Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Components of Income Tax Expense (Benefit)

The significant components of the income tax expense (benefit) are as follows (in millions):

2013	UAL		United
Current	$	(18)	$	(18)
Deferred		(14)		1
	$	(32)	$	(17)
2012
Current	$	(14)	$	(9)
Deferred		13		13
	$	(1)	$	4
2011
Current	$	11	$	3
Deferred		(6)		(5)
	$	5	$	(2)

Income Tax Provision Differed from Amounts Computed at Statutory Federal Income Tax Rate

The income tax provision differed from amounts computed at the statutory federal income tax rate, as follows (in millions):

Year ended December 31, 2013	UAL		United
Income tax provision at statutory rate	$	189	$	223
State income taxes, net of federal income tax		5		5
Foreign income taxes		3		3
Nondeductible employee meals		15		15
Nondeductible interest expense		—		—
Derivative market adjustment		—		(24)
Nondeductible compensation		3		3
State rate change		(33)		(33)
Valuation allowance		(219)		(229)
Other, net		5		20
	$	(32)	$	(17)
Year ended December 31, 2012
Income tax provision at statutory rate	$	(253)	$	(230)
State income taxes, net of federal income tax		(15)		(7)
Foreign income taxes		7		7
Nondeductible employee meals		12		12
Nondeductible interest expense		19		19
Derivative market adjustment		—		(15)
Nondeductible compensation		5		5
Valuation allowance		234		223
Other, net		(10)		(10)
	$	(1)	$	4
Year Ended December 31, 2011
Income tax provision at statutory rate	$	298	$	299
State income taxes, net of federal income tax		(19)		(17)
Nondeductible acquisition costs		(17)		(17)
Nondeductible employee meals		12		12
Nondeductible interest expense		13		13
Derivative market adjustment		—		10
Nondeductible compensation		9		10
Valuation allowance		(294)		(315)
Other, net		3		3
	$	5	$	(2)

Components of Deferred Tax Assets and Liabilities

Temporary differences and carryforwards that give rise to deferred tax assets and liabilities at December 31, 2013 and 2012 were as follows (in millions):

	UAL				United
	December 31,				December 31,
	2013		2012		2013		2012
Deferred income tax asset (liability):
Federal and state net operating loss (“NOL”) carryforwards	$	3,221	$	3,025	$	3,158	$	2,957
Frequent flyer deferred revenue		2,254		2,425		2,254		2,426
Employee benefits, including pension, postretirement, medical and the Pension Benefit Guaranty Corporation (“PBGC”) notes		1,701		2,488		1,701		2,491
Lease fair value adjustment		123		259		123		259
AMT credit carryforwards		233		251		233		251
Other assets		217		947		217		882
Less: Valuation allowance		(3,806)		(4,603)		(3,776)		(4,503)
Total deferred tax assets (a)	$	3,943	$	4,792	$	3,910	$	4,763
Depreciation, capitalized interest and other	$	(3,201)	$	(3,705)	$	(3,201)	$	(3,702)
Intangibles		(1,585)		(1,578)		(1,585)		(1,579)
Other liabilities		(144)		(509)		(111)		(406)
Total deferred tax liabilities	$	(4,930)	$	(5,792)	$	(4,897)	$	(5,687)
Net deferred tax liability (a)	$	(987)	$	(1,000)	$	(987)	$	(924)

(a) During 2013, UAL identified adjustments to the components of the deferred taxes. As a result of this analysis, changes in deferred tax assets and liabilities occurred, and are reflected in 2013 deferred tax balances. UAL and United increased their valuation allowance to reflect these adjustments by $84 million and $163 million, respectively. United separately identified an adjustment of $68 million to increase its deferred tax liability with an offset to United-only equity to correct an error made in prior years. This item did not affect the consolidated accounts of UAL. It was corrected in the current period as it was not considered material to United’s prior year reported financial position.

Reconciliation of Unrecognized Tax Benefits

The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits related to the Company’s uncertain tax positions (in millions):

	2013		2012		2011
Balance at January 1,	$	19	$	24	$	32
Decrease in unrecognized tax benefits relating to settlements with taxing authorities		—		(12)		—
Increase (decrease) in unrecognized tax benefits as a result of tax positions taken during a prior period		—		8		(9)
Decrease in unrecognized tax benefits relating from a lapse of the statute of limitations		(5)		(1)		—
Increase in unrecognized tax benefits as a result of tax positions taken during the current period		—		—		1
Balance at December 31,	$	14	$	19	$	24