FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2012

Financial Assets And Liabilities Measured At Fair Value On A Recurring Basis

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, 2012 and December 31, 2011 (in millions):

	June 30, 2012											December 31, 2011
	Total			Level 1		Level 2			Level 3			Total			Level 1		Level 2			Level 3
	UAL
Cash and cash equivalents	$	6,086		$	6,086	$	—		$	—		$	6,246		$	6,246	$	—		$	—
Short-term investments:
Asset-backed securities		522			—		522			—			478			—		478			—
Corporate debt		518			—		518			—			515			—		515			—
Certificates of deposit placed through an account registry service (“CDARS”)		421			—		421			—			355			—		355			—
Auction rate securities		112			—		—			112			113			—		—			113
U.S. government and agency notes		20			—		20			—			22			—		22			—
Other fixed income securities		25			—		25			—			33			—		33			—
Enhanced equipment trust certificates (“EETC”)		63			—		—			63			60			—		—			60
Fuel derivatives, net		(101	)		—		(101	)		—			73			—		73			—
Foreign currency derivatives		—			—		—			—			(1	)		—		(1	)		—
Restricted cash		586			586		—			—			569			569		—			—
	United
Cash and cash equivalents	$	4,076		$	4,076	$	—		$	—		$	3,458		$	3,458	$	—		$	—
Short-term investments:
Asset-backed securities		20			—		20			—			29			—		29			—
Corporate debt		132			—		132			—			138			—		138			—
CDARS		162			—		162			—			87			—		87			—
U.S. government and agency notes		6			—		6			—			5			—		5			—
Other fixed income securities		22			—		22			—			16			—		16			—
EETC		63			—		—			63			60			—		—			60
Fuel derivatives, net		(54	)		—		(54	)		—			44			—		44			—
Restricted cash		445			445		—			—			433			433		—			—
	Continental
Cash and cash equivalents	$	2,004		$	2,004	$	—		$	—		$	2,782		$	2,782	$	—		$	—
Short-term investments:
Asset-backed securities		502			—		502			—			449			—		449			—
Corporate debt		386			—		386			—			377			—		377			—
CDARS		259			—		259			—			268			—		268			—
Auction rate securities		112			—		—			112			113			—		—			113
U.S. government and agency notes		14			—		14			—			17			—		17			—
Other fixed income securities		3			—		3			—			17			—		17			—
Fuel derivatives, net		(47	)		—		(47	)		—			29			—		29			—
Foreign currency derivatives		—			—		—			—			(1	)		—		(1	)		—
Restricted cash		140			140		—			—			135			135		—			—
Convertible debt derivative asset		289			—		—			289			193			—		—			193
Convertible debt option liability		(147	)		—		—			(147	)		(95	)		—		—			(95	)

Activity For "Level Three" Financial Assets And Financial Liabilities

The tables below present disclosures about the activity for “Level 3” financial assets and financial liabilities for the three and six months ended June 30 (in millions):

	Three Months Ended June 30,
	2012				2011
UAL (a)	Auction Rate Securities		EETC		Auction Rate Securities		EETC
Balance at March 31	$	112	$	62	$	120	$	63
Settlements		—		—		—		—
Reported in earnings—unrealized		—		—		1		—
Reported in other comprehensive income		—		1		—		2
Balance at June 30	$	112	$	63	$	121	$	65

(a) For 2012 and 2011, United’s only Level 3 recurring measurements are the above EETCs.

	Six Months Ended June 30,
	2012						2011
UAL (a)	Auction Rate Securities			EETC			Auction Rate Securities		EETC
Balance at January 1	$	113		$	60		$	119	$	66
Settlements		—			(2	)		—		(2	)
Reported in earnings—unrealized		(1	)		—			1		—
Reported in other comprehensive income		—			5			1		1
Balance at June 30	$	112		$	63		$	121	$	65

(a) For 2012 and 2011, United’s only Level 3 recurring measurements are the above EETCs.

	Three Months Ended June 30,
	2012							2011
Continental	Auction Rate Securities		Convertible Debt Supplemental Derivative Asset (a)		Convertible Debt Conversion Option Liability (a)			Auction Rate Securities		Convertible Debt Supplemental Derivative Asset (a)			Convertible Debt Conversion Option Liability (a)
Balance at March 31	$	112	$	231	$	(119	)	$	120	$	262		$	(152	)
Sales		—		—		—			—		—			—
Gains (losses):
Reported in earnings—unrealized		—		58		(28	)		1		(11	)		9
Reported in other comprehensive income		—		—		—			—		—			—
Balance at June 30	$	112	$	289	$	(147	)	$	121	$	251		$	(143	)

(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.

	Six Months Ended June 30,
	2012								2011
Continental	Auction Rate Securities			Convertible Debt Supplemental Derivative Asset (a)		Convertible Debt Conversion Option Liability (a)			Auction Rate Securities		Convertible Debt Supplemental Derivative Asset (a)			Convertible Debt Conversion Option Liability (a)
Balance at January 1	$	113		$	193	$	(95	)	$	119	$	286		$	(164	)
Sales		—			—		—			—		—			—
Gains (losses):
Reported in earnings—unrealized		(1	)		96		(52	)		1		(35	)		21
Reported in other comprehensive income		—			—		—			1		—			—
Balance at June 30	$	112		$	289	$	(147	)	$	121	$	251		$	(143	)

(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.

Carrying Values And Estimated Fair Values Of Financial Instruments

The table below presents the carrying values and estimated fair values of financial instruments not presented in the tables above as of June 30, 2012 and December 31, 2011 (in millions):

	Fair Value of Debt by Fair Value Hierarchy Level
	June 30, 2012										December 31, 2011
	Carrying Amount		Fair Value								Carrying Amount		Fair Value
			Total		Level 1		Level 2		Level 3				Total		Level 1		Level 2		Level 3
UAL debt	$	11,477	$	12,542	$	—	$	7,250	$	5,292	$	11,682	$	11,992	$	—	$	859	$	11,133
United debt		5,531		5,718		—		2,197		3,521		5,745		5,630		—		—		5,630
Continental debt		5,540		5,832		—		4,061		1,771		5,528		5,503		—		—		5,503

Quantitative Information About Level 3 Fair Value Measurements

Quantitative Information About Level 3 Fair Value Measurements as of June 30, 2012 ($ in millions)

Item	Fair Value at June 30, 2012			Valuation Technique	Unobservable Input	Range (Weighted Average)
Auction rate securities	$	112		Discounted Cash Flows	Credit risk premium (a) Illiquidity premium (b) Expected repayments (c)	1% 5% Assumed repayment in years 2013 through 2036
EETC	$	63		Discounted Cash Flows	Structure credit risk (d)	7% - 9% (8%)
Convertible debt derivative asset	$	289		Binomial Lattice Model	Expected volatility (e) Own credit risk (f)	45% - 60% (48%) 7% - 10% (8%)
Convertible debt option liability	$	(147	)	Binomial Lattice Model	Expected volatility (e) Own credit risk (f)	45% - 60% (48%) 7% - 10% (8%)

(a) Represents the credit risk premium component of the discount rate that the Company has determined market participants would use in pricing the investments.

(b) Represents the illiquidity premium component of the discount rate that the Company has determined market participants would use in pricing the investments.

(c) Represents the estimated timing of principal repayments used in the discounted cash flow model.

(d) Represents the credit risk premium of the EETC structure above the risk-free rate that the Company has determined market participants would use in pricing the instruments.

(e) Represents the range in volatility estimates that the Company has determined market participants would use when pricing the instruments.

(f) Represents the range of Company-specific risk adjustments that the Company has determined market participants would use as a model input.