The income tax provision\n differed from amounts computed at the statutory federal income tax\n rate, as follows (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n UAL \n | \n \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2013 | \n\n | |||
| \n Income tax provision at\n statutory rate \n | \n \n | $ | \n1,477 | \n\n | \n | $ | \n395 | \n\n | \n | $ | \n189 | \n\n |
| \n State income taxes, net of\n federal income tax \n | \n \n | \n | 60 | \n\n | \n | \n | 16 | \n\n | \n | \n | 5 | \n\n |
| \n Foreign income\n taxes \n | \n \n | \n | 4 | \n\n | \n | \n | 2 | \n\n | \n | \n | 3 | \n\n |
| \n Nondeductible employee\n meals \n | \n \n | \n | 15 | \n\n | \n | \n | 15 | \n\n | \n | \n | 15 | \n\n |
| \n State rate\n change \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | (33) | \n\n |
| \n Valuation\n allowance \n | \n \n | \n | (4,684) | \n\n | \n | \n | (441) | \n\n | \n | \n | (219) | \n\n |
| \n Other, net \n | \n \n | \n | 7 | \n\n | \n | \n | 9 | \n\n | \n | \n | 8 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | $ | \n(3,121) | \n\n | \n | $ | \n(4) | \n\n | \n | $ | \n(32) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | \n | |||||||||
| \n United \n | \n \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2013 | \n\n | |||
| \n Income tax provision at\n statutory rate \n | \n \n | $ | \n1,477 | \n\n | \n | $ | \n388 | \n\n | \n | $ | \n223 | \n\n |
| \n State income taxes, net of\n federal income tax \n | \n \n | \n | 60 | \n\n | \n | \n | 15 | \n\n | \n | \n | 5 | \n\n |
| \n Foreign income\n taxes \n | \n \n | \n | 4 | \n\n | \n | \n | 2 | \n\n | \n | \n | 3 | \n\n |
| \n Nondeductible employee\n meals \n | \n \n | \n | 15 | \n\n | \n | \n | 15 | \n\n | \n | \n | 15 | \n\n |
| \n Derivative market\n adjustment \n | \n \n | \n | — | \n\n | \n | \n | (7) | \n\n | \n | \n | (24) | \n\n |
| \n State rate\n change \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | (33) | \n\n |
| \n Valuation\n allowance \n | \n \n | \n | (4,643) | \n\n | \n | \n | (426) | \n\n | \n | \n | (229) | \n\n |
| \n Other, net \n | \n \n | \n | 7 | \n\n | \n | \n | 9 | \n\n | \n | \n | 23 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | $ | \n(3,080) | \n\n | \n | $ | \n(4) | \n\n | \n | $ | \n(17) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
At December 31, the\n Company’s derivatives were reported in its consolidated\n balance sheets as follows (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n Classification \n | \n \n | \n \n Balance Sheet Location \n | \n \n | 2015 | \n\n | \n | 2014 | \n\n | ||
| \n Derivatives designated\n as cash flow hedges \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Liabilities: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Fuel contracts due within\n one year \n | \n \n | Fuel derivative instruments | \n\n | $ | \n119 | \n\n | \n | $ | \n450 | \n\n |
| \n Fuel contracts with\n maturities greater than one year \n | \n \n | Other liabilities and deferred credits: Other | \n\n | \n | — | \n\n | \n | \n | 27 | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | \n | $ | \n119 | \n\n | \n | $ | \n477 | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Derivatives not\n designated for hedge accounting \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Assets: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Fuel contracts due within\n one year \n | \n \n | Receivables | \n\n | $ | \n— | \n\n | \n | $ | \n6 | \n\n |
| \n Liabilities: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Fuel contracts due within\n one year \n | \n \n | Fuel derivative instruments | \n\n | $ | \n5 | \n\n | \n | $ | \n244 | \n\n |
| \n Fuel contracts with\n maturities greater than one year \n | \n \n | Other liabilities and deferred credits: Other | \n\n | \n | — | \n\n | \n | \n | 2 | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total liabilities \n | \n \n | \n | \n | $ | \n5 | \n\n | \n | $ | \n246 | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total\n derivatives \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Assets: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Fuel contracts due within\n one year \n | \n \n | Receivables | \n\n | $ | \n— | \n\n | \n | $ | \n6 | \n\n |
| \n Liabilities: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Fuel contracts due within\n one year \n | \n \n | Fuel derivative instruments | \n\n | $ | \n124 | \n\n | \n | $ | \n694 | \n\n |
| \n Fuel contracts with\n maturities greater than one year \n | \n \n | Other liabilities and deferred credits: Other | \n\n | \n | — | \n\n | \n | \n | 29 | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total liabilities \n | \n \n | \n | \n | $ | \n124 | \n\n | \n | $ | \n723 | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n The\n Company’s operating revenue by principal geographic region\n (as defined by the U.S. Department of Transportation) for the years\n ended December 31 is presented in the table below (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n |
| \n | \n | 2015 | \n\n | |
| \n Domestic (U.S. and\n Canada) \n | \n \n | $ | \n21,931 | \n\n |
| \n Pacific \n | \n \n | \n | 5,498 | \n\n |
| \n Atlantic \n | \n \n | \n | 7,068 | \n\n |
| \n Latin America \n | \n \n | \n | 3,367 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
| \n Total \n | \n \n | $ | \n37,864 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | |||
| \n | \n | 2014 | \n\n | |
| \n Domestic (U.S. and\n Canada) \n | \n \n | $ | \n22,320 | \n\n |
| \n Pacific \n | \n \n | \n | 5,767 | \n\n |
| \n Atlantic \n | \n \n | \n | 7,321 | \n\n |
| \n Latin America \n | \n \n | \n | 3,493 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
| \n Total \n | \n \n | $ | \n38,901 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | |||
| \n | \n | 2013 | \n\n | |
| \n Domestic (U.S. and\n Canada) \n | \n \n | $ | \n22,092 | \n\n |
| \n Pacific \n | \n \n | \n | 5,794 | \n\n |
| \n Atlantic \n | \n \n | \n | 7,132 | \n\n |
| \n Latin America \n | \n \n | \n | 3,261 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
| \n Total \n | \n \n | $ | \n38,279 | \n(a) | \n
| \n | \n | \n \n | \n \n \n | \n \n |
\n (a) UAL and\n United amounts are substantially the same.
\n \n \nThe estimated amounts that\n will be amortized in 2016 out of accumulated other comprehensive\n income (loss) into net periodic benefit cost are as follows (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Pension \n Benefits | \n \n | \n | Other \n Postretirement \n Benefits | \n \n | ||
| \n Actuarial (gain)\n loss \n | \n \n | $ | \n71 | \n\n | \n | $ | \n(22) | \n\n |
| \n Prior service\n credit \n | \n \n | \n | — | \n\n | \n | \n | (32) | \n\n |
| Pension\n Benefits | \n\n | |||||||
| \n | \n | December 31, 2015 | \n\n | \n | December 31, 2014 | \n\n | ||
| \n Amounts recognized in the\n consolidated balance sheets consist of: \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Noncurrent asset \n | \n \n | $ | \n2 | \n\n | \n | $ | \n2 | \n\n |
| \n Current\n liability \n | \n \n | \n | (12) | \n\n | \n | \n | (17) | \n\n |
| \n Noncurrent\n liability \n | \n \n | \n | (1,488) | \n\n | \n | \n | (2,226) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total liability \n | \n \n | $ | \n(1,498) | \n\n | \n | $ | \n(2,241) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Amounts recognized in\n accumulated other comprehensive loss consist of: \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Net actuarial\n loss \n | \n \n | $ | \n(844) | \n\n | \n | $ | \n(982) | \n\n |
| \n Prior service\n loss \n | \n \n | \n | (1) | \n\n | \n | \n | (1) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total accumulated other\n comprehensive loss \n | \n \n | $ | \n(845) | \n\n | \n | $ | \n(983) | \n\n \n | \n
| Other Postretirement Benefits | \n\n | |||||||
| \n | \n | December 31, 2015 | \n\n | \n | December 31, 2014 | \n\n | ||
| \n Amounts recognized in the\n consolidated balance sheets consist of: \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Current\n liability \n | \n \n | $ | \n(64) | \n\n | \n | $ | \n(62) | \n\n |
| \n Noncurrent\n liability \n | \n \n | \n | (1,882) | \n\n | \n | \n | (1,933) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total liability \n | \n \n | $ | \n(1,946) | \n\n | \n | $ | \n(1,995) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| Amounts recognized in accumulated other comprehensive income\n consist of: | \n\n | \n | \n | \n | \n | \n | \n | \n |
| \n Net actuarial\n gain \n | \n \n | $ | \n236 | \n\n | \n | $ | \n233 | \n\n |
| \n Prior service\n credit \n | \n \n | \n | 246 | \n\n | \n | \n | 278 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total accumulated other\n comprehensive income \n | \n \n | $ | \n482 | \n\n | \n | $ | \n511 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n
| (l) | \n\n Intangibles—The Company has finite-lived and\n indefinite-lived intangible assets, including goodwill.\n Finite-lived intangible assets are amortized over their estimated\n useful lives. Goodwill and indefinite-lived intangible assets are\n not amortized but are reviewed for impairment annually or more\n frequently if events or circumstances indicate that the asset may\n be impaired. Goodwill and indefinite-lived assets are reviewed for\n impairment on an annual basis as of October 1, or on an\n interim basis whenever a triggering event occurs. See Note 2 of\n this report for additional information related to\n intangibles. \n | \n
The computations of\n UAL’s basic and diluted earnings per share are set forth\n below for the years ended December 31 (in millions, except per\n share amounts):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2013 | \n\n | |||
| \n Basic earnings per\n share: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Earnings available to common\n stockholders \n | \n \n | $ | \n7,340 | \n\n | \n | $ | \n1,132 | \n\n | \n | $ | \n571 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Basic weighted-average\n shares outstanding \n | \n \n | \n | 376 | \n\n | \n | \n | 371 | \n\n | \n | \n | 348 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Earnings per share,\n basic \n | \n \n | $ | \n19.52 | \n\n | \n | $ | \n3.05 | \n\n | \n | $ | \n1.64 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Diluted earnings per\n share: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Earnings available to common\n stockholders \n | \n \n | $ | \n7,340 | \n\n | \n | $ | \n1,132 | \n\n | \n | $ | \n571 | \n\n |
| \n Effect of dilutive\n securities \n | \n \n | \n | — | \n\n | \n | \n | 11 | \n\n | \n | \n | 26 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Earnings available to common\n stockholders including the effect of dilutive securities \n | \n \n | $ | \n7,340 | \n\n | \n | $ | \n1,143 | \n\n | \n | $ | \n597 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Diluted shares\n outstanding: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Basic weighted-average\n shares outstanding \n | \n \n | \n | 376 | \n\n | \n | \n | 371 | \n\n | \n | \n | 348 | \n\n |
| \n Effect of convertible\n notes \n | \n \n | \n | — | \n\n | \n | \n | 18 | \n\n | \n | \n | 42 | \n\n |
| \n Effect of employee stock\n awards \n | \n \n | \n | 1 | \n\n | \n | \n | 1 | \n\n | \n | \n | 1 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Diluted weighted-average\n shares outstanding \n | \n \n | \n | 377 | \n\n | \n | \n | 390 | \n\n | \n | \n | 391 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Earnings per share,\n diluted \n | \n \n | $ | \n19.47 | \n\n | \n | $ | \n2.93 | \n\n | \n | $ | \n1.53 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| (n) | \nShare-Based\n Compensation—The Company measures the cost of employee\n services received in exchange for an award of equity instruments\n based on the grant-date fair value of the award. The resulting cost\n is recognized over the period during which an employee is required\n to provide service in exchange for the award, usually the vesting\n period. Obligations for cash-settled restricted stock units\n (“RSUs”) are remeasured at fair value throughout the\n requisite service period on the last day of each reporting period\n based upon UAL’s stock price. In addition to the service\n requirement, certain RSUs have performance metrics that must be\n achieved prior to vesting. These awards are accrued based on the\n expected level of achievement at each reporting period. A\n cumulative adjustment is recorded on the last day of each reporting\n period to adjust compensation expense based on both UAL’s\n stock price and the then current level of expected performance\n achievement for the performance-based awards. See Note 5 of this\n report for additional information on UAL’s share-based\n compensation plans. | \n
NOTE\n 5 - SHARE-BASED COMPENSATION PLANS
\nUAL maintains several\n share-based compensation plans. These plans provide for grants of\n qualified and non-qualified stock options, stock appreciation\n rights, restricted stock awards, RSUs, performance compensation\n awards, performance units, cash incentive awards and other types of\n equity-based and equity-related awards.
\nAll awards are recorded as\n equity or a liability in the Company’s consolidated balance\n sheets. The share-based compensation expense is directly recorded\n in salaries and related costs or integration-related\n expense.
\nThe Company generally\n grants incentive compensation awards, including long-term\n equity-based awards, during the first quarter of the calendar year.\n In the first quarter of 2015, UAL granted share-based compensation\n awards pursuant to the United Continental Holdings, Inc. 2008\n Incentive Compensation Plan. These share-based compensation awards\n include approximately 0.2 million shares of restricted stock\n and 0.3 million of time-vested RSUs that vest pro-rata over\n three years on the anniversary of the grant date. The time-vested\n RSUs are cash-settled based on the 20-day average closing price of\n UAL common stock immediately prior to the vesting date. In\n addition, UAL granted 0.6 million performance-based RSUs that\n will vest based on UAL’s return on invested capital and the\n Company’s relative improvement in pre-tax margin for the\n three years ending December 31, 2017. If these performance\n conditions are achieved, cash payments will be made after the end\n of the performance period based on the 20-day average closing price\n of UAL common stock immediately prior to the vesting date. The\n Company accounts for the RSUs as liability awards.
\nThe following table\n provides information related to UAL’s share-based\n compensation plan cost for the years ended December 31 (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2013 | \n\n | |||
| \n Compensation cost\n (a): \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n RSUs \n | \n \n | $ | \n52 | \n\n | \n | $ | \n104 | \n\n | \n | $ | \n88 | \n\n |
| \n Restricted stock \n | \n \n | \n | 6 | \n\n | \n | \n | 10 | \n\n | \n | \n | 11 | \n\n |
| \n Other \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 1 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total \n | \n \n | $ | \n58 | \n\n | \n | $ | \n114 | \n\n | \n | $ | \n100 | \n\n |
| \n \n | \n \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
(a) All compensation cost\n is recorded to Salaries and related costs, with the exception of $3\n million and $9 million in 2014 and 2013, respectively, that was\n recorded in integration-related costs as a component of special\n items.
\nThe table below summarizes\n UAL’s unearned compensation and weighted-average remaining\n period to recognize costs for all outstanding share-based awards\n that are probable of being achieved for the year ended\n December 31, 2015 (in millions, except as noted):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Unearned \n Compensation | \n \n | \n | Weighted- \n Average \n Remaining \n Period \n (in\n years) | \n \n | ||
| \n RSUs \n | \n \n | $ | \n37 | \n\n | \n | \n | 1.5 | \n\n |
| \n Restricted stock \n | \n \n | \n | 4 | \n\n | \n | \n | 1.4 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
| \n Total \n | \n \n | $ | \n41 | \n\n | \n | \n | \n | \n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
RSUs and Restricted\n Stock. All outstanding RSUs are to be settled in cash. As of\n December 31, 2015, UAL had recorded a liability of $102\n million related to its RSUs. UAL paid $85 million, $86 million and\n $29 million related to its RSUs during 2015, 2014 and 2013,\n respectively.
