XML 41 R15.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Pension and Other Postretirement Plans | 12 Months Ended
--- | ---
Dec. 31, 2018
Retirement Benefits [Abstract] |
Pension and Other Postretirement Plans | PENSION AND OTHER POSTRETIREMENT PLANS The following summarizes the significant pension and other postretirement plans of United: Pension Plans. United maintains two primary defined benefit pension plans, one covering certain pilot employees and another covering certain U.S. non-pilot employees. Each of these plans provide benefits based on a combination of years of benefit accruals service and an employee's final average compensation. Additional benefit accruals are frozen under the plan covering certain pilot employees and management and administrative employees. Benefit accruals for certain non-pilot employees continue. United maintains additional defined benefit pension plans, which cover certain international employees. Other Postretirement Plans. United maintains postretirement medical programs which provide medical benefits to certain retirees and eligible dependents, as well as life insurance benefits to certain retirees participating in the plan. Benefits provided are subject to applicable contributions, co-payments, deductibles and other limits as described in the specific plan documentation. Actuarial assumption changes are reflected as a component of the net actuarial loss/(gain) during 2018 and 2017. The 2018 actuarial gains were mainly related to an increase in the discount rate applied in 2018 compared to 2017. These amounts will be amortized over the average remaining service life of the covered active employees or the average life expectancy of inactive participants. The impacts on 2018 and 2017 pension and retiree medical expense are presented below. The following tables set forth the reconciliation of the beginning and ending balances of the benefit obligation and plan assets, the funded status and the amounts recognized in these financial statements for the defined benefit and other postretirement plans (in millions):
| Pension Benefits
| Year Ended December 31, 2018 |  | Year Ended December 31, 2017
Accumulated benefit obligation: | $ | 4,448 |  |  | $ | 4,739 |
Change in projected benefit obligation: |  |  |
Projected benefit obligation at beginning of year | $ | 5,852 |  |  | $ | 5,253 |
Service cost | 228 |  |  | 195 |
Interest cost | 217 |  |  | 220 |
Actuarial (gain) loss | (601 | ) |  | 525 |
Gross benefits paid and settlements | (292 | ) |  | (366 | )
Other | (8 | ) |  | 25 |
Projected benefit obligation at end of year | $ | 5,396 |  |  | $ | 5,852 |
Change in plan assets: |  |  |
Fair value of plan assets at beginning of year | $ | 3,932 |  |  | $ | 3,355 |
Actual (loss) return on plan assets | (215 | ) |  | 510 |
Employer contributions | 413 |  |  | 419 |
Gross benefits paid and settlements | (292 | ) |  | (366 | )
Other | (11 | ) |  | 14 |
Fair value of plan assets at end of year | $ | 3,827 |  |  | $ | 3,932 |
Funded status—Net amount recognized | $ | (1,569 | ) |  | $ | (1,920 | )
| Pension Benefits
| December 31, 2018 |  | December 31, 2017
Amounts recognized in the consolidated balance sheets consist of: |  |  |
Noncurrent asset | $ | 13 |  |  | $ | 9 |
Current liability | (6 | ) |  | (8 | )
Noncurrent liability | (1,576 | ) |  | (1,921 | )
Total liability | $ | (1,569 | ) |  | $ | (1,920 | )
Amounts recognized in accumulated other comprehensive loss consist of: |  |  |
Net actuarial loss | $ | (1,382 | ) |  | $ | (1,610 | )
Prior service cost | (5 | ) |  | (1 | )
Total accumulated other comprehensive loss | $ | (1,387 | ) |  | $ | (1,611 | )
| Other Postretirement Benefits
| Year Ended December 31, 2018 |  | Year Ended December 31, 2017
Change in benefit obligation: |  |  |
Benefit obligation at beginning of year | $ | 1,710 |  |  | $ | 1,687 |
Service cost | 12 |  |  | 13 |
Interest cost | 61 |  |  | 66 |
Plan participants' contributions | 68 |  |  | 68 |
Benefits paid | (181 | ) |  | (178 | )
Actuarial loss (gain) | (285 | ) |  | 40 |
Other | 6 |  |  | 14 |
Benefit obligation at end of year | $ | 1,391 |  |  | $ | 1,710 |
Change in plan assets: |  |  |
Fair value of plan assets at beginning of year | $ | 54 |  |  | $ | 55 |
Actual return on plan assets | 1 |  |  | 1 |
Employer contributions | 111 |  |  | 108 |
