Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Components of Income Tax Expense (Benefit)

The significant components of the income tax expense (benefit) are as follows (in millions):

2014	UAL		United
Current	$	(17)	$	(17)
Deferred		13		13
	$	(4)	$	(4)
2013
Current	$	(18)	$	(18)
Deferred		(14)		1
	$	(32)	$	(17)
2012
Current	$	(14)	$	(9)
Deferred		13		13
	$	(1)	$	4

Income Tax Provision Differed from Amounts Computed at Statutory Federal Income Tax Rate

The income tax provision differed from amounts computed at the statutory federal income tax rate, as follows (in millions):

UAL	2014		2013		2012
Income tax provision at statutory rate	$	395	$	189	$	(253)
State income taxes, net of federal income tax		16		5		(15)
Foreign income taxes		2		3		7
Nondeductible employee meals		15		15		12
Nondeductible interest expense		—		—		19
State rate change		—		(33)		—
Valuation allowance		(441)		(219)		234
Other, net		9		8		(5)
	$	(4)	$	(32)	$	(1)
United	2014		2013		2012
Income tax provision at statutory rate	$	388	$	223	$	(230)
State income taxes, net of federal income tax		15		5		(7)
Foreign income taxes		2		3		7
Nondeductible employee meals		15		15		12
Nondeductible interest expense		—		—		19
Derivative market adjustment		(7)		(24)		(15)
State rate change		—		(33)		—
Valuation allowance		(426)		(229)		223
Other, net		9		23		(5)
	$	(4)	$	(17)	$	4

Components of Deferred Tax Assets and Liabilities

Temporary differences and carryforwards that give rise to deferred tax assets and liabilities at December 31, 2014 and 2013 were as follows (in millions):

	UAL				United
	December 31,				December 31,
	2014		2013		2014		2013
Deferred income tax asset (liability):
Federal and state net operating loss (“NOL”) carryforwards	$	3,491	$	4,006	$	3,423	$	3,943
Frequent flyer deferred revenue		2,287		2,254		2,287		2,254
Employee benefits, including pension, postretirement and medical		1,943		1,701		1,943		1,701
Alternative minimum tax credit carryforwards		214		233		214		233
Other		657		340		659		340
Less: Valuation allowance		(4,751)		(4,591)		(4,721)		(4,561)
Total deferred tax assets	$	3,841	$	3,943	$	3,805	$	3,910
Depreciation, capitalized interest and other	$	(3,212)	$	(3,201)	$	(3,212)	$	(3,201)
Intangibles		(1,545)		(1,585)		(1,545)		(1,585)
Other		(84)		(144)		(48)		(111)
Total deferred tax liabilities	$	(4,841)	$	(4,930)	$	(4,805)	$	(4,897)
Net deferred tax liability	$	(1,000)	$	(987)	$	(1,000)	$	(987)

Reconciliation of Unrecognized Tax Benefits

The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits related to the Company’s uncertain tax positions (in millions):

	2014		2013		2012
Balance at January 1,	$	14	$	19	$	24
Decrease in unrecognized tax benefits relating to settlements with taxing authorities		(5)		—		(12)
Increase in unrecognized tax benefits as a result of tax positions taken during a prior period		—		—		8
Decrease in unrecognized tax benefits relating from a lapse of the statute of limitations		—		(5)		(1)
Balance at December 31,	$	9	$	14	$	19