\n\n
\nThe table below summarizes\n UAL’s RSUs and restricted stock activity for the years ended\n December 31 (shares in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | RSUs | \n\n | \n | Restricted Stock | \n\n | \n | Weighted- \n Average \n Grant Price | \n \n | |||
| \n Non-vested at\n December 31, 2012 \n | \n \n | \n | 4.3 | \n\n | \n | \n | 0.8 | \n\n | \n | $ | \n23.94 | \n\n |
| \n Granted \n | \n \n | \n | 1.8 | \n\n | \n | \n | 0.5 | \n\n | \n | \n | 25.98 | \n\n |
| \n Vested \n | \n \n | \n | (0.5) | \n\n | \n | \n | (0.3) | \n\n | \n | \n | 23.93 | \n\n |
| \n Forfeited \n | \n \n | \n | (0.2) | \n\n | \n | \n | (0.1) | \n\n | \n | \n | 24.76 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
| \n Non-vested at\n December 31, 2013 \n | \n \n | \n | 5.4 | \n\n | \n | \n | 0.9 | \n\n | \n | \n | 25.02 | \n\n |
| \n Granted \n | \n \n | \n | 0.9 | \n\n | \n | \n | 0.3 | \n\n | \n | \n | 43.33 | \n\n |
| \n Vested \n | \n \n | \n | (2.2) | \n\n | \n | \n | (0.4) | \n\n | \n | \n | 24.66 | \n\n |
| \n Forfeited \n | \n \n | \n | (0.3) | \n\n | \n | \n | (0.1) | \n\n | \n | \n | 28.88 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
| \n Non-vested at\n December 31, 2014 \n | \n \n | \n | 3.8 | \n\n | \n | \n | 0.7 | \n\n | \n | \n | 32.55 | \n\n |
| \n Granted \n | \n \n | \n | 1.0 | \n\n | \n | \n | 0.2 | \n\n | \n | \n | 66.53 | \n\n |
| \n Vested \n | \n \n | \n | (1.6) | \n\n | \n | \n | (0.4) | \n\n | \n | \n | 31.14 | \n\n |
| \n Forfeited \n | \n \n | \n | (0.6) | \n\n | \n | \n | (0.2) | \n\n | \n | \n | 46.23 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
| \n Non-vested at\n December 31, 2015 \n | \n \n | \n | 2.6 | \n\n | \n | \n | 0.3 | \n\n | \n | \n | 48.68 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
The fair value of RSUs and\n restricted stock that vested in 2015, 2014 and 2013 was $92\n million, $97 million and $22 million, respectively. The fair value\n of the restricted stock awards was based upon the UAL common stock\n price on the date of grant. These awards are accounted for as\n equity awards. The fair value of the RSUs was based on the UAL\n common stock price as of the last day preceding the settlement\n date. These awards were accounted for as liability awards.\n Restricted stock vesting and the recognition of the expense is\n similar to the stock option vesting described below.
\nStock Options. UAL\n has not granted any stock options since 2010. Historically, stock\n options were awarded with exercise prices equal to the fair market\n value of UAL’s common stock on the date of grant. UAL stock\n options generally vested over a period of either three or four\n years and have a contractual life of 10 years. Expense related to\n each portion of an option grant was recognized on a straight-line\n basis over the specific vesting period for those options. The\n Company determined the fair value of stock options at the grant\n date using a Black Scholes option pricing model. As of\n December 31, 2015, there were less than 0.5 million\n outstanding stock option awards, all of which were exercisable,\n with a weighted-average exercise price of $26.80.
\n\n The following\n table presents information about the Company’s goodwill and\n other intangible assets at December 31 (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | \n | \n | 2015 | \n\n | \n | 2014 | \n\n | ||||||||||
| \n \n Item \n | \n \n | Asset life (a) | \n\n | Gross \n Carrying \n Amount | \n \n | \n | Accumulated \n Amortization | \n \n | \n | Gross \n Carrying \n Amount | \n \n | \n | Accumulated \n Amortization | \n \n | ||||
| \n Goodwill \n | \n \n | \n | \n | $ | \n4,523 | \n\n | \n | \n | \n | \n | \n | $ | \n4,523 | \n\n | \n | \n | \n | \n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Finite-lived intangible\n assets \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Frequent flyer database\n (b) \n | \n \n | 22 | \n\n | $ | \n1,177 | \n\n | \n | $ | \n702 | \n\n | \n | $ | \n1,177 | \n\n | \n | $ | \n624 | \n\n |
| \n Hubs \n | \n \n | 20 | \n\n | \n | 145 | \n\n | \n | \n | 74 | \n\n | \n | \n | 145 | \n\n | \n | \n | 67 | \n\n |
| \n Contracts \n | \n \n | 12 | \n\n | \n | 135 | \n\n | \n | \n | 86 | \n\n | \n | \n | 155 | \n\n | \n | \n | 86 | \n\n |
| \n Patents and\n tradenames \n | \n \n | 3 | \n\n | \n | 108 | \n\n | \n | \n | 108 | \n\n | \n | \n | 108 | \n\n | \n | \n | 108 | \n\n |
| \n Airport slots and\n gates \n | \n \n | 8 | \n\n | \n | 97 | \n\n | \n | \n | 97 | \n\n | \n | \n | 97 | \n\n | \n | \n | 97 | \n\n |
| \n Other \n | \n \n | 25 | \n\n | \n | 109 | \n\n | \n | \n | 77 | \n\n | \n | \n | 109 | \n\n | \n | \n | 67 | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total \n | \n \n | \n | \n | $ | \n1,771 | \n\n | \n | $ | \n1,144 | \n\n | \n | $ | \n1,791 | \n\n | \n | $ | \n1,049 | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Indefinite-lived\n intangible assets \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Route\n authorities \n | \n \n | \n | \n | $ | \n1,570 | \n\n | \n | \n | \n | \n | \n | $ | \n1,589 | \n\n | \n | \n | \n | \n |
| \n Airport slots and\n gates \n | \n \n | \n | \n | \n | 942 | \n\n | \n | \n | \n | \n | \n | \n | 956 | \n\n | \n | \n | \n | \n |
| \n Tradenames and\n logos \n | \n \n | \n | \n | \n | 593 | \n\n | \n | \n | \n | \n | \n | \n | 593 | \n\n | \n | \n | \n | \n |
| \n Alliances \n | \n \n | \n | \n | \n | 404 | \n\n | \n | \n | \n | \n | \n | \n | 404 | \n\n | \n | \n | \n | \n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
| \n Total \n | \n \n | \n | \n | $ | \n3,509 | \n\n | \n | \n | \n | \n | \n | $ | \n3,542 | \n\n | \n | \n | \n | \n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
\n
\n\n (a) Weighted\n average life expressed in years.
\n\n (b) The\n frequent flyer database is amortized based on an accelerated\n amortization schedule to reflect utilization of the assets.\n Estimated cash flows correlating to the expected attrition rate of\n customers in the frequent flyer database is considered in the\n determination of the amortization schedules.
\n \n \nThe table below summarizes\n UAL’s unearned compensation and weighted-average remaining\n period to recognize costs for all outstanding share-based awards\n that are probable of being achieved for the year ended\n December 31, 2015 (in millions, except as noted):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Unearned \n Compensation | \n \n | \n | Weighted- \n Average \n Remaining \n Period \n (in\n years) | \n \n | ||
| \n RSUs \n | \n \n | $ | \n37 | \n\n | \n | \n | 1.5 | \n\n |
| \n Restricted stock \n | \n \n | \n | 4 | \n\n | \n | \n | 1.4 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
| \n Total \n | \n \n | $ | \n41 | \n\n | \n | \n | \n | \n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
\n NOTE 17 -\n SEGMENT INFORMATION
\n\n Operating\n segments are defined as components of an enterprise with separate\n financial information, which are evaluated regularly by the chief\n operating decision maker and are used in resource allocation and\n performance assessments.
\n\n The Company\n deploys its aircraft across its route network through a single\n route scheduling system to maximize its value. When making resource\n allocation decisions, the Company’s chief operating decision\n maker evaluates flight profitability data, which considers aircraft\n type and route economics. The Company’s chief operating\n decision maker makes resource allocation decisions to maximize the\n Company’s consolidated financial results. Managing the\n Company as one segment allows management the opportunity to\n maximize the value of its route network.
\n\n The\n Company’s operating revenue by principal geographic region\n (as defined by the U.S. Department of Transportation) for the years\n ended December 31 is presented in the table below (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n |
| \n | \n | 2015 | \n\n | |
| \n Domestic (U.S. and\n Canada) \n | \n \n | $ | \n21,931 | \n\n |
| \n Pacific \n | \n \n | \n | 5,498 | \n\n |
| \n Atlantic \n | \n \n | \n | 7,068 | \n\n |
| \n Latin America \n | \n \n | \n | 3,367 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
| \n Total \n | \n \n | $ | \n37,864 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | |||
| \n | \n | 2014 | \n\n | |
| \n Domestic (U.S. and\n Canada) \n | \n \n | $ | \n22,320 | \n\n |
| \n Pacific \n | \n \n | \n | 5,767 | \n\n |
| \n Atlantic \n | \n \n | \n | 7,321 | \n\n |
| \n Latin America \n | \n \n | \n | 3,493 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
| \n Total \n | \n \n | $ | \n38,901 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | |||
| \n | \n | 2013 | \n\n | |
| \n Domestic (U.S. and\n Canada) \n | \n \n | $ | \n22,092 | \n\n |
| \n Pacific \n | \n \n | \n | 5,794 | \n\n |
| \n Atlantic \n | \n \n | \n | 7,132 | \n\n |
| \n Latin America \n | \n \n | \n | 3,261 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
| \n Total \n | \n \n | $ | \n38,279 | \n(a) | \n
| \n | \n | \n \n | \n \n \n | \n \n |
\n (a) UAL and\n United amounts are substantially the same.
\n\n The Company\n attributes revenue among the geographic areas based upon the origin\n and destination of each flight segment. The Company’s\n operations involve an insignificant level of dedicated\n revenue-producing assets in geographic regions as the overwhelming\n majority of the Company’s revenue producing assets (primarily\n U.S. registered aircraft) can be deployed in any of its geographic\n regions.
\nThe estimated future benefit\n payments, net of expected participant contributions, in\n United’s pension plans and other postretirement benefit plans\n as of December 31, 2015 are as follows (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Pension | \n\n | \n | Other \n \n Postretirement | \n \n | \n | Other Postretirement— \n \n subsidy\n receipts | \n \n | |||
| \n 2016 \n | \n \n | $ | \n282 | \n\n | \n | $ | \n125 | \n\n | \n | $ | \n5 | \n\n |
| \n 2017 \n | \n \n | \n | 287 | \n\n | \n | \n | 128 | \n\n | \n | \n | 5 | \n\n |
| \n 2018 \n | \n \n | \n | 286 | \n\n | \n | \n | 131 | \n\n | \n | \n | 6 | \n\n |
| \n 2019 \n | \n \n | \n | 292 | \n\n | \n | \n | 135 | \n\n | \n | \n | 6 | \n\n |
| \n 2020 \n | \n \n | \n | 293 | \n\n | \n | \n | 140 | \n\n | \n | \n | 7 | \n\n |
| \n Years 2021 –\n 2025 \n | \n \n | \n | 1,577 | \n\n | \n | \n | 761 | \n\n | \n | \n | 40 | \n\n |
Activity related to the\n accruals for severance and medical costs and future lease payments\n on permanently grounded aircraft is as follows (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Severance/ \n Medical Costs | \n \n | \n | Permanently \n \n Grounded Aircraft | \n \n | ||
| \n Balance at\n December 31, 2012 \n | \n \n | $ | \n65 | \n\n | \n | $ | \n5 | \n\n |
| \n Accrual \n | \n \n | \n | 120 | \n\n | \n | \n | 10 | \n\n |
| \n Payments \n | \n \n | \n | (94) | \n\n | \n | \n | (4) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Balance at\n December 31, 2013 \n | \n \n | \n | 91 | \n\n | \n | \n | 11 | \n\n |
| \n Accrual \n | \n \n | \n | 199 | \n\n | \n | \n | 102 | \n\n |
| \n Payments \n | \n \n | \n | (181) | \n\n | \n | \n | (11) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Balance at\n December 31, 2014 \n | \n \n | \n | 109 | \n\n | \n | \n | 102 | \n\n |
| \n Accrual \n | \n \n | \n | 107 | \n\n | \n | \n | 30 | \n\n |
| \n Payments \n | \n \n | \n | (189) | \n\n | \n | \n | (54) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Balance at\n December 31, 2015 \n | \n \n | $ | \n27 | \n\n | \n | $ | \n78 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
The following table provides\n information related to UAL’s share-based compensation plan\n cost for the years ended December 31 (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2013 | \n\n | |||
| \n Compensation cost\n (a): \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n RSUs \n | \n \n | $ | \n52 | \n\n | \n | $ | \n104 | \n\n | \n | $ | \n88 | \n\n |
| \n Restricted stock \n | \n \n | \n | 6 | \n\n | \n | \n | 10 | \n\n | \n | \n | 11 | \n\n |
| \n Other \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 1 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total \n | \n \n | $ | \n58 | \n\n | \n | $ | \n114 | \n\n | \n | $ | \n100 | \n\n |
| \n \n | \n \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
(a) All compensation cost is\n recorded to Salaries and related costs, with the exception of $3\n million and $9 million in 2014 and 2013, respectively, that was\n recorded in integration-related costs as a component of special\n items.
\n| \n | \n | \n |
| \n Pension Fund \n | \n \n | IAM National Pension Fund | \n
| \n EIN/ Pension Plan\n Number \n | \n \n | 51-6031295 - 002 | \n
| \n Pension Protection Act Zone\n Status (2015 and 2014) \n | \n \n | Green Zone. Plans in the green zone are at least 80 percent\n funded. | \n
| \n FIP/RP Status\n Pending/Implemented \n | \n \n | No | \n
| \n United’s\n Contributions \n | \n \n | $40 million, $39 million and $38 million in the years ended\n December 31, 2015, 2014 and 2013, respectively | \n
| \n Surcharge Imposed \n | \n \n | No | \n
| \n Expiration Date of\n Collective Bargaining Agreement \n | \n \n | N/A | \n
NOTE 14 - VARIABLE\n INTEREST ENTITIES
\nVariable interests are\n contractual, ownership or other monetary interests in an entity\n that change with fluctuations in the fair value of the\n entity’s net assets exclusive of variable interests. A VIE\n can arise from items such as lease agreements, loan arrangements,\n guarantees or service contracts. An entity is a VIE if (a) the\n entity lacks sufficient equity or (b) the entity’s\n equity holders lack power or the obligation and right as equity\n holders to absorb the entity’s expected losses or to receive\n its expected residual returns. Therefore, if the equity owners as a\n group do not have the power to direct the entity’s activities\n that most significantly impact its economic performance, the entity\n is a VIE.
\nIf an entity is determined\n to be a VIE, the entity must be consolidated by the primary\n beneficiary. The primary beneficiary is the holder of the variable\n interests that has the power to direct the activities of a VIE that\n (i) most significantly impact the VIE’s economic\n performance and (ii) has the obligation to absorb losses of or\n the right to receive benefits from the VIE that could potentially\n be significant to the VIE. Therefore, the Company must identify\n which activities most significantly impact the VIE’s economic\n performance and determine whether it, or another party, has the\n power to direct those activities.
\n\n
\nThe Company’s\n evaluation of its association with VIEs is described\n below:
\nAircraft\n Leases. We are the lessee in a number of operating leases\n covering the majority of our leased aircraft. The lessors are\n trusts established specifically to purchase, finance and lease\n aircraft to us. These leasing entities meet the criteria for VIEs.\n We are generally not the primary beneficiary of the leasing\n entities if the lease terms are consistent with market terms at the\n inception of the lease and do not include a residual value\n guarantee, fixed-price purchase option or similar feature that\n obligates us to absorb decreases in value or entitles us to\n participate in increases in the value of the aircraft. This is the\n case for many of our operating leases; however, leases of\n approximately 47 mainline jet aircraft contain a fixed-price\n purchase option that allow United to purchase the aircraft at\n predetermined prices on specified dates during the lease term.\n Additionally, leases covering approximately 207 leased regional jet\n aircraft contain an option to purchase the aircraft at the end of\n the lease term at prices that, depending on market conditions,\n could be below fair value. United has not consolidated the related\n trusts because, even taking into consideration these purchase\n options, United is still not the primary beneficiary.\n United’s maximum exposure under these leases is the remaining\n lease payments, which are reflected in future lease commitments in\n Note 13 of this report.
\nEETCs. United\n evaluated whether the pass-through trusts formed for its EETC\n financings, treated as either debt or aircraft operating leases,\n are VIEs required to be consolidated by United under applicable\n accounting guidance, and determined that the pass-through trusts\n are VIEs. Based on United’s analysis as described below,\n United determined that it does not have a variable interest in the\n pass-through trusts.
\nThe primary risk of the\n pass-through trusts is credit risk (i.e. the risk that United, the\n issuer of the equipment notes, may be unable to make its principal\n and interest payments). The primary purpose of the pass-through\n trust structure is to enhance the credit worthiness of\n United’s debt obligation through certain bankruptcy\n protection provisions, a liquidity facility (in certain of the EETC\n structures) and improved loan-to-value ratios for more senior debt\n classes. These credit enhancements lower United’s total\n borrowing cost. Pass-through trusts are established to receive\n principal and interest payments on the equipment notes purchased by\n the pass-through trusts from United and remit these proceeds to the\n pass-through trusts’ certificate holders.
\nUnited does not invest in or\n obtain a financial interest in the pass-through trusts. Rather,\n United has an obligation to make interest and principal payments on\n its equipment notes held by the pass-through trusts. United did not\n intend to have any voting or non-voting equity interest in the\n pass-through trusts or to absorb variability from the pass-through\n trusts. Based on this analysis, the Company determined that it is\n not required to consolidate the pass-through trusts.
