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Special Charges | 3 Months Ended
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Mar. 31, 2020
Other Income and Expenses [Abstract] |
SPECIAL CHARGES | SPECIAL CHARGES For the three months ended March 31, special charges, certain credit losses and unrealized gains and losses on investments in the statements of consolidated operations consisted of the following (in millions):
| Three Months Ended March 31,
| 2020 |  | 2019
Impairment of assets | $ | 50 |  |  | $ | 8 |
Severance and benefit costs | — |  |  | 6 |
(Gains) losses on sale of assets and other special charges | 13 |  |  | 4 |
Total operating special charges | 63 |  |  | 18 |
Nonoperating credit loss on BRW Term Loan and related guarantee | 697 |  |  | — |
Nonoperating unrealized (gains) losses on investments | 319 |  |  | (17 | )
Total special charges, credit losses and unrealized (gains) losses on investments, net | 1,079 |  |  | 1 |
Income tax benefit, net of valuation allowance | (14 | ) |  | — |
Total special charges, credit losses and unrealized (gains) losses on investments, net of income taxes | $ | 1,065 |  |  | $ | 1 |
2020 Impairment of assets. United assesses its goodwill and intangible assets for potential impairment on an annual basis as of October 1, and on an interim basis if there are indicators that an impairment of goodwill or the intangible assets may have occurred. In the first quarter of 2020, the Company evaluated its goodwill and intangible assets for possible impairments due to the impact of the COVID-19 pandemic on UAL's market capitalization and cash flow projections. For goodwill and certain of its intangible assets, including the Company's China routes, London-Heathrow slots, alliances and the United trade name and logo, the Company performed a quantitative assessment which involved determining the fair value of the asset and comparing that amount to the asset's carrying value and, in the case of goodwill, comparing the Company's fair value to its carrying value. For all other intangible assets, the Company performed a qualitative assessment of whether it was more likely than not that an impairment had occurred. To determine fair value, the Company used discounted cash flow methods appropriate for each asset. Key inputs into the models included forecasted capacity, revenues, fuel costs, other operating costs and an overall discount rate. The assumptions used for future projections include that demand will remain suppressed for the remainder of 2020 and likely into 2021. These assumptions are inherently uncertain as they relate to future events and circumstances. In light of the ongoing impact of the COVID-19 pandemic on both the U.S. and global economies, and the significant, sustained impact on the demand for travel, the exact timing of the recovery from the COVID-19 pandemic, and the speed at which such recovery could occur, continues to remain uncertain and could result in additional impairment charges in the future. We expect to continue to modify our cost management structure, liquidity-raising efforts and capacity as the timing of demand recovery becomes more certain. As a result of the impairment assessments, the Company determined that its China routes fair value was $1.1 billion, which was lower than the carrying value of these routes. As a result, during the three months ended March 31, 2020, the Company recorded a $50 million impairment for its China routes which was primarily caused by the COVID-19 pandemic and the Company's subsequent suspension of flights to China. The China routes are subject to provisions that require the Company to maintain a certain level of flying to maintain its rights to use the routes. The Company has received waivers from the Chinese government to retain its rights to continue operating the routes despite the suspension of flying and we expect to continue to receive waivers until flying resumes. No other impairments were recorded. In response to decreased demand caused by the COVID-19 pandemic, the Company has temporarily grounded certain of its mainline fleet. As required under relevant accounting standards, United performed forecasted cash flow analyses and determined that as of March 31, 2020 the carrying value of the tested fleets is recoverable from future cash flows expected to be generated by those fleets. To determine whether impairments exist for active and temporarily parked aircraft, we group assets at the fleet-type level. To the extent we make decisions to permanently ground any of our fleet, or our estimates of future cash flows generated by our fleet change, we may be required to record impairment charges in future periods. Gains (loss) on sale of other assets and other special charges. During the three months ended March 31, 2020, the Company recorded a $10 million one-time special charge related to the wind-down of the capacity purchase agreement with Trans States Airlines, LLC and $3 million for costs related to the transition of fleet types within other regional carrier contracts. Nonoperating credit loss on BRW Term Loan and related guarantee. During the three months ended March 31, 2020, the Company recorded a $697 million expected credit loss allowance for the BRW Term Loan and related guarantee. United recorded the allowance based on United's assessment of AVH's financial uncertainty due to its high level of leverage and the fact that the airline has currently ceased operations due to the COVID-19 pandemic. BRW's equity and BRW's holdings of AVH equity are secured as a pledge under the BRW Term Loan, which is currently in default. Nonoperating unrealized gains (losses) on investments, net. During the three months ended March 31, 2020, the Company recorded losses of $319 million primarily for the $293 million decrease in the market value of its investment in Azul and $24 million for the decrease in fair value of the AVH Derivative Assets. 2019 Impairment of assets. During the three months ended March 31, 2019, the Company recorded an $8 million fair value adjustment for aircraft purchased off lease. Severance and benefit costs. During the three months ended March 31, 2019, the Company recorded $2 million of severance and benefit costs related to a voluntary early-out program for its technicians and related employees represented by the IBT and management severance of $4 million. Nonoperating unrealized gains (losses) on investments, net. During the three months ended March 31, 2019, the Company recorded gains of $14 million for the change in the market value of its equity investment in Azul and gains of $3 million for the change in fair value of the AVH Derivative Assets.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
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