and six months ended June 30, 2010, the charges related to UAL and United in the table above primarily related to asset impairment charges incurred as a result of a decrease in the value of certain aircraft-related assets. During the three and six months ended June 30, 2010, Continental Predecessor's charges presented in the table above primarily consisted of aircraft-related charges related to grounded Boeing 737-300 aircraft, which is net of gains on the sale of two Boeing 737-500 aircraft. Merger-related costs related to third-party costs incurred for legal, finance, advisory, accounting and consultant fees and communication costs.

Accrual Activity

Activity related to the accruals for severance and medical costs and future lease payments on permanently grounded aircraft is as follows (in millions):

2011 Activity	Severance /  Medical Costs			Permanently Grounded Aircraft
UAL
Balance at December 31, 2010	$	102		$	41
Increase (decrease) in accrual		(4	)		1
Payments		(28	)		(8	)
Balance at June 30, 2011	$	70		$	34
United
Balance at December 31, 2010	$	42		$	41
Increase in accrual		15			1
Payments		(17	)		(8	)
Balance at June 30, 2011	$	40		$	34
Continental - Successor
Balance at December 31, 2010	$	60
Decrease in accrual		(19	)
Payments		(11	)
Balance at June 30, 2011	$	30

The severance-related accrual as of June 30, 2011, which primarily relates to the integration of United and Continental, is expected to be paid through 2012. Lease payments for grounded aircraft are expected to be paid through 2013.

2010 Activity	Severance/ Medical Costs			Permanently Grounded Aircraft
UAL
Balance at December 31, 2009	$	45		$	83
Payments		(22	)		(24	)
Balance at June 30, 2010	$	23		$	59
United
Balance at December 31, 2009	$	45		$	83
Payments		(22	)		(24	)
Balance at June 30, 2010	$	23		$	59
Continental - Predecessor
Balance at December 31, 2009	$	14
Increase in accrual		2
Payments		(10	)
Balance at June 30, 2010	$	6

Continental Airlines Inc [Member]

Special Items

NOTE 10 - SPECIAL ITEMS

Special Revenue Item. As discussed in Note 1, during the second quarter of 2011, the Company modified the previously existing United and Continental co-branded credit card agreements with Chase as a result of the merger. This modification resulted in the following one-time adjustment to decrease frequent flyer deferred revenue and increase special revenue in accordance with ASU 2009-13 for the three and six months ended June 30, 2011 as follows (in millions):

	UAL		United		Continental
Special revenue item	$	107	$	88	$	19

Special Charges. For the three and six months ended June 30, special charges consisted of the following (in millions):

	Three Months Ended June 30,						Six Months Ended June 30,
2011	UAL		United		Continental Successor		UAL			United		Continental Successor
Integration-related costs	$	145	$	90	$	55	$	224		$	164	$	60
Aircraft-related charges (gains), net		1		—		1		(1	)		—		(1	)
Total	$	146	$	90	$	56	$	223		$	164	$	59
2010	UAL		United		Continental Predecessor		UAL			United		Continental Predecessor
Aircraft-related charges, net	$	73	$	73	$	—	$	90		$	90	$	6
Merger-related costs		28		28		18		28			28		18
Other		5		5		6		6			6		10
Total	$	106	$	106	$	24	$	124		$	124	$	34

Integration-related costs include costs to terminate certain service contracts that will not be used by the Company, costs to write-off system assets that are no longer used or planned to be used by the Company, payments to third-party consultants to assist with integration planning and organization design, severance related costs primarily associated with administrative headcount reductions, relocation and training, and compensation costs related to the systems integration. In addition, as of June 30, 2011, UAL is obligated under the 8% Notes indenture to issue to the PBGC $62.5 million aggregate principal amount of 8% Notes no later than February 14, 2012. UAL recorded a liability for the fair value of the obligation of approximately $49 million as described above in Notes 8 and 9. This is being classified as an integration-related cost as the financial results of UAL, excluding Continental's results, would not have resulted in a triggering event under the 8% Notes indenture. Other special charges include gains and losses on the disposal of aircraft and related spare parts.

During the three and six months ended June 30, 2010, the charges related to UAL and United in the table above primarily related to asset impairment charges incurred as a result of a decrease in the value of certain aircraft-related assets. During the three and six months ended June 30, 2010, Continental Predecessor's charges presented in the table above primarily consisted of aircraft-related charges related to grounded Boeing 737-300 aircraft, which is net of gains on the sale of two Boeing 737-500 aircraft. Merger-related costs related to third-party costs incurred for legal, finance, advisory, accounting and consultant fees and communication costs.

Accrual Activity

Activity related to the accruals for severance and medical costs and future lease payments on permanently grounded aircraft is as follows (in millions):

2011 Activity	Severance /  Medical Costs			Permanently Grounded Aircraft
UAL
Balance at December 31, 2010	$	102		$	41
Increase (decrease) in accrual		(4	)		1
Payments		(28	)		(8	)
Balance at June 30, 2011	$	70		$	34
United
Balance at December 31, 2010	$	42		$	41
Increase in accrual		15			1
Payments		(17	)		(8	)
Balance at June 30, 2011	$	40		$	34
Continental - Successor
Balance at December 31, 2010	$	60
Decrease in accrual		(19	)
Payments		(11	)
Balance at June 30, 2011	$	30

The severance-related accrual as of June 30, 2011, which primarily relates to the integration of United and Continental, is expected to be paid through 2012. Lease payments for grounded aircraft are expected to be paid through 2013.

2010 Activity	Severance/ Medical Costs			Permanently Grounded Aircraft
UAL
Balance at December 31, 2009	$	45		$	83
Payments		(22	)		(24	)
Balance at June 30, 2010	$	23		$	59
United
Balance at December 31, 2009	$	45		$	83
Payments		(22	)		(24	)
Balance at June 30, 2010	$	23		$	59
Continental - Predecessor
Balance at December 31, 2009	$	14
Increase in accrual		2
Payments		(10	)
Balance at June 30, 2010	$	6

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Subsequent Events

6 Months Ended

Jun. 30, 2011

Subsequent Events

NOTE 11 - SUBSEQUENT EVENTS

In July 2011, UAL repaid and extinguished at par value $106 million principal amount outstanding of equipment notes due July 2012 and floating rate debt due December 2011 secured by a total of 21 aircraft.

United Airlines Inc [Member]

Subsequent Events

NOTE 11 - SUBSEQUENT EVENTS

In July 2011, UAL repaid and extinguished at par value $106 million principal amount outstanding of equipment notes due July 2012 and floating rate debt due December 2011 secured by a total of 21 aircraft.

Continental Airlines Inc [Member]

Subsequent Events

NOTE 11 - SUBSEQUENT EVENTS

In July 2011, UAL repaid and extinguished at par value $106 million principal amount outstanding of equipment notes due July 2012 and floating rate debt due December 2011 secured by a total of 21 aircraft.

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New Accounting Pronouncements (Tables)

6 Months Ended

Jun. 30, 2011

New Accounting Pronouncements

Description of New Accounting Pronouncements Changes in Revenue

	Three Months Ended June 30, 2011						Six Months Ended June 30, 2011
	UAL		United		Continental		UAL		United		Continental
Revenue	$	106	$	66	$	40	$	161	$	104	$	57
Per basic share	$	0.32					$	0.49
Per diluted share	$	0.27					$	0.42

Special Revenue

	Three Months Ended June 30, 2011						Six Months Ended June 30, 2011
	UAL		United		Continental		UAL		United		Continental
Special revenue item	$	107	$	88	$	19	$	107	$	88	$	19
Per basic share	$	0.32					$	0.33
Per diluted share	$	0.27					$	0.28

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2011

Earnings Per Share

Computation of Earnings per Share

	Three Months Ended June 30,					Six Months Ended June 30,
	2011			2010		2011			2010
UAL basic earnings per share:
Net income	$	538		$	273	$	325		$	191
Less: Income allocable to participating securities		(2	)		—		(1	)		—
Earnings available to common stockholders	$	536		$	273	$	324		$	191
Basic weighted average shares outstanding		330			168		329			168
Earnings per share, basic	$	1.63		$	1.62	$	0.98		$	1.14
UAL diluted earnings per share:
Earnings available to common stockholders	$	536		$	273		324		$	191
Effect of UAL 4.5% Senior Limited-Subordination Convertible Notes		11			21		—			—
Effect of Continental 4.5% Convertible Notes		2			—		4			—
Effect of UAL 5% Senior Convertible Notes		—			4		—			—
Effect of Continental 6% Convertible Junior Subordinated Debentures		4			—		—			—
Effect of UAL 6% Senior Convertible Notes		5			5		9			10
Earnings available to common stockholders including the effect of dilutive securities	$	558		$	303	$	337		$	201
UAL diluted shares outstanding:
Basic weighted average shares outstanding		330			168		329			168
Effect of employee stock options		1			2		2			1
Effect of UAL 4.5% Senior Limited-Subordination Convertible Notes		13			22		—			—
Effect of Continental 4.5% Convertible Notes		12			—		12			—
Effect of UAL 5% Senior Convertible Notes		—			3		—			—
Effect of Continental 6% Convertible Junior Subordinated Debentures		4			—		—			—
Effect of UAL 6% Senior Convertible Notes		40			40		40			40
Diluted weighted average shares outstanding		400			235		383			209
Earnings per share, diluted	$	1.39		$	1.29	$	0.88		$	0.96
UAL potentially dilutive shares excluded from diluted per share amounts:
Restricted stock and stock options		7			5		6			6
UAL 4.5% Senior Limited-Subordination Convertible Notes		—			—		18			22
Continental 6% Convertible Junior Subordinated Debentures		—			—		4			—
UAL 5% Senior Convertible Notes (Note 9)		—			—		—			3

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Employee Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2011

Employee Benefit Plans

Share-Based Compensation Expense

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Share-based compensation expense	$	14	$	8	$	27	$	21

Unrecognized Share-Based Compensation Expense

	June 30, 2011		December 31, 2010
Unrecognized share-based compensation expense	$	63	$	43

Components of Net Periodic Benefit Cost

	Pension Benefits Three Months Ended June 30,						Other Postretirement Benefits Three Months Ended June 30,
	2011			2010			2011			2010
UAL
Service cost	$	23		$	2		$	12		$	8
Interest cost		45			3			32			29
Expected return on plan assets		(35	)		(3	)		—			(1	)
Amortization of unrecognized gain and prior service cost		(7	)		(1	)		(1	)		(3	)
Net periodic benefit costs	$	26		$	1		$	43		$	33
United
Service cost	$	2		$	2		$	8		$	8
Interest cost		3			3			28			29
Expected return on plan assets		(3	)		(3	)		—			(1	)
Amortization of unrecognized gain and prior service cost		(1	)		(1	)		—			(3	)
Net periodic benefit costs	$	1		$	1		$	36		$	33
Continental (a)
Service cost	$	21		$	16		$	4		$	3
Interest cost		42			40			4			3
Expected return on plan assets		(32	)		(28	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		(6	)		25			(1	)		4
Net periodic benefit costs	$	25		$	53		$	7		$	10

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

	Pension Benefits Six Months Ended June 30,						Other Postretirement Benefits Six Months Ended June 30,
	2011			2010			2011			2010
UAL
Service cost	$	44		$	3		$	24		$	15
Interest cost		89			5			63			58
Expected return on plan assets		(69	)		(5	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		(12	)		(1	)		(1	)		(6	)
Net periodic benefit costs	$	52		$	2		$	85		$	66
United
Service cost	$	3		$	3		$	17		$	15
Interest cost		5			5			56			58
Expected return on plan assets		(5	)		(5	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		(1	)		(1	)		—			(6	)
Net periodic benefit costs	$	2		$	2		$	72		$	66
Continental (a)
Service cost	$	41		$	33		$	7		$	5
Interest cost		84			79			7			7
Expected return on plan assets		(64	)		(55	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		(11	)		49			(1	)		8
Net periodic benefit costs	$	50		$	106		$	13		$	20