\n\n Temporary\n differences and carryforwards that give rise to deferred tax assets\n and liabilities at December 31, 2015 and 2014 were as follows\n (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | UAL | \n\n | \n | United | \n\n | ||||||||||
| \n | \n | December 31, | \n\n | \n | December 31, | \n\n | ||||||||||
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2015 | \n\n | \n | 2014 | \n\n | ||||
| \n Deferred income tax asset\n (liability): \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Federal and state net\n operating loss (“NOL”) carryforwards \n | \n \n | $ | \n2,897 | \n\n | \n | $ | \n3,491 | \n\n | \n | $ | \n2,855 | \n\n | \n | $ | \n3,423 | \n\n |
| \n Deferred\n revenue \n | \n \n | \n | 2,160 | \n\n | \n | \n | 2,287 | \n\n | \n | \n | 2,160 | \n\n | \n | \n | 2,287 | \n\n |
| \n Employee benefits,\n including pension, postretirement and medical \n | \n \n | \n | 1,662 | \n\n | \n | \n | 1,943 | \n\n | \n | \n | 1,662 | \n\n | \n | \n | 1,943 | \n\n |
| \n Alternative minimum tax\n (“AMT”) credit carryforwards \n | \n \n | \n | 232 | \n\n | \n | \n | 214 | \n\n | \n | \n | 232 | \n\n | \n | \n | 214 | \n\n |
| \n Other \n | \n \n | \n | 566 | \n\n | \n | \n | 657 | \n\n | \n | \n | 566 | \n\n | \n | \n | 659 | \n\n |
| \n Less: Valuation\n allowance \n | \n \n | \n | (48) | \n\n | \n | \n | (4,751) | \n\n | \n | \n | (48) | \n\n | \n | \n | (4,721) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total deferred tax\n assets \n | \n \n | $ | \n7,469 | \n\n | \n | $ | \n3,841 | \n\n | \n | $ | \n7,427 | \n\n | \n | $ | \n3,805 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Depreciation, capitalized\n interest and other \n | \n \n | $ | \n(3,921) | \n\n | \n | $ | \n(3,212) | \n\n | \n | $ | \n(3,921) | \n\n | \n | $ | \n(3,212) | \n\n |
| \n Intangibles \n | \n \n | \n | (1,511) | \n\n | \n | \n | (1,545) | \n\n | \n | \n | (1,511) | \n\n | \n | \n | (1,545) | \n\n |
| \n Other \n | \n \n | \n | — | \n\n | \n | \n | (84) | \n\n | \n | \n | — | \n\n | \n | \n | (48) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total deferred tax\n liabilities \n | \n \n | $ | \n(5,432) | \n\n | \n | $ | \n(4,841) | \n\n | \n | $ | \n(5,432) | \n\n | \n | $ | \n(4,805) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Net deferred tax asset\n (liability) \n | \n \n | $ | \n2,037 | \n\n | \n | $ | \n(1,000) | \n\n | \n | $ | \n1,995 | \n\n | \n | $ | \n(1,000) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n
\n \n \n\n NOTE 9 -\n FAIR VALUE MEASUREMENTS
\n\n Fair\n Value Information. Accounting standards require\n us to use valuation techniques to measure fair value that maximize\n the use of observable inputs and minimize the use of unobservable\n inputs. These inputs are described in Note 8 of this report. The\n table below presents disclosures about the fair value of financial\n assets and financial liabilities measured at fair value on a\n recurring basis in the Company’s financial statements as of\n December 31 (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | ||||||||||||||||||||||||||
| \n | \n | Total | \n\n | \n | Level 1 | \n\n | \n | Level 2 | \n\n | \n | Level 3 | \n\n | \n | Total | \n\n | \n | Level 1 | \n\n | \n | Level 2 | \n\n | \n | Level 3 | \n\n | ||||||||
| \n | \n | UAL | \n\n | |||||||||||||||||||||||||||||
| \n Cash and cash\n equivalents \n | \n \n | $ | \n3,006 | \n\n | \n | $ | \n3,006 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n— | \n\n | \n | $ | \n2,002 | \n\n | \n | $ | \n2,002 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n— | \n\n |
| \n Short-term\n investments: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Corporate debt \n | \n \n | \n | 891 | \n\n | \n | \n | — | \n\n | \n | \n | 891 | \n\n | \n | \n | — | \n\n | \n | \n | 876 | \n\n | \n | \n | — | \n\n | \n | \n | 876 | \n\n | \n | \n | — | \n\n |
| \n Asset-backed\n securities \n | \n \n | \n | 710 | \n\n | \n | \n | — | \n\n | \n | \n | 710 | \n\n | \n | \n | — | \n\n | \n | \n | 901 | \n\n | \n | \n | — | \n\n | \n | \n | 901 | \n\n | \n | \n | — | \n\n |
| \n \n Certificates\n of deposit placed \n\n through an\n account registry \n\n service\n (“CDARS”) \n | \n \n | \n | 281 | \n\n | \n | \n | — | \n\n | \n | \n | 281 | \n\n | \n | \n | — | \n\n | \n | \n | 256 | \n\n | \n | \n | — | \n\n | \n | \n | 256 | \n\n | \n | \n | — | \n\n |
| \n U.S. government and\n agency notes \n | \n \n | \n | 72 | \n\n | \n | \n | — | \n\n | \n | \n | 72 | \n\n | \n | \n | — | \n\n | \n | \n | 68 | \n\n | \n | \n | — | \n\n | \n | \n | 68 | \n\n | \n | \n | — | \n\n |
| \n Auction rate\n securities \n | \n \n | \n | 9 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 9 | \n\n | \n | \n | 26 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 26 | \n\n |
| \n Other fixed-income\n securities \n | \n \n | \n | 227 | \n\n | \n | \n | — | \n\n | \n | \n | 227 | \n\n | \n | \n | — | \n\n | \n | \n | 255 | \n\n | \n | \n | — | \n\n | \n | \n | 255 | \n\n | \n | \n | — | \n\n |
| \n \n Enhanced\n equipment trust \n\n certificates\n (“EETC”) \n | \n \n | \n | 26 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 26 | \n\n | \n | \n | 28 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 28 | \n\n |
| \n Fuel derivatives\n liability, net \n | \n \n | \n | 124 | \n\n | \n | \n | — | \n\n | \n | \n | 124 | \n\n | \n | \n | — | \n\n | \n | \n | 717 | \n\n | \n | \n | — | \n\n | \n | \n | 717 | \n\n | \n | \n | — | \n\n |
| \n Foreign currency\n derivatives \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 2 | \n\n | \n | \n | — | \n\n | \n | \n | 2 | \n\n | \n | \n | — | \n\n |
| \n Restricted\n cash \n | \n \n | \n | 206 | \n\n | \n | \n | 206 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 320 | \n\n | \n | \n | 320 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n |
| \n | \n | |||||||||||||||||||||||||||||||
| \n | \n | United | \n\n | |||||||||||||||||||||||||||||
| \n Cash and cash\n equivalents \n | \n \n | $ | \n3,000 | \n\n | \n | $ | \n3,000 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n— | \n\n | \n | $ | \n1,996 | \n\n | \n | $ | \n1,996 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n— | \n\n |
| \n Short-term\n investments: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Corporate debt \n | \n \n | \n | 891 | \n\n | \n | \n | — | \n\n | \n | \n | 891 | \n\n | \n | \n | — | \n\n | \n | \n | 876 | \n\n | \n | \n | — | \n\n | \n | \n | 876 | \n\n | \n | \n | — | \n\n |
| \n Asset-backed\n securities \n | \n \n | \n | 710 | \n\n | \n | \n | — | \n\n | \n | \n | 710 | \n\n | \n | \n | — | \n\n | \n | \n | 901 | \n\n | \n | \n | — | \n\n | \n | \n | 901 | \n\n | \n | \n | — | \n\n |
| \n CDARS \n | \n \n | \n | 281 | \n\n | \n | \n | — | \n\n | \n | \n | 281 | \n\n | \n | \n | — | \n\n | \n | \n | 256 | \n\n | \n | \n | — | \n\n | \n | \n | 256 | \n\n | \n | \n | — | \n\n |
| \n U.S. government and\n agency notes \n | \n \n | \n | 72 | \n\n | \n | \n | — | \n\n | \n | \n | 72 | \n\n | \n | \n | — | \n\n | \n | \n | 68 | \n\n | \n | \n | — | \n\n | \n | \n | 68 | \n\n | \n | \n | — | \n\n |
| \n Auction rate\n securities \n | \n \n | \n | 9 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 9 | \n\n | \n | \n | 26 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 26 | \n\n |
| \n Other fixed-income\n securities \n | \n \n | \n | 227 | \n\n | \n | \n | — | \n\n | \n | \n | 227 | \n\n | \n | \n | — | \n\n | \n | \n | 255 | \n\n | \n | \n | — | \n\n | \n | \n | 255 | \n\n | \n | \n | — | \n\n |
| \n EETC \n | \n \n | \n | 26 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 26 | \n\n | \n | \n | 28 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 28 | \n\n |
| \n Fuel derivatives\n liability, net \n | \n \n | \n | 124 | \n\n | \n | \n | — | \n\n | \n | \n | 124 | \n\n | \n | \n | — | \n\n | \n | \n | 717 | \n\n | \n | \n | — | \n\n | \n | \n | 717 | \n\n | \n | \n | — | \n\n |
| \n Foreign currency\n derivatives \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 2 | \n\n | \n | \n | — | \n\n | \n | \n | 2 | \n\n | \n | \n | — | \n\n |
| \n Restricted\n cash \n | \n \n | \n | 206 | \n\n | \n | \n | 206 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 320 | \n\n | \n | \n | 320 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n |
| \n Convertible debt\n derivative asset \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 712 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 712 | \n\n |
| \n Convertible debt\n derivative option liability \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 511 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 511 | \n\n |
\n
\n\n United’s debt-related derivatives presented in the tables\n above related to (a) supplemental indentures that provided\n that United’s convertible debt was convertible into shares of\n UAL common stock upon the terms and conditions specified in the\n indentures, and (b) the embedded conversion options in\n United’s convertible debt that were required to be separated\n and accounted for as though they were free-standing derivatives as\n a result of the United debt becoming convertible into the common\n stock of a different reporting entity. The derivatives described\n above related to the 4.5% Convertible Notes due 2015 (the\n “4.5% Convertible Notes”). Gains (losses) on these\n derivatives were recorded in Nonoperating income (expense):\n Miscellaneous, net in United’s statements of consolidated\n operations. These derivatives along with their gains (losses) were\n reported in United’s separate financial statements and were\n eliminated in consolidation for UAL. In January 2015, the holders\n of substantially all of the remaining $202 million principal amount\n of the 4.5% Convertible Notes exercised their conversion option\n resulting in the issuance of 11 million shares of UAL common\n stock. The derivative assets and liabilities associated with the\n 4.5% Convertible Notes were settled in connection with the\n retirement of the related convertible debt, and the final\n accounting did not materially impact UAL’s or United’s\n statements of consolidated operations.
\n\n Available-for-sale investment maturities—The\n short-term investments shown in the table above are classified as\n available-for-sale. As of December 31, 2015, asset-backed\n securities have remaining maturities of less than one year to\n approximately 34 years, corporate debt securities have remaining\n maturities of less than one year to approximately six years and\n CDARS have maturities of less than one year. U.S. government and\n other securities have maturities of less than one year to\n approximately three years. The EETC securities mature in\n 2019.
\n\n Derivative\n instruments and investments presented in the tables above have the\n same fair value as their carrying value. The table below presents\n the carrying values and estimated fair values of financial\n instruments not presented in the tables above as of\n December 31 (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Fair Value of Debt by\n Fair Value Hierarchy Level | \n\n | |||||||||||||||||||||||||||||||||||||
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | ||||||||||||||||||||||||||||||||||
| \n | \n | Carrying \n Amount | \n \n | \n | Fair\n Value | \n\n | \n | Carrying \n Amount (a) | \n \n | \n | Fair\n Value | \n\n | ||||||||||||||||||||||||||||
| \n | \n | \n | \n | \n | Total | \n\n | \n | Level 1 | \n\n | \n | Level 2 | \n\n | \n | Level 3 | \n\n | \n | \n | \n | \n | Total | \n\n | \n | Level 1 | \n\n | \n | Level 2 | \n\n | \n | Level 3 | \n\n | ||||||||||
| \n Long-term debt \n | \n \n | $ | \n10,897 | \n\n | \n | $ | \n11,371 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n8,646 | \n\n | \n | $ | \n2,725 | \n\n | \n | $ | \n11,266 | \n\n | \n | $ | \n12,386 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n8,568 | \n\n | \n | $ | \n3,818 | \n\n |
\n
\n\n (a) 2014\n amount differs from the amount reported in the Company’s Form\n 10-K for the fiscal year ended December 31, 2014 due to the\n adoption of an accounting standard update in 2015. See Note 1(t)\n Recently Issued Accounting Standards of this report for additional\n information.
\n\n Fair value of\n the financial instruments included in the tables above was\n determined as follows:
\n\n
\n| \n | \n | \n |
| \n \n Description \n | \n \n | \n \n Fair Value\n Methodology \n | \n
| Cash and cash equivalents | \n\n | The carrying amounts approximate fair value because of the\n short-term maturity of these assets. | \n
| \n | \n | |
| Short-term investments and Restricted\n cash | \n\n | Fair value is based on (a) the trading prices of the investment\n or similar instruments, (b) an income approach, which uses\n valuation techniques to convert future amounts into a single\n present amount based on current market expectations about those\n future amounts when observable trading prices are not available,\n (c) internally-developed models of the expected future cash flows\n related to the securities, or (d) broker quotes obtained by\n third-party valuation services. | \n
| \n | \n | |
| \n Fuel\n derivatives \n | \n \n | Derivative contracts are privately negotiated contracts and are\n not exchange traded. Fair value measurements are estimated with\n option pricing models that employ observable inputs. Inputs to the\n valuation models include contractual terms, market prices, yield\n curves, fuel price curves and measures of volatility, among\n others. | \n
| Foreign currency derivatives | \n\n | Fair value is determined with a formula utilizing observable\n inputs. Significant inputs to the valuation models include\n contractual terms, risk-free interest rates and forward exchange\n rates. | \n
| \n | \n | |
| \n Debt \n | \n \n | Fair values were based on either market prices or the\n discounted amount of future cash flows using our current\n incremental rate of borrowing for similar liabilities. | \n
| \n | \n | |
| Convertible debt derivative asset and option\n liability | \n\n | United used a binomial lattice model to value the conversion\n options and the supplemental derivative assets. Significant\n binomial model inputs that are not objectively determinable include\n volatility and the Company’s credit risk component of the\n discount rate. | \n
The table below presents\n the Company’s contractual principal payments at\n December 31, 2015 under then-outstanding long-term debt\n agreements in each of the next five calendar years (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n |
| \n 2016 \n | \n \n | $ | \n1,224 | \n\n |
| \n 2017 \n | \n \n | \n | 822 | \n\n |
| \n 2018 \n | \n \n | \n | 1,359 | \n\n |
| \n 2019 \n | \n \n | \n | 1,788 | \n\n |
| \n 2020 \n | \n \n | \n | 942 | \n\n |
| \n After 2020 \n | \n \n | \n | 4,907 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | $ | \n11,042 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
| (t) | \nRecently Issued\n Accounting Standards—The Financial Accounting Standards\n Board (“FASB”) amended the FASB Accounting Standards\n Codification and created a new Topic 606, Revenue from Contracts\n with Customers. This amendment prescribes that an entity should\n recognize revenue to depict the transfer of promised goods or\n services to customers in an amount that reflects the consideration\n to which the entity expects to be entitled in exchange for those\n goods or services. The amendment supersedes the revenue recognition\n requirements in Topic 605, Revenue Recognition, and most\n industry-specific guidance throughout the Industry Topics of the\n Codification, and is effective for annual and interim reporting\n periods beginning after December 15, 2017. Under the new\n standard, certain airline ancillary fees directly related to\n passenger revenue tickets, such as airline change fees and baggage\n fees, are likely to no longer be considered distinct performance\n obligations separate from the passenger travel component. In\n addition, the change fees which were previously recognized when\n received, will likely be recognized when transportation is\n provided. The Company is evaluating other impacts on its\n consolidated financial statements. | \n
\n The FASB issued\n Accounting Standards Update No. 2015-03,\n Interest—Imputation of Interest (Subtopic 835-30):\n Simplifying the Presentation of Debt Issuance Costs. This\n standard amends existing guidance to require the presentation of\n debt issuance costs in the balance sheet as a deduction from the\n carrying amount of the related debt liability instead of a deferred\n charge. The Company adopted the standard as of December 31,\n 2015. As a result of the adoption, unamortized debt issuance costs\n previously recorded as an asset on the Company’s balance\n sheet included under the caption Other, net are now reclassified\n and presented as a deduction from the carrying amount of the\n related debt liability. The reclassified amounts were $170 million\n and $167 million as of December 31, 2015 and 2014,\n respectively.
