United Airlines 2010 Annual Report Download - page 166

In 2009, Continental recorded a $12 million non-cash charge to write off intangible route assets related to
certain Mexican and Central American locations as a result of its annual impairment analysis. Continental
determined that these routes had no fair value since they are subject to “open skies” agreements and there are no
other barriers to flying to these locations.
Other special charges in 2009 related primarily to an adjustment to Continental Predecessor’s reserve for
unused facilities due to reductions in expected sublease income for a maintenance hangar in Denver.
2008
For the year ended December 31, 2008, aircraft-related charges of $40 million include non-cash
impairments on owned Boeing 737-300 and 737-500 aircraft and related assets. Aircraft-related charges in 2008
also include charges for future lease costs on permanently grounded 737-300 aircraft and gains on the sale of ten
Boeing 737-500 aircraft.
In conjunction with the 2008 capacity reductions, Continental Predecessor incurred $34 million for
severance and continuing medical coverage for employees accepting early retirement packages or company-
offered leaves of absence during 2008. Approximately 3,000 positions were eliminated as a result of the capacity
reductions, the majority of which were implemented in September 2008.
Continental also recorded an $18 million non-cash charge in 2008 to write off an intangible route asset as a
result of its decision to move all of its flights between New York Liberty and London from London Gatwick
Airport to London Heathrow Airport.
In addition, Continental recorded non-cash settlement charges totaling $52 million related to lump sum
distributions from its pilot-only defined benefit pension plan to pilots who retired, as discussed in Note 9.
Other special charges in 2008 relate primarily to contract settlements with regional carriers and adjustments
to reserves for unused facilities.
Non-Operating Charges
In 2008, Continental recorded an expense of $125 million related to changes in the fair value of fuel
derivative contracts with Lehman Brothers that were deemed ineffective after Lehman Brothers declared
bankruptcy and a gain of $26 million related to the receipt of a put right covering certain of its student loan-
related auction rate securities. Other-than-temporary impairment losses on investments included a loss of $60
million in 2008 to reflect the decline in the value of Continental’s student loan-related auction rate securities.
Additionally, in May 2008, Continental sold all of its remaining shares of Copa Holdings, S.A. (“Copa”) Class A
common stock for net proceeds of $149 million and recognized a gain of $78 million.
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