NOTE 10—SPECIAL CHARGES

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


	Three Months Ended March 31,
2012	UAL			United			Continental
Integration-related costs	$	134		$	71		$	63
Voluntary severance and benefits		49			49			—
(Gains) losses on sale of assets and other special charges, net		(19	)		(24	)		5

Subtotal special charges		164			96			68
Income tax benefit		(2	)		—			(2	)

Total special charges, net of income taxes	$	162		$	96		$	66


2011	UAL			United		Continental
Integration-related costs	$	79		$	74	$	5
Gain on aircraft sales		(2	)		—		(2	)

Total	$	77		$	74	$	3

Integration-related costs include compensation costs related to systems integration and training, costs to repaint aircraft and other branding activities, costs to write-off or accelerate depreciation on systems and facilities that are no longer used or planned to be used for significantly shorter periods, relocation costs for employees and severance primarily associated with administrative headcount reductions.

During the three months ended March 31, 2012, the Company recorded $49 million of severance and benefits associated with two voluntary employee programs. In one program, approximately 400 mechanics offered to retire early in exchange for a cash severance payment that was based on the number of years of service each employee had accumulated. The other program is a voluntary company-offered leave of absence that approximately 1,800 flight attendants accepted, which allows for continued medical coverage during the leave of absence period.

In addition, the Company sold six aircraft and its interest in a crew hotel in Hawaii during the first quarter of 2012. The Company also recorded an impairment charge on an intangible asset related to take-off and landing slots to reflect the discontinuance of one of the frequencies on an international route. The Company also made adjustments to certain legal reserves.

Accruals

The accrual for severance and medical costs was $90 million, $69 million and $21 million related to UAL, United and Continental, respectively, as of March 31, 2012. In addition, the accrual balance of future lease payments on permanently grounded aircraft was $23 million for both UAL and United as of March 31, 2012.

The severance-related accrual as of March 31, 2012, which primarily relates to the integration of United and Continental, is expected to be paid during 2012. Lease payments for grounded aircraft are expected to continue through 2013.

At March 31, 2011, the accrual balance for severance and medical costs was $81 million, $45 million and $36 million, related to UAL, United and Continental, respectively. In addition, the accrual balance of future lease payments on permanently grounded aircraft was $38 million for both UAL and United as of March 31, 2011.

Special Charges

NOTE 10—SPECIAL CHARGES

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


	Three Months Ended March 31,
2012	UAL			United			Continental
Integration-related costs	$	134		$	71		$	63
Voluntary severance and benefits		49			49			—
(Gains) losses on sale of assets and other special charges, net		(19	)		(24	)		5

Subtotal special charges		164			96			68
Income tax benefit		(2	)		—			(2	)

Total special charges, net of income taxes	$	162		$	96		$	66


2011	UAL			United		Continental
Integration-related costs	$	79		$	74	$	5
Gain on aircraft sales		(2	)		—		(2	)

Total	$	77		$	74	$	3

Integration-related costs include compensation costs related to systems integration and training, costs to repaint aircraft and other branding activities, costs to write-off or accelerate depreciation on systems and facilities that are no longer used or planned to be used for significantly shorter periods, relocation costs for employees and severance primarily associated with administrative headcount reductions.

During the three months ended March 31, 2012, the Company recorded $49 million of severance and benefits associated with two voluntary employee programs. In one program, approximately 400 mechanics offered to retire early in exchange for a cash severance payment that was based on the number of years of service each employee had accumulated. The other program is a voluntary company-offered leave of absence that approximately 1,800 flight attendants accepted, which allows for continued medical coverage during the leave of absence period.

In addition, the Company sold six aircraft and its interest in a crew hotel in Hawaii during the first quarter of 2012. The Company also recorded an impairment charge on an intangible asset related to take-off and landing slots to reflect the discontinuance of one of the frequencies on an international route. The Company also made adjustments to certain legal reserves.

Accruals

The accrual for severance and medical costs was $90 million, $69 million and $21 million related to UAL, United and Continental, respectively, as of March 31, 2012. In addition, the accrual balance of future lease payments on permanently grounded aircraft was $23 million for both UAL and United as of March 31, 2012.

The severance-related accrual as of March 31, 2012, which primarily relates to the integration of United and Continental, is expected to be paid during 2012. Lease payments for grounded aircraft are expected to continue through 2013.

At March 31, 2011, the accrual balance for severance and medical costs was $81 million, $45 million and $36 million, related to UAL, United and Continental, respectively. In addition, the accrual balance of future lease payments on permanently grounded aircraft was $38 million for both UAL and United as of March 31, 2011.

Special Charges

NOTE 10—SPECIAL CHARGES

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


	Three Months Ended March 31,
2012	UAL			United			Continental
Integration-related costs	$	134		$	71		$	63
Voluntary severance and benefits		49			49			—
(Gains) losses on sale of assets and other special charges, net		(19	)		(24	)		5

Subtotal special charges		164			96			68
Income tax benefit		(2	)		—			(2	)

Total special charges, net of income taxes	$	162		$	96		$	66


2011	UAL			United		Continental
Integration-related costs	$	79		$	74	$	5
Gain on aircraft sales		(2	)		—		(2	)

Total	$	77		$	74	$	3

Integration-related costs include compensation costs related to systems integration and training, costs to repaint aircraft and other branding activities, costs to write-off or accelerate depreciation on systems and facilities that are no longer used or planned to be used for significantly shorter periods, relocation costs for employees and severance primarily associated with administrative headcount reductions.

During the three months ended March 31, 2012, the Company recorded $49 million of severance and benefits associated with two voluntary employee programs. In one program, approximately 400 mechanics offered to retire early in exchange for a cash severance payment that was based on the number of years of service each employee had accumulated. The other program is a voluntary company-offered leave of absence that approximately 1,800 flight attendants accepted, which allows for continued medical coverage during the leave of absence period.

In addition, the Company sold six aircraft and its interest in a crew hotel in Hawaii during the first quarter of 2012. The Company also recorded an impairment charge on an intangible asset related to take-off and landing slots to reflect the discontinuance of one of the frequencies on an international route. The Company also made adjustments to certain legal reserves.

Accruals

The accrual for severance and medical costs was $90 million, $69 million and $21 million related to UAL, United and Continental, respectively, as of March 31, 2012. In addition, the accrual balance of future lease payments on permanently grounded aircraft was $23 million for both UAL and United as of March 31, 2012.

The severance-related accrual as of March 31, 2012, which primarily relates to the integration of United and Continental, is expected to be paid during 2012. Lease payments for grounded aircraft are expected to continue through 2013.

At March 31, 2011, the accrual balance for severance and medical costs was $81 million, $45 million and $36 million, related to UAL, United and Continental, respectively. In addition, the accrual balance of future lease payments on permanently grounded aircraft was $38 million for both UAL and United as of March 31, 2011.