\n\n The FASB issued\n Accounting Standards Update No. 2015-07, Fair Value\n Measurement (Topic 820): Disclosures for Investments in Certain\n Entities That Calculate Net Asset Value per Share (or Its\n Equivalent). Under the standard, investments for which fair\n value is measured at net asset value per share (or its equivalent)\n using the practical expedient will no longer be categorized in the\n fair value hierarchy. It is effective for fiscal years and interim\n periods beginning after December 15, 2015, but early adoption\n is permitted. As of December 31, 2015, the Company had\n approximately $200 million of such investments as part of\n Short-term investments balance sheet total. In addition, pension\n plan investments measured at net asset value per share will no\n longer be categorized within the fair value hierarchy. As of\n December 31, 2015, the Company had approximately $1.4 billion\n of such investments. The Company is evaluating other impacts on its\n consolidated financial statements.
\n\n The FASB issued\n Accounting Standards Update No. 2015-17, Balance Sheet\n Classification of Deferred Taxes. This standard amends existing\n guidance to require companies to classify all deferred tax assets\n and liabilities as noncurrent in the statement of financial\n position. For a particular tax-paying component of an entity and\n within a particular tax jurisdiction, all deferred tax liabilities\n and assets, as well as any related valuation allowance, shall be\n offset and presented as a single noncurrent amount. As a result,\n companies will no longer allocate valuation allowances between\n current and noncurrent deferred tax assets because those allowances\n also will be classified as noncurrent. As of December 31,\n 2015, the Company adopted this standard and reclassified\n approximately $1.5 billion from Current assets: Deferred income\n taxes to Other assets: Deferred income taxes as of\n December 31, 2015, and reclassified $591 million from Current\n assets: Deferred income taxes to Other liabilities and deferred\n credits: Deferred income taxes as of December 31,\n 2014.
\n| (d) | \nCash and Cash Equivalents\n and Restricted Cash— Highly liquid investments with a\n maturity of three months or less on their acquisition date are\n classified as cash and cash equivalents. | \n
\n Restricted cash\n primarily includes cash collateral associated with workers’\n compensation obligations, reserves for institutions that process\n credit card ticket sales and cash collateral received from fuel\n hedge counterparties. Restricted cash is classified as short-term\n or long-term in the consolidated balance sheets based on the\n expected timing of return of the assets to the Company. Airline\n industry practice includes classification of restricted cash flows\n as either investing cash flows or operating cash flows. Cash flows\n related to restricted cash activity are classified as investing\n activities because the Company considers restricted cash arising\n from these activities similar to an investment. The Company’s\n net cash inflows associated with its restricted cash balances for\n the years ended December 31, 2015, 2014 and 2013 were $114\n million, $75 million and $52 million, respectively.
\nThe significant components\n of the income tax expense (benefit) are as follows (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n 2015 \n | \n \n | UAL | \n\n | \n | United | \n\n | ||
| \n Current \n | \n \n | $ | \n56 | \n\n | \n | $ | \n56 | \n\n |
| \n Deferred \n | \n \n | \n | (3,177) | \n\n | \n | \n | (3,136) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | $ | \n(3,121) | \n\n | \n | $ | \n(3,080) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | ||||||
| \n \n 2014 \n | \n \n | \n | \n | \n | \n | \n | ||
| \n Current \n | \n \n | $ | \n(17) | \n\n | \n | $ | \n(17) | \n\n |
| \n Deferred \n | \n \n | \n | 13 | \n\n | \n | \n | 13 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | $ | \n(4) | \n\n | \n | $ | \n(4) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | ||||||
| \n \n 2013 \n | \n \n | \n | \n | \n | \n | \n | ||
| \n Current \n | \n \n | $ | \n(18) | \n\n | \n | $ | \n(18) | \n\n |
| \n Deferred \n | \n \n | \n | (14) | \n\n | \n | \n | 1 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | $ | \n(32) | \n\n | \n | $ | \n(17) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
Special items classified as\n special charges in the statements of consolidated operations\n consisted of the following for the years ended December 31 (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| Operating: | \n\n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2013 | \n\n | |||
| \n Severance and benefit\n costs \n | \n \n | $ | \n107 | \n\n | \n | $ | \n199 | \n\n | \n | $ | \n105 | \n\n |
| \n Impairment of\n assets \n | \n \n | \n | 79 | \n\n | \n | \n | 49 | \n\n | \n | \n | 33 | \n\n |
| \n Integration-related\n costs \n | \n \n | \n | 60 | \n\n | \n | \n | 96 | \n\n | \n | \n | 205 | \n\n |
| \n Labor agreement\n costs \n | \n \n | \n | 18 | \n\n | \n | \n | — | \n\n | \n | \n | 127 | \n\n |
| (Gains) losses on sale of assets and other miscellaneous\n (gains) losses, net | \n\n | \n | 62 | \n\n | \n | \n | 99 | \n\n | \n | \n | 50 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Special charges \n | \n \n | \n | 326 | \n\n | \n | \n | 443 | \n\n | \n | \n | 520 | \n\n |
| \n Nonoperating and income\n taxes: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| Loss on extinguishment of debt and other, net | \n\n | \n | 202 | \n\n | \n | \n | 74 | \n\n | \n | \n | — | \n\n |
| Income tax benefit related to special charges | \n\n | \n | (11) | \n\n | \n | \n | (10) | \n\n | \n | \n | (7) | \n\n |
| \n Income tax benefit\n associated with \nvaluation allowance release\n (Note 7) \n | \n \n | \n | (3,130) | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n \n Total operating\n and nonoperating \n\n special\n charges, net of income taxes \n | \n \n | $ | \n(2,613) | \n\n | \n | $ | \n507 | \n\n | \n | $ | \n513 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n Derivative\n instruments and investments presented in the tables above have the\n same fair value as their carrying value. The table below presents\n the carrying values and estimated fair values of financial\n instruments not presented in the tables above as of\n December 31 (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Fair Value of Debt by\n Fair Value Hierarchy Level | \n\n | |||||||||||||||||||||||||||||||||||||
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | ||||||||||||||||||||||||||||||||||
| \n | \n | Carrying \n Amount | \n \n | \n | Fair\n Value | \n\n | \n | Carrying \n Amount (a) | \n \n | \n | Fair\n Value | \n\n | ||||||||||||||||||||||||||||
| \n | \n | \n | \n | \n | Total | \n\n | \n | Level 1 | \n\n | \n | Level 2 | \n\n | \n | Level 3 | \n\n | \n | \n | \n | \n | Total | \n\n | \n | Level 1 | \n\n | \n | Level 2 | \n\n | \n | Level 3 | \n\n | ||||||||||
| \n Long-term debt \n | \n \n | $ | \n10,897 | \n\n | \n | $ | \n11,371 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n8,646 | \n\n | \n | $ | \n2,725 | \n\n | \n | $ | \n11,266 | \n\n | \n | $ | \n12,386 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n8,568 | \n\n | \n | $ | \n3,818 | \n\n |
\n
\n\n (a) 2014\n amount differs from the amount reported in the Company’s Form\n 10-K for the fiscal year ended December 31, 2014 due to the\n adoption of an accounting standard update in 2015. See Note 1(t)\n Recently Issued Accounting Standards of this report for additional\n information.
\n \n \n| (b) | \nRevenue\n Recognition—The Company records passenger ticket sales\n and tickets sold by other airlines for use on United as passenger\n revenue when the transportation is provided or upon estimated\n breakage. The value of unused passenger tickets is included in\n current liabilities as Advance ticket sales. Tickets sold by other\n airlines are recorded at the estimated values to be billed to the\n other airlines. Differences between amounts billed and the actual\n amounts may be rejected and rebilled or written off if the amount\n recorded was different from the original estimate. When necessary,\n the Company records a reserve against our interline billings and\n payables if historical experience indicates that these amounts are\n different. Non-refundable tickets generally expire on the date of\n the intended flight, unless the date is extended by notification\n from the customer on or before the intended flight\n date. | \n
\n Fees charged in\n association with changes or extensions to non-refundable tickets\n are recorded as other revenue at the time the fee is incurred. The\n fare on the changed ticket, including any additional collection of\n fare, is deferred and recognized in accordance with our\n transportation revenue recognition policy at the time the\n transportation is provided. Change fees related to non-refundable\n tickets are considered a separate transaction from the air\n transportation because they represent a charge for the\n Company’s additional service to modify a previous sale.\n Therefore, the pricing of the change fee and the initial customer\n order are separately determined and represent distinct earnings\n processes.
\n\n The Company\n records an estimate of breakage revenue on the flight date for\n tickets that will expire unused. These estimates are based on the\n evaluation of actual historical results and forecasted trends.\n Refundable tickets expire after one year from the date of\n issuance.
\n\n The Company\n recognizes cargo and other revenue as service is\n provided.
\n\n Under our\n capacity purchase agreements (“CPAs”) with regional\n carriers, we purchase all of the capacity related to aircraft\n covered by the contracts and are responsible for selling all of the\n related seat inventory. We record the passenger revenue and related\n expenses as separate operating revenue and expense in the\n consolidated statement of operations.
\n\n
\n\n Accounts\n receivable primarily consist of amounts due from credit card\n companies and customers of our aircraft maintenance and cargo\n transportation services. We provide an allowance for uncollectible\n accounts equal to the estimated losses expected to be incurred\n based on historical write-offs and other specific analyses. Bad\n debt expense and write-offs were not material for the years ended\n December 31, 2015, 2014 and 2013.
\nThe table below summarizes\n UAL’s RSUs and restricted stock activity for the years ended\n December 31 (shares in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | RSUs | \n\n | \n | Restricted Stock | \n\n | \n | Weighted- \n Average \n Grant Price | \n \n | |||
| \n Non-vested at\n December 31, 2012 \n | \n \n | \n | 4.3 | \n\n | \n | \n | 0.8 | \n\n | \n | $ | \n23.94 | \n\n |
| \n Granted \n | \n \n | \n | 1.8 | \n\n | \n | \n | 0.5 | \n\n | \n | \n | 25.98 | \n\n |
| \n Vested \n | \n \n | \n | (0.5) | \n\n | \n | \n | (0.3) | \n\n | \n | \n | 23.93 | \n\n |
| \n Forfeited \n | \n \n | \n | (0.2) | \n\n | \n | \n | (0.1) | \n\n | \n | \n | 24.76 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
| \n Non-vested at\n December 31, 2013 \n | \n \n | \n | 5.4 | \n\n | \n | \n | 0.9 | \n\n | \n | \n | 25.02 | \n\n |
| \n Granted \n | \n \n | \n | 0.9 | \n\n | \n | \n | 0.3 | \n\n | \n | \n | 43.33 | \n\n |
| \n Vested \n | \n \n | \n | (2.2) | \n\n | \n | \n | (0.4) | \n\n | \n | \n | 24.66 | \n\n |
| \n Forfeited \n | \n \n | \n | (0.3) | \n\n | \n | \n | (0.1) | \n\n | \n | \n | 28.88 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
| \n Non-vested at\n December 31, 2014 \n | \n \n | \n | 3.8 | \n\n | \n | \n | 0.7 | \n\n | \n | \n | 32.55 | \n\n |
| \n Granted \n | \n \n | \n | 1.0 | \n\n | \n | \n | 0.2 | \n\n | \n | \n | 66.53 | \n\n |
| \n Vested \n | \n \n | \n | (1.6) | \n\n | \n | \n | (0.4) | \n\n | \n | \n | 31.14 | \n\n |
| \n Forfeited \n | \n \n | \n | (0.6) | \n\n | \n | \n | (0.2) | \n\n | \n | \n | 46.23 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
| \n Non-vested at\n December 31, 2015 \n | \n \n | \n | 2.6 | \n\n | \n | \n | 0.3 | \n\n | \n | \n | 48.68 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n UAL \n \n \n | \n \n | Quarter\n Ended | \n\n | |||||||||||||
| \n \n (In\n millions, except per share\n amounts) \n | \n \n | March 31 | \n\n | \n | June 30 | \n\n | \n | September 30 | \n\n | \n | December 31 | \n\n | ||||
| \n 2015 \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Operating\n revenue \n | \n \n | $ | \n8,608 | \n\n | \n | $ | \n9,914 | \n\n | \n | $ | \n10,306 | \n\n | \n | $ | \n9,036 | \n\n |
| \n Income from\n operations \n | \n \n | \n | 741 | \n\n | \n | \n | 1,445 | \n\n | \n | \n | 1,899 | \n\n | \n | \n | 1,081 | \n\n |
| \n Net income \n | \n \n | \n | 508 | \n\n | \n | \n | 1,193 | \n\n | \n | \n | 4,816 | \n\n | \n | \n | 823 | \n\n |
| \n Basic earnings per\n share \n | \n \n | \n | 1.33 | \n\n | \n | \n | 3.14 | \n\n | \n | \n | 12.83 | \n\n | \n | \n | 2.24 | \n\n |
| \n Diluted earnings per\n share \n | \n \n | \n | 1.32 | \n\n | \n | \n | 3.14 | \n\n | \n | \n | 12.82 | \n\n | \n | \n | 2.24 | \n\n |
| \n 2014 \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Operating\n revenue \n | \n \n | $ | \n8,696 | \n\n | \n | $ | \n10,329 | \n\n | \n | $ | \n10,563 | \n\n | \n | $ | \n9,313 | \n\n |
| \n Income (loss) from\n operations \n | \n \n | \n | (349) | \n\n | \n | \n | 906 | \n\n | \n | \n | 1,191 | \n\n | \n | \n | 625 | \n\n |
| \n Net income\n (loss) \n | \n \n | \n | (609) | \n\n | \n | \n | 789 | \n\n | \n | \n | 924 | \n\n | \n | \n | 28 | \n\n |
| \n Basic earnings (loss) per\n share \n | \n \n | \n | (1.66) | \n\n | \n | \n | 2.11 | \n\n | \n | \n | 2.49 | \n\n | \n | \n | 0.08 | \n\n |
| \n Diluted earnings (loss)\n per share \n | \n \n | \n | (1.66) | \n\n | \n | \n | 2.01 | \n\n | \n | \n | 2.37 | \n\n | \n | \n | 0.07 | \n\n |
NOTE 4 - EARNINGS PER\n SHARE
\nThe computations of\n UAL’s basic and diluted earnings per share are set forth\n below for the years ended December 31 (in millions, except per\n share amounts):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2013 | \n\n | |||
| \n Basic earnings per\n share: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Earnings available to\n common stockholders \n | \n \n | $ | \n7,340 | \n\n | \n | $ | \n1,132 | \n\n | \n | $ | \n571 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Basic weighted-average\n shares outstanding \n | \n \n | \n | 376 | \n\n | \n | \n | 371 | \n\n | \n | \n | 348 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Earnings per share,\n basic \n | \n \n | $ | \n19.52 | \n\n | \n | $ | \n3.05 | \n\n | \n | $ | \n1.64 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Diluted earnings per\n share: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Earnings available to\n common stockholders \n | \n \n | $ | \n7,340 | \n\n | \n | $ | \n1,132 | \n\n | \n | $ | \n571 | \n\n |
| \n Effect of dilutive\n securities \n | \n \n | \n | — | \n\n | \n | \n | 11 | \n\n | \n | \n | 26 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Earnings available to\n common stockholders including the effect of dilutive\n securities \n | \n \n | $ | \n7,340 | \n\n | \n | $ | \n1,143 | \n\n | \n | $ | \n597 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Diluted shares\n outstanding: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Basic weighted-average\n shares outstanding \n | \n \n | \n | 376 | \n\n | \n | \n | 371 | \n\n | \n | \n | 348 | \n\n |
| \n Effect of convertible\n notes \n | \n \n | \n | — | \n\n | \n | \n | 18 | \n\n | \n | \n | 42 | \n\n |
| \n Effect of employee stock\n awards \n | \n \n | \n | 1 | \n\n | \n | \n | 1 | \n\n | \n | \n | 1 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Diluted weighted-average\n shares outstanding \n | \n \n | \n | 377 | \n\n | \n | \n | 390 | \n\n | \n | \n | 391 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Earnings per share,\n diluted \n | \n \n | $ | \n19.47 | \n\n | \n | $ | \n2.93 | \n\n | \n | $ | \n1.53 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
The number of antidilutive\n securities excluded from the computation of diluted earnings per\n share amounts were not material.
\nSee Notes 3 and 11 of this\n report for additional information related to the ASR Program, open\n market share repurchases, open market purchases of the\n Company’s convertible debt and exchange of shares for\n redemption of convertible debt.