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

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Statements of Consolidated Operations (USD $) In Millions, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Operating revenue:
Mainline	$ 6,864	$ 3,532	$ 12,627	$ 6,401
Regional	1,742	962	3,166	1,750
Total passenger revenue	8,606	4,494	15,793	8,151
Cargo	316	190	599	347
Special revenue item (Note 1)	107		107
Other operating revenue	780	477	1,512	904
Total revenues	9,809	5,161	18,011	9,402
Operating expenses:
Aircraft fuel	3,227	1,486	5,899	2,693
Salaries and related costs	1,916	1,061	3,722	2,051
Regional capacity purchase	615	405	1,188	793
Landing fees and other rent	502	271	975	528
Aircraft maintenance materials and outside repairs	444	245	883	467
Depreciation and amortization	385	223	773	444
Distribution expenses	375	198	725	370
Aircraft rent	252	81	505	162
Special charges (Note 10)	146	106	223	124
Other operating expenses	1,139	644	2,276	1,253
Total operating expenses	9,001	4,720	17,169	8,885
Operating income	808	441	842	517
Nonoperating income (expense):
Interest expense	(250)	(178)	(504)	(363)
Interest income	5	2	9	3
Interest capitalized	8	3	14	5
Miscellaneous, net	(29)	3	(30)	28
Total other income (expense)	(266)	(170)	(511)	(327)
Income before income taxes	542	271	331	190
Income tax expense (benefit)	4	(2)	6	(1)
Net income	538	273	325	191
Earnings per share, basic	$ 1.63	$ 1.62	$ 0.98	$ 1.14
Earnings per share, diluted	$ 1.39	$ 1.29	$ 0.88	$ 0.96
Continental Airlines Inc [Member] | Successor [Member]
Operating revenue:
Mainline	3,118		5,741
Regional	696		1,229
Total passenger revenue	3,814		6,970
Cargo	126		241
Special revenue item (Note 1)	19		19
Other operating revenue	325		612
Total revenues	4,284		7,842
Operating expenses:
Aircraft fuel	1,394		2,554
Salaries and related costs	864		1,669
Regional capacity purchase	214		406
Landing fees and other rent	228		448
Aircraft maintenance materials and outside repairs	154		303
Depreciation and amortization	156		317
Distribution expenses	177		340
Aircraft rent	173		345
Special charges (Note 10)	56		59
Other operating expenses	494		998
Total operating expenses	3,910		7,439
Operating income	374		403
Nonoperating income (expense):
Interest expense	(88)		(171)
Interest income	2		4
Interest capitalized	4		8
Miscellaneous, net	(28)		(35)
Total other income (expense)	(110)		(194)
Income before income taxes	264		209
Income tax expense (benefit)	2		4
Net income	262		205
Earnings per share, basic
Earnings per share, diluted
Continental Airlines Inc [Member] | Predecessor [Member]
Operating revenue:
Mainline		2,635		4,892
Regional		616		1,117
Total passenger revenue		3,251		6,009
Cargo		111		213
Special revenue item (Note 1)
Other operating revenue		329		632
Total revenues		3,691		6,854
Operating expenses:
Aircraft fuel		992		1,865
Salaries and related costs		822		1,618
Regional capacity purchase		205		402
Landing fees and other rent		215		428
Aircraft maintenance materials and outside repairs		131		273
Depreciation and amortization		122		256
Distribution expenses		161		306
Aircraft rent		230		459
Special charges (Note 10)		24		34
Other operating expenses		460		934
Total operating expenses		3,362		6,575
Operating income		329		279
Nonoperating income (expense):
Interest expense		(92)		(187)
Interest income		2		4
Interest capitalized		6		13
Miscellaneous, net		(12)		(21)
Total other income (expense)		(96)		(191)
Income before income taxes		233		88
Income tax expense (benefit)				1
Net income		233		87
Earnings per share, basic		$ 1.67		$ 0.62
Earnings per share, diluted		$ 1.46		$ 0.60
United Airlines Inc [Member]
Operating revenue:
Mainline	3,745	3,532	6,884	6,401
Regional	1,046	962	1,937	1,750
Total passenger revenue	4,791	4,494	8,821	8,151
Cargo	191	190	358	347
Special revenue item (Note 1)	88		88
Other operating revenue	500	479	979	908
Total revenues	5,570	5,163	10,246	9,406
Operating expenses:
Aircraft fuel	1,833	1,486	3,345	2,693
Salaries and related costs	1,038	1,061	2,025	2,051
Regional capacity purchase	401	405	783	793
Landing fees and other rent	275	271	527	528
Aircraft maintenance materials and outside repairs	290	245	582	467
Depreciation and amortization	229	223	456	444
Distribution expenses	199	198	386	370
Aircraft rent	80	81	161	162
Special charges (Note 10)	90	106	164	124
Other operating expenses	698	644	1,372	1,252
Total operating expenses	5,133	4,720	9,801	8,884
Operating income	437	443	445	522
Nonoperating income (expense):
Interest expense	(159)	(173)	(327)	(353)
Interest income	3	2	5	3
Interest capitalized	3	3	6	5
Miscellaneous, net	(3)	4	(8)	29
Total other income (expense)	(156)	(164)	(324)	(316)
Income before income taxes	281	279	121	206
Income tax expense (benefit)		(2)		(1)
Net income	$ 281	$ 281	$ 121	$ 207

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Financial Instruments and Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2011

Financial Instruments and Fair Value Measurements

Financial Assets and Liabilities Measured on A Recurring Basis

	June 30, 2011											December 31, 2010
	Total			Level 1		Level 2			Level 3			Total			Level 1		Level 2			Level 3
	UAL
Cash and cash equivalents	$	7,519		$	7,519	$	—		$	—		$	8,069		$	8,069	$	—		$	—
Short-term investments:
Auction rate securities		121			—		—			121			119			—		—			119
CDARS		196			196		—			—			45			45		—			—
Asset-backed securities		224			224		—			—			258			258		—			—
Corporate debt		397			397		—			—			135			135		—			—
U.S. government and agency notes		47			47		—			—			39			39		—			—
Other fixed income securities		75			75		—			—			15			15		—			—
EETC		65			—		—			65			66			—		—			66
Fuel derivatives, net		191			—		191			—			375			—		375			—
Foreign currency derivatives		(3	)		—		(3	)		—			(7	)		—		(7	)		—
Restricted cash (a)		160			160		—			—			160			160		—			—
	United (a)
Cash and cash equivalents	$	4,107		$	4,107	$	—		$	—		$	4,665		$	4,665	$	—		$	—
Short-term investments:
Asset-backed securities		23			23		—			—			—			—		—			—
Corporate debt		124			124		—			—			—
U.S. government and agency notes		5			5		—			—			—			—		—			—
Other fixed income securities		3			3		—			—
EETC		65			—		—			65			66			—		—			66
Fuel derivatives, net		138			—		138			—			277			—		277			—
	Continental Successor
Cash and cash equivalents	$	3,406		$	3,406	$	—		$	—		$	3,398		$	3,398	$	—		$	—
Short-term investments:
Auction rate securities		121			—		—			121			119			—		—			119
CDARS		196			196		—			—			45			45		—			—
Asset-backed securities		201			201		—			—			258			258		—			—
Corporate debt		273			273		—			—			135			135		—			—
U.S. government and agency notes		41			41		—			—			39			39		—			—
Other fixed income securities		72			72		—			—			15			15		—			—
Fuel derivatives, net		53			—		53			—			98			—		98			—
Foreign currency derivatives		(3	)		—		(3	)		—			(7	)		—		(7	)		—
Restricted cash		160			160		—			—			160			160		—			—
Convertible debt derivative asset		251			—		—			251			286			—		—			286
Convertible debt option liability		(143	)		—		—			(143	)		(164	)		—		—			(164	)

Activity for Level Three Financial Assets and Financial Liabilities

	Three Months Ended June 30,
		2011				2010
UAL (a)		Auction  Rate Securities		EETC		EETC
Balance at March 31		$	120	$	63	$	58
Settlements			—		—		—
Reported in earnings - unrealized			1		—		—
Reported in other comprehensive income			—		2		3
Balance at June 30		$	121	$	65	$	61

(a) For 2010, amounts also represent United. For 2011, United's only Level Three recurring measurements are the above EETCs.

	Six Months Ended June 30,
	2011					2010
UAL (a)	Auction  Rate Securities		EETC			EETC
Balance at January 1	$	119	$	66		$	51
Settlements		—		(2	)		(2	)
Reported in earnings - unrealized		1		—			—
Reported in other comprehensive income		1		1			12
Balance at June 30	$	121	$	65		$	61

(a) For 2010, amounts also represent United. For 2011, United's only Level Three recurring measurements are the above EETCs.

Carrying Values and Estimated Fair Values of Financial Instruments

	June 30, 2011				December 31, 2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
UAL debt	$	12,490	$	13,304	$	13,845	$	14,995
United debt		6,103		6,216		7,026		7,350
Continental Successor debt		5,973		6,133		6,401		6,663

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Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2011

Schedule of Derivative Assets

Derivatives designated as hedges		June 30, 2011						December 31, 2010
	Balance Sheet Location	UAL		United		Continental Successor		UAL		United		Continental Successor
Assets:
Fuel contracts due within one year	Receivables	$	194	$	141	$	53	$	375	$	277	$	98
Liabilities:
Fuel contracts due within one year	Other Current Liabilities	$	3	$	3	$	—	$	—	$	—	$	—

Schedule of Gain Loss on Derivative Instruments

Fuel contracts	Amount of Gain (Loss) Recognized in AOCI on  Derivatives (Effective portion)						Gain (Loss) Reclassified from AOCI into Income (Fuel Expense) (Effective Portion)					Amount of Gain  (Loss) Recognized in Income  (Nonoperating Expense) (Ineffective Portion)
	Three Months Ended June 30,						Three Months Ended June 30,					Three Months Ended June 30,
	2011			2010			2011		2010			2011			2010
UAL	$	(231	)	$	(146	)	$	278	$	—		$	(34	)	$	(3	)
United		(149	)		(146	)		213		—			(7	)		(3	)
Continental (a)		(82	)		(53	)		65		(9	)		(27	)		(2	)

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

Fuel contracts	Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective portion)					Gain (Loss) Reclassified from AOCI into Income (Fuel Expense) (Effective Portion)					Amount of Gain (Loss) Recognized in Income (Nonoperating Expense) (Ineffective Portion)
	Six Months Ended June 30,					Six Months Ended June 30,					Six Months Ended June 30,
	2011		2010			2011		2010			2011			2010
UAL	$	293	$	(146	)	$	432	$	—		$	(31	)	$	(3	)
United		236		(146	)		338		—			(5	)		(3	)
Continental (a)		57		(37	)		94		(6	)		(26	)		(2	)

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

Schedule of Credit Risk Derivatives

	UAL			United			Continental
Net derivative asset with counterparties	$	191		$	138		$	53
Collateral held by the Company (a)		(31	)		(31	)		—
Collateral posted by the Company		—			—			—
Potential loss related to the failure of the Company's counterparties to perform (b)		160			107			53

(a) Classified as an other current liability.

(b) Based on fair value at June 30, 2011 and collateral held.

Second Half Of 2011 [Member]

Description of Derivative Instruments

	Maximum Price					Minimum Price
	% of Expected Consumption			Weighted Average  Price (per gallon)		% of Expected Consumption			Weighted Average  Price (per gallon)
UAL
Heating oil collars		15	%	$	3.32		15	%	$	2.65
Heating oil call options		4			2.41		N/A			N/A
Heating oil swaps		3			2.24		3			2.24
West Texas Intermediate ("WTI") crude oil call options		13			2.32		N/A			N/A
WTI crude oil swaps		11			2.17		11			2.17
Aircraft fuel call options		4			3.15		N/A			N/A
Aircraft fuel swaps		1			3.14		1			3.14
Total		51	%				30	%

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Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2011

Comprehensive Income (Loss)

Schedule of Comprehensive Income (Loss)

NOTE 7 - COMPREHENSIVE INCOME (LOSS)

Total comprehensive income (loss) for the three and six months ended June 30 included the following (in millions):

	UAL						United						Continental Successor (a)			Continental Predecessor (a)
Three Months Ended June 30,	2011			2010			2011			2010			2011			2010
Net income	$	538		$	273		$	281		$	281		$	262		$	233
Other comprehensive income (loss) adjustments, before tax:
Investments		2			3			2			3			—			—
Fuel derivative financial instruments:
Reclassification into earnings		(278	)		—			(213	)		—			(65	)		9
Change in fair value		(231	)		(146	)		(149	)		(146	)		(82	)		(53	)
Employee benefit plans:
Amortization of net actuarial (gains) losses		(8	)		(3	)		(1	)		(3	)		(7	)		21
Amortization of prior service cost		—			—			—			—			—			8
Other		1			(3	)		—			(4	)		1			(3	)
Comprehensive loss adjustments, before tax		(514	)		(149	)		(361	)		(150	)		(153	)		(18	)
Total comprehensive income (loss) (a)	$	24		$	124		$	(80	)	$	131		$	109		$	215

(a) There were no income tax effects for either period due to the recording of valuation allowance.

	UAL						United						Continental Successor (a)			Continental Predecessor (a)
Six Months Ended June 30,	2011			2010			2011			2010			2011			2010
Net income	$	325		$	191		$	121		$	207		$	205		$	87
Other comprehensive income (loss) adjustments, before tax:
Investments		3			12			1			12			2			—
Fuel derivative financial instruments:
Reclassification into earnings		(432	)		—			(338	)		—			(94	)		6
Change in fair value		293			(146	)		236			(146	)		57			(37	)
Employee benefit plans:
Amortization of net actuarial (gains) losses		(13	)		(6	)		(1	)		(6	)		(12	)		41
Amortization of prior service cost		—			—			—			—			—			16
Other		4			(4	)		1			(4	)		3			(3	)
Comprehensive income (loss) adjustments, before tax		(145	)		(144	)		(101	)		(144	)		(44	)		23
Total comprehensive income (a)	$	180		$	47		$	20		$	63		$	161		$	110

(a) There were no income tax effects for either period due to the recording of valuation allowance.