Plan participants' contributions | 68 |  |  | 68 |
Benefits paid | (181 | ) |  | (178 | )
Fair value of plan assets at end of year | 53 |  |  | 54 |
Funded status—Net amount recognized | $ | (1,338 | ) |  | $ | (1,656 | )
| Other Postretirement Benefits
| December 31, 2018 |  | December 31, 2017
Amounts recognized in the consolidated balance sheets consist of: |  |  |
Current liability | $ | (43 | ) |  | $ | (54 | )
Noncurrent liability | (1,295 | ) |  | (1,602 | )
Total liability | $ | (1,338 | ) |  | $ | (1,656 | )
Amounts recognized in accumulated other comprehensive income consist of: |  |  |
Net actuarial gain | $ | 554 |  |  | $ | 301 |
Prior service credit | 170 |  |  | 208 |
Total accumulated other comprehensive income | $ | 724 |  |  | $ | 509 |
The following information relates to all pension plans with an accumulated benefit obligation and a projected benefit obligation in excess of plan assets at December 31 (in millions):
| 2018 |  | 2017
Projected benefit obligation | $ | 5,196 |  |  | $ | 5,637 |
Accumulated benefit obligation | 4,286 |  |  | 4,567 |
Fair value of plan assets | 3,614 |  |  | 3,709 |
Net periodic benefit cost for the years ended December 31 included the following components (in millions):
| 2018 |  | 2017 |  | 2016
| Pension Benefits |  | Other Postretirement Benefits |  | Pension Benefits |  | Other Postretirement Benefits |  | Pension Benefits |  | Other Postretirement Benefits
Service cost | $ | 228 |  |  | $ | 12 |  |  | $ | 195 |  |  | $ | 13 |  |  | $ | 112 |  |  | $ | 19 |
Interest cost | 217 |  |  | 61 |  |  | 220 |  |  | 66 |  |  | 200 |  |  | 86 |
Expected return on plan assets | (292 | ) |  | (2 | ) |  | (243 | ) |  | (2 | ) |  | (216 | ) |  | (2 | )
Curtailment gain | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (107 | )
Amortization of unrecognized actuarial (gain) loss | 130 |  |  | (32 | ) |  | 128 |  |  | (33 | ) |  | 76 |  |  | (19 | )
Amortization of prior service credits | — |  |  | (37 | ) |  | — |  |  | (37 | ) |  | — |  |  | (31 | )
Other | 1 |  |  | — |  |  | 5 |  |  | — |  |  | 5 |  |  | — |
Net periodic benefit cost (credit) | $ | 284 |  |  | $ | 2 |  |  | $ | 305 |  |  | $ | 7 |  |  | $ | 177 |  |  | $ | (54 | )
Service cost is recorded in Salaries and related costs on the statement of consolidated operations. All other components of net periodic benefit costs are recorded in Miscellaneous, net on the statement of consolidated operations. See Note 14 of this report for additional information related to the curtailment gain recorded in 2016. The assumptions used for the benefit plans were as follows:
|  | Pension Benefits
Assumptions used to determine benefit obligations |  | 2018 |  | 2017
Discount rate |  | 4.20 | % |  | 3.65 | %
Rate of compensation increase |  | 3.89 | % |  | 3.89 | %
Assumptions used to determine net expense |  |
Discount rate |  | 3.65 | % |  | 4.19 | %
Expected return on plan assets |  | 7.31 | % |  | 7.02 | %
Rate of compensation increase |  | 3.89 | % |  | 3.54 | %
|  | Other Postretirement Benefits
Assumptions used to determine benefit obligations |  | 2018 |  | 2017
Discount rate |  | 4.30 | % |  | 3.63 | %
Assumptions used to determine net expense |  |  |  |
Discount rate |  | 3.63 | % |  | 4.07 | %
Expected return on plan assets |  | 3.00 | % |  | 3.00 | %
Health care cost trend rate assumed for next year |  | 6.00 | % |  | 6.25 | %
Rate to which the cost trend rate is assumed to decline (ultimate trend rate in 2023) |  | 5.00 | % |  | 5.00 | %
The Company used the Society of Actuaries' 2014 mortality tables, modified to reflect the Social Security Administration Trustee's Report on current projections regarding expected longevity improvements. The Company selected the 2018 discount rate for substantially all of its plans by using a hypothetical portfolio of high quality bonds at December 31, 2018, that would provide the necessary cash flows to match projected benefit payments. We develop our expected long-term rate of return assumption for our defined benefit plans based on historical experience and by evaluating input from the trustee managing the plans' assets. Our expected long-term rate of return on plan assets for these plans is based on a target allocation of assets, which is based on our goal of earning the highest rate of return while maintaining risk at acceptable levels. The plans strive to have assets sufficiently diversified so that adverse or unexpected results from one security class will not have an unduly detrimental impact on the entire portfolio. Plan fiduciaries regularly review our actual asset allocation and the pension plans' investments are periodically rebalanced to our targeted allocation when considered appropriate. United's plan assets are allocated within the following guidelines:
| Percent of Total |  | Expected Long-Term Rate of Return
Equity securities | 30-45 | % |  | 9.5 | %
Fixed-income securities | 30-40 |  |  | 5.8 |
Alternatives | 10-25 |  |  | 7.3 |
Other | 0-10 |  |  | 7.8 |
One-hundred percent of other postretirement plan assets are invested in a deposit administration fund. A one percentage point decrease in the weighted average discount rate would increase the Company's postretirement benefit liability by approximately $139 million and increase the estimated 2018 benefits expense by approximately $10 million. Fair Value Information. Accounting standards require us to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows:
Level 1 | Unadjusted quoted prices in active markets for assets or liabilities identical to those to be reported at fair value
Level 2 | Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputs
Level 3 | Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants would price the assets or liabilities
Assets and liabilities measured at fair value are based on the valuation techniques identified in the tables below. The valuation techniques are as follows: (a) Market approach. Prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities; and (b) Income approach. Techniques to convert future amounts to a single current value based on market expectations (including present value techniques, option-pricing and excess earnings models). The following tables present information about United's pension and other postretirement plan assets at December 31, (in millions):
|  | 2018 |  |  | 2017
Pension Plan Assets: |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Assets Measured at NAV(a) |  |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Assets Measured at NAV(a)
Equity securities funds |  | $ | 1,394 |  |  | $ | 254 |  |  | $ | 106 |  |  | $ | — |  |  | $ | 1,034 |  |  |  | $ | 1,406 |  |  | $ | 269 |  |  | $ | 133 |  |  | $ | — |  |  | $ | 1,004 |
Fixed-income securities |  | 1,431 |  |  | — |  |  | 605 |  |  | 21 |  |  | 805 |  |  |  | 1,470 |  |  | — |  |  | 834 |  |  | 18 |  |  | 618 |
Alternatives |  | 596 |  |  | — |  |  | — |  |  | 134 |  |  | 462 |  |  |  | 637 |  |  | — |  |  | — |  |  | 139 |  |  | 498 |
Other investments |  | 406 |  |  | 224 |  |  | 40 |  |  | 142 |  |  | — |  |  |  | 419 |  |  | 32 |  |  | 124 |  |  | 172 |  |  | 91 |
Total |  | $ | 3,827 |  |  | $ | 478 |  |  | $ | 751 |  |  | $ | 297 |  |  | $ | 2,301 |  |  |  | $ | 3,932 |  |  | $ | 301 |  |  | $ | 1,091 |  |  | $ | 329 |  |  | $ | 2,211 |
Other Postretirement Benefit Plan Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposit administration fund |  | $ | 53 |  |  | $ | — |  |  | $ | — |  |  | $ | 53 |  |  | $ | — |  |  |  | $ | 54 |  |  | $ | — |  |  | $ | — |  |  | $ | 54 |  |  | $ | — |
(a) In accordance with the relevant accounting standards, certain investments that are measured at fair value using the net asset value ("NAV") per share (or its equivalent) have not been classified in the fair value hierarchy. These investments are commingled funds that invest in fixed-income instruments including bonds, debt securities, and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities. Redemption periods for these investments range from daily to semiannually. Equity and Fixed-Income. Equities include investments in both developed market and emerging market equity securities. Fixed-income includes primarily U.S. and non-U.S. government fixed-income securities and U.S. and non-U.S. corporate fixed-income securities. Deposit Administration Fund. This investment is a stable value investment product structured to provide investment income. Alternatives. Alternative investments consist primarily of investments in hedge funds, real estate and private equity interests. Other investments. Other investments consist of cash, insurance contracts and other funds. The reconciliation of United's defined benefit plan assets measured at fair value using unobservable inputs (Level 3) for the years ended December 31, 2018 and 2017 is as follows (in millions):
