United Airlines 2012 Annual Report Download - page 44

Table of Contents
Excluding the impact of the Merger, operating expenses increased approximately $1.3 billion, or 6.9%, in 2011 as compared to 2010.
The significant increase in aircraft fuel expense was primarily attributable to a 27% increase in fuel prices offset by a 2.2% decrease in fuel consumption.
Salaries and related costs increased $31 million, or 0.7%, due to higher pay rates and a one-time signing bonus for certain labor groups.
Landing fees and other rent decreased $48 million, or 4.5%, primarily due to higher than anticipated credits (refunds) received in 2011 as a result of airports’
audits of prior period payment.
Aircraft maintenance materials and outside repairs increased $169 million, or 17.2%, primarily due to increased power by the hour rates and a higher
number of service events.
Other operating expenses decreased $168 million, or 6.2%, primarily due to aircraft redeployment as a result of the Merger.
The table below presents integration and Merger-related costs and special items incurred by UAL during the years ended December 31 (in millions):
 
Integration and Merger-related costs $517 $564
Termination of maintenance service contract 58 —
Intangible asset impairments 4 29
Aircraft impairment — 136
Goodwill impairment credit — (64)
Other 13 4
Total special items 592 669
Tax benefit on intangible asset impairments (2) (12)
Total special items, net of tax $590 $657
Integration and Merger-related costs include compensation costs related to systems integration and training, costs to repaint aircraft in the new livery and other
branding activities, costs to write-off or accelerate depreciation on systems and facilities that are no longer used or planned to be used for significantly shorter
periods, severance primarily associated with administrative headcount reductions and a charge related to the Company’s obligation to issue 8% Notes. See
Notes 1 and 21 to the financial statements included in Item 8 of this report for additional information related to special items.
Nonoperating Income (Expense)
The following table illustrates the year-over-year dollar and percentage changes in UAL’s nonoperating income (expense) (in millions, except percentage
changes):
  












Interest expense $(949) $(798) $ 151 $ 256 $(105) (14.7)
Interest capitalized 32 15 17 13 4 36.4
Interest income 20 15 5 7 (2) (16.7)
Miscellaneous, net (80) 45 (125) (74) (51) NM
Total $(977) $(723) $ 254 $ 310 $ (56) (8.7)
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