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies

Schedule of Acquisition of Aircrafts and Related Spare Engines

	UAL		United		Continental Successor
Last Six Months of 2011	$	517	$	178	$	339
2012		1,451		145		1,306
2013		925		59		866
2014		1,089		96		993
2015		1,533		377		1,156
After 2015		7,503		6,837		666
	$	13,018	$	7,692	$	5,326

Schedule of Outstanding Debt

	UAL		United		Continental
Floating rate debt (a)	$	3,182	$	2,250	$	932
Fixed rate debt (a)		444		213		231
Carrying value of loans/leases from non-U.S. entities (b)		3,499		2,461		1,038

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Special Items (Tables)

6 Months Ended

Jun. 30, 2011

Jun. 30, 2010

Special Items

Revenue Adjustment in Accordance with ASU 2009-13

	UAL		United		Continental
Special revenue item	$	107	$	88	$	19

Components of Special Charges

	Three Months Ended June 30,						Six Months Ended June 30,
2011	UAL		United		Continental Successor		UAL			United		Continental Successor
Integration-related costs	$	145	$	90	$	55	$	224		$	164	$	60
Aircraft-related charges (gains), net		1		—		1		(1	)		—		(1	)
Total	$	146	$	90	$	56	$	223		$	164	$	59
2010	UAL		United		Continental Predecessor		UAL			United		Continental Predecessor
Aircraft-related charges, net	$	73	$	73	$	—	$	90		$	90	$	6
Merger-related costs		28		28		18		28			28		18
Other		5		5		6		6			6		10
Total	$	106	$	106	$	24	$	124		$	124	$	34

Summary of Accrual Activity

2011 Activity	Severance /  Medical Costs			Permanently Grounded Aircraft
UAL
Balance at December 31, 2010	$	102		$	41
Increase (decrease) in accrual		(4	)		1
Payments		(28	)		(8	)
Balance at June 30, 2011	$	70		$	34
United
Balance at December 31, 2010	$	42		$	41
Increase in accrual		15			1
Payments		(17	)		(8	)
Balance at June 30, 2011	$	40		$	34
Continental - Successor
Balance at December 31, 2010	$	60
Decrease in accrual		(19	)
Payments		(11	)
Balance at June 30, 2011	$	30

2010 Activity	Severance/ Medical Costs			Permanently Grounded Aircraft
UAL
Balance at December 31, 2009	$	45		$	83
Payments		(22	)		(24	)
Balance at June 30, 2010	$	23		$	59
United
Balance at December 31, 2009	$	45		$	83
Payments		(22	)		(24	)
Balance at June 30, 2010	$	23		$	59
Continental - Predecessor
Balance at December 31, 2009	$	14
Increase in accrual		2
Payments		(10	)
Balance at June 30, 2010	$	6

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New Accounting Pronouncements (Details) (USD $) In Millions, except Per Share data	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011
Revenue	$ 106	$ 161
Special revenue item	107	107
Per basic share	$ 0.32	$ 0.49
Per diluted share	$ 0.27	$ 0.42
Special Revenue Item [Member]
Special revenue item	107	107
Per basic share	$ 0.32	$ 0.33
Per diluted share	$ 0.27	$ 0.28
Co-Brand Agreement [Member]
Expected increase to other sales revenue per quarter		70
Quarterly reduction in passenger revenue for remainder of year		$ 20

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Earnings Per Share (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011
UAL 6% Senior Convertible Notes [Member]
Interest rate of senior notes		6.00%
Expiration date		2031
Principal amount of senior notes	$ 633	$ 633
Redeemed rate of senior note		100.00%
UAL 4.5% Senior Limited Subordination Convertible Notes [Member]
Interest rate of senior notes		4.50%
Expiration date		2021
Principal amount of senior notes	726	726
Repurchase of senior notes	$ 570

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Earnings Per Share (Computation of Earnings per Share) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Net income	$ 538	$ 273	$ 325	$ 191
Less: Income allocable to participating securities	(2)		(1)
Earnings available to common stockholders	536	273	324	191
Basic weighted average shares outstanding	330	168	329	168
Earnings per share, basic	$ 1.63	$ 1.62	$ 0.98	$ 1.14
Earnings available to common stockholders including the effect of dilutive securities	558	303	337	201
Diluted weighted average shares outstanding	400	235	383	209
Earnings per share, diluted	$ 1.39	$ 1.29	$ 0.88	$ 0.96
UAL 4.5% Senior Limited Subordination Convertible Notes [Member]
Interest rate of senior notes			4.50%
Effect of convertible notes on basic earnings per share, amount	11	21
Effect of convertible notes on basic earnings per share, shares	13	22
Dilutive shares excluded from diluted per share amounts			18	22
Continental 4.5% Convertible Notes [Member]
Effect of convertible notes on basic earnings per share, amount	2		4
Effect of convertible notes on basic earnings per share, shares	12		12
UAL 5% Senior Convertible Notes [Member]
Interest rate of senior notes			5.00%
Effect of convertible notes on basic earnings per share, amount		4
Effect of convertible notes on basic earnings per share, shares		3
Dilutive shares excluded from diluted per share amounts				3
Continental 6% Convertible Junior Subordinated Debentures [Member]
Effect of convertible notes on basic earnings per share, amount	4
Effect of convertible notes on basic earnings per share, shares	4
Dilutive shares excluded from diluted per share amounts			4
UAL 6% Senior Convertible Notes [Member]
Interest rate of senior notes			6.00%
Effect of convertible notes on basic earnings per share, amount	$ 5	$ 5	$ 9	$ 10
Effect of convertible notes on basic earnings per share, shares	40	40	40	40
Restricted Shares And Units And Stock Options [Member]
Effect of employee stock options	1	2	2	1
Restricted Stock And Stock Options [Member]
Dilutive shares excluded from diluted per share amounts	7	5	6	6

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Income Taxes (Details)	6 Months Ended
	Jun. 30, 2011
Income Taxes
Federal statutory interest rate	35.00%

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Employee Benefit Plans (Narrative) (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended	6 Months Ended
	Feb. 28, 2011	Jun. 30, 2011	Jun. 30, 2011
Restricted stock, vesting period, in years	three
Performance-based restricted stock units	0.5
Percentage of pre-tax earnings paid for profit sharing plan			15.00%
Stock based compensation program expense threshold			$ 10
Profit sharing and related payroll tax expense		$ 90	$ 90
Restricted Shares And Units And Stock Options [Member]
Performance-based restricted stock units	3.0
Performance-Based Restricted Stock Units RSU at the Target Performance Level [Member]
Performance-based restricted stock units	1.9
Performance-Based Restricted Stock Units RSU Based on Return on Invested Capital [Member]
Performance-based restricted stock units	1.2
Performance-Based Restricted Stock Units RSU Based on Merger-Related Goals [Member]
Performance-based restricted stock units	1.8

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Consolidated Balance Sheets (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 7,519	$ 8,069
Short-term investments	1,060	611
Total unrestricted cash, cash equivalents and short-term investments	8,579	8,680
Restricted cash	46	37
Receivables, less allowance for doubtful accounts	1,863	1,613
Aircraft fuel, spare parts and supplies, less obsolescence allowance	508	466
Deferred income taxes	622	591
Prepaid expenses and other	773	658
Total current assets	12,391	12,045
Operating property and equipment: Owned -
Flight equipment	15,618	15,181
Other property and equipment	2,993	2,890
Operating property and equipment - owned, gross	18,611	18,071
Less - accumulated depreciation and amortization	(3,421)	(2,858)
Operating property and equipment - owned, net	15,190	15,213
Purchase deposits for flight equipment	304	230
Operating property and equipment: Capital leases -
Flight equipment	1,474	1,741
Other property and equipment	221	217
Operating property and equipment - capital leases, gross	1,695	1,958
Less - accumulated amortization	(499)	(456)
Operating property and equipment - capital leases, net	1,196	1,502
Total property, plant, and equipment, net	16,690	16,945
Other assets:
Goodwill	4,523	4,523
Intangibles, less accumulated amortization	4,815	4,917
Restricted cash, cash equivalents and investments	358	350
Investments	101	103
Other, net	816	715
Other assets total	10,613	10,608
Total assets	39,694	39,598
Current liabilities:
Advance ticket sales	4,497	2,998
Frequent flyer deferred revenue	2,491	2,582
Accounts payable	1,999	1,805
Accrued salaries and benefits	1,229	1,470
Current maturities of long-term debt	1,389	2,411
Current maturities of capital leases	138	252
Other	1,019	1,127
Total current liabilities	12,762	12,645
Long-term debt	11,101	11,434
Long-term obligations under capital leases	970	1,036
Other liabilities and deferred credits:
Frequent flyer deferred revenue	3,355	3,491
Postretirement benefit liability	2,383	2,344
Pension liability	1,458	1,473
Advanced purchase of miles	1,545	1,159
Deferred income taxes	1,618	1,585
Lease fair value adjustment, net	1,246	1,371
Other	1,314	1,333
Total non-current liabilities	12,919	12,756
Commitments and contingencies
Stockholders' equity:
Preferred stock
Common stock	3	3
Additional capital invested	7,106	7,071
Retained earnings (accumulated deficit)	(5,378)	(5,703)
Stock held in treasury, at cost	(31)	(31)
Accumulated other comprehensive income (loss)	242	387
Total stockholders' equity (deficit)	1,942	1,727
Total liabilities and stockholders' equity (deficit)	39,694	39,598
Continental Airlines Inc [Member] | Successor [Member]
Current assets:
Cash and cash equivalents	3,406	3,398
Short-term investments	904	611
Total unrestricted cash, cash equivalents and short-term investments	4,310	4,009
Receivables, less allowance for doubtful accounts	760	609
Aircraft fuel, spare parts and supplies, less obsolescence allowance	265	246
Receivables from related parties		3
Deferred income taxes	273	225
Prepaid expenses and other	262	185
Total current assets	5,870	5,277
Operating property and equipment: Owned -
Flight equipment	6,597	6,463
Other property and equipment	832	804
Operating property and equipment - owned, gross	7,429	7,267
Less - accumulated depreciation and amortization	(389)	(141)
Operating property and equipment - owned, net	7,040	7,126
Purchase deposits for flight equipment	250	178
Operating property and equipment: Capital leases -
Other property and equipment	168	168
Less - accumulated amortization	(10)	(3)
Operating property and equipment - capital leases, net	158	165
Total property, plant, and equipment, net	7,448	7,469
Other assets:
Goodwill	4,523	4,523
Intangibles, less accumulated amortization	2,504	2,575
Restricted cash, cash equivalents and investments	160	160
Other, net	413	375
Other assets total	7,600	7,633
Total assets	20,918	20,379
Current liabilities:
Advance ticket sales	2,046	1,463
Frequent flyer deferred revenue	951	879
Accounts payable	840	902
Accrued salaries and benefits	457	532
Current maturities of long-term debt	754	865
Current maturities of capital leases	3	3
Related party payables	42
Other	285	236
Total current liabilities	5,378	4,880
Long-term debt	5,219	5,536
Long-term obligations under capital leases	178	178
Other liabilities and deferred credits:
Frequent flyer deferred revenue	1,170	1,170
Postretirement benefit liability	262	253
Pension liability	1,357	1,372
Lease fair value adjustment, net	1,250	1,374
Advanced purchase of miles	270
Deferred income taxes	834	784
Other	500	522
Total non-current liabilities	5,643	5,475
Commitments and contingencies
Stockholders' equity:
Common stock
Additional capital invested	4,144	4,115
Retained earnings (accumulated deficit)	110	(95)
Accumulated other comprehensive income (loss)	246	290
Total stockholders' equity (deficit)	4,500	4,310
Total liabilities and stockholders' equity (deficit)	20,918	20,379
United Airlines Inc [Member]
Current assets:
Cash and cash equivalents	4,107	4,665
Short-term investments	155
Total unrestricted cash, cash equivalents and short-term investments	4,262	4,665
Restricted cash	46	37
Receivables, less allowance for doubtful accounts	1,103	1,004
Aircraft fuel, spare parts and supplies, less obsolescence allowance	243	321
Receivables from related parties	193	135
Deferred income taxes	350	373
Prepaid expenses and other	513	366
Total current assets	6,710	6,901
Operating property and equipment: Owned -
Flight equipment	9,021	8,718
Other property and equipment	2,161	2,086
Operating property and equipment - owned, gross	11,182	10,804
Less - accumulated depreciation and amortization	(3,032)	(2,717)
Operating property and equipment - owned, net	8,150	8,087
Purchase deposits for flight equipment	54	51
Operating property and equipment: Capital leases -
Flight equipment	1,474	1,741
Other property and equipment	52	49
Operating property and equipment - capital leases, gross	1,526	1,790
Less - accumulated amortization	(489)	(453)
Operating property and equipment - capital leases, net	1,037	1,337
Total property, plant, and equipment, net	9,241	9,475
Other assets:
Intangibles, less accumulated amortization	2,313	2,343
Restricted cash, cash equivalents and investments	198	190
Investments	96	97
Other, net	602	622
Other assets total	3,209	3,252
Total assets	19,160	19,628
Current liabilities:
Advance ticket sales	2,451	1,536
Frequent flyer deferred revenue	1,540	1,703
Accounts payable	1,161	907
Accrued salaries and benefits	772	938
Current maturities of long-term debt	635	1,546
Current maturities of capital leases	135	249
Related party payables	61	63
Other	751	950
Total current liabilities	7,506	7,892
Long-term debt	5,468	5,480
Long-term obligations under capital leases	792	858
Other liabilities and deferred credits:
Frequent flyer deferred revenue	2,184	2,321
Postretirement benefit liability	2,121	2,091
Pension liability	100	101
Advanced purchase of miles	1,275	1,159
Deferred income taxes	708	731
Other	956	972
Total non-current liabilities	7,344	7,375
Commitments and contingencies
Stockholders' equity:
Common stock
Additional capital invested	3,428	3,421
Retained earnings (accumulated deficit)	(5,368)	(5,489)
Accumulated other comprehensive income (loss)	(10)	91
Total stockholders' equity (deficit)	(1,950)	(1,977)
Total liabilities and stockholders' equity (deficit)	$ 19,160	$ 19,628

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Employee Benefit Plans (Components of Net Periodic Benefit Cost) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Pension Benefits [Member]
Service cost	$ 23	$ 2	$ 44	$ 3
Interest cost	45	3	89	5
Expected return on plan assets	(35)	(3)	(69)	(5)
Amortization of unrecognized gain and prior service cost	(7)	(1)	(12)	(1)
Net periodic benefit costs	26	1	52	2
Other Postretirement Benefits [Member]
Service cost	12	8	24	15
Interest cost	32	29	63	58
Expected return on plan assets		(1)	(1)	(1)
Amortization of unrecognized gain and prior service cost	(1)	(3)	(1)	(6)
Net periodic benefit costs	$ 43	$ 33	$ 85	$ 66

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Employee Benefit Plans (Share-Based Compensation Expense) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Employee Benefit Plans
Share-based compensation expense	$ 14	$ 8	$ 27	$ 21
Unrecognized share-based compensation expense	$ 63		$ 63		$ 43

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Financial Instruments and Fair Value Measurements (Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) (USD $) In Millions	Jun. 30, 2011		Dec. 31, 2010
Restricted Cash [Member]
Restricted cash	$ 160	[1]	$ 160	[1]
Restricted Cash [Member] | Level 1 [Member]
Restricted cash	160	[1]	160	[1]
Restricted Cash [Member] | Level 2 [Member]
Restricted cash		[1]		[1]
Restricted Cash [Member] | Level 3 [Member]
Restricted cash		[1]		[1]
Foreign Currency Derivatives [Member]
Foreign currency derivatives	(3)		(7)
Foreign Currency Derivatives [Member] | Level 2 [Member]
Foreign currency derivatives	(3)		(7)
Cash and Cash Equivalents [Member]
Cash and cash equivalents	7,519		8,069
Cash and Cash Equivalents [Member] | Level 1 [Member]
Cash and cash equivalents	7,519		8,069
Fuel Derivatives, Net [Member]
Fuel derivatives, net	191		375
Fuel Derivatives, Net [Member] | Level 2 [Member]
Fuel derivatives, net	191		375
EETC [Member]
EETC	65		66
EETC [Member] | Level 3 [Member]
EETC	65		66
CDARS [Member]
Short-term investments	196		45
CDARS [Member] | Level 1 [Member]
Short-term investments	196		45
Other Fixed Income Securities [Member]
Short-term investments	75		15
Other Fixed Income Securities [Member] | Level 1 [Member]
Short-term investments	75		15
U.S. Government and Agency Notes [Member]
Short-term investments	47		39
U.S. Government and Agency Notes [Member] | Level 1 [Member]
Short-term investments	47		39
Corporate Debt [Member]
Short-term investments	397		135
Corporate Debt [Member] | Level 1 [Member]
Short-term investments	397		135
Auction Rate Securities [Member]
Short-term investments	121		119
Auction Rate Securities [Member] | Level 3 [Member]
Short-term investments	121		119
Asset-backed Securities [Member]
Short-term investments	224		258
Asset-backed Securities [Member] | Level 1 [Member]
Short-term investments	$ 224		$ 258

[1] United's restricted cash is recorded at cost.