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n (In\n millions) \n | \n \n | At\n December 31, | \n\n | |||||
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | ||
| \n Secured \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| Notes payable, fixed interest rates of 1.42% to 12.00%\n (weighted average rate of 5.37% as of December 31, 2015),\n payable through 2027 | \n\n | $ | \n7,971 | \n\n | \n | $ | \n7,464 | \n\n |
| Notes payable, floating interest rates of the London Interbank\n Offered Rate (“LIBOR”) plus 0.20% to 2.85%, payable\n through 2027 | \n\n | \n | 1,302 | \n\n | \n | \n | 1,151 | \n\n |
| Term loan, LIBOR subject to a 0.75% floor, plus 2.75%, or\n alternative rate based on certain market rates plus 1.75%, due\n 2019 | \n\n | \n | 875 | \n\n | \n | \n | 884 | \n\n |
| Term loan, LIBOR subject to a 0.75% floor, plus 3.00%, or\n alternative rate based on certain market rates plus 2%, due\n 2021 | \n\n | \n | 194 | \n\n | \n | \n | 499 | \n\n |
| Unsecured | \n\n | \n | \n | \n | \n | \n | \n | \n |
| 6% Notes due 2026 to 2028 (a) | \n\n | \n | — | \n\n | \n | \n | 632 | \n\n |
| 6% Senior Notes due 2020 (a) | \n\n | \n | 300 | \n\n | \n | \n | 300 | \n\n |
| 6.375% Senior Notes due 2018 (a) | \n\n | \n | 300 | \n\n | \n | \n | 300 | \n\n |
| 4.5% Convertible Notes due 2015 | \n\n | \n | — | \n\n | \n | \n | 202 | \n\n |
| Other | \n\n | \n | 100 | \n\n | \n | \n | 101 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | 11,042 | \n\n | \n | \n | 11,533 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Less: unamortized debt\n discount, premiums and debt issuance costs \n | \n \n | \n | (145) | \n\n | \n | \n | (267) | \n(b) | \n
| \n Less: current portion of\n long-term debt \n | \n \n | \n | (1,224) | \n\n | \n | \n | (1,313) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Long-term debt,\n net \n | \n \n | $ | \n9,673 | \n\n | \n | $ | \n9,953 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n
\n\n (a) UAL is\n the issuer of this debt. United is a guarantor.
\n\n (b) 2014\n amount differs from the amount reported in the Company’s Form\n 10-K for the fiscal year ended December 31, 2014 due to the\n adoption of an accounting standard update in 2015. See\n Note 1(t) Recently Issued Accounting Standards of this report\n for additional information.
\n \n \nThe following tables present\n the fuel hedge gains (losses) recognized during the periods\n presented and their classification in the financial statements (in\n millions):
\nDerivatives designated\n as cash flow hedges
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Amount of\n Loss \n Recognized \n in AOCI on Derivatives \n (Effective Portion) | \n \n | \n | Loss\n Reclassified from \n AOCI into Income \n (Fuel\n Expense) \n (Effective Portion) | \n \n | \n | Amount of Loss \n Recognized in \n Nonoperating income \n (expense): Miscellaneous, \n net (Ineffective Portion) | \n \n | |||||||||||||||
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2015 | \n\n | \n | 2014 | \n\n | ||||||
| \n Fuel contracts \n | \n \n | $ | \n(320) | \n\n | \n | $ | \n(599) | \n\n | \n | $ | \n(604) | \n\n | \n | $ | \n(89) | \n\n | \n | $ | \n— | \n\n | \n | $ | \n(3) | \n\n |
\n The estimated\n useful lives of property and equipment are as follows:
\n\n
\n| \n | \n | \n | \n | \n |
| \n | \n | Estimated Useful Life (in years) | \n\n | |
| \n Aircraft and related\n rotable parts \n | \n \n | \n | 25 to 30 | \n\n |
| \n Buildings \n | \n \n | \n | 25 to 45 | \n\n |
| \n Other property and\n equipment \n | \n \n | \n | 3 to 15 | \n\n |
| \n Computer\n software \n | \n \n | \n | 5 | \n\n |
| \n Building\n improvements \n | \n \n | \n | 1 to 40 | \n\n |
Derivatives not\n designated for hedge accounting
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Amount of Gain (Loss) Recognized \n in Nonoperating income (expense): \n Miscellaneous, net | \n \n | \n | \n | |||||||||
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2013 | \n\n | \n | \n | |||
| \n Fuel contracts \n | \n \n | $ | \n(80) | \n\n | \n | $ | \n(462 | \n) | \n\n | $ | \n79 | \n\n | \n | \n |
NOTE\n 6 - ACCUMULATED OTHER COMPREHENSIVE INCOME\n (LOSS)
\nThe tables below present\n the components of the Company’s accumulated other\n comprehensive income (loss) (“AOCI”), net of tax (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | Deferred\n Taxes | \n\n | \n | \n | \n | |||||||||
| \n \n UAL\n (a) \n | \n \n | Pension and \n Other \n Postretirement \n Unrecognized \n Actuarial \n Gains (Losses) \n and Prior \n Service Cost | \n \n | \n | Unrealized \n Gains \n (Losses) \n on\n Derivatives | \n \n | \n | Investments \n and Other | \n \n | \n | Pension and \n Other \n Postretirement \n Liabilities | \n \n | \n | Derivative \n Contracts | \n \n | \n | Total | \n\n | ||||||
| \n Balance at\n December 31, 2012 \n | \n \n | $ | \n(927) | \n\n | \n | $ | \n(10) | \n\n | \n | $ | \n6 | \n\n | \n | $ | \n(115) | \n\n | \n | $ | \n— | \n(d) | \n\n | $ | \n(1,046) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Other comprehensive income\n before reclassifications (b) \n | \n \n | \n | 1,584 | \n(c) | \n\n | \n | 39 | \n\n | \n | \n | 7 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 1,630 | \n\n |
| \n Amounts reclassified from\n accumulated other comprehensive income (b) \n | \n \n | \n | 42 | \n\n | \n | \n | (18) | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 24 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Net current-period other\n comprehensive income (loss) \n | \n \n | \n | 1,626 | \n\n | \n | \n | 21 | \n\n | \n | \n | 7 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 1,654 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Balance at\n December 31, 2013 \n | \n \n | $ | \n699 | \n\n | \n | $ | \n11 | \n\n | \n | $ | \n13 | \n\n | \n | $ | \n(115) | \n\n | \n | $ | \n— | \n(d) | \n\n | $ | \n608 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Other comprehensive loss\n before reclassifications (b) \n | \n \n | \n | (1,106) | \n(c) | \n\n | \n | (599) | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | (1,705) | \n\n |
| \n Amounts reclassified from\n accumulated other comprehensive income (b) \n | \n \n | \n | (65) | \n\n | \n | \n | 89 | \n\n | \n | \n | (6) | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 18 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Net current-period other\n comprehensive income (loss) \n | \n \n | \n | (1,171) | \n\n | \n | \n | (510) | \n\n | \n | \n | (6) | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | (1,687) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Balance at\n December 31, 2014 \n | \n \n | $ | \n(472) | \n\n | \n | $ | \n(499) | \n\n | \n | $ | \n7 | \n\n | \n | $ | \n(115) | \n\n | \n | $ | \n— | \n(d) | \n\n | $ | \n(1,079) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Other comprehensive income\n (loss) before reclassifications \n | \n \n | \n | 78 | \n(c) | \n\n | \n | (320) | \n\n | \n | \n | (4) | \n\n | \n | \n | (28) | \n\n | \n | \n | 115 | \n\n | \n | \n | (159) | \n\n |
| \n Amounts reclassified from\n accumulated other comprehensive income \n | \n \n | \n | 31 | \n\n | \n | \n | 604 | \n\n | \n | \n | — | \n\n | \n | \n | (11) | \n\n | \n | \n | (217) | \n\n | \n | \n | 407 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Net current-period other\n comprehensive income (loss) \n | \n \n | \n | 109 | \n\n | \n | \n | 284 | \n\n | \n | \n | (4) | \n\n | \n | \n | (39) | \n\n | \n | \n | (102) | \n\n | \n | \n | 248 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Balance at\n December 31, 2015 \n | \n \n | $ | \n(363) | \n\n | \n | $ | \n(215) | \n\n | \n | $ | \n3 | \n\n | \n | $ | \n(154) | \n\n | \n | $ | \n(102) | \n\n | \n | $ | \n(831) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n Details\n about AOCI Components \n | \n \n | Amount Reclassified from\n AOCI to \n Income | \n \n | \n | Affected Line Item\n in \n the Statement Where \n Net Income is Presented | \n |||||||||
| \n | \n | Year Ended December\n 31, | \n\n | \n | \n | |||||||||
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2013 | \n\n | \n | \n | |||
| \n Derivatives designated as\n cash flow hedges \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Fuel\n contracts-reclassifications of (gains) losses into\n earnings \n | \n \n | $ | \n604 | \n\n | \n | $ | \n89 | \n\n | \n | $ | \n(18) | \n\n | \n | Aircraft fuel | \n
| \n Amortization of pension and\n postretirement items \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n Amortization of\n unrecognized (gains) losses and prior \n\n service cost\n and the effect of curtailments and settlements (e) \n | \n \n | \n | 31 | \n\n | \n | \n | (65) | \n\n | \n | \n | 42 | \n\n | \n | Salaries and related costs | \n
| \n Investments and\n other \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Available-for-sale\n securities—reclassifications of gains into\n earnings \n | \n \n | \n | — | \n\n | \n | \n | (6) | \n\n | \n | \n | — | \n\n | \n | Miscellaneous, net | \n
\n
\n\n
\n(a) UAL and United amounts\n are substantially the same except for an additional $1 million and\n $6 million of additional gains related to investments and other and\n an income tax benefit, respectively, at United in 2013.
\n(b) Income tax expense for\n these items was offset by the Company’s valuation\n allowance.
\n(c) Prior service credits\n increased by $0 million, $3 million and $331 million and actuarial\n gains (losses) increased by approximately $78 million, $(1.1)\n billion and $1.3 billion for 2015, 2014 and 2013,\n respectively.
\n(d) Deferred tax balance\n was offset by the Company’s valuation allowance.
\n(e) This accumulated other\n comprehensive income component is included in the computation of\n net periodic pension and other postretirement costs (see Note 8 of\n this report for additional information).
\nThe following table sets\n forth the reconciliation of the beginning and ending balances of\n the benefit obligation and plan assets, the funded status and the\n amounts recognized in these financial statements for the defined\n benefit and other postretirement plans (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Pension\n Benefits | \n\n | |||||
| \n | \n | Year Ended \n December 31, 2015 | \n \n | \n | Year Ended \n December 31, 2014 | \n \n | ||
| \n Accumulated benefit\n obligation: \n | \n \n | $ | \n3,795 | \n\n | \n | $ | \n4,068 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Change in projected benefit\n obligation: \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Projected benefit\n obligation at beginning of year \n | \n \n | $ | \n4,803 | \n\n | \n | $ | \n4,000 | \n\n |
| \n Service cost \n | \n \n | \n | 124 | \n\n | \n | \n | 98 | \n\n |
| \n Interest cost \n | \n \n | \n | 200 | \n\n | \n | \n | 201 | \n\n |
| \n Actuarial (gain)\n loss \n | \n \n | \n | (298) | \n\n | \n | \n | 807 | \n\n |
| \n Gross benefits paid and\n settlements \n | \n \n | \n | (343) | \n\n | \n | \n | (281) | \n\n |
| \n Other \n | \n \n | \n | (13) | \n\n | \n | \n | (22) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Projected benefit\n obligation at end of year \n | \n \n | $ | \n4,473 | \n\n | \n | $ | \n4,803 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Change in plan\n assets: \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Fair value of plan assets\n at beginning of year \n | \n \n | $ | \n2,562 | \n\n | \n | $ | \n2,397 | \n\n |
| \n Actual gain (loss) on plan\n assets \n | \n \n | \n | (59) | \n\n | \n | \n | 151 | \n\n |
| \n Employer\n contributions \n | \n \n | \n | 824 | \n\n | \n | \n | 307 | \n\n |
| \n Gross benefits paid and\n settlements \n | \n \n | \n | (343) | \n\n | \n | \n | (281) | \n\n |
| \n Other \n | \n \n | \n | (9) | \n\n | \n | \n | (12) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Fair value of plan assets\n at end of year \n | \n \n | $ | \n2,975 | \n\n | \n | $ | \n2,562 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Funded status—Net\n amount recognized \n | \n \n | $ | \n(1,498) | \n\n | \n | $ | \n(2,241) | \n\n |
| Other Postretirement\n Benefits | \n\n | |||||||
| \n | \n | Year Ended \n December 31, 2015 | \n \n | \n | Year Ended \n December 31, 2014 | \n \n | ||
| \n Change in benefit\n obligation: \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Benefit obligation at\n beginning of year \n | \n \n | $ | \n2,052 | \n\n | \n | $ | \n1,819 | \n\n |
| \n Service cost \n | \n \n | \n | 21 | \n\n | \n | \n | 19 | \n\n |
| \n Interest cost \n | \n \n | \n | 82 | \n\n | \n | \n | 88 | \n\n |
| \n Plan participants’\n contributions \n | \n \n | \n | 68 | \n\n | \n | \n | 67 | \n\n |
| \n Benefits paid \n | \n \n | \n | (205) | \n\n | \n | \n | (212) | \n\n |
| \n Actuarial (gain)\n loss \n | \n \n | \n | (22) | \n\n | \n | \n | 262 | \n\n |
| \n Other \n | \n \n | \n | 6 | \n\n | \n | \n | 9 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Benefit obligation at end\n of year \n | \n \n | $ | \n2,002 | \n\n | \n | $ | \n2,052 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Change in plan\n assets: \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Fair value of plan assets\n at beginning of year \n | \n \n | $ | \n57 | \n\n | \n | $ | \n57 | \n\n |
| \n Actual return on plan\n assets \n | \n \n | \n | 1 | \n\n | \n | \n | 1 | \n\n |
| \n Employer\n contributions \n | \n \n | \n | 135 | \n\n | \n | \n | 144 | \n\n |
| \n Plan participants’\n contributions \n | \n \n | \n | 68 | \n\n | \n | \n | 67 | \n\n |
| \n Benefits paid \n | \n \n | \n | (205) | \n\n | \n | \n | (212) | \n\n |
| \n Fair value of plan assets\n at end of year \n | \n \n | \n | 56 | \n\n | \n | \n | 57 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Funded status—Net\n amount recognized \n | \n \n | $ | \n(1,946) | \n\n | \n | $ | \n(1,995 | \n
| (k) | \nAdvertising—Advertising costs, which are included\n in Other operating expenses, are expensed as incurred. Advertising\n expenses were $201 million, $179 million and $178 million for the\n years ended December 31, 2015, 2014 and 2013,\n respectively. | \n
\n NOTE 2 -\n GOODWILL AND OTHER INTANGIBLE ASSETS
\n\n The following\n table presents information about the Company’s goodwill and\n other intangible assets at December 31 (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | \n | \n | 2015 | \n\n | \n | 2014 | \n\n | ||||||||||
| \n \n Item \n | \n \n | Asset life (a) | \n\n | Gross \n Carrying \n Amount | \n \n | \n | Accumulated \n Amortization | \n \n | \n | Gross \n Carrying \n Amount | \n \n | \n | Accumulated \n Amortization | \n \n | ||||
| \n Goodwill \n | \n \n | \n | \n | $ | \n4,523 | \n\n | \n | \n | \n | \n | \n | $ | \n4,523 | \n\n | \n | \n | \n | \n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Finite-lived intangible\n assets \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Frequent flyer database\n (b) \n | \n \n | 22 | \n\n | $ | \n1,177 | \n\n | \n | $ | \n702 | \n\n | \n | $ | \n1,177 | \n\n | \n | $ | \n624 | \n\n |
| \n Hubs \n | \n \n | 20 | \n\n | \n | 145 | \n\n | \n | \n | 74 | \n\n | \n | \n | 145 | \n\n | \n | \n | 67 | \n\n |
| \n Contracts \n | \n \n | 12 | \n\n | \n | 135 | \n\n | \n | \n | 86 | \n\n | \n | \n | 155 | \n\n | \n | \n | 86 | \n\n |
| \n Patents and\n tradenames \n | \n \n | 3 | \n\n | \n | 108 | \n\n | \n | \n | 108 | \n\n | \n | \n | 108 | \n\n | \n | \n | 108 | \n\n |
| \n Airport slots and\n gates \n | \n \n | 8 | \n\n | \n | 97 | \n\n | \n | \n | 97 | \n\n | \n | \n | 97 | \n\n | \n | \n | 97 | \n\n |
| \n Other \n | \n \n | 25 | \n\n | \n | 109 | \n\n | \n | \n | 77 | \n\n | \n | \n | 109 | \n\n | \n | \n | 67 | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total \n | \n \n | \n | \n | $ | \n1,771 | \n\n | \n | $ | \n1,144 | \n\n | \n | $ | \n1,791 | \n\n | \n | $ | \n1,049 | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Indefinite-lived\n intangible assets \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Route\n authorities \n | \n \n | \n | \n | $ | \n1,570 | \n\n | \n | \n | \n | \n | \n | $ | \n1,589 | \n\n | \n | \n | \n | \n |
| \n Airport slots and\n gates \n | \n \n | \n | \n | \n | 942 | \n\n | \n | \n | \n | \n | \n | \n | 956 | \n\n | \n | \n | \n | \n |
| \n Tradenames and\n logos \n | \n \n | \n | \n | \n | 593 | \n\n | \n | \n | \n | \n | \n | \n | 593 | \n\n | \n | \n | \n | \n |
| \n Alliances \n | \n \n | \n | \n | \n | 404 | \n\n | \n | \n | \n | \n | \n | \n | 404 | \n\n | \n | \n | \n | \n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
| \n Total \n | \n \n | \n | \n | $ | \n3,509 | \n\n | \n | \n | \n | \n | \n | $ | \n3,542 | \n\n | \n | \n | \n | \n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n |
\n
\n\n (a) Weighted\n average life expressed in years.
