NOTE 10 - SPECIAL CHARGES

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


Operating:	2015		2014
Severance and benefits	$	50	$	14
Integration-related costs		18		34
(Gains) losses on sale of assets and other special charges		(4)		4

Special charges		64		52
Nonoperating:
Loss on extinguishment of debt and other, net		6		21
Income tax benefit		—		(1)

Total operating and nonoperating special charges, net of income taxes	$	70	$	72

During the three months ended March 31, 2015, the Company recorded $50 million of severance and benefits related to a voluntary early-out program for its flight attendants. In 2014, more than 2,500 flight attendants elected to voluntarily separate from the Company and will receive a severance payment, with a maximum value of $100,000 per participant, based on years of service, with retirement dates through the end of 2015. The Company will record approximately $50 million of additional expense through the remainder of 2015 associated with this program over the remaining required service periods.

Integration-related costs include compensation costs related primarily to systems integration and training for employees.

During the three months ended March 31, 2015, the Company recorded $6 million of losses as part of Nonoperating income (expense): Miscellaneous, net due to the write-off of the debt discount related to the redemption of the 2026 Notes and 2028 Notes.

During the three months ended March 31, 2014, the Company recorded $14 million of severance and benefits and $34 million in integration-related costs. The severance and benefits primarily related to reductions of management and front-line employees, including from Hopkins International Airport (“Cleveland”), as part of its cost savings initiatives. The Company reduced its average daily departures from Cleveland by over 60 percent during the second quarter of 2014. The Company is currently evaluating its options regarding its long-term contractual commitments at Cleveland. The capacity reductions at Cleveland may result in further special charges, which could be significant, related to our contractual commitments. In addition, the Company recorded $21 million of losses due to exchange rate changes in Venezuela applicable to funds held in local currency.

Accruals

The accrual balance for severance and benefits was $96 million as of March 31, 2015, compared to $69 million as of March 31, 2014. The severance-related accrual as of March 31, 2015 is expected to be mostly paid through 2015. The following is a reconciliation of severance accrual activity for the period:


	Severance and Benefits
Balance at December 31, 2014	$	109
Accrual		50
Payments		(63)

Balance at March 31, 2015	$	96