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Financial Instruments and Fair Value Measurements (Activity for Level Three Financial Assets and Financial Liabilities) (Details) (USD $) In Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2011		Jun. 30, 2010		Jun. 30, 2011		Jun. 30, 2010
EETC [Member]
Beginning Balance	$ 63	[1]	$ 58	[1]	$ 66	[1]	$ 51	[1]
Settlements		[1]		[1]	(2)	[1]	(2)	[1]
Reported in other comprehensive income (loss)	2	[1]	3	[1]	1	[1]	12	[1]
Ending Balance	65	[1]	61	[1]	65	[1]	61	[1]
Auction Rate Securities [Member]
Beginning Balance	120	[1]			119	[1]
Settlements		[1]
Reported in earnings - unrealized	1	[1]			1	[1]
Reported in other comprehensive income (loss)		[1]			1	[1]
Ending Balance	$ 121	[1]			$ 121	[1]

[1] For 2010, amounts also represent United. For 2011, United's only Level Three recurring measurements are the above EETCs.

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Financial Instruments and Fair Value Measurements (Carrying Values and Estimated Fair Values of Financial Instruments) (Details) (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Financial Instruments and Fair Value Measurements
Carrying Amount	$ 12,490	$ 13,845
Fair Value	$ 13,304	$ 14,995

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Hedging Activities (Description of Derivative Instruments) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Nonoperating income (expense)	$ (266)	$ (170)	$ (511)	$ (327)
Second Half Of 2011 [Member] | Maximum [Member]
Percentage of Expected Consumption	51.00%		51.00%
Second Half Of 2011 [Member] | Maximum [Member] | Aircraft Fuel Swaps [Member]
Percentage of Expected Consumption	1.00%		1.00%
Weighted Average Price (per gallon)	3.14		3.14
Second Half Of 2011 [Member] | Maximum [Member] | Aircraft Fuel Call Options [Member]
Percentage of Expected Consumption	4.00%		4.00%
Weighted Average Price (per gallon)	3.15		3.15
Second Half Of 2011 [Member] | Maximum [Member] | Heating Oil Swaps [Member]
Percentage of Expected Consumption	3.00%		3.00%
Weighted Average Price (per gallon)	2.24		2.24
Second Half Of 2011 [Member] | Maximum [Member] | Heating Oil Call Options [Member]
Percentage of Expected Consumption	4.00%		4.00%
Weighted Average Price (per gallon)	2.41		2.41
Second Half Of 2011 [Member] | Maximum [Member] | Heating Oil Collars [Member]
Percentage of Expected Consumption	15.00%		15.00%
Weighted Average Price (per gallon)	3.32		3.32
Second Half Of 2011 [Member] | Maximum [Member] | WTI Crude Oil Swaps [Member]
Percentage of Expected Consumption	11.00%		11.00%
Weighted Average Price (per gallon)	2.17		2.17
Second Half Of 2011 [Member] | Maximum [Member] | WTI Crude Oil Call Options [Member]
Percentage of Expected Consumption	13.00%		13.00%
Weighted Average Price (per gallon)	2.32		2.32
Second Half Of 2011 [Member] | Minimum [Member]
Percentage of Expected Consumption	30.00%		30.00%
Weighted Average Price (per gallon)
Second Half Of 2011 [Member] | Minimum [Member] | Aircraft Fuel Swaps [Member]
Percentage of Expected Consumption	1.00%		1.00%
Weighted Average Price (per gallon)	3.14		3.14
Second Half Of 2011 [Member] | Minimum [Member] | Aircraft Fuel Call Options [Member]
Percentage of Expected Consumption
Weighted Average Price (per gallon)
Second Half Of 2011 [Member] | Minimum [Member] | Heating Oil Swaps [Member]
Percentage of Expected Consumption	3.00%		3.00%
Weighted Average Price (per gallon)	2.24		2.24
Second Half Of 2011 [Member] | Minimum [Member] | Heating Oil Call Options [Member]
Percentage of Expected Consumption
Weighted Average Price (per gallon)
Second Half Of 2011 [Member] | Minimum [Member] | Heating Oil Collars [Member]
Percentage of Expected Consumption	15.00%		15.00%
Weighted Average Price (per gallon)	2.65		2.65
Second Half Of 2011 [Member] | Minimum [Member] | WTI Crude Oil Swaps [Member]
Percentage of Expected Consumption	11.00%		11.00%
Weighted Average Price (per gallon)	2.17		2.17
Second Half Of 2011 [Member] | Minimum [Member] | WTI Crude Oil Call Options [Member]
Percentage of Expected Consumption
Weighted Average Price (per gallon)
First Half Of 2012 [Member]
Hedging percentage of fuel consumption			13.00%
Aircraft Fuel Hedges [Member]
Nonoperating income (expense)	$ (34)		$ (31)

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Hedging Activities (Schedule of Derivative Assets) (Details) (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Receivables [Member]
Fuel contracts due within one year, assets	$ 194	$ 375
Other Current Liabilities [Member]
Fuel contracts due within one year, liabilities	$ 3

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Hedging Activities (Schedule of Gain Loss on Derivative Instruments) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Hedging Activities
Amount of Gain Recognized in AOCI on Derivatives (Effective portion)	$ (231)	$ (146)	$ 293	$ (146)
Gain Reclassified from AOCI into Income (Fuel Expense) (Effective Portion)	278		432
Amount of Gain Recognized in Income (Nonoperating Expense)(Ineffective Portion)	$ (34)	$ (3)	$ (31)	$ (3)

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Hedging Activities (Schedule of Credit Risk Derivatives) (Details) (USD $) In Millions	Jun. 30, 2011
Hedging Activities
Net derivative asset with counterparties	$ 191
Collateral held by the Company	(31)	[1]
Collateral posted by the Company
Potential loss related to the failure of the Company's counterparties to perform	$ 160	[2]

[1] Based on fair value at June 30, 2011 and collateral held.

[2] Classified as an other current liability.

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Comprehensive Income (Loss) (Details) (USD $) In Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2011		Jun. 30, 2010		Jun. 30, 2011		Jun. 30, 2010
Comprehensive Income (Loss)
Net income	$ 538		$ 273		$ 325		$ 191
Investments	2		3		3		12
Reclassification into earnings	(278)				(432)
Change in fair value	(231)		(146)		293		(146)
Amortization of net actuarial (gains) losses	(8)		(3)		(13)		(6)
Other	1		(3)		4		(4)
Comprehensive income (loss) adjustments, before tax	(514)		(149)		(145)		(144)
Total comprehensive income (loss)	$ 24	[1]	$ 124	[1]	$ 180	[1]	$ 47	[1]

[1] There were no income tax effects for either period due to the recording of valuation allowance.

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Consolidated Balance Sheets (Parenthetical) (USD $) In Millions, except Share data	Jun. 30, 2011	Dec. 31, 2010
Receivables, allowance for doubtful accounts	$ 6	$ 6
Aircraft fuel, spare parts and supplies, obsolescence allowance	74	64
Intangibles, accumulated amortization	587	504
Common stock, par value	$ 0.01	$ 0.01
Common shares, authorized	1,000,000,000	1,000,000,000
Common shares, outstanding	330,766,357	327,922,565
United Airlines Inc [Member]
Receivables, allowance for doubtful accounts	5	5
Aircraft fuel, spare parts and supplies, obsolescence allowance	67	61
Intangibles, accumulated amortization	503	473
Common stock, par value	$ 5	$ 5
Common shares, authorized	1,000	1,000
Common shares, outstanding	205	205
Continental Airlines Inc [Member]
Receivables, allowance for doubtful accounts	1	1
Aircraft fuel, spare parts and supplies, obsolescence allowance	7	3
Intangibles, accumulated amortization	$ 84	$ 31
Common stock, par value	$ 0.01	$ 0.01
Common shares, authorized	1,000	1,000
Common shares, outstanding	1,000	1,000

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Commitments and Contingencies (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Decrease in passenger revenue	$ 8,606,000,000	$ 4,494,000,000	$ 15,793,000,000	$ 8,151,000,000
Contingent senior unsecured notes	500,000,000		500,000,000
Contingent senior notes interest rate	8.00%		8.00%
Maximum number of tranches			8
Equal tranches amount			62,500,000
Maximum tranche issue period, days			45
Minimum EBITDAR over the prior twelve months			3,500,000,000
Present value of obligation recorded as liability	49,000,000
Unrestricted cash balance under credit card processing agreement			3,500,000,000
Required reserve under credit card processing agreement			25,000,000
Number of employees	83,000		83,000
Percentage of employees represented by various U.S. labor organizations			74.00%
Redevelopment project at Bush Intercontinental Airport, cost			1,000,000,000
Bonds issued by City of Houston to fund phase one of redevelopment project	100,000,000		100,000,000
Maximum [Member]
Estimated time to complete construction on redevelopment project, in years			10
Minimum [Member]
Estimated time to complete construction on redevelopment project, in years			7
Trans-Atlantic Joint Venture [Member]
Decrease in passenger revenue			$ (44,000,000)

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Commitments and Contingencies (Schedule of Outstanding Debt) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2011
Floating Rate Debt [Member]
Outstanding debt	$ 3,182	[1]
Remaining terms of outstanding debt in years	9
Fixed Rate Debt [Member]
Outstanding debt	444	[1]
Carrying Value of Loans/Leases from Non-U.S. Entities [Member]
Outstanding debt	$ 3,499	[2]
Remaining terms of outstanding debt in years	9

[1] Remaining terms of up to nine years, subject to these increased cost provisions.

[2] Remaining terms of up to 9 years; the Company bears 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 customary exclusions.

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Debt and Advanced Purchase of Miles (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended			6 Months Ended			3 Months Ended			6 Months Ended
	Jun. 30, 2011	Jul. 31, 2011	Dec. 31, 2010	Jun. 30, 2011 Continental Airlines Inc [Member]	Jun. 30, 2011 United Airlines Inc [Member]	Dec. 31, 2010 United Airlines Inc [Member]	Mar. 31, 2011 UAL 5% Senior Convertible Notes [Member]	Jun. 30, 2011 UAL 4.5% Senior Limited Subordination Convertible Notes [Member]	Jun. 30, 2011 Contingent Senior Unsecured Notes PBGC [Member]	Jun. 30, 2011 Contingent Senior Unsecured Notes PBGC [Member]	Jun. 30, 2011 Continental 6.750% Senior Secured Notes [Member]
Repurchase of senior notes							$ 150	$ 570
Interest rate on notes	8.00%						5.00%	4.50%	8.00%	8.00%	6.75%
Due date of debt instruments							2021	2021		February 14, 2012	2015
Balance of note payable after decrease in long-term debt				210
Increase in advanced purchase of miles	270			270
Increase in other assets	60			60
Maximum obligation under the Co-Brand Agreement secured by junior lien					850
Principal amount of note	500							726
Outstanding principal amount classified as long-term debt								156
UAL's obligation to issue notes to the PBGC, principal									62.5
Net present value of the non-cash obligation, recorded as a liability	49				49				49
Advanced purchase of miles	$ 1,545	$ 165	$ 1,159		$ 1,275	$ 1,159

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Special Items (Components of Special Items) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Special revenue item	$ 107		$ 107
Integration-related costs	145		224
Aircraft-related charges (gains), net	1	73	(1)	90
Merger-related costs		28		28
Other		5		6
Total	146	106	223	124
Interest rate on notes	8.00%		8.00%
Net present value of the non-cash obligation, recorded as a liability			49
Contingent Senior Unsecured Notes PBGC [Member]
Interest rate on notes	8.00%		8.00%
UAL's obligation to issue notes to the PBGC, principal	62.5
Net present value of the non-cash obligation, recorded as a liability	$ 49
Boeing 737-500 Aircraft [Member]
Number of aircraft sold				2