\n\n (b) The\n frequent flyer database is amortized based on an accelerated\n amortization schedule to reflect utilization of the assets.\n Estimated cash flows correlating to the expected attrition rate of\n customers in the frequent flyer database is considered in the\n determination of the amortization schedules.
\n\n Amortization\n expense in 2015, 2014 and 2013 was $105 million, $128 million and\n $142 million, respectively. Projected amortization expense in 2016,\n 2017, 2018, 2019 and 2020 is $90 million, $79 million, $70 million,\n $64 million and $58 million, respectively.
\n\n See Note 16\n of this report for additional information related to impairment of\n intangible assets.
\nSchedule II
\nValuation and Qualifying Accounts
\nFor the Years Ended December 31, 2015, 2014 and\n 2013
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n (In\n millions) \n\n \n\n Description \n | \n \n | Balance at \n Beginning of \n Period | \n \n | \n | Additions \n Charged to \n Costs\n and \n Expenses | \n \n | \n | Deductions \n (a) | \n \n | \n | Other | \n\n | \n | Balance at \n End\n of \n Period | \n \n | |||||
| \n Allowance for doubtful\n accounts—UAL and United: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n 2015 \n | \n \n | $ | \n22 | \n\n | \n | $ | \n25 | \n\n | \n | $ | \n29 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n18 | \n\n |
| \n 2014 \n | \n \n | \n | 13 | \n\n | \n | \n | 45 | \n\n | \n | \n | 36 | \n\n | \n | \n | — | \n\n | \n | \n | 22 | \n\n |
| \n 2013 \n | \n \n | \n | 13 | \n\n | \n | \n | 35 | \n\n | \n | \n | 35 | \n\n | \n | \n | — | \n\n | \n | \n | 13 | \n\n |
| \n Obsolescence\n allowance—spare parts—UAL and United: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n 2015 \n | \n \n | $ | \n169 | \n\n | \n | $ | \n38 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n28 | \n\n | \n | $ | \n235 | \n\n |
| \n 2014 \n | \n \n | \n | 162 | \n\n | \n | \n | 35 | \n\n | \n | \n | 28 | \n\n | \n | \n | — | \n\n | \n | \n | 169 | \n\n |
| \n 2013 \n | \n \n | \n | 125 | \n\n | \n | \n | 38 | \n\n | \n | \n | 1 | \n\n | \n | \n | — | \n\n | \n | \n | 162 | \n\n |
| \n Valuation allowance\n for deferred tax assets—UAL: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n 2015 \n | \n \n | $ | \n4,751 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n4,703 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n48 | \n\n |
| \n 2014 \n | \n \n | \n | 4,591 | \n\n | \n | \n | 156 | \n\n | \n | \n | — | \n\n | \n | \n | 4 | \n(b) | \n\n | \n | 4,751 | \n\n |
| \n 2013 \n | \n \n | \n | 5,388 | \n\n | \n | \n | 7 | \n\n | \n | \n | 888 | \n\n | \n | \n | 84 | \n(b) | \n\n | \n | 4,591 | \n\n |
| \n Valuation allowance\n for deferred tax assets—United: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n 2015 \n | \n \n | $ | \n4,721 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n4,673 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n48 | \n\n |
| \n 2014 \n | \n \n | \n | 4,561 | \n\n | \n | \n | 167 | \n\n | \n | \n | — | \n\n | \n | \n | (7) | \n(b) | \n\n | \n | 4,721 | \n\n |
| \n 2013 \n | \n \n | \n | 5,288 | \n\n | \n | \n | 8 | \n\n | \n | \n | 898 | \n\n | \n | \n | 163 | \n(b) | \n\n | \n | 4,561 | \n\n |
\n
\n\n (a) Deduction\n from reserve for purpose for which reserve was created.
\n\n (b) See Note\n 7 to the financial statements included in Part II, Item 8 of\n this report for additional information related to other valuation\n allowance adjustments.
\nUnited’s plan assets\n are allocated within the following guidelines:
\n\n
\n| \n | \n | \n | \n | \n |
| \n | \n | \n Percent of Total \n | \n \n | \n \n Expected Long-Term \nRate of Return \n | \n
| \n | \n | \n | \n | \n |
| \n Equity\n securities \n | \n \n | 30-40 % | \n\n | 9.5 % | \n
| \n Fixed-income\n securities \n | \n \n | 34-44 | \n\n | 5.0 | \n
| \n Alternatives \n | \n \n | 14-27 | \n\n | 7.3 | \n
| \n Other \n | \n \n | 0-10 | \n\n | 7.0 | \n
| (h) | \nMaintenance and\n Repairs—The cost of maintenance and repairs, including\n the cost of minor replacements, is charged to expense as incurred,\n except for costs incurred under our power-by-the-hour\n (“PBTH”) engine maintenance agreements. PBTH contracts\n transfer certain risk to third-party service providers and fix the\n amount we pay per flight hour or per cycle to the service provider\n in exchange for maintenance and repairs under a predefined\n maintenance program. Under PBTH agreements, the Company recognizes\n expense at a level rate per engine hour, unless the level of\n service effort and the related payments during the period are\n substantially consistent, in which case the Company recognizes\n expense based on the amounts paid. | \n
The assumptions used for the\n benefit plans were as follows:
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n | \n \n | \n | Pension Benefits | \n\n | ||||
| \n \n Assumptions\n used to determine benefit obligations \n | \n \n | \n | \n2015 | \n\n | \n | \n | \n2014 | \n\n |
| \n Discount rate \n | \n \n | \n | 4.58% | \n\n | \n | \n | 4.20% | \n\n |
| \n Rate of compensation\n increase \n | \n \n | \n | 3.66% | \n\n | \n | \n | 3.66% | \n\n |
| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Assumptions used to\n determine net expense \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Discount rate \n | \n \n | \n | 4.20% | \n\n | \n | \n | 5.10% | \n\n |
| \n Expected return on plan\n assets \n | \n \n | \n | 7.40% | \n\n | \n | \n | 7.36% | \n\n |
| \n Rate of compensation\n increase \n | \n \n | \n | 3.51% | \n\n | \n | \n | 3.50% | \n\n |
\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n | \n \n | Other Postretirement Benefits | \n\n | |||||
| \n Assumptions used to\n determine benefit obligations \n | \n \n | 2015 | \n\n | \n | 2014 | \n\n | ||
| \n Discount rate \n | \n \n | \n | 4.49% | \n\n | \n | \n | 4.07% | \n\n |
| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Assumptions used to\n determine net expense \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Discount rate \n | \n \n | \n | 4.07% | \n\n | \n | \n | 4.94% | \n\n |
| \n Expected return on plan\n assets \n | \n \n | \n | 3.00% | \n\n | \n | \n | 4.00% | \n\n |
| \n Health care cost trend rate\n assumed for next year \n | \n \n | \n | 6.75% | \n\n | \n | \n | 7.00% | \n\n |
| \n Rate to which the cost trend\n rate is assumed to decline (ultimate trend rate in 2023) \n | \n \n | \n | 5.00% | \n\n | \n | \n | 5.00% | \n\n |
| (c) | \nFrequent Flyer\n Accounting—United’s MileagePlus program is designed\n to increase customer loyalty. Program participants earn miles by\n flying on United and certain other participating airlines. Program\n participants can also earn miles through purchases from other\n non-airline partners that participate in United’s loyalty\n program. We sell miles to these partners, which include credit card\n issuers, retail merchants, hotels, car rental companies and our\n participating airline partners. Miles can be redeemed for free\n (other than taxes and government imposed fees), discounted or\n upgraded air travel and non-travel awards. The Company records its\n obligation for future award redemptions using a deferred revenue\n model. | \n
\n Miles Earned\n in Conjunction with Flights
\n\n In the case of\n the sale of air services, the Company recognizes a portion of the\n ticket sales as revenue when the air transportation occurs and\n defers a portion of the ticket sale representing the value of the\n related miles as a multiple-deliverable revenue arrangement. The\n miles are recorded in Frequent flyer deferred revenue on the\n Company’s consolidated balance sheet and recognized into\n revenue when the transportation is provided.
\n\n The Company\n determines the estimated selling price of air transportation and\n miles as if each element is sold on a separate basis. The total\n consideration from each ticket sale is then allocated to each of\n these elements individually on a pro rata basis.
\n\n The\n Company’s estimated selling price of miles is based on an\n equivalent ticket value less fulfillment discount, which\n incorporates the expected redemption of miles, as the best estimate\n of selling price for these miles. The equivalent ticket value is\n based on the prior 12 months’ weighted average equivalent\n ticket value of similar fares as those used to settle award\n redemptions while taking into consideration such factors as\n redemption pattern, cabin class, loyalty status and geographic\n region. The estimated selling price of miles is adjusted by a\n fulfillment discount that considers a number of factors, including\n redemption patterns of various customer groups.
\n\n Co-branded\n Credit Card Partner Mileage Sales
\n\n United has a\n significant contract, the Consolidated Amended and Restated\n Co-Branded Card Marketing Services Agreement (the “Co-Brand\n Agreement”), to sell MileagePlus miles to its co-branded\n credit card partner, Chase Bank USA, N.A. (“Chase”).\n United identified the following significant revenue elements in the\n Co-Brand Agreement: the air transportation element represented by\n the value of the mile (generally resulting from its redemption for\n future air transportation and whose fair value is described above);\n use of the United brand and access to MileagePlus member lists;\n advertising; and other travel related benefits.
\n\n The fair value\n of the elements is determined using management’s estimated\n selling price of each element. The objective of using the estimated\n selling price based methodology is to determine the price at which\n we would transact a sale if the product or service were sold on a\n stand-alone basis. Accordingly, we determine our best estimate of\n selling price by considering multiple inputs and methods including,\n but not limited to, discounted cash flows, brand value, volume\n discounts, published selling prices, number of miles awarded and\n number of miles redeemed. The Company estimated the selling prices\n and volumes over the term of the Co-Brand Agreement in order to\n determine the allocation of proceeds to each of the multiple\n elements to be delivered. We also evaluate volumes on an annual\n basis, which may result in a change in the allocation of estimated\n selling price on a prospective basis.
\n\n
\n\n The Company\n records passenger revenue related to the air transportation element\n when the transportation is delivered. The other elements are\n generally recognized as Other operating revenue when\n earned.
\n\n Expiration of\n Miles
\n\n The Company\n accounts for miles sold and awarded that will never be redeemed by\n program members, which we refer to as breakage. The Company reviews\n its breakage estimates annually based upon the latest available\n information regarding redemption and expiration patterns. Miles\n expire after 18 months of member account inactivity.
\n\n The\n Company’s estimate of the expected expiration of miles\n requires significant management judgment. Current and future\n changes to expiration assumptions or to the expiration policy, or\n to program rules and program redemption opportunities, may result\n in material changes to the deferred revenue balance as well as\n recognized revenues from the programs.
\n\n Other\n Information
\n\n The following\n table provides additional information related to the frequent flyer\n program (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n Year\n Ended \n\n December 31, \n | \n \n | Cash Proceeds \n from Miles Sold \n and Earned | \n \n | \n | Other Revenue \n Recognized Upon \n Award of Miles \n to Third-Party \n Customers (a) | \n \n | \n | Increase in Frequent \n Flyer Deferred \n Revenue for Miles \n Awarded (b) | \n \n | \n | Increase \n (Decrease) in \n Advanced \n Purchase of \n Miles (c) | \n \n | ||||
| \n 2015 \n | \n \n | $ | \n2,999 | \n\n | \n | $ | \n1,050 | \n\n | \n | $ | \n2,173 | \n\n | \n | $ | \n(224) | \n\n |
| \n 2014 \n | \n \n | \n | 2,861 | \n\n | \n | \n | 882 | \n\n | \n | \n | 2,178 | \n\n | \n | \n | (199) | \n\n |
| \n 2013 \n | \n \n | \n | 2,903 | \n\n | \n | \n | 903 | \n\n | \n | \n | 2,174 | \n\n | \n | \n | (174) | \n\n |
| \n \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | |||
| (a) This amount represents\n other revenue recognized during the period from the sale of miles\n to third parties, representing the marketing-related deliverable\n services component of the sale. | \n\n | |||||||||||||||
| (b) This amount represents\n the increase to Frequent flyer deferred revenue during the\n period. | \n\n | |||||||||||||||
| (c) This amount represents\n the net increase (decrease) in the advance purchase of miles\n obligation due to cash payments for the sale of miles in excess of\n (less than) miles awarded to customers. | \n\n |
\n NOTE\n 7 - INCOME TAXES
\n\n The\n significant components of the income tax expense (benefit) are as\n follows (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n 2015 \n | \n \n | UAL | \n\n | \n | United | \n\n | ||
| \n Current \n | \n \n | $ | \n56 | \n\n | \n | $ | \n56 | \n\n |
| \n Deferred \n | \n \n | \n | (3,177) | \n\n | \n | \n | (3,136) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | $ | \n(3,121) | \n\n | \n | $ | \n(3,080) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | ||||||
| \n \n 2014 \n | \n \n | \n | \n | \n | \n | \n | ||
| \n Current \n | \n \n | $ | \n(17) | \n\n | \n | $ | \n(17) | \n\n |
| \n Deferred \n | \n \n | \n | 13 | \n\n | \n | \n | 13 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | $ | \n(4) | \n\n | \n | $ | \n(4) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | ||||||
| \n \n 2013 \n | \n \n | \n | \n | \n | \n | \n | ||
| \n Current \n | \n \n | $ | \n(18) | \n\n | \n | $ | \n(18) | \n\n |
| \n Deferred \n | \n \n | \n | (14) | \n\n | \n | \n | 1 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | $ | \n(32) | \n\n | \n | $ | \n(17) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n
\n\n The income\n tax provision differed from amounts computed at the statutory\n federal income tax rate, as follows (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n UAL \n | \n \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2013 | \n\n | |||
| \n Income tax provision at\n statutory rate \n | \n \n | $ | \n1,477 | \n\n | \n | $ | \n395 | \n\n | \n | $ | \n189 | \n\n |
| \n State income taxes, net\n of federal income tax \n | \n \n | \n | 60 | \n\n | \n | \n | 16 | \n\n | \n | \n | 5 | \n\n |
| \n Foreign income\n taxes \n | \n \n | \n | 4 | \n\n | \n | \n | 2 | \n\n | \n | \n | 3 | \n\n |
| \n Nondeductible employee\n meals \n | \n \n | \n | 15 | \n\n | \n | \n | 15 | \n\n | \n | \n | 15 | \n\n |
| \n State rate\n change \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | (33) | \n\n |
| \n Valuation\n allowance \n | \n \n | \n | (4,684) | \n\n | \n | \n | (441) | \n\n | \n | \n | (219) | \n\n |
| \n Other, net \n | \n \n | \n | 7 | \n\n | \n | \n | 9 | \n\n | \n | \n | 8 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | $ | \n(3,121) | \n\n | \n | $ | \n(4) | \n\n | \n | $ | \n(32) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | \n | |||||||||
| \n United \n | \n \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2013 | \n\n | |||
| \n Income tax provision at\n statutory rate \n | \n \n | $ | \n1,477 | \n\n | \n | $ | \n388 | \n\n | \n | $ | \n223 | \n\n |
| \n State income taxes, net\n of federal income tax \n | \n \n | \n | 60 | \n\n | \n | \n | 15 | \n\n | \n | \n | 5 | \n\n |
| \n Foreign income\n taxes \n | \n \n | \n | 4 | \n\n | \n | \n | 2 | \n\n | \n | \n | 3 | \n\n |
| \n Nondeductible employee\n meals \n | \n \n | \n | 15 | \n\n | \n | \n | 15 | \n\n | \n | \n | 15 | \n\n |
| \n Derivative market\n adjustment \n | \n \n | \n | — | \n\n | \n | \n | (7) | \n\n | \n | \n | (24) | \n\n |
| \n State rate\n change \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | (33) | \n\n |
| \n Valuation\n allowance \n | \n \n | \n | (4,643) | \n\n | \n | \n | (426) | \n\n | \n | \n | (229) | \n\n |
| \n Other, net \n | \n \n | \n | 7 | \n\n | \n | \n | 9 | \n\n | \n | \n | 23 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | $ | \n(3,080) | \n\n | \n | $ | \n(4) | \n\n | \n | $ | \n(17) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n Temporary\n differences and carryforwards that give rise to deferred tax assets\n and liabilities at December 31, 2015 and 2014 were as follows\n (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | UAL | \n\n | \n | United | \n\n | ||||||||||
| \n | \n | December 31, | \n\n | \n | December 31, | \n\n | ||||||||||
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2015 | \n\n | \n | 2014 | \n\n | ||||
| \n Deferred income tax asset\n (liability): \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Federal and state net\n operating loss (“NOL”) carryforwards \n | \n \n | $ | \n2,897 | \n\n | \n | $ | \n3,491 | \n\n | \n | $ | \n2,855 | \n\n | \n | $ | \n3,423 | \n\n |
| \n Deferred\n revenue \n | \n \n | \n | 2,160 | \n\n | \n | \n | 2,287 | \n\n | \n | \n | 2,160 | \n\n | \n | \n | 2,287 | \n\n |
| \n Employee benefits,\n including pension, postretirement and medical \n | \n \n | \n | 1,662 | \n\n | \n | \n | 1,943 | \n\n | \n | \n | 1,662 | \n\n | \n | \n | 1,943 | \n\n |
| \n Alternative minimum tax\n (“AMT”) credit carryforwards \n | \n \n | \n | 232 | \n\n | \n | \n | 214 | \n\n | \n | \n | 232 | \n\n | \n | \n | 214 | \n\n |
| \n Other \n | \n \n | \n | 566 | \n\n | \n | \n | 657 | \n\n | \n | \n | 566 | \n\n | \n | \n | 659 | \n\n |
| \n Less: Valuation\n allowance \n | \n \n | \n | (48) | \n\n | \n | \n | (4,751) | \n\n | \n | \n | (48) | \n\n | \n | \n | (4,721) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total deferred tax\n assets \n | \n \n | $ | \n7,469 | \n\n | \n | $ | \n3,841 | \n\n | \n | $ | \n7,427 | \n\n | \n | $ | \n3,805 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Depreciation, capitalized\n interest and other \n | \n \n | $ | \n(3,921) | \n\n | \n | $ | \n(3,212) | \n\n | \n | $ | \n(3,921) | \n\n | \n | $ | \n(3,212) | \n\n |
| \n Intangibles \n | \n \n | \n | (1,511) | \n\n | \n | \n | (1,545) | \n\n | \n | \n | (1,511) | \n\n | \n | \n | (1,545) | \n\n |
| \n Other \n | \n \n | \n | — | \n\n | \n | \n | (84) | \n\n | \n | \n | — | \n\n | \n | \n | (48) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total deferred tax\n liabilities \n | \n \n | $ | \n(5,432) | \n\n | \n | $ | \n(4,841) | \n\n | \n | $ | \n(5,432) | \n\n | \n | $ | \n(4,805) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Net deferred tax asset\n (liability) \n | \n \n | $ | \n2,037 | \n\n | \n | $ | \n(1,000) | \n\n | \n | $ | \n1,995 | \n\n | \n | $ | \n(1,000) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n
\n\n United and\n its domestic consolidated subsidiaries file a consolidated federal\n income tax return with UAL. Under an intercompany tax allocation\n policy, United and its subsidiaries compute, record and pay UAL for\n their own tax liability as if they were separate companies filing\n separate returns. In determining their own tax liabilities, United\n and each of its subsidiaries take into account all tax credits or\n benefits generated and utilized as separate companies and they are\n each compensated for the aforementioned tax benefits only if they\n would be able to use those benefits on a separate company\n basis.
