United Airlines 2010 Annual Report Download - page 136
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Continental Successor Continental Predecessor
Cash and cash equivalents .............. $3,398 $3,398 $— $ — $2,546 $2,546 $— $—
Short-term investments:
Auction rate securities ............. 119 — — 119 201 — — 201
CDARS ........................ 45 45 — — 103 103 — —
Asset-backed securities ............ 258 258 — — 6 6 — —
Corporate debt ................... 135 135 — — — — — —
U.S. government and agency notes . . . 39 39 — — — — — —
Other fixed income securities ....... 15 15 — — — — — —
Current fuel derivative instruments asset . . 98 — 98 — 14 — 14 —
Foreign currency derivatives ............ (7) — (7) — 5 — 5 —
Restricted cash ....................... 160 160 — — 164 164 — —
Auction rate securities put right ......... — — — — 20 — — 20
Convertible debt derivative asset ......... 286 — — 286 — — — —
Convertible debt option liability ......... (164) — — (164) — — — —
The table below presents disclosures about the activity for “Level Three” financial assets and financial
liabilities (in millions):
2010 2009
UAL (a)
Student
Loan-Related
Auction Rate
Securities EETC EETC
Balance at beginning of year .......................................... $— $ 51 $ 46
Purchases, sales, issuances and settlements (net) .......................... — (4) (10)
Acquired in Merger ................................................. 117 — —
Reported in other comprehensive income (loss) ........................... 2 19 15
Balance at end of year ............................................... $119 $ 66 $ 51
(a) For 2009, amounts also represent United. For 2010, United’s only Level 3 recurring measurement are the above EETCs.
As of December 31, 2010, the auction rate securities, which had a par value of $145 million, were variable-
rate debt instruments with contractual maturities generally greater than ten years and whose interest rates are
reset every 7, 28 or 35 days, depending on the terms of the particular instrument. These securities are secured by
pools of student loans guaranteed by state-designated guaranty agencies and reinsured by the U.S.
government. All of the auction rate securities Continental holds are senior obligations under the applicable
indentures authorizing the issuance of the securities. Auctions for these securities began failing in the first quarter
of 2008 and have continued to fail, resulting in Continental holding such securities and the issuers of these
securities paying interest adjusted to the maximum contractual rates.
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