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Special Items (Summary of Accrual Activity) (Details) (USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Increase (decrease) in accrual	$ 224	$ (90)
Severance/ Medical Costs [Member]
Balance	102	45
Increase (decrease) in accrual	(4)
Payments	(28)	(22)
Balance	70	23
Permanently Grounded Aircraft [Member]
Balance	41	83
Increase (decrease) in accrual	1
Payments	(8)	(24)
Balance	$ 34	$ 59

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Subsequent Events (Narrative) (Details) (USD $) In Millions	1 Months Ended
	Jul. 31, 2011
Subsequent Events
Repayment and extinguishment of debt	$ 106
Collateral pledged for debt	21 aircraft

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Condensed Statements of Consolidated Cash Flows (USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash Flows from Operating Activities:
Net income	$ 325	$ 191
Adjustments to reconcile net income to net cash provided (used) by operating activities -
Depreciation and amortization	773	444
Amortization of debt and lease fair value adjustment	(119)	8
Special items, non-cash portion (Notes 1 and 10)	(48)	90
Increase in advance ticket sales	1,499	808
Increase (decrease) in frequent flyer deferred revenue and advanced purchase of miles	(89)	(60)
Increase in receivables	(387)	(324)
Increase (decrease) in accounts payable	202	123
Increase in other current assets	(251)	(83)
Increase (decrease) in other accrued liabilities	(224)	90
Net change in fuel hedge cash collateral	(29)	4
Other, net	106	65
Net cash provided by operating activities	1,758	1,356
Cash Flows from Investing Activities:
Capital expenditures	(350)	(124)
Aircraft purchase deposits paid, net	(70)	(42)
(Increase) decrease in restricted cash	(20)	43
Proceeds from sale of property and equipment	54	25
Purchases of short-term investments, net	(443)
Other, net		3
Net cash used in investing activities	(829)	(95)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt	142	1,995
Payments of long-term debt	(1,477)	(1,274)
Principal payments under capital leases	(176)	(93)
Other, net	32	(25)
Net cash provided by (used in) financing activities	(1,479)	603
Increase (decrease) in cash and cash equivalents during the period	(550)	1,864
Cash and cash equivalents at beginning of the period	8,069	3,042
Cash and cash equivalents at end of the period	7,519	4,906
Investing and Financing Activities Not Affecting Cash:
Property and equipment acquired through the issuance of debt	97
Reclassification of debt to advanced purchases of miles	(270)
Reclassification of debt discount to other assets	60
8% Contingent Senior Unsecured Notes, net of discount	49
Interest paid in kind on UAL 6% Senior Notes	18	17
Continental Airlines Inc [Member] | Successor [Member]
Cash Flows from Operating Activities:
Net income	205
Adjustments to reconcile net income to net cash provided (used) by operating activities -
Depreciation and amortization	317
Amortization of debt and lease fair value adjustment	(127)
Special items, non-cash portion (Notes 1 and 10)	(20)
Increase in advance ticket sales	583
Increase (decrease) in frequent flyer deferred revenue and advanced purchase of miles	91
Increase in receivables	(185)
Increase (decrease) in accounts payable	(11)
Increase in other current assets	(133)
Increase (decrease) in other accrued liabilities	(34)
Other, net	30
Net cash provided by operating activities	716
Cash Flows from Investing Activities:
Capital expenditures	(127)
Aircraft purchase deposits paid, net	(67)
Proceeds from sale of property and equipment	52
Purchases of short-term investments, net	(291)
Other, net	1
Net cash used in investing activities	(432)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt	142
Payments of long-term debt	(440)
Other, net	22
Net cash provided by (used in) financing activities	(276)
Increase (decrease) in cash and cash equivalents during the period	8
Cash and cash equivalents at beginning of the period	3,398
Cash and cash equivalents at end of the period	3,406
Investing and Financing Activities Not Affecting Cash:
Property and equipment acquired through the issuance of debt	97
Reclassification of debt to advanced purchases of miles	(270)
Reclassification of debt discount to other assets	60
Continental Airlines Inc [Member] | Predecessor [Member]
Cash Flows from Operating Activities:
Net income		87
Adjustments to reconcile net income to net cash provided (used) by operating activities -
Depreciation and amortization		256
Special items, non-cash portion (Notes 1 and 10)		16
Increase in advance ticket sales		654
Increase (decrease) in frequent flyer deferred revenue and advanced purchase of miles		98
Increase in receivables		(180)
Increase (decrease) in accounts payable		116
Increase in other current assets		(184)
Increase (decrease) in other accrued liabilities		118
Other, net		20
Net cash provided by operating activities		1,001
Cash Flows from Investing Activities:
Capital expenditures		(148)
Aircraft purchase deposits paid, net		(84)
Proceeds from sale of property and equipment		25
Purchases of short-term investments, net		(124)
Other, net		(3)
Net cash used in investing activities		(334)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt		225
Payments of long-term debt		(411)
Other, net		20
Net cash provided by (used in) financing activities		(166)
Increase (decrease) in cash and cash equivalents during the period		501
Cash and cash equivalents at beginning of the period		2,546
Cash and cash equivalents at end of the period		3,047
United Airlines Inc [Member]
Cash Flows from Operating Activities:
Net income	121	207
Adjustments to reconcile net income to net cash provided (used) by operating activities -
Depreciation and amortization	456	444
Amortization of debt and lease fair value adjustment	8	8
Special items, non-cash portion (Notes 1 and 10)	(28)	90
Increase in advance ticket sales	915	808
Increase (decrease) in frequent flyer deferred revenue and advanced purchase of miles	(180)	(60)
Increase in receivables	(257)	(324)
Increase (decrease) in accounts payable	251	123
Increase in other current assets	(77)	(100)
Increase (decrease) in other accrued liabilities	(231)	88
Net change in fuel hedge cash collateral	(29)	4
Other, net	93	64
Net cash provided by operating activities	1,042	1,352
Cash Flows from Investing Activities:
Capital expenditures	(222)	(124)
Aircraft purchase deposits paid, net	(3)	(42)
(Increase) decrease in restricted cash	(20)	43
Proceeds from sale of property and equipment	1	25
Purchases of short-term investments, net	(153)
Other, net		3
Net cash used in investing activities	(397)	(95)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt		1,995
Payments of long-term debt	(1,037)	(1,273)
Principal payments under capital leases	(175)	(93)
Other, net	9	(22)
Net cash provided by (used in) financing activities	(1,203)	607
Increase (decrease) in cash and cash equivalents during the period	(558)	1,864
Cash and cash equivalents at beginning of the period	4,665	3,036
Cash and cash equivalents at end of the period	4,107	4,900
Investing and Financing Activities Not Affecting Cash:
8% Contingent Senior Unsecured Notes, net of discount	49
Interest paid in kind on UAL 6% Senior Notes	18	17
Continental Airlines Inc [Member]
Investing and Financing Activities Not Affecting Cash:
Reclassification of debt to advanced purchases of miles	(270)
Reclassification of debt discount to other assets	$ 60

XML



New Accounting Pronouncements

6 Months Ended

Jun. 30, 2011

New Accounting Pronouncements

NOTE 1 - NEW ACCOUNTING PRONOUNCEMENTS

Multiple-Deliverable Revenue Arrangements

Frequent Flyer Awards. United and Continental have loyalty programs to increase customer loyalty. Program participants earn mileage credits ("miles") by flying on United, Continental and certain other participating airlines. Program participants can also earn miles through purchases from other non-airline partners that participate in the Company's loyalty programs. We sell miles to these partners, which include retail merchants, credit card issuers, hotels and car rental companies, among others. Miles can be redeemed for free, discounted or upgraded air travel and non-travel awards. The Company records its obligation for future award redemptions using a deferred revenue model.

In the case of the sale of air transportation services, the Company recognizes a portion of the ticket sales as revenue when the air transportation occurs and defers a portion of the ticket sale that represents the fair value of the miles, as described further below. In the case of miles sold to third parties, historically we have had two primary revenue elements: marketing and air transportation.

The adoption of the Accounting Standards Update 2009-13, "Multiple-Deliverable Revenue Arrangements—a consensus of the FASB Emerging Issues Task Force" ("ASU 2009-13"), as described below, resulted in the revision of the accounting for certain aspects of the frequent flyer accounting.

Passenger Tickets

Effective January 1, 2011, the Company began applying the provisions of ASU 2009-13, which resulted in a change to the Company's accounting for passenger ticket sales that include the issuance of miles that may be redeemed for free travel or other products or services at a future date. Under the Company's accounting policy prior to January 1, 2011, the Company estimated the weighted average fair value of miles that were issued in connection with the sale of air transportation. The fair value of the miles was deferred and the residual amount of ticket proceeds was recognized as revenue at the time the air transportation was provided.

Effective January 1, 2011, the Company began applying the new guidance to determine the estimated selling price of the air transportation and miles as if each element were sold on a separate basis and allocating the total consideration to each of these elements on a pro rata basis. The estimated selling price of miles is computed using an estimated weighted average equivalent ticket value that is adjusted by a sales discount that considers a number of factors, including ultimate fulfillment expectations associated with miles sold in flight transactions to various customer groups.

As a result of the prospective adoption, the new accounting policy was only applied to new sales of air transportation in 2011. Generally, as compared to the historical accounting policy, for passenger tickets sold with miles earned, the new accounting policy decreases the value of miles that the Company records as deferred revenue and increases the passenger revenue recorded at the time air transportation is provided. Due to the average period from purchase of air transportation to the provision of air transportation, the new accounting policy was only applicable to a portion of the Company's multiple element ticket transactions recorded during the three and six months ended June 30, 2011. The application of the new accounting method resulted in the following increases to revenue (in millions, except per share amounts):

	Three Months Ended June 30, 2011						Six Months Ended June 30, 2011
	UAL		United		Continental		UAL		United		Continental
Revenue	$	106	$	66	$	40	$	161	$	104	$	57
Per basic share	$	0.32					$	0.49
Per diluted share	$	0.27					$	0.42

We estimate that application of the new accounting method in the remaining half of 2011 will increase UAL's revenue as compared to revenue that would have been recorded under the historical method of accounting. The Company cannot reliably estimate the impact of ASU 2009-13 on its future revenue, because the impact depends on many factors, including the volume of air transportation sales with mileage credit components.

Co-branded Credit Card Partner Mileage Sales

United and Continental each had significant contracts to sell frequent flyer miles to their co-branded credit card partner, Chase Bank USA, N.A. ("Chase"). Miles can be redeemed for free, discounted or upgraded air travel and non-travel awards. On June 9, 2011, these contracts were modified and the Company entered into one agreement with Chase (the "Co-Brand Agreement"). The Company applied the provisions of ASU 2009-13 to the Co-Brand Agreement as a materially modified contract.

Under the Co-Brand Agreement and ASU 2009-13, we have identified five elements in the agreement: air transportation; use of the United brand and access to frequent flyer member lists; advertising; baggage services; and airport lounge usage. The fair value of the elements is determined using management's estimated selling price of each element. The objective of using estimated selling price based methodology is to determine the price at which we would transact a sale if the product or service were sold on a stand-alone basis. Accordingly, we determine our best estimate of selling price considering multiple inputs and methods including, but not limited to, discounted cash flows, brand value, volume discounts, published selling prices, number of miles awarded and number of miles redeemed. The Company estimated the selling prices and volumes over the term of the modified agreement in order to determine the allocation of proceeds to each of the multiple elements to be delivered.

The new guidance changed the allocation of arrangement consideration to the number of units of accounting; however, the pattern and timing of revenue recognition for those units did not change. The Company records passenger revenue related to the air transportation element when the transportation is delivered. The other elements are generally recognized as other operating revenue when earned.

The application of the new accounting standard decreases the value of the air transportation deliverables related to the Co-Brand Agreement that the Company records as deferred revenue (and ultimately passenger revenue when redeemed awards are flown) and increases the value primarily of the marketing-related deliverables recorded in other revenue at the time these marketing-related deliverables are provided. Other than the effects disclosed in the "Special Revenue Item" section below, the impact of adoption of ASU 2009-13 did not have a significant impact on revenue during the second quarter of 2011 as compared to revenue that would have been recognized under the Company's historical accounting method.

While revenue recognition is subject to fluctuation based on credit card sale volumes and frequent flyer redemption patterns, the Company expects, as a result of the Co-Brand Agreement, that other revenue will increase by approximately $70 million per quarter, with passenger revenue reduced by approximately $20 million per quarter for the remainder of the year. These estimates are subject to variability primarily depending on the volume of future transactions.

Pending new or materially modified contracts after January 1, 2011, certain other non-airline partners who participate in the loyalty programs and to which we sell miles remain subject to our historical residual accounting method.

Special Revenue Item

The transition provisions of ASU 2009-13 require that the Company's existing deferred revenue balance be adjusted retroactively to reflect the value of any undelivered element remaining at the date of contract modification as if we had been applying ASU 2009-13 since the Co-Brand Agreement contract initiation. We applied this transition provision by revaluing the undelivered transportation element using its new estimated selling price as determined in connection with the contract modification. This estimated selling price was lower than the rate at which the undelivered element had been deferred under the previous contracts and recorded the following one-time non-cash adjustment to decrease frequent flyer deferred revenue and increase special revenue (in millions):

	Three Months Ended June 30, 2011						Six Months Ended June 30, 2011
	UAL		United		Continental		UAL		United		Continental
Special revenue item	$	107	$	88	$	19	$	107	$	88	$	19
Per basic share	$	0.32					$	0.33
Per diluted share	$	0.27					$	0.28

United Airlines Inc [Member]

New Accounting Pronouncements

NOTE 1 - NEW ACCOUNTING PRONOUNCEMENTS

Multiple-Deliverable Revenue Arrangements

Frequent Flyer Awards. United and Continental have loyalty programs to increase customer loyalty. Program participants earn mileage credits ("miles") by flying on United, Continental and certain other participating airlines. Program participants can also earn miles through purchases from other non-airline partners that participate in the Company's loyalty programs. We sell miles to these partners, which include retail merchants, credit card issuers, hotels and car rental companies, among others. Miles can be redeemed for free, discounted or upgraded air travel and non-travel awards. The Company records its obligation for future award redemptions using a deferred revenue model.