\n\n The federal\n and state NOL carryforwards relate to prior years’ NOLs,\n which may be used to reduce tax liabilities in future years. These\n tax benefits are mostly attributable to federal pre-tax NOL\n carryforwards of $8.0 billion for UAL. If not utilized these\n federal pre-tax NOLs will expire as follows (in billions): $2.1 in\n 2025, $2.0 in 2026, $1.4 in 2027 and $2.5 after 2028. In addition,\n the majority of tax benefits of the state net operating losses of\n $103 million for UAL will expire over a five to 20-year period.\n Additionally, the Company has $232 million of AMT credit\n carryforwards which do not expire.
\n\n The\n Company’s income tax benefit was $3.1 billion for the year\n ended December 31, 2015. A discrete tax benefit of $3.1\n billion for the reduction to the U.S. net federal and state\n deferred tax asset valuation allowance was included in the income\n tax benefit for the year ended December 31, 2015.
\n\n During 2015,\n after considering all positive and negative evidence and the four\n sources of taxable income, the Company concluded that its deferred\n income tax assets are more likely than not to be realized. In\n evaluating the likelihood of utilizing the Company’s net\n federal and state deferred tax assets, the significant relevant\n factors that the Company considered are: (1) its recent\n history and forecasted profitability; (2) growth in the U.S.\n and global economies; and (3) future impact of taxable\n temporary differences. Although the Company was not in a three-year\n cumulative loss position at December 31, 2014, management\n concluded that the low level of cumulative pre-tax income, coupled\n with the Company’s history of operating losses resulted in a\n determination that a valuation allowance was still necessary. We\n considered past profitability and future expectations of\n profitability to determine whether it is more likely than not that\n we will generate sufficient taxable income to realize our net\n deferred tax assets. Management placed significant weight on past\n performance (i.e., losses or near break-even results in 2009 to\n 2013) as it is more objectively verifiable than projections of\n future taxable income. However, during 2015, the Company’s\n pre-tax profit of $4.2 billion benefited from lower oil prices and\n improved efficiency that resulted in significant taxable income.\n Additionally, based upon current projection of future earnings, the\n Company evaluated the NOLs expiration periods and change in\n ownership limitations under Section 382 of the Internal\n Revenue Code of 1986, as amended, and determined the NOLs would be\n realized before expiring beginning in 2025. Therefore, the Company\n released almost all of its valuation allowance in 2015, resulting\n in a $3.1 billion benefit in its provision for income taxes. The\n valuation allowance recorded in AOCI in prior years was released\n through the income statement and resulted in remaining debits\n within AOCI of $285 million and $180 million related to pension and\n derivatives, respectively, which will not be recognized into income\n tax expense until either the plans are exited or the Company no\n longer has any outstanding derivatives.
\n\n The Company\n has retained a valuation allowance of $48 million against certain\n state and local NOLs and credit carryforwards at the end of 2015.\n The Company expects these NOLs and credits will expire unused due\n to limited carryforward periods. The ability to utilize these state\n NOLs and credits will be evaluated on a quarterly basis to\n determine if there are any significant events or any prudent and\n feasible tax planning strategies that would affect the\n Company’s ability to realize these deferred tax\n assets.
\n\n The\n Company’s effective tax rates differ from the federal\n statutory rate of 35% primarily because of the impact of changes to\n existing valuation allowances. The change in the effective tax rate\n each period is impacted by a number of factors, including the\n relative mix of domestic and state income tax expense in the U.S.,\n adjustments to the valuation allowances and discrete items. During\n 2015, the Company reversed a significant portion of valuation\n allowances. Of the $4.7 billion reversed, $1.5 billion relates to\n current year income.
\n\n The\n Company’s unrecognized tax benefits related to uncertain tax\n positions were $24 million, $9 million and $14 million at 2015,\n 2014 and 2013, respectively. Included in the ending balance at 2015\n is $21 million that would affect the Company’s effective tax\n rate if recognized. The changes in unrecognized tax benefits\n relating to settlements with taxing authorities, unrecognized tax\n benefits as a result of tax positions taken during a prior period\n and unrecognized tax benefits relating from a lapse of the statute\n of limitations were immaterial during 2015, 2014 and 2013. The\n Company does not expect significant increases or decreases in their\n unrecognized tax benefits within the next 12 months.
\n\n There are no\n significant amounts included in the balance at December 31,\n 2015 for tax positions for which the ultimate deductibility is\n highly certain but for which there is uncertainty about the timing\n of such deductibility.
\n\n The\n Company’s federal income tax returns for tax years after 2002\n remain subject to examination by the Internal Revenue Service\n (“IRS”) and state taxing jurisdictions. Currently,\n there are no ongoing examinations of the Company’s prior year\n tax returns being conducted by the IRS.
\nNOTE 1 - SIGNIFICANT\n ACCOUNTING POLICIES
\n\n
\n| (a) | \nUse of\n Estimates—The preparation of financial statements in\n conformity with accounting principles generally accepted in the\n United States of America (“GAAP”) requires management\n to make estimates and assumptions that affect the amounts reported\n in these financial statements and accompanying notes. Actual\n results could differ from those estimates. | \n
\n
\n| (b) | \nRevenue\n Recognition—The Company records passenger ticket sales\n and tickets sold by other airlines for use on United as passenger\n revenue when the transportation is provided or upon estimated\n breakage. The value of unused passenger tickets is included in\n current liabilities as Advance ticket sales. Tickets sold by other\n airlines are recorded at the estimated values to be billed to the\n other airlines. Differences between amounts billed and the actual\n amounts may be rejected and rebilled or written off if the amount\n recorded was different from the original estimate. When necessary,\n the Company records a reserve against our interline billings and\n payables if historical experience indicates that these amounts are\n different. Non-refundable tickets generally expire on the date of\n the intended flight, unless the date is extended by notification\n from the customer on or before the intended flight\n date. | \n
\n Fees charged in\n association with changes or extensions to non-refundable tickets\n are recorded as other revenue at the time the fee is incurred. The\n fare on the changed ticket, including any additional collection of\n fare, is deferred and recognized in accordance with our\n transportation revenue recognition policy at the time the\n transportation is provided. Change fees related to non-refundable\n tickets are considered a separate transaction from the air\n transportation because they represent a charge for the\n Company’s additional service to modify a previous sale.\n Therefore, the pricing of the change fee and the initial customer\n order are separately determined and represent distinct earnings\n processes.
\n\n The Company\n records an estimate of breakage revenue on the flight date for\n tickets that will expire unused. These estimates are based on the\n evaluation of actual historical results and forecasted trends.\n Refundable tickets expire after one year from the date of\n issuance.
\n\n The Company\n recognizes cargo and other revenue as service is\n provided.
\n\n Under our\n capacity purchase agreements (“CPAs”) with regional\n carriers, we purchase all of the capacity related to aircraft\n covered by the contracts and are responsible for selling all of the\n related seat inventory. We record the passenger revenue and related\n expenses as separate operating revenue and expense in the\n consolidated statement of operations.
\n\n
\n\n Accounts\n receivable primarily consist of amounts due from credit card\n companies and customers of our aircraft maintenance and cargo\n transportation services. We provide an allowance for uncollectible\n accounts equal to the estimated losses expected to be incurred\n based on historical write-offs and other specific analyses. Bad\n debt expense and write-offs were not material for the years ended\n December 31, 2015, 2014 and 2013.
\n\n
\n| (c) | \nFrequent Flyer\n Accounting—United’s MileagePlus program is designed\n to increase customer loyalty. Program participants earn miles by\n flying on United and certain other participating airlines. Program\n participants can also earn miles through purchases from other\n non-airline partners that participate in United’s loyalty\n program. We sell miles to these partners, which include credit card\n issuers, retail merchants, hotels, car rental companies and our\n participating airline partners. Miles can be redeemed for free\n (other than taxes and government imposed fees), discounted or\n upgraded air travel and non-travel awards. The Company records its\n obligation for future award redemptions using a deferred revenue\n model. | \n
\n Miles Earned\n in Conjunction with Flights
\n\n In the case of\n the sale of air services, the Company recognizes a portion of the\n ticket sales as revenue when the air transportation occurs and\n defers a portion of the ticket sale representing the value of the\n related miles as a multiple-deliverable revenue arrangement. The\n miles are recorded in Frequent flyer deferred revenue on the\n Company’s consolidated balance sheet and recognized into\n revenue when the transportation is provided.
\n\n The Company\n determines the estimated selling price of air transportation and\n miles as if each element is sold on a separate basis. The total\n consideration from each ticket sale is then allocated to each of\n these elements individually on a pro rata basis.
\n\n The\n Company’s estimated selling price of miles is based on an\n equivalent ticket value less fulfillment discount, which\n incorporates the expected redemption of miles, as the best estimate\n of selling price for these miles. The equivalent ticket value is\n based on the prior 12 months’ weighted average equivalent\n ticket value of similar fares as those used to settle award\n redemptions while taking into consideration such factors as\n redemption pattern, cabin class, loyalty status and geographic\n region. The estimated selling price of miles is adjusted by a\n fulfillment discount that considers a number of factors, including\n redemption patterns of various customer groups.
\n\n Co-branded\n Credit Card Partner Mileage Sales
\n\n United has a\n significant contract, the Consolidated Amended and Restated\n Co-Branded Card Marketing Services Agreement (the “Co-Brand\n Agreement”), to sell MileagePlus miles to its co-branded\n credit card partner, Chase Bank USA, N.A. (“Chase”).\n United identified the following significant revenue elements in the\n Co-Brand Agreement: the air transportation element represented by\n the value of the mile (generally resulting from its redemption for\n future air transportation and whose fair value is described above);\n use of the United brand and access to MileagePlus member lists;\n advertising; and other travel related benefits.
\n\n The fair value\n of the elements is determined using management’s estimated\n selling price of each element. The objective of using the estimated\n selling price based methodology is to determine the price at which\n we would transact a sale if the product or service were sold on a\n stand-alone basis. Accordingly, we determine our best estimate of\n selling price by considering multiple inputs and methods including,\n but not limited to, discounted cash flows, brand value, volume\n discounts, published selling prices, number of miles awarded and\n number of miles redeemed. The Company estimated the selling prices\n and volumes over the term of the Co-Brand Agreement in order to\n determine the allocation of proceeds to each of the multiple\n elements to be delivered. We also evaluate volumes on an annual\n basis, which may result in a change in the allocation of estimated\n selling price on a prospective basis.
\n\n
\n\n The Company\n records passenger revenue related to the air transportation element\n when the transportation is delivered. The other elements are\n generally recognized as Other operating revenue when\n earned.
\n\n Expiration\n of Miles
\n\n The Company\n accounts for miles sold and awarded that will never be redeemed by\n program members, which we refer to as breakage. The Company reviews\n its breakage estimates annually based upon the latest available\n information regarding redemption and expiration patterns. Miles\n expire after 18 months of member account inactivity.
\n\n The\n Company’s estimate of the expected expiration of miles\n requires significant management judgment. Current and future\n changes to expiration assumptions or to the expiration policy, or\n to program rules and program redemption opportunities, may result\n in material changes to the deferred revenue balance as well as\n recognized revenues from the programs.
\n\n Other\n Information
\n\n The following\n table provides additional information related to the frequent flyer\n program (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n Year\n Ended \n\n December 31, \n | \n \n | Cash Proceeds \n from Miles Sold \n and Earned | \n \n | \n | Other Revenue \n Recognized Upon \n Award of Miles \n to Third-Party \n Customers (a) | \n \n | \n | Increase in Frequent \n Flyer Deferred \n Revenue for Miles \n Awarded (b) | \n \n | \n | Increase \n (Decrease) in \n Advanced \n Purchase of \n Miles (c) | \n \n | ||||
| \n 2015 \n | \n \n | $ | \n2,999 | \n\n | \n | $ | \n1,050 | \n\n | \n | $ | \n2,173 | \n\n | \n | $ | \n(224) | \n\n |
| \n 2014 \n | \n \n | \n | 2,861 | \n\n | \n | \n | 882 | \n\n | \n | \n | 2,178 | \n\n | \n | \n | (199) | \n\n |
| \n 2013 \n | \n \n | \n | 2,903 | \n\n | \n | \n | 903 | \n\n | \n | \n | 2,174 | \n\n | \n | \n | (174) | \n\n |
| \n \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | |||
| (a) This amount represents\n other revenue recognized during the period from the sale of miles\n to third parties, representing the marketing-related deliverable\n services component of the sale. | \n\n | |||||||||||||||
| (b) This amount represents\n the increase to Frequent flyer deferred revenue during the\n period. | \n\n | |||||||||||||||
| (c) This amount represents\n the net increase (decrease) in the advance purchase of miles\n obligation due to cash payments for the sale of miles in excess of\n (less than) miles awarded to customers. | \n\n |
\n
\n| (d) | \nCash and Cash\n Equivalents and Restricted Cash— Highly liquid\n investments with a maturity of three months or less on their\n acquisition date are classified as cash and cash\n equivalents. | \n
\n Restricted cash\n primarily includes cash collateral associated with workers’\n compensation obligations, reserves for institutions that process\n credit card ticket sales and cash collateral received from fuel\n hedge counterparties. Restricted cash is classified as short-term\n or long-term in the consolidated balance sheets based on the\n expected timing of return of the assets to the Company. Airline\n industry practice includes classification of restricted cash flows\n as either investing cash flows or operating cash flows. Cash flows\n related to restricted cash activity are classified as investing\n activities because the Company considers restricted cash arising\n from these activities similar to an investment. The Company’s\n net cash inflows associated with its restricted cash balances for\n the years ended December 31, 2015, 2014 and 2013 were $114\n million, $75 million and $52 million, respectively.
