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.