In the case of the sale of air transportation services, the Company recognizes a portion of the ticket sales as revenue when the air transportation occurs and defers a portion of the ticket sale that represents the fair value of the miles, as described further below. In the case of miles sold to third parties, historically we have had two primary revenue elements: marketing and air transportation.

The adoption of the Accounting Standards Update 2009-13, "Multiple-Deliverable Revenue Arrangements—a consensus of the FASB Emerging Issues Task Force" ("ASU 2009-13"), as described below, resulted in the revision of the accounting for certain aspects of the frequent flyer accounting.

Passenger Tickets

Effective January 1, 2011, the Company began applying the provisions of ASU 2009-13, which resulted in a change to the Company's accounting for passenger ticket sales that include the issuance of miles that may be redeemed for free travel or other products or services at a future date. Under the Company's accounting policy prior to January 1, 2011, the Company estimated the weighted average fair value of miles that were issued in connection with the sale of air transportation. The fair value of the miles was deferred and the residual amount of ticket proceeds was recognized as revenue at the time the air transportation was provided.

Effective January 1, 2011, the Company began applying the new guidance to determine the estimated selling price of the air transportation and miles as if each element were sold on a separate basis and allocating the total consideration to each of these elements on a pro rata basis. The estimated selling price of miles is computed using an estimated weighted average equivalent ticket value that is adjusted by a sales discount that considers a number of factors, including ultimate fulfillment expectations associated with miles sold in flight transactions to various customer groups.

As a result of the prospective adoption, the new accounting policy was only applied to new sales of air transportation in 2011. Generally, as compared to the historical accounting policy, for passenger tickets sold with miles earned, the new accounting policy decreases the value of miles that the Company records as deferred revenue and increases the passenger revenue recorded at the time air transportation is provided. Due to the average period from purchase of air transportation to the provision of air transportation, the new accounting policy was only applicable to a portion of the Company's multiple element ticket transactions recorded during the three and six months ended June 30, 2011. The application of the new accounting method resulted in the following increases to revenue (in millions, except per share amounts):

	Three Months Ended June 30, 2011						Six Months Ended June 30, 2011
	UAL		United		Continental		UAL		United		Continental
Revenue	$	106	$	66	$	40	$	161	$	104	$	57
Per basic share	$	0.32					$	0.49
Per diluted share	$	0.27					$	0.42

We estimate that application of the new accounting method in the remaining half of 2011 will increase UAL's revenue as compared to revenue that would have been recorded under the historical method of accounting. The Company cannot reliably estimate the impact of ASU 2009-13 on its future revenue, because the impact depends on many factors, including the volume of air transportation sales with mileage credit components.

Co-branded Credit Card Partner Mileage Sales

United and Continental each had significant contracts to sell frequent flyer miles to their co-branded credit card partner, Chase Bank USA, N.A. ("Chase"). Miles can be redeemed for free, discounted or upgraded air travel and non-travel awards. On June 9, 2011, these contracts were modified and the Company entered into one agreement with Chase (the "Co-Brand Agreement"). The Company applied the provisions of ASU 2009-13 to the Co-Brand Agreement as a materially modified contract.

Under the Co-Brand Agreement and ASU 2009-13, we have identified five elements in the agreement: air transportation; use of the United brand and access to frequent flyer member lists; advertising; baggage services; and airport lounge usage. The fair value of the elements is determined using management's estimated selling price of each element. The objective of using estimated selling price based methodology is to determine the price at which we would transact a sale if the product or service were sold on a stand-alone basis. Accordingly, we determine our best estimate of selling price considering multiple inputs and methods including, but not limited to, discounted cash flows, brand value, volume discounts, published selling prices, number of miles awarded and number of miles redeemed. The Company estimated the selling prices and volumes over the term of the modified agreement in order to determine the allocation of proceeds to each of the multiple elements to be delivered.

The new guidance changed the allocation of arrangement consideration to the number of units of accounting; however, the pattern and timing of revenue recognition for those units did not change. The Company records passenger revenue related to the air transportation element when the transportation is delivered. The other elements are generally recognized as other operating revenue when earned.

The application of the new accounting standard decreases the value of the air transportation deliverables related to the Co-Brand Agreement that the Company records as deferred revenue (and ultimately passenger revenue when redeemed awards are flown) and increases the value primarily of the marketing-related deliverables recorded in other revenue at the time these marketing-related deliverables are provided. Other than the effects disclosed in the "Special Revenue Item" section below, the impact of adoption of ASU 2009-13 did not have a significant impact on revenue during the second quarter of 2011 as compared to revenue that would have been recognized under the Company's historical accounting method.

While revenue recognition is subject to fluctuation based on credit card sale volumes and frequent flyer redemption patterns, the Company expects, as a result of the Co-Brand Agreement, that other revenue will increase by approximately $70 million per quarter, with passenger revenue reduced by approximately $20 million per quarter for the remainder of the year. These estimates are subject to variability primarily depending on the volume of future transactions.

Pending new or materially modified contracts after January 1, 2011, certain other non-airline partners who participate in the loyalty programs and to which we sell miles remain subject to our historical residual accounting method.

Special Revenue Item

The transition provisions of ASU 2009-13 require that the Company's existing deferred revenue balance be adjusted retroactively to reflect the value of any undelivered element remaining at the date of contract modification as if we had been applying ASU 2009-13 since the Co-Brand Agreement contract initiation. We applied this transition provision by revaluing the undelivered transportation element using its new estimated selling price as determined in connection with the contract modification. This estimated selling price was lower than the rate at which the undelivered element had been deferred under the previous contracts and recorded the following one-time non-cash adjustment to decrease frequent flyer deferred revenue and increase special revenue (in millions):

	Three Months Ended June 30, 2011						Six Months Ended June 30, 2011
	UAL		United		Continental		UAL		United		Continental
Special revenue item	$	107	$	88	$	19	$	107	$	88	$	19
Per basic share	$	0.32					$	0.33
Per diluted share	$	0.27					$	0.28

Continental Airlines Inc [Member]

New Accounting Pronouncements

NOTE 1 - NEW ACCOUNTING PRONOUNCEMENTS

Multiple-Deliverable Revenue Arrangements

Frequent Flyer Awards. United and Continental have loyalty programs to increase customer loyalty. Program participants earn mileage credits ("miles") by flying on United, Continental and certain other participating airlines. Program participants can also earn miles through purchases from other non-airline partners that participate in the Company's loyalty programs. We sell miles to these partners, which include retail merchants, credit card issuers, hotels and car rental companies, among others. Miles can be redeemed for free, discounted or upgraded air travel and non-travel awards. The Company records its obligation for future award redemptions using a deferred revenue model.

In the case of the sale of air transportation services, the Company recognizes a portion of the ticket sales as revenue when the air transportation occurs and defers a portion of the ticket sale that represents the fair value of the miles, as described further below. In the case of miles sold to third parties, historically we have had two primary revenue elements: marketing and air transportation.

The adoption of the Accounting Standards Update 2009-13, "Multiple-Deliverable Revenue Arrangements—a consensus of the FASB Emerging Issues Task Force" ("ASU 2009-13"), as described below, resulted in the revision of the accounting for certain aspects of the frequent flyer accounting.

Passenger Tickets

Effective January 1, 2011, the Company began applying the provisions of ASU 2009-13, which resulted in a change to the Company's accounting for passenger ticket sales that include the issuance of miles that may be redeemed for free travel or other products or services at a future date. Under the Company's accounting policy prior to January 1, 2011, the Company estimated the weighted average fair value of miles that were issued in connection with the sale of air transportation. The fair value of the miles was deferred and the residual amount of ticket proceeds was recognized as revenue at the time the air transportation was provided.

Effective January 1, 2011, the Company began applying the new guidance to determine the estimated selling price of the air transportation and miles as if each element were sold on a separate basis and allocating the total consideration to each of these elements on a pro rata basis. The estimated selling price of miles is computed using an estimated weighted average equivalent ticket value that is adjusted by a sales discount that considers a number of factors, including ultimate fulfillment expectations associated with miles sold in flight transactions to various customer groups.

As a result of the prospective adoption, the new accounting policy was only applied to new sales of air transportation in 2011. Generally, as compared to the historical accounting policy, for passenger tickets sold with miles earned, the new accounting policy decreases the value of miles that the Company records as deferred revenue and increases the passenger revenue recorded at the time air transportation is provided. Due to the average period from purchase of air transportation to the provision of air transportation, the new accounting policy was only applicable to a portion of the Company's multiple element ticket transactions recorded during the three and six months ended June 30, 2011. The application of the new accounting method resulted in the following increases to revenue (in millions, except per share amounts):

	Three Months Ended June 30, 2011						Six Months Ended June 30, 2011
	UAL		United		Continental		UAL		United		Continental
Revenue	$	106	$	66	$	40	$	161	$	104	$	57
Per basic share	$	0.32					$	0.49
Per diluted share	$	0.27					$	0.42

We estimate that application of the new accounting method in the remaining half of 2011 will increase UAL's revenue as compared to revenue that would have been recorded under the historical method of accounting. The Company cannot reliably estimate the impact of ASU 2009-13 on its future revenue, because the impact depends on many factors, including the volume of air transportation sales with mileage credit components.

Co-branded Credit Card Partner Mileage Sales

United and Continental each had significant contracts to sell frequent flyer miles to their co-branded credit card partner, Chase Bank USA, N.A. ("Chase"). Miles can be redeemed for free, discounted or upgraded air travel and non-travel awards. On June 9, 2011, these contracts were modified and the Company entered into one agreement with Chase (the "Co-Brand Agreement"). The Company applied the provisions of ASU 2009-13 to the Co-Brand Agreement as a materially modified contract.

Under the Co-Brand Agreement and ASU 2009-13, we have identified five elements in the agreement: air transportation; use of the United brand and access to frequent flyer member lists; advertising; baggage services; and airport lounge usage. The fair value of the elements is determined using management's estimated selling price of each element. The objective of using estimated selling price based methodology is to determine the price at which we would transact a sale if the product or service were sold on a stand-alone basis. Accordingly, we determine our best estimate of selling price considering multiple inputs and methods including, but not limited to, discounted cash flows, brand value, volume discounts, published selling prices, number of miles awarded and number of miles redeemed. The Company estimated the selling prices and volumes over the term of the modified agreement in order to determine the allocation of proceeds to each of the multiple elements to be delivered.

The new guidance changed the allocation of arrangement consideration to the number of units of accounting; however, the pattern and timing of revenue recognition for those units did not change. The Company records passenger revenue related to the air transportation element when the transportation is delivered. The other elements are generally recognized as other operating revenue when earned.

The application of the new accounting standard decreases the value of the air transportation deliverables related to the Co-Brand Agreement that the Company records as deferred revenue (and ultimately passenger revenue when redeemed awards are flown) and increases the value primarily of the marketing-related deliverables recorded in other revenue at the time these marketing-related deliverables are provided. Other than the effects disclosed in the "Special Revenue Item" section below, the impact of adoption of ASU 2009-13 did not have a significant impact on revenue during the second quarter of 2011 as compared to revenue that would have been recognized under the Company's historical accounting method.

While revenue recognition is subject to fluctuation based on credit card sale volumes and frequent flyer redemption patterns, the Company expects, as a result of the Co-Brand Agreement, that other revenue will increase by approximately $70 million per quarter, with passenger revenue reduced by approximately $20 million per quarter for the remainder of the year. These estimates are subject to variability primarily depending on the volume of future transactions.

Pending new or materially modified contracts after January 1, 2011, certain other non-airline partners who participate in the loyalty programs and to which we sell miles remain subject to our historical residual accounting method.

