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Special Items | 9 Months Ended
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Sep. 30, 2016
Special Items | NOTE 10 - SPECIAL ITEMS For the three and nine months ended September 30, special items consisted of the following (in millions):
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
Operating: |  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
Labor agreement costs |  | $ | 14 |  |  | $ | — |  |  | $ | 124 |  |  | $ | — |
Severance and benefit costs |  |  | 13 |  |  |  | 28 |  |  |  | 27 |  |  |  | 103 |
Impairment of intangible asset related to Newark Liberty International Airport (“Newark”) slots |  |  | — |  |  |  | — |  |  |  | 412 |  |  |  | — |
Cleveland airport lease restructuring |  |  | — |  |  |  | — |  |  |  | 74 |  |  |  | — |
(Gains) losses on sale of assets and other special charges |  |  | 18 |  |  |  | 48 |  |  |  | 32 |  |  |  | 92 |
Special charges |  |  | 45 |  |  |  | 76 |  |  |  | 669 |  |  |  | 195 |
Nonoperating and income taxes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Losses on extinguishment of debt and other |  |  | — |  |  |  | 61 |  |  |  | (1) |  |  |  | 195 |
Income tax benefit related to special charges |  |  | (16) |  |  |  | — |  |  |  | (241) |  |  |  | — |
Total special charges, net of tax |  |  | 29 |  |  |  | 137 |  |  |  | 427 |  |  |  | 390 |
Income tax valuation allowance release (Note 4) |  |  | — |  |  |  | (3,218) |  |  |  | — |  |  |  | (3,218) |
Total special items |  | $ | 29 |  |  | $ | (3,081) |  |  | $ | 427 |  |  | $ | (2,828) |
The fleet service, passenger service, storekeeper and other employees represented by the IAM ratified seven new contracts with the Company which extended the contracts through 2021. The Company also reached a tentative agreement with the IBT. During the three and nine months ended September 30, 2016, the Company recorded $61 million ($39 million net of taxes) and $171 million ($109 million net of taxes), respectively, of special charges primarily for payments to be made in conjunction with the IAM and IBT agreements described above. Also, as part of the recently ratified contract with the AFA, the Company amended two of its flight attendant postretirement medical plans. The amendments triggered curtailment accounting, resulting in the recognition of a one-time $47 million gain ($30 million net of taxes) for accelerated recognition of a prior service credit. During the three and nine months ended September 30, 2016, the Company recorded $13 million ($8 million net of taxes) and $27 million ($17 million net of taxes), respectively, of severance and benefit costs. During the three and nine months ended September 30, 2015, the Company recorded $28 million and $103 million, respectively, of severance and benefit costs. The severance and benefit costs relate to a voluntary early-out program for the Company’s flight attendants and other severance agreements. In 2014, more than 2,500 flight attendants elected to voluntarily separate from the Company for a severance payment, with a maximum value of $100,000 per participant, based on years of service, with retirement dates through the end of 2016. In April 2016, the Federal Aviation Administration (“FAA”) announced that it will designate Newark as a Level 2 schedule-facilitated airport under the International Air Transport Association Worldwide Slot Guidelines effective October 30, 2016. The designation was associated with an updated demand and capacity analysis of Newark by the FAA. In the second quarter of 2016, the Company determined that the FAA’s action impaired the entire value of its Newark slots because the slots will no longer be the mechanism that governs take-off and landing rights. Accordingly, the Company recorded a $412 million special charge ($264 million net of taxes) to write off the intangible asset. The Newark slots served as part of the collateral for the term loans under the Company’s Credit Agreement and under the Second Amended and Restated Co-Branded Card Marketing Services Agreement with Chase Bank USA, N.A. (the “Chase Agreement”). The Credit Agreement and the Chase Agreement have been amended to remove the Newark slots as collateral with no replacement collateral required. During the nine months ended September 30, 2016, the City of Cleveland agreed to amend the lease, which runs through 2029, associated with certain excess airport terminal space (principally Terminal D) and related facilities at Hopkins International Airport. The Company recorded an accrual for remaining payments under the lease for facilities that the Company no longer uses and will continue to incur costs under the lease without economic benefit to the Company. This liability was measured and recorded at its fair value when the Company ceased its right to use such facilities leased to it pursuant to the lease. The Company recorded a net charge of $74 million ($47 million net of taxes) related to the amended lease. During the three and nine months ended September 30, 2016, the Company recorded gains and losses on sale of assets and other special charges of $18 million ($12 million net of taxes) and $32 million ($20 million net of taxes), respectively. During the three and nine months ended September 30, 2015, the Company recorded $48 million and $92 million, respectively, for integration costs, impairment of assets and other special gains and losses. During the nine months ended September 30, 2016, the Company recorded $8 million ($5 million net of taxes) of losses due to exchange rate changes in Venezuela applicable to funds held in local currency and recorded a $9 million ($6 million net of taxes) gain on the sale of an affiliate. During the third quarter of 2015, the Company recorded $61 million of losses due to exchange rate changes in Venezuela applicable to funds held in local currency. During the nine months ended September 30, 2015, the Company recorded a charge of $134 million due to the write-off of the unamortized non-cash debt discount related to the extinguishment of the 2026 Notes and 2028 Notes. Both of the charges were recorded as part of Nonoperating income (expense): Miscellaneous, net. Accruals The accrual balance for severance and benefits was $34 million as of September 30, 2016, compared to $110 million as of September 30, 2015. The severance-related accrual as of September 30, 2016 is expected to be mostly paid through 2016. The following is a reconciliation of severance accrual activity for the period:
|  | Severance and Benefits |
Balance at December 31, 2015 |  | $ | 27 |
Accrual |  |  | 27 |
Payments |  |  | (20) |
Balance at September 30, 2016 |  | $ | 34 |

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- Definition The entire description for costs incurred to effect a business combination that have been expensed during the period. Such costs could include business integration costs, systems integration and conversion costs, and severance and other employee-related costs. + References No definition available. + Details
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