SPECIAL ITEMS SPECIAL ITEMS

12 Months Ended

Dec. 31, 2020

Unusual or Infrequent Items Disclosure [Text Block]

SPECIAL ITEMS

In 2020, the Company recognized $627 million in impairment charges and other special items, and $220 million in special restructuring costs. These special items are largely described in Note 2, but also include an amount accrued for a judgment in a class action lawsuit issued subsequent to December 31, 2020 that was a recognized subsequent event. Also in 2020 the Company recognized special items of $6 million for merger-related costs associated with its acquisition of Virgin America. Costs classified as merger-related are directly attributable to merger activities. Additionally, the Company incurred $26 million in swap-break charges and pre-payment penalties related to the early payment of debt associated with the sale of ten owned Airbus aircraft. These charges are reflected as Special charges - net non-operating in the consolidated statements of operations.

In 2019, the Company recognized $44 million in merger-related costs, primarily for expenses associated with a one-time true-up of Airbus flight attendant and pilot vacation balances, as well as certain technology integration costs.

In 2018, the Company recognized $87 million in merger-related costs. The Company incurred a one-time settlement fee of $20 million for the termination of an existing maintenance services agreement and subsequently entered into a new services agreement that provides more flexibility for the timing and scope of engine work. Additionally, the Company incurred $25 million for one-time bonuses paid to employees as a result of tax reform. These charges were recognized as special charges and are included in the Special items - other line on our consolidated statements of operations.

The Company has recognized $370 million in merger-related costs since the acquisition of Virgin America in December 2016. No additional merger-related costs will be incurred subsequent to 2020. Special items recorded as a result of the COVID-19 pandemic are disclosed in Note 2. COVID-19 Pandemic.

The following breaks down merger-related costs incurred in 2020, 2019 and 2018 (in millions):


	2020		2019		2018
Consulting and professional services	$	5	$	18	$	45
Employee-related costs(a)	—		15		13
Legal and accounting fees	1		1		1
Other merger-related costs(b)	—		10		28
Total Merger-related Costs	$	6	$	44	$	87

(a)Employee-related costs consist primarily of vacation balance true-ups, severance, retention bonuses, and training and skill development.

(b)Other merger-related costs consist primarily of costs for marketing and advertising, IT, employee appreciation and company sponsored events, moving expenses, supplies, and other immaterial expenses.