United Airlines 2008 Annual Report Download - page 113

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The table below summarizes restricted stock activity for the twelve months ended December 31,
2008:
Restricted Stock
Weighted-
Average
Grant Price
Non-vested at beginning of year ............................ 2,017,989 $37.20
Granted............................................... 413,800 15.76
Vested................................................ (886,188) 33.36
Canceled .............................................. (114,926) 38.98
Non-vested at end of year ................................. 1,430,675 35.32
The fair value of restricted shares vested in 2008, 2007 and 2006 was $30 million, $28 million and
$31 million, respectively. The weighted-average grant date price of shares granted in 2007 and 2006 was
$43.61 and $36.78.
(8) Income Taxes
In 2008, substantially all of the tax benefit of the Company’s net loss was offset by a valuation
allowance. In 2008, UAL and United recorded tax benefits of $25 million and $22 million, respectively,
primarily due to the impairment and sale of select indefinite-lived intangibles and the impact of an
increase in state tax rates. This tax benefit is small relative to the Company’s losses; consequently, the
Company’s effective tax rate is insignificant, when compared to the 35% U.S. federal statutory rate. In
2007, the Company’s regular taxable income was completely absorbed by utilization of its net operating
loss (“NOL”) carry forward; however, the Company did incur an alternative minimum tax (“AMT”)
liability of $6 million.
The significant components of the income tax expense (benefit) are as follows:
UAL 2008 2007
Period from
February 1
to December 31,
2006
Period from
January 1
to January 31,
2006
Year Ended
December 31,
Successor
(In millions)
Predecessor
Current tax expense ............................... $ 1 $ 6 $— $ —
Deferred tax expense (benefit) ...................... (26) 291 21 8,488
Increase (decrease) in the valuation allowance for
deferred tax assets .............................. — — — (8,488)
$(25) $297 $21 $ —
United
Current tax expense ............................... $ 4 $ 6 $— $ —
Deferred tax expense (benefit) ...................... (26) 290 29 8,397
Increase (decrease) in the valuation allowance for
deferred tax assets .............................. — — — (8,397)
$(22) $296 $29 $ —
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