| 2018 |  | 2017
Balance at beginning of year | $ | 383 |  |  | $ | 287 |
Actual return (loss) on plan assets: |  |  |
Sold during the year | 10 |  |  | 7 |
Held at year end | (21 | ) |  | 16 |
Purchases, sales, issuances and settlements (net) | (22 | ) |  | 73 |
Balance at end of year | $ | 350 |  |  | $ | 383 |
Funding requirements for tax-qualified defined benefit pension plans are determined by government regulations. United's contributions reflected above have satisfied its required contributions through the 2018 calendar year. In 2019, employer anticipated contributions to all of United's pension and postretirement plans are at least $318 million and approximately $95 million, respectively. The estimated future benefit payments, net of expected participant contributions, in United's pension plans and other postretirement benefit plans as of December 31, 2018 are as follows (in millions):
| Pension |  | Other Postretirement |  | Other Postretirement— subsidy receipts
2019 | $ | 329 |  |  | $ | 100 |  |  | $ | 5 |
2020 | 327 |  |  | 104 |  |  | 6 |
2021 | 353 |  |  | 108 |  |  | 6 |
2022 | 367 |  |  | 111 |  |  | 6 |
2023 | 379 |  |  | 113 |  |  | 7 |
Years 2024 – 2028 | 2,022 |  |  | 575 |  |  | 38 |
Defined Contribution Plans Depending upon the employee group, employer contributions consist of matching contributions and/or non-elective employer contributions. United's employer contribution percentages vary from 1% to 16% of eligible earnings depending on the terms of each plan. United recorded expenses for its defined contribution plans of $693 million, $656 million and $592 million in the years ended December 31, 2018, 2017 and 2016, respectively. Multi-Employer Plans United's participation in the IAM National Pension Plan ("IAM Plan") for the annual period ended December 31, 2018 is outlined in the table below. There have been no significant changes that affect the comparability of 2018 and 2017 contributions. The risks of participating in these multi-employer plans are different from single-employer plans, as United may be subject to additional risks that others do not meet their obligations, which in certain circumstances could revert to United. The IAM Plan reported $435 million in employers' contributions for the year ended December 31, 2017. For 2017, the Company's contributions to the IAM Plan represented more than 5% of total contributions to the IAM Plan. The 2018 information is not available as Form 5500 is not final for the plan year.
Pension Fund | IAM National Pension Fund
EIN/ Pension Plan Number | 51-6031295 - 002
Pension Protection Act Zone Status (2018 and 2017) | Green Zone. Plans in the green zone are at least 80 percent funded.
FIP/RP Status Pending/Implemented | No
United's Contributions | $52 million, $50 million and $41 million in the years ended December 31, 2018, 2017 and 2016, respectively
Surcharge Imposed | No
Expiration Date of Collective Bargaining Agreement | N/A
Profit Sharing Substantially all employees participate in profit sharing based on a percentage of pre-tax earnings, excluding special charges, profit sharing expense and share-based compensation. Profit sharing percentages range from 5% to 20% depending on the work group, and in some cases profit sharing percentages vary above and below certain pre-tax margin thresholds. Eligible U.S. co-workers in each participating work group receive a profit sharing payout using a formula based on the ratio of each qualified co-worker's annual eligible earnings to the eligible earnings of all qualified co-workers in all domestic work groups. Eligible non-U.S. co-workers receive profit sharing based on the calculation under the U.S. profit sharing plan for management and administrative employees. The Company recorded profit sharing and related payroll tax expense of $334 million, $349 million and $628 million in 2018, 2017 and 2016, respectively. Profit sharing expense is recorded as a component of Salaries and related costs in the Company's statements of consolidated operations.

X
- References No definition available. + Details
Name: | us-gaap_CompensationAndRetirementDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration