United Airlines 2014 Annual Report Download - page 37
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Table of Contents
Landing fees and other rent increased $184 million, or 8.8%, in 2014 as compared to 2013 primarily due to a transition from paying regional carriers for
landing fees to paying airports directly. Landing fees have also increased due to airport security services and modernization projects at certain airport
locations.
Aircraft rent decreased $53 million, or 5.7%, in 2014 as compared to 2013 primarily due to aircraft lease expirations and terminations of several Boeing 757-
200 aircraft leases resulting from the Company’s purchase of the leased aircraft.
The table below presents integration-related costs and special items incurred by the Company during the years ended December 31 (in millions):
Severance and benefit costs $199 $105
Integration-related costs 96 205
Costs associated with permanently grounding Embraer ERJ 135 aircraft 66 —
Impairment of assets 49 33
Labor agreement costs — 127
(Gains) losses on sale of assets and other special (gains) losses, net 33 50
Total special items $443 $520
See Note 17 to the financial statements included in Part II, Item 8 of this report for additional information.
Nonoperating Income (Expense)
The following table illustrates the year-over-year dollar and percentage changes in the Company’s nonoperating income (expense) (in millions, except
percentage changes):
Interest expense $ (735) $(783) $ (48) (6.1)
Interest capitalized 52 49 3 6.1
Interest income 22 21 1 4.8
Miscellaneous, net (584) 3 (587) NM
Total $(1,245) $(710) $ 535 75.4
The decrease in interest expense of $48 million, or 6.1%, in 2014 as compared to 2013 was primarily due to the Company’s extinguishment of certain of its
debt instruments and the refinancing of certain of its debt instruments at lower interest rates.
In 2014, Miscellaneous, net included a MTM loss of $465 million from fuel hedge derivatives as compared to a gain of $84 million in 2013. Miscellaneous,
net also included foreign currency losses of $41 million and $29 million in 2014 and 2013, respectively. 2014 Miscellaneous, net includes a $64 million
debt extinguishment charge related to the retirement of the $248 million 6% Convertible Junior Subordinated Debentures.
United’s nonoperating expense also included a net gain of $19 million associated with marking to market the fair value of derivative assets and liabilities
related to agreements that provide for United’s convertible debt to be settled with UAL common stock as compared to a net gain of $70 million in 2013.
These net gains and related derivatives are reflected only in the United stand-alone financial statements as they are eliminated at the consolidated level. See
Note 9 to the financial statements included in Part II, Item 8 of this report for additional information.
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