United Airlines 2008 Annual Report Download - page 43

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Additional details of significant variances in 2008 as compared to 2007 results, as presented in the
table above, include the following:
• UAL recorded the following impairment and other charges, as further discussed below, during
the year ended December 31, 2008:
(In millions)
Year Ended
December 31,
2008 Income statement classification
Goodwill impairment................. $2,277 Goodwill impairment
Intangible asset impairments ........... 64
Aircraft and related deposit
impairments ...................... 250
Total other impairments ............. 314
Lease termination and other charges .... 25
Total other impairments and special
items.......................... 339 Otherimpairments and special items
Severance.......................... 106 Salariesandrelatedcosts
Employee benefit obligation adjustment . . 57 Salaries and related costs
Litigation-related settlement gain ....... (29) Other operating expenses
Charges related to terminated/deferred
projects ......................... 26 Purchased services
Net gain on asset sales ............... (3) Depreciation and amortization
Accelerated depreciation .............. 34 Depreciation and amortization
Total other charges................. 191
Operating non-cash fuel hedge loss...... 568 Aircraft fuel
Nonoperating non-cash fuel hedge loss . . . 279 Miscellaneous, net
Tax benefit on intangible asset
impairments and asset sales .......... (31) Income tax benefit
Total impairments and other charges . . . $3,623
• The relatively small income tax benefit in 2008 is related to the impairment and sale of certain
indefinite-lived intangible assets, partially offset by the impact of an increase in state tax rates. In
2007, UAL recognized income tax expense of $297 million.
Liquidity. The following table provides a summary of the Company’s cash, restricted cash and
short-term investments at December 31, 2008 and 2007.
(In millions) 2008 2007
As of December 31,
Cash and cash equivalents ................................. $2,039 $1,259
Short-term investments ................................... — 2,295
Restricted cash .......................................... 272 756
Cash, short-term investments & restricted cash ............... $2,311 $4,310
The decrease in the Company’s cash, restricted cash and short-term investments balances was
primarily due to a $3.4 billion unfavorable reduction in cash flows from operations in 2008 as compared
to 2007. The operating cash decrease was primarily due to increased cash expenses, mainly fuel and fuel
hedge cash settlements, as discussed below under Results of Operations. Fuel hedge collateral
requirements also used operating cash of approximately $965 million in the year ended December 31,
2008. This unfavorable variance was partly offset by approximately $600 million of proceeds received
from the amendment of the co-brand credit card agreement, as discussed above. Restricted cash
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