Special Revenue Item

The transition provisions of ASU 2009-13 require that the Company's existing deferred revenue balance be adjusted retroactively to reflect the value of any undelivered element remaining at the date of contract modification as if we had been applying ASU 2009-13 since the Co-Brand Agreement contract initiation. We applied this transition provision by revaluing the undelivered transportation element using its new estimated selling price as determined in connection with the contract modification. This estimated selling price was lower than the rate at which the undelivered element had been deferred under the previous contracts and recorded the following one-time non-cash adjustment to decrease frequent flyer deferred revenue and increase special revenue (in millions):

	Three Months Ended June 30, 2011						Six Months Ended June 30, 2011
	UAL		United		Continental		UAL		United		Continental
Special revenue item	$	107	$	88	$	19	$	107	$	88	$	19
Per basic share	$	0.32					$	0.33
Per diluted share	$	0.27					$	0.28

XML



Earnings Per Share

6 Months Ended

Jun. 30, 2011

Earnings Per Share

NOTE 2 - EARNINGS PER SHARE

The table below represents the computation of UAL basic and diluted earnings per share amounts and the number of securities that have been excluded from the computation of diluted earnings per share amounts, because they were antidilutive (in millions, except per share amounts):

	Three Months Ended June 30,					Six Months Ended June 30,
	2011			2010		2011			2010
UAL basic earnings per share:
Net income	$	538		$	273	$	325		$	191
Less: Income allocable to participating securities		(2	)		—		(1	)		—
Earnings available to common stockholders	$	536		$	273	$	324		$	191
Basic weighted average shares outstanding		330			168		329			168
Earnings per share, basic	$	1.63		$	1.62	$	0.98		$	1.14
UAL diluted earnings per share:
Earnings available to common stockholders	$	536		$	273		324		$	191
Effect of UAL 4.5% Senior Limited-Subordination Convertible Notes		11			21		—			—
Effect of Continental 4.5% Convertible Notes		2			—		4			—
Effect of UAL 5% Senior Convertible Notes		—			4		—			—
Effect of Continental 6% Convertible Junior Subordinated Debentures		4			—		—			—
Effect of UAL 6% Senior Convertible Notes		5			5		9			10
Earnings available to common stockholders including the effect of dilutive securities	$	558		$	303	$	337		$	201
UAL diluted shares outstanding:
Basic weighted average shares outstanding		330			168		329			168
Effect of employee stock options		1			2		2			1
Effect of UAL 4.5% Senior Limited-Subordination Convertible Notes		13			22		—			—
Effect of Continental 4.5% Convertible Notes		12			—		12			—
Effect of UAL 5% Senior Convertible Notes		—			3		—			—
Effect of Continental 6% Convertible Junior Subordinated Debentures		4			—		—			—
Effect of UAL 6% Senior Convertible Notes		40			40		40			40
Diluted weighted average shares outstanding		400			235		383			209
Earnings per share, diluted	$	1.39		$	1.29	$	0.88		$	0.96
UAL potentially dilutive shares excluded from diluted per share amounts:
Restricted stock and stock options		7			5		6			6
UAL 4.5% Senior Limited-Subordination Convertible Notes		—			—		18			22
Continental 6% Convertible Junior Subordinated Debentures		—			—		4			—
UAL 5% Senior Convertible Notes (Note 9)		—			—		—			3

UAL's 6% Senior Notes due 2031, with a principal amount of $633 million as of June 30, 2011, are callable at any time at 100% of par value and can be redeemed with either cash or shares of UAL common stock, or a combination thereof, at UAL's option. These notes are not included in the diluted earnings per share calculation as it is UAL's intent to redeem these notes with cash, if UAL were to redeem the notes. During the second quarter of 2011, UAL repurchased at par value approximately $570 million of the $726 million outstanding principal amount of its 4.5% Senior Limited-Subordination Convertible Notes due 2021 with cash after the notes were put to UAL by the noteholders. The dilutive effect of the 4.5% Senior Limited-Subordination Convertible Notes due 2021 was excluded in the diluted earnings per share calculations for the three and six months ended June 30, 2011 from the date notice was given of the Company's intent to pay the notes put to it in cash up to the repurchase date.

The table below represents the computation of Continental Predecessor's basic and diluted earnings per share amounts (in millions, except per share amounts):

	Three Months Ended June 30,		Six Months Ended June 30,
	2010		2010
Continental Predecessor basic earnings per share:
Earnings available to common stockholders	$	233	$	87
Basic weighted average shares outstanding		140		139
Earnings per share, basic	$	1.67	$	0.62
Continental Predecessor diluted earnings per share:
Earnings available to common stockholders	$	233	$	87
Effect of 5% Convertible Notes		4		—
Effect of 6% Convertible Junior Subordinated Debentures		3		—
Effect of 4.5% Convertible Notes		3		5
Earnings available to common stockholders including the effect of dilutive securities	$	243	$	92
Continental Predecessor diluted shares outstanding:
Basic weighted average shares outstanding		140		139
5% Convertible Notes		9		—
6% Convertible Junior Subordinated Debentures		4		—
4.5% Convertible Notes		12		12
Employee stock options		2		2
Diluted weighted average shares outstanding		167		153
Earnings per share, diluted	$	1.46	$	0.60
Continental Predecessor potentially dilutive shares excluded from diluted per share amounts:
5% Convertible Notes		—		9
6% Convertible Junior Subordinated Debentures		—		4
Employee stock options		1		1

United Airlines Inc [Member]

Earnings Per Share

NOTE 2 - EARNINGS PER SHARE

The table below represents the computation of UAL basic and diluted earnings per share amounts and the number of securities that have been excluded from the computation of diluted earnings per share amounts, because they were antidilutive (in millions, except per share amounts):

	Three Months Ended June 30,					Six Months Ended June 30,
	2011			2010		2011			2010
UAL basic earnings per share:
Net income	$	538		$	273	$	325		$	191
Less: Income allocable to participating securities		(2	)		—		(1	)		—
Earnings available to common stockholders	$	536		$	273	$	324		$	191
Basic weighted average shares outstanding		330			168		329			168
Earnings per share, basic	$	1.63		$	1.62	$	0.98		$	1.14
UAL diluted earnings per share:
Earnings available to common stockholders	$	536		$	273		324		$	191
Effect of UAL 4.5% Senior Limited-Subordination Convertible Notes		11			21		—			—
Effect of Continental 4.5% Convertible Notes		2			—		4			—
Effect of UAL 5% Senior Convertible Notes		—			4		—			—
Effect of Continental 6% Convertible Junior Subordinated Debentures		4			—		—			—
Effect of UAL 6% Senior Convertible Notes		5			5		9			10
Earnings available to common stockholders including the effect of dilutive securities	$	558		$	303	$	337		$	201
UAL diluted shares outstanding:
Basic weighted average shares outstanding		330			168		329			168
Effect of employee stock options		1			2		2			1
Effect of UAL 4.5% Senior Limited-Subordination Convertible Notes		13			22		—			—
Effect of Continental 4.5% Convertible Notes		12			—		12			—
Effect of UAL 5% Senior Convertible Notes		—			3		—			—
Effect of Continental 6% Convertible Junior Subordinated Debentures		4			—		—			—
Effect of UAL 6% Senior Convertible Notes		40			40		40			40
Diluted weighted average shares outstanding		400			235		383			209
Earnings per share, diluted	$	1.39		$	1.29	$	0.88		$	0.96
UAL potentially dilutive shares excluded from diluted per share amounts:
Restricted stock and stock options		7			5		6			6
UAL 4.5% Senior Limited-Subordination Convertible Notes		—			—		18			22
Continental 6% Convertible Junior Subordinated Debentures		—			—		4			—
UAL 5% Senior Convertible Notes (Note 9)		—			—		—			3

UAL's 6% Senior Notes due 2031, with a principal amount of $633 million as of June 30, 2011, are callable at any time at 100% of par value and can be redeemed with either cash or shares of UAL common stock, or a combination thereof, at UAL's option. These notes are not included in the diluted earnings per share calculation as it is UAL's intent to redeem these notes with cash, if UAL were to redeem the notes. During the second quarter of 2011, UAL repurchased at par value approximately $570 million of the $726 million outstanding principal amount of its 4.5% Senior Limited-Subordination Convertible Notes due 2021 with cash after the notes were put to UAL by the noteholders. The dilutive effect of the 4.5% Senior Limited-Subordination Convertible Notes due 2021 was excluded in the diluted earnings per share calculations for the three and six months ended June 30, 2011 from the date notice was given of the Company's intent to pay the notes put to it in cash up to the repurchase date.

The table below represents the computation of Continental Predecessor's basic and diluted earnings per share amounts (in millions, except per share amounts):

	Three Months Ended June 30,		Six Months Ended June 30,
	2010		2010
Continental Predecessor basic earnings per share:
Earnings available to common stockholders	$	233	$	87
Basic weighted average shares outstanding		140		139
Earnings per share, basic	$	1.67	$	0.62
Continental Predecessor diluted earnings per share:
Earnings available to common stockholders	$	233	$	87
Effect of 5% Convertible Notes		4		—
Effect of 6% Convertible Junior Subordinated Debentures		3		—
Effect of 4.5% Convertible Notes		3		5
Earnings available to common stockholders including the effect of dilutive securities	$	243	$	92
Continental Predecessor diluted shares outstanding:
Basic weighted average shares outstanding		140		139
5% Convertible Notes		9		—
6% Convertible Junior Subordinated Debentures		4		—
4.5% Convertible Notes		12		12
Employee stock options		2		2
Diluted weighted average shares outstanding		167		153
Earnings per share, diluted	$	1.46	$	0.60
Continental Predecessor potentially dilutive shares excluded from diluted per share amounts:
5% Convertible Notes		—		9
6% Convertible Junior Subordinated Debentures		—		4
Employee stock options		1		1

Continental Airlines Inc [Member]

Earnings Per Share

NOTE 2 - EARNINGS PER SHARE

The table below represents the computation of UAL basic and diluted earnings per share amounts and the number of securities that have been excluded from the computation of diluted earnings per share amounts, because they were antidilutive (in millions, except per share amounts):

	Three Months Ended June 30,					Six Months Ended June 30,
	2011			2010		2011			2010
UAL basic earnings per share:
Net income	$	538		$	273	$	325		$	191
Less: Income allocable to participating securities		(2	)		—		(1	)		—
Earnings available to common stockholders	$	536		$	273	$	324		$	191
Basic weighted average shares outstanding		330			168		329			168
Earnings per share, basic	$	1.63		$	1.62	$	0.98		$	1.14
UAL diluted earnings per share:
Earnings available to common stockholders	$	536		$	273		324		$	191
Effect of UAL 4.5% Senior Limited-Subordination Convertible Notes		11			21		—			—
Effect of Continental 4.5% Convertible Notes		2			—		4			—
Effect of UAL 5% Senior Convertible Notes		—			4		—			—
Effect of Continental 6% Convertible Junior Subordinated Debentures		4			—		—			—
Effect of UAL 6% Senior Convertible Notes		5			5		9			10
Earnings available to common stockholders including the effect of dilutive securities	$	558		$	303	$	337		$	201
UAL diluted shares outstanding:
Basic weighted average shares outstanding		330			168		329			168
Effect of employee stock options		1			2		2			1
Effect of UAL 4.5% Senior Limited-Subordination Convertible Notes		13			22		—			—
Effect of Continental 4.5% Convertible Notes		12			—		12			—
Effect of UAL 5% Senior Convertible Notes		—			3		—			—
Effect of Continental 6% Convertible Junior Subordinated Debentures		4			—		—			—
Effect of UAL 6% Senior Convertible Notes		40			40		40			40
Diluted weighted average shares outstanding		400			235		383			209
Earnings per share, diluted	$	1.39		$	1.29	$	0.88		$	0.96
UAL potentially dilutive shares excluded from diluted per share amounts:
Restricted stock and stock options		7			5		6			6
UAL 4.5% Senior Limited-Subordination Convertible Notes		—			—		18			22
Continental 6% Convertible Junior Subordinated Debentures		—			—		4			—
UAL 5% Senior Convertible Notes (Note 9)		—			—		—			3

UAL's 6% Senior Notes due 2031, with a principal amount of $633 million as of June 30, 2011, are callable at any time at 100% of par value and can be redeemed with either cash or shares of UAL common stock, or a combination thereof, at UAL's option. These notes are not included in the diluted earnings per share calculation as it is UAL's intent to redeem these notes with cash, if UAL were to redeem the notes. During the second quarter of 2011, UAL repurchased at par value approximately $570 million of the $726 million outstanding principal amount of its 4.5% Senior Limited-Subordination Convertible Notes due 2021 with cash after the notes were put to UAL by the noteholders. The dilutive effect of the 4.5% Senior Limited-Subordination Convertible Notes due 2021 was excluded in the diluted earnings per share calculations for the three and six months ended June 30, 2011 from the date notice was given of the Company's intent to pay the notes put to it in cash up to the repurchase date.

The table below represents the computation of Continental Predecessor's basic and diluted earnings per share amounts (in millions, except per share amounts):

	Three Months Ended June 30,		Six Months Ended June 30,
	2010		2010
Continental Predecessor basic earnings per share:
Earnings available to common stockholders	$	233	$	87
Basic weighted average shares outstanding		140		139
Earnings per share, basic	$	1.67	$	0.62
Continental Predecessor diluted earnings per share:
Earnings available to common stockholders	$	233	$	87
Effect of 5% Convertible Notes		4		—
Effect of 6% Convertible Junior Subordinated Debentures		3		—
Effect of 4.5% Convertible Notes		3		5
Earnings available to common stockholders including the effect of dilutive securities	$	243	$	92
Continental Predecessor diluted shares outstanding:
Basic weighted average shares outstanding		140		139
5% Convertible Notes		9		—
6% Convertible Junior Subordinated Debentures		4		—
4.5% Convertible Notes		12		12
Employee stock options		2		2
Diluted weighted average shares outstanding		167		153
Earnings per share, diluted	$	1.46	$	0.60
Continental Predecessor potentially dilutive shares excluded from diluted per share amounts:
5% Convertible Notes		—		9
6% Convertible Junior Subordinated Debentures		—		4
Employee stock options		1		1

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Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes

NOTE 3 - INCOME TAXES

Our effective tax rates differ from the federal statutory rate of 35% primarily due to the following: changes in the valuation allowance, expenses that are not deductible for federal income tax purposes, and foreign and state income taxes. We are required to provide a valuation allowance for our deferred tax assets in excess of deferred tax liabilities because we have concluded that it is more likely than not that such deferred tax assets will ultimately not be realized.

United Airlines Inc [Member]

Income Taxes

NOTE 3 - INCOME TAXES

Our effective tax rates differ from the federal statutory rate of 35% primarily due to the following: changes in the valuation allowance, expenses that are not deductible for federal income tax purposes, and foreign and state income taxes. We are required to provide a valuation allowance for our deferred tax assets in excess of deferred tax liabilities because we have concluded that it is more likely than not that such deferred tax assets will ultimately not be realized.

Continental Airlines Inc [Member]

Income Taxes

NOTE 3 - INCOME TAXES

Our effective tax rates differ from the federal statutory rate of 35% primarily due to the following: changes in the valuation allowance, expenses that are not deductible for federal income tax purposes, and foreign and state income taxes. We are required to provide a valuation allowance for our deferred tax assets in excess of deferred tax liabilities because we have concluded that it is more likely than not that such deferred tax assets will ultimately not be realized.

