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 nine months ended September 30, 2011 as follows (in millions):


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

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


	Three Months Ended September 30,								Nine Months Ended September 30,
2011	UAL			United		Continental Successor			UAL			United		Continental Successor
Integration-related costs	$	123		$	72	$	51		$	347		$	236	$	111
Aircraft-related charges (gains), net		(3	)		—		(3	)		(4	)		—		(4	)

Total	$	120		$	72	$	48		$	343		$	236	$	107


2010	UAL			United			Continental Predecessor		UAL		United		Continental Predecessor
Aircraft-related charges, net	$	22		$	22		$	—	$	112	$	112	$	6
Merger-related costs		44			44			11		72		72		29
Other		(3	)		(3	)		2		3		3		12

Total	$	63		$	63		$	13	$	187	$	187	$	47

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, at June 30, 2011, UAL became 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 since 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 nine months ended September 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 nine months ended September 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 include 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		17			2
Payments		(46	)		(12	)

Balance at September 30, 2011	$	73		$	31


United
Balance at December 31, 2010	$	42		$	41
Increase in accrual		28			2
Payments		(28	)		(12	)

Balance at September 30, 2011	$	42		$	31


Continental—Successor
Balance at December 31, 2010	$	60
Decrease in accrual		(11	)
Payments		(18	)

Balance at September 30, 2011	$	31

The severance-related accrual as of September 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
Increase (decrease) in accrual		2			(2	)
Payments		(27	)		(33	)

Balance at September 30, 2010	$	20		$	48


United
Balance at December 31, 2009	$	45		$	83
Increase (decrease) in accrual		2			(2	)
Payments		(27	)		(33	)

Balance at September 30, 2010	$	20		$	48


Continental—Predecessor
Balance at December 31, 2009	$	14
Increase in accrual		3
Payments		(14	)

Balance at September 30, 2010	$	3

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 nine months ended September 30, 2011 as follows (in millions):


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

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


	Three Months Ended September 30,								Nine Months Ended September 30,
2011	UAL			United		Continental Successor			UAL			United		Continental Successor
Integration-related costs	$	123		$	72	$	51		$	347		$	236	$	111
Aircraft-related charges (gains), net		(3	)		—		(3	)		(4	)		—		(4	)

Total	$	120		$	72	$	48		$	343		$	236	$	107


2010	UAL			United			Continental Predecessor		UAL		United		Continental Predecessor
Aircraft-related charges, net	$	22		$	22		$	—	$	112	$	112	$	6
Merger-related costs		44			44			11		72		72		29
Other		(3	)		(3	)		2		3		3		12

Total	$	63		$	63		$	13	$	187	$	187	$	47

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, at June 30, 2011, UAL became 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 since 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 nine months ended September 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 nine months ended September 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 include 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		17			2
Payments		(46	)		(12	)

Balance at September 30, 2011	$	73		$	31


United
Balance at December 31, 2010	$	42		$	41
Increase in accrual		28			2
Payments		(28	)		(12	)

Balance at September 30, 2011	$	42		$	31


Continental—Successor
Balance at December 31, 2010	$	60
Decrease in accrual		(11	)
Payments		(18	)

Balance at September 30, 2011	$	31

The severance-related accrual as of September 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
Increase (decrease) in accrual		2			(2	)
Payments		(27	)		(33	)

Balance at September 30, 2010	$	20		$	48


United
Balance at December 31, 2009	$	45		$	83
Increase (decrease) in accrual		2			(2	)
Payments		(27	)		(33	)

Balance at September 30, 2010	$	20		$	48


Continental—Predecessor
Balance at December 31, 2009	$	14
Increase in accrual		3
Payments		(14	)

Balance at September 30, 2010	$	3

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 nine months ended September 30, 2011 as follows (in millions):


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

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


	Three Months Ended September 30,								Nine Months Ended September 30,
2011	UAL			United		Continental Successor			UAL			United		Continental Successor
Integration-related costs	$	123		$	72	$	51		$	347		$	236	$	111
Aircraft-related charges (gains), net		(3	)		—		(3	)		(4	)		—		(4	)

Total	$	120		$	72	$	48		$	343		$	236	$	107


2010	UAL			United			Continental Predecessor		UAL		United		Continental Predecessor
Aircraft-related charges, net	$	22		$	22		$	—	$	112	$	112	$	6
Merger-related costs		44			44			11		72		72		29
Other		(3	)		(3	)		2		3		3		12

Total	$	63		$	63		$	13	$	187	$	187	$	47

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, at June 30, 2011, UAL became 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 since 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 nine months ended September 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 nine months ended September 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 include 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		17			2
Payments		(46	)		(12	)

Balance at September 30, 2011	$	73		$	31


United
Balance at December 31, 2010	$	42		$	41
Increase in accrual		28			2
Payments		(28	)		(12	)

Balance at September 30, 2011	$	42		$	31


Continental—Successor
Balance at December 31, 2010	$	60
Decrease in accrual		(11	)
Payments		(18	)

Balance at September 30, 2011	$	31

The severance-related accrual as of September 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
Increase (decrease) in accrual		2			(2	)
Payments		(27	)		(33	)

Balance at September 30, 2010	$	20		$	48


United
Balance at December 31, 2009	$	45		$	83
Increase (decrease) in accrual		2			(2	)
Payments		(27	)		(33	)

Balance at September 30, 2010	$	20		$	48


Continental—Predecessor
Balance at December 31, 2009	$	14
Increase in accrual		3
Payments		(14	)

Balance at September 30, 2010	$	3