NOTE 10 - SPECIAL CHARGES

For the three months ended March 31, special charges consisted of the following (in millions):


	2014		2013
Integration-related costs	$	34	$	70
Severance and benefits		14		14
(Gains) losses on sale of assets and other special (gains) losses, net		4		(3)
Additional costs associated with the temporarily grounded Boeing 787 aircraft		—		11

Special charges		52		92
Venezuela foreign exchange loss		21		—
Income tax benefit		(1)		—

Total operating and nonoperating special charges, net of income taxes	$	72	$	92

Integration-related costs include compensation costs related to systems integration and training, new uniforms, relocation for employees and severance primarily associated with administrative headcount reductions.

During the three months ended March 31, 2014, the Company recorded $14 million of severance and benefits. We currently expect to reduce up to 470 airport operations and catering positions at Hopkins International Airport (“Cleveland”) as a result of the previously announced capacity reductions and an additional 238 airport positions in Canada. In addition, the Company recorded $4 million of other charges related to asset impairments on certain intangible assets, losses on the sale of assets and other items.

During the three months ended March 31, 2014, the Company recorded $21 million of losses due to exchange rate changes in Venezuela applicable to funds held in local currency. Approximately $100 million of the Company’s unrestricted cash balance was held as Venezuelan bolivars as of March 31, 2014. The Company is working with Venezuelan authorities regarding the timing of the repatriation of its funds held in local currency.

During the three months ended March 31, 2013, the Company recorded $14 million associated with a voluntary program offered by United in which flight attendants took an unpaid 13-month leave of absence. The flight attendants continue to receive medical benefits and other company benefits while on leave under this program. Approximately 1,300 flight attendants opted to participate in the program. In addition, the Company recorded $11 million associated with the temporary grounding of its Boeing 787 aircraft. The charges are comprised of aircraft depreciation expense and dedicated personnel costs that the Company continues to incur while the aircraft are grounded. Also, the Company recorded a $5 million gain related to a contract termination and $2 million in losses on the sale of assets.

Cleveland Capacity Reduction. In February 2014, the Company announced that it would be reducing its flying from Cleveland in stages beginning in April 2014. The Company will reduce its average daily departures from Cleveland by over 60 percent. The Company is currently evaluating its options regarding its long-term contractual commitments at Cleveland. The capacity reductions at Cleveland may result in special charges, which could be significant, related to our contractual commitments.

Accruals

The accrual for severance and medical costs was $69 million as of March 31, 2014, compared to $62 million as of March 31, 2013. The severance-related accrual as of March 31, 2014 is expected to be paid through 2015.