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Employee Benefit Plans

6 Months Ended

Jun. 30, 2011

Employee Benefit Plans

NOTE 4 - EMPLOYEE BENEFIT PLANS

Defined Benefit Pension and Other Postretirement Benefit Plans. The Company's net periodic benefit cost includes the following components (in millions):

	Pension Benefits Three Months Ended June 30,						Other Postretirement Benefits Three Months Ended June 30,
	2011			2010			2011			2010
UAL
Service cost	$	23		$	2		$	12		$	8
Interest cost		45			3			32			29
Expected return on plan assets		(35	)		(3	)		—			(1	)
Amortization of unrecognized gain and prior service cost		(7	)		(1	)		(1	)		(3	)
Net periodic benefit costs	$	26		$	1		$	43		$	33
United
Service cost	$	2		$	2		$	8		$	8
Interest cost		3			3			28			29
Expected return on plan assets		(3	)		(3	)		—			(1	)
Amortization of unrecognized gain and prior service cost		(1	)		(1	)		—			(3	)
Net periodic benefit costs	$	1		$	1		$	36		$	33
Continental (a)
Service cost	$	21		$	16		$	4		$	3
Interest cost		42			40			4			3
Expected return on plan assets		(32	)		(28	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		(6	)		25			(1	)		4
Net periodic benefit costs	$	25		$	53		$	7		$	10

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

	Pension Benefits Six Months Ended June 30,						Other Postretirement Benefits Six Months Ended June 30,
	2011			2010			2011			2010
UAL
Service cost	$	44		$	3		$	24		$	15
Interest cost		89			5			63			58
Expected return on plan assets		(69	)		(5	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		(12	)		(1	)		(1	)		(6	)
Net periodic benefit costs	$	52		$	2		$	85		$	66
United
Service cost	$	3		$	3		$	17		$	15
Interest cost		5			5			56			58
Expected return on plan assets		(5	)		(5	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		(1	)		(1	)		—			(6	)
Net periodic benefit costs	$	2		$	2		$	72		$	66
Continental (a)
Service cost	$	41		$	33		$	7		$	5
Interest cost		84			79			7			7
Expected return on plan assets		(64	)		(55	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		(11	)		49			(1	)		8
Net periodic benefit costs	$	50		$	106		$	13		$	20

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

During the six months ended June 30, 2011, Continental contributed $71 million to its tax-qualified defined benefit pension plans. Continental contributed an additional $33 million to its tax-qualified defined benefit pension plans in July 2011.

Share-Based Compensation. In February 2011, UAL granted share-based compensation awards pursuant to the United Continental Holdings, Inc. 2008 Incentive Compensation Plan. These share-based compensation awards include approximately 0.5 million shares of restricted stock that vest pro-rata over three years on the anniversary of the grant date. These awards also include approximately 3.0 million performance-based restricted stock units ("RSUs") (equivalent to approximately 1.9 million RSUs at the target performance level), consisting of approximately 1.2 million RSUs that vest based on UAL's return on invested capital for the period beginning January 1, 2011 and ending December 31, 2013 and 1.8 million RSUs that vest based on the achievement of merger-related goals. Vesting of a portion of the merger incentive RSUs is based on the achievement of certain merger-related milestones and vesting of the remainder of the merger incentive RSUs is based on the achievement of revenue and cost synergies over a three-year performance period ending December 31, 2013. The RSUs will be settled in cash. If the specified performance conditions are achieved, cash payments will be made shortly after the end of the performance period or achievement of the specified merger milestone, as applicable, based on the fair market value of UAL common stock. The Company accounts for the performance-based RSUs as liability awards. The table below presents information related to share-based compensation expense (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Share-based compensation expense	$	14	$	8	$	27	$	21

	June 30, 2011		December 31, 2010
Unrecognized share-based compensation expense	$	63	$	43

Profit Sharing Plans. Effective for 2011, substantially all employees participate in profit sharing plans, which pay 15% of total pre-tax earnings, excluding special items and stock compensation expense, to eligible employees when pre-tax profit excluding special items, profit sharing expense and stock-based compensation program expense exceeds $10 million. Eligible U.S. co-workers in each participating work group will receive a profit sharing payout using a formula based on the ratio of each qualified co-worker's annual eligible earnings to the eligible earnings of all qualified co-workers in all domestic workgroups. The international profit sharing plan utilizes the same profit sharing payout percentage that is paid out to eligible U.S. co-workers. UAL recorded profit sharing and related payroll tax expense of $90 million in the three and six months ended June 30, 2011. Profit sharing expense is recorded as a component of salaries and related costs in the consolidated statements of operations.

During 2010, United and Continental maintained separate employee profit sharing plans for the employees of each respective subsidiary. During the three and six months ended June 30, 2010, United and Continental Predecessor recorded profit sharing and related payroll tax expense of $63 million and $19 million, respectively.

United Airlines Inc [Member]

Employee Benefit Plans

NOTE 4 - EMPLOYEE BENEFIT PLANS

Defined Benefit Pension and Other Postretirement Benefit Plans. The Company's net periodic benefit cost includes the following components (in millions):

	Pension Benefits Three Months Ended June 30,						Other Postretirement Benefits Three Months Ended June 30,
	2011			2010			2011			2010
UAL
Service cost	$	23		$	2		$	12		$	8
Interest cost		45			3			32			29
Expected return on plan assets		(35	)		(3	)		—			(1	)
Amortization of unrecognized gain and prior service cost		(7	)		(1	)		(1	)		(3	)
Net periodic benefit costs	$	26		$	1		$	43		$	33
United
Service cost	$	2		$	2		$	8		$	8
Interest cost		3			3			28			29
Expected return on plan assets		(3	)		(3	)		—			(1	)
Amortization of unrecognized gain and prior service cost		(1	)		(1	)		—			(3	)
Net periodic benefit costs	$	1		$	1		$	36		$	33
Continental (a)
Service cost	$	21		$	16		$	4		$	3
Interest cost		42			40			4			3
Expected return on plan assets		(32	)		(28	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		(6	)		25			(1	)		4
Net periodic benefit costs	$	25		$	53		$	7		$	10

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

	Pension Benefits Six Months Ended June 30,						Other Postretirement Benefits Six Months Ended June 30,
	2011			2010			2011			2010
UAL
Service cost	$	44		$	3		$	24		$	15
Interest cost		89			5			63			58
Expected return on plan assets		(69	)		(5	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		(12	)		(1	)		(1	)		(6	)
Net periodic benefit costs	$	52		$	2		$	85		$	66
United
Service cost	$	3		$	3		$	17		$	15
Interest cost		5			5			56			58
Expected return on plan assets		(5	)		(5	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		(1	)		(1	)		—			(6	)
Net periodic benefit costs	$	2		$	2		$	72		$	66
Continental (a)
Service cost	$	41		$	33		$	7		$	5
Interest cost		84			79			7			7
Expected return on plan assets		(64	)		(55	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		(11	)		49			(1	)		8
Net periodic benefit costs	$	50		$	106		$	13		$	20

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

During the six months ended June 30, 2011, Continental contributed $71 million to its tax-qualified defined benefit pension plans. Continental contributed an additional $33 million to its tax-qualified defined benefit pension plans in July 2011.

Share-Based Compensation. In February 2011, UAL granted share-based compensation awards pursuant to the United Continental Holdings, Inc. 2008 Incentive Compensation Plan. These share-based compensation awards include approximately 0.5 million shares of restricted stock that vest pro-rata over three years on the anniversary of the grant date. These awards also include approximately 3.0 million performance-based restricted stock units ("RSUs") (equivalent to approximately 1.9 million RSUs at the target performance level), consisting of approximately 1.2 million RSUs that vest based on UAL's return on invested capital for the period beginning January 1, 2011 and ending December 31, 2013 and 1.8 million RSUs that vest based on the achievement of merger-related goals. Vesting of a portion of the merger incentive RSUs is based on the achievement of certain merger-related milestones and vesting of the remainder of the merger incentive RSUs is based on the achievement of revenue and cost synergies over a three-year performance period ending December 31, 2013. The RSUs will be settled in cash. If the specified performance conditions are achieved, cash payments will be made shortly after the end of the performance period or achievement of the specified merger milestone, as applicable, based on the fair market value of UAL common stock. The Company accounts for the performance-based RSUs as liability awards. The table below presents information related to share-based compensation expense (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Share-based compensation expense	$	14	$	8	$	27	$	21

	June 30, 2011		December 31, 2010
Unrecognized share-based compensation expense	$	63	$	43

Profit Sharing Plans. Effective for 2011, substantially all employees participate in profit sharing plans, which pay 15% of total pre-tax earnings, excluding special items and stock compensation expense, to eligible employees when pre-tax profit excluding special items, profit sharing expense and stock-based compensation program expense exceeds $10 million. Eligible U.S. co-workers in each participating work group will receive a profit sharing payout using a formula based on the ratio of each qualified co-worker's annual eligible earnings to the eligible earnings of all qualified co-workers in all domestic workgroups. The international profit sharing plan utilizes the same profit sharing payout percentage that is paid out to eligible U.S. co-workers. UAL recorded profit sharing and related payroll tax expense of $90 million in the three and six months ended June 30, 2011. Profit sharing expense is recorded as a component of salaries and related costs in the consolidated statements of operations.

During 2010, United and Continental maintained separate employee profit sharing plans for the employees of each respective subsidiary. During the three and six months ended June 30, 2010, United and Continental Predecessor recorded profit sharing and related payroll tax expense of $63 million and $19 million, respectively.

Continental Airlines Inc [Member]

Employee Benefit Plans

NOTE 4 - EMPLOYEE BENEFIT PLANS

Defined Benefit Pension and Other Postretirement Benefit Plans. The Company's net periodic benefit cost includes the following components (in millions):

	Pension Benefits Three Months Ended June 30,						Other Postretirement Benefits Three Months Ended June 30,
	2011			2010			2011			2010
UAL
Service cost	$	23		$	2		$	12		$	8
Interest cost		45			3			32			29
Expected return on plan assets		(35	)		(3	)		—			(1	)
Amortization of unrecognized gain and prior service cost		(7	)		(1	)		(1	)		(3	)
Net periodic benefit costs	$	26		$	1		$	43		$	33
United
Service cost	$	2		$	2		$	8		$	8
Interest cost		3			3			28			29
Expected return on plan assets		(3	)		(3	)		—			(1	)
Amortization of unrecognized gain and prior service cost		(1	)		(1	)		—			(3	)
Net periodic benefit costs	$	1		$	1		$	36		$	33
Continental (a)
Service cost	$	21		$	16		$	4		$	3
Interest cost		42			40			4			3
Expected return on plan assets		(32	)		(28	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		(6	)		25			(1	)		4
Net periodic benefit costs	$	25		$	53		$	7		$	10

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

	Pension Benefits Six Months Ended June 30,						Other Postretirement Benefits Six Months Ended June 30,
	2011			2010			2011			2010
UAL
Service cost	$	44		$	3		$	24		$	15
Interest cost		89			5			63			58
Expected return on plan assets		(69	)		(5	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		(12	)		(1	)		(1	)		(6	)
Net periodic benefit costs	$	52		$	2		$	85		$	66
United
Service cost	$	3		$	3		$	17		$	15
Interest cost		5			5			56			58
Expected return on plan assets		(5	)		(5	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		(1	)		(1	)		—			(6	)
Net periodic benefit costs	$	2		$	2		$	72		$	66
Continental (a)
Service cost	$	41		$	33		$	7		$	5
Interest cost		84			79			7			7
Expected return on plan assets		(64	)		(55	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		(11	)		49			(1	)		8
Net periodic benefit costs	$	50		$	106		$	13		$	20

(a) For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

During the six months ended June 30, 2011, Continental contributed $71 million to its tax-qualified defined benefit pension plans. Continental contributed an additional $33 million to its tax-qualified defined benefit pension plans in July 2011.

Share-Based Compensation. In February 2011, UAL granted share-based compensation awards pursuant to the United Continental Holdings, Inc. 2008 Incentive Compensation Plan. These share-based compensation awards include approximately 0.5 million shares of restricted stock that vest pro-rata over three years on the anniversary of the grant date. These awards also include approximately 3.0 million performance-based restricted stock units ("RSUs") (equivalent to approximately 1.9 million RSUs at the target performance level), consisting of approximately 1.2 million RSUs that vest based on UAL's return on invested capital for the period beginning January 1, 2011 and ending December 31, 2013 and 1.8 million RSUs that vest based on the achievement of merger-related goals. Vesting of a portion of the merger incentive RSUs is based on the achievement of certain merger-related milestones and vesting of the remainder of the merger incentive RSUs is based on the achievement of revenue and cost synergies over a three-year performance period ending December 31, 2013. The RSUs will be settled in cash. If the specified performance conditions are achieved, cash payments will be made shortly after the end of the performance period or achievement of the specified merger milestone, as applicable, based on the fair market value of UAL common stock. The Company accounts for the performance-based RSUs as liability awards. The table below presents information related to share-based compensation expense (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Share-based compensation expense	$	14	$	8	$	27	$	21

	June 30, 2011		December 31, 2010
Unrecognized share-based compensation expense	$	63	$	43

Profit Sharing Plans. Effective for 2011, substantially all employees participate in profit sharing plans, which pay 15% of total pre-tax earnings, excluding special items and stock compensation expense, to eligible employees when pre-tax profit excluding special items, profit sharing expense and stock-based compensation program expense exceeds $10 million. Eligible U.S. co-workers in each participating work group will receive a profit sharing payout using a formula based on the ratio of each qualified co-worker's annual eligible earnings to the eligible earnings of all qualified co-workers in all domestic workgroups. The international profit sharing plan utilizes the same profit sharing payout percentage that is paid out to eligible U.S. co-workers. UAL recorded profit sharing and related payroll tax expense of $90 million in the three and six months ended June 30, 2011. Profit sharing expense is recorded as a component of salaries and related costs in the consolidated statements of operations.

During 2010, United and Continental maintained separate employee profit sharing plans for the employees of each respective subsidiary. During the three and six months ended June 30, 2010, United and Continental Predecessor recorded profit sharing and related payroll tax expense of $63 million and $19 million, respectively.