\n\n
\n| (e) | \nShort-term\n Investments—Short-term investments are classified as\n available-for-sale and are stated at fair value. Realized gains and\n losses on sales of investments are reflected in nonoperating income\n (expense) in the consolidated statements of operations. Unrealized\n gains and losses on available-for-sale securities are reflected as\n a component of accumulated other comprehensive income\n (loss). | \n
\n
\n| (f) | \nAircraft Fuel, Spare\n Parts and Supplies—The Company accounts for aircraft\n fuel, spare parts and supplies at average cost and provides an\n obsolescence allowance for aircraft spare parts with an assumed\n residual value of 10% of original cost. | \n
\n
\n| (g) | \nProperty and\n Equipment—The Company records additions to owned\n operating property and equipment at cost when acquired. Property\n under capital leases and the related obligation for future lease\n payments are recorded at an amount equal to the initial present\n value of those lease payments. Modifications that enhance the\n operating performance or extend the useful lives of airframes or\n engines are capitalized as property and equipment. It is the\n Company’s policy to record compensation from delays in\n delivery of aircraft as a reduction of the cost of the related\n aircraft. | \n
\n Depreciation\n and amortization of owned depreciable assets is based on the\n straight-line method over the assets’ estimated useful lives.\n Leasehold improvements are amortized over the remaining term of the\n lease, including estimated facility renewal options when renewal is\n reasonably assured at key airports, or the estimated useful life of\n the related asset, whichever is less. Properties under capital\n leases are amortized on the straight-line method over the life of\n the lease or, in the case of certain aircraft, over their estimated\n useful lives, whichever is shorter. Amortization of capital lease\n assets is included in depreciation and amortization expense. The\n estimated useful lives of property and equipment are as\n follows:
\n\n
\n| \n | \n | \n | \n | \n |
| \n | \n | Estimated Useful Life (in years) | \n\n | |
| \n Aircraft and related\n rotable parts \n | \n \n | \n | 25 to 30 | \n\n |
| \n Buildings \n | \n \n | \n | 25 to 45 | \n\n |
| \n Other property and\n equipment \n | \n \n | \n | 3 to 15 | \n\n |
| \n Computer\n software \n | \n \n | \n | 5 | \n\n |
| \n Building\n improvements \n | \n \n | \n | 1 to 40 | \n\n |
\n As of\n December 31, 2015 and 2014, the Company had a carrying value\n of computer software of $279 million and $281 million,\n respectively. For the years ended December 31, 2015, 2014 and\n 2013, the Company’s depreciation expense related to computer\n software was $93 million, $81 million and $72 million,\n respectively. Aircraft and aircraft spare parts were assumed to\n have residual values of approximately 10% of original cost, and\n other categories of property and equipment were assumed to have no\n residual value.
\n\n
\n| (h) | \nMaintenance and\n Repairs—The cost of maintenance and repairs, including\n the cost of minor replacements, is charged to expense as incurred,\n except for costs incurred under our power-by-the-hour\n (“PBTH”) engine maintenance agreements. PBTH contracts\n transfer certain risk to third-party service providers and fix the\n amount we pay per flight hour or per cycle to the service provider\n in exchange for maintenance and repairs under a predefined\n maintenance program. Under PBTH agreements, the Company recognizes\n expense at a level rate per engine hour, unless the level of\n service effort and the related payments during the period are\n substantially consistent, in which case the Company recognizes\n expense based on the amounts paid. | \n
\n
\n| (i) | \nLease Fair Value\n Adjustments—Lease fair value adjustments, which arose\n from recording operating leases at fair value under fresh start or\n business combination accounting, are amortized on a straight-line\n basis over the related lease term. | \n
\n
\n| (j) | \nRegional Capacity\n Purchase—Payments made to regional carriers under CPAs\n are reported in Regional capacity purchase in our consolidated\n statements of operations. | \n
\n
\n| (k) | \nAdvertising—Advertising costs, which are included\n in Other operating expenses, are expensed as incurred. Advertising\n expenses were $201 million, $179 million and $178 million for the\n years ended December 31, 2015, 2014 and 2013,\n respectively. | \n
\n
\n| (l) | \n\n Intangibles—The Company has finite-lived and\n indefinite-lived intangible assets, including goodwill.\n Finite-lived intangible assets are amortized over their estimated\n useful lives. Goodwill and indefinite-lived intangible assets are\n not amortized but are reviewed for impairment annually or more\n frequently if events or circumstances indicate that the asset may\n be impaired. Goodwill and indefinite-lived assets are reviewed for\n impairment on an annual basis as of October 1, or on an\n interim basis whenever a triggering event occurs. See Note 2 of\n this report for additional information related to\n intangibles. \n | \n
\n
\n| (m) | \nLong-Lived Asset\n Impairments—The Company evaluates the carrying value of\n long-lived assets subject to amortization whenever events or\n changes in circumstances indicate that an impairment may exist. For\n purposes of this testing, the Company has generally identified the\n aircraft fleet type as the lowest level of identifiable cash flows.\n An impairment charge is recognized when the asset’s carrying\n value exceeds its net undiscounted future cash flows and its fair\n market value. The amount of the charge is the difference between\n the asset’s carrying value and fair market value. See Note 16\n of this report for additional information related to asset\n impairments. | \n
\n
\n| (n) | \nShare-Based\n Compensation—The Company measures the cost of employee\n services received in exchange for an award of equity instruments\n based on the grant-date fair value of the award. The resulting cost\n is recognized over the period during which an employee is required\n to provide service in exchange for the award, usually the vesting\n period. Obligations for cash-settled restricted stock units\n (“RSUs”) are remeasured at fair value throughout the\n requisite service period on the last day of each reporting period\n based upon UAL’s stock price. In addition to the service\n requirement, certain RSUs have performance metrics that must be\n achieved prior to vesting. These awards are accrued based on the\n expected level of achievement at each reporting period. A\n cumulative adjustment is recorded on the last day of each reporting\n period to adjust compensation expense based on both UAL’s\n stock price and the then current level of expected performance\n achievement for the performance-based awards. See Note 5 of this\n report for additional information on UAL’s share-based\n compensation plans. | \n
\n
\n| (o) | \nTicket\n Taxes—Certain governmental taxes are imposed on the\n Company’s ticket sales through a fee included in ticket\n prices. The Company collects these fees and remits them to the\n appropriate government agency. These fees are recorded on a net\n basis (excluded from operating revenue). | \n
\n
\n| (p) | \nRetirement of Leased\n Aircraft—The Company accrues for estimated lease costs\n over the remaining term of the lease at the present value of future\n minimum lease payments, net of estimated sublease rentals (if any),\n in the period that aircraft are permanently removed from service.\n When reasonably estimable and probable, the Company estimates\n maintenance lease return condition obligations for items such as\n minimum aircraft and engine conditions specified in leases and\n accrues these amounts over the lease term while the aircraft are\n operating, and any remaining unrecognized estimated obligations are\n accrued in the period that an aircraft is removed from\n service. | \n
\n
\n| (q) | \nUncertain Income Tax\n Positions—The Company has recorded reserves for income\n taxes and associated interest that may become payable in future\n years. Although management believes that its positions taken on\n income tax matters are reasonable, the Company nevertheless has\n established tax and interest reserves in recognition that various\n taxing authorities may challenge certain of the positions taken by\n the Company, potentially resulting in additional liabilities for\n taxes and interest. The Company’s uncertain tax position\n reserves are reviewed periodically and are adjusted as events occur\n that affect its estimates, such as the availability of new\n information, the lapsing of applicable statutes of limitation, the\n conclusion of tax audits, the measurement of additional estimated\n liability, the identification of new tax matters, the release of\n administrative tax guidance affecting its estimates of tax\n liabilities, or the rendering of relevant court decisions. The\n Company records penalties and interest relating to uncertain tax\n positions in Other operating expense and Interest expense,\n respectively, in its consolidated statements of operations. The\n Company has not recorded any significant expense or liabilities\n related to interest or penalties in its consolidated financial\n statements. | \n
\n
\n| (r) | \nLabor\n Costs—The Company records expenses associated with\n amendable labor agreements when the amounts are probable and\n estimable. These include costs associated with lump sum cash\n payments that would be made in conjunction with the ratification of\n labor agreements. To the extent these upfront costs are in lieu of\n future pay increases, they would be capitalized and amortized over\n the term of the labor agreements. If not, these amounts would be\n expensed. | \n
\n
\n| (s) | \nThird-Party\n Business—The Company has third-party business revenue\n that includes fuel sales, catering, ground handling, maintenance\n services and frequent flyer award non-air redemptions, and\n third-party business revenue is recorded in Other operating\n revenue. The Company also incurs third-party business expenses,\n such as maintenance, ground handling and catering services for\n third parties, fuel sales and non-air mileage redemptions, and\n those third-party business expenses are recorded in Other operating\n expenses. | \n
\n
\n| (t) | \nRecently Issued\n Accounting Standards—The Financial Accounting Standards\n Board (“FASB”) amended the FASB Accounting Standards\n Codification and created a new Topic 606, Revenue from Contracts\n with Customers. This amendment prescribes that an entity should\n recognize revenue to depict the transfer of promised goods or\n services to customers in an amount that reflects the consideration\n to which the entity expects to be entitled in exchange for those\n goods or services. The amendment supersedes the revenue recognition\n requirements in Topic 605, Revenue Recognition, and most\n industry-specific guidance throughout the Industry Topics of the\n Codification, and is effective for annual and interim reporting\n periods beginning after December 15, 2017. Under the new\n standard, certain airline ancillary fees directly related to\n passenger revenue tickets, such as airline change fees and baggage\n fees, are likely to no longer be considered distinct performance\n obligations separate from the passenger travel component. In\n addition, the change fees which were previously recognized when\n received, will likely be recognized when transportation is\n provided. The Company is evaluating other impacts on its\n consolidated financial statements. | \n
\n The FASB issued\n Accounting Standards Update No. 2015-03,\n Interest—Imputation of Interest (Subtopic 835-30):\n Simplifying the Presentation of Debt Issuance Costs. This\n standard amends existing guidance to require the presentation of\n debt issuance costs in the balance sheet as a deduction from the\n carrying amount of the related debt liability instead of a deferred\n charge. The Company adopted the standard as of December 31,\n 2015. As a result of the adoption, unamortized debt issuance costs\n previously recorded as an asset on the Company’s balance\n sheet included under the caption Other, net are now reclassified\n and presented as a deduction from the carrying amount of the\n related debt liability. The reclassified amounts were $170 million\n and $167 million as of December 31, 2015 and 2014,\n respectively.
\n\n The FASB issued\n Accounting Standards Update No. 2015-07, Fair Value\n Measurement (Topic 820): Disclosures for Investments in Certain\n Entities That Calculate Net Asset Value per Share (or Its\n Equivalent). Under the standard, investments for which fair\n value is measured at net asset value per share (or its equivalent)\n using the practical expedient will no longer be categorized in the\n fair value hierarchy. It is effective for fiscal years and interim\n periods beginning after December 15, 2015, but early adoption\n is permitted. As of December 31, 2015, the Company had\n approximately $200 million of such investments as part of\n Short-term investments balance sheet total. In addition, pension\n plan investments measured at net asset value per share will no\n longer be categorized within the fair value hierarchy. As of\n December 31, 2015, the Company had approximately $1.4 billion\n of such investments. The Company is evaluating other impacts on its\n consolidated financial statements.
\n\n The FASB issued\n Accounting Standards Update No. 2015-17, Balance Sheet\n Classification of Deferred Taxes. This standard amends existing\n guidance to require companies to classify all deferred tax assets\n and liabilities as noncurrent in the statement of financial\n position. For a particular tax-paying component of an entity and\n within a particular tax jurisdiction, all deferred tax liabilities\n and assets, as well as any related valuation allowance, shall be\n offset and presented as a single noncurrent amount. As a result,\n companies will no longer allocate valuation allowances between\n current and noncurrent deferred tax assets because those allowances\n also will be classified as noncurrent. As of December 31,\n 2015, the Company adopted this standard and reclassified\n approximately $1.5 billion from Current assets: Deferred income\n taxes to Other assets: Deferred income taxes as of\n December 31, 2015, and reclassified $591 million from Current\n assets: Deferred income taxes to Other liabilities and deferred\n credits: Deferred income taxes as of December 31,\n 2014.
\nThe following tables present\n information about United’s pension and other postretirement\n plan assets at December 31 (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | 2015 | \n\n | \n | \n | \n\n | 2014 | \n\n | ||||||||||||||||||||||||||
| Pension Plan Assets: | \n\n | Total | \n\n | \n | Level 1 | \n\n | \n | Level 2 | \n\n | \n | Level 3 | \n\n | \n | \n | \n\n | Total | \n\n | \n | Level 1 | \n\n | \n | Level 2 | \n\n | \n | Level 3 | \n\n | ||||||||
| \n Equity securities\n funds \n | \n \n | $ | \n1,135 | \n\n | \n | $ | \n254 | \n\n | \n | $ | \n881 | \n\n | \n | $ | \n— | \n\n | \n | \n | \n\n | $ | \n1,181 | \n\n | \n | $ | \n388 | \n\n | \n | $ | \n793 | \n\n | \n | $ | \n— | \n\n |
| \n Fixed-income\n securities \n | \n \n | \n | 1,109 | \n\n | \n | \n | — | \n\n | \n | \n | 1,100 | \n\n | \n | \n | 9 | \n\n | \n | \n | \n\n | \n | 813 | \n\n | \n | \n | — | \n\n | \n | \n | 813 | \n\n | \n | \n | — | \n\n |
| \n Alternatives \n | \n \n | \n | 527 | \n\n | \n | \n | — | \n\n | \n | \n | 267 | \n\n | \n | \n | 260 | \n\n | \n | \n | \n\n | \n | 359 | \n\n | \n | \n | — | \n\n | \n | \n | 148 | \n\n | \n | \n | 211 | \n\n |
| \n Insurance\n contract \n | \n \n | \n | 18 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 18 | \n\n | \n | \n | \n\n | \n | 21 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 21 | \n\n |
| \n Other investments \n | \n \n | \n | 186 | \n\n | \n | \n | 37 | \n\n | \n | \n | 149 | \n\n | \n | \n | — | \n\n | \n | \n | \n\n | \n | 188 | \n\n | \n | \n | — | \n\n | \n | \n | 165 | \n\n | \n | \n | 23 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n\n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total \n | \n \n | $ | \n2,975 | \n\n | \n | $ | \n291 | \n\n | \n | $ | \n2,397 | \n\n | \n | $ | \n287 | \n\n | \n | \n | \n\n | $ | \n2,562 | \n\n | \n | $ | \n388 | \n\n | \n | $ | \n1,919 | \n\n | \n | $ | \n255 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n\n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| Other Postretirement Benefit Plan Assets: | \n\n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n\n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Deposit administration\n fund \n | \n \n | $ | \n56 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n— | \n\n | \n | $ | \n56 | \n\n | \n | \n | \n\n | $ | \n57 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n— | \n\n | \n | $ | \n57 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n\n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| (a) | \nUse of\n Estimates—The preparation of financial statements in\n conformity with accounting principles generally accepted in the\n United States of America (“GAAP”) requires management\n to make estimates and assumptions that affect the amounts reported\n in these financial statements and accompanying notes. Actual\n results could differ from those estimates. | \n
NOTE 3 - COMMON\n STOCKHOLDERS’ EQUITY AND PREFERRED SECURITIES
\nIn 2014, UAL’s Board\n of Directors authorized a share repurchase program to acquire up to\n $1 billion of UAL’s common stock (the “2014\n Program”). On July 21, 2015, UAL’s Board of\n Directors authorized a $3 billion share repurchase program, which\n the Company expects to complete substantially earlier than its\n original expected completion date of December 31, 2017 (the\n “2015 Program”). Under the programs, UAL may repurchase\n shares through the open market, privately negotiated transactions,\n block trades, or accelerated share repurchase transactions from\n time to time in accordance with applicable securities laws. UAL\n will repurchase shares of common stock subject to prevailing market\n conditions, and may discontinue such repurchases at any time. In\n October 2015, pursuant to the 2015 Program, the Company entered\n into agreements to repurchase approximately $300 million of shares\n of UAL common stock through an accelerated share repurchase program\n (the “ASR Program”). The ASR Program was completed in\n November 2015 and in total, United purchased approximately\n 5 million shares at an average price of $58.14 under the\n program. The aggregate number of shares repurchased by UAL under\n the ASR Program was based on the volume-weighted average price per\n share of UAL’s common stock during the calculation period,\n less a discount. In addition to the ASR Program, UAL spent $932\n million to repurchase approximately 16 million shares of UAL\n common stock in open market transactions in the year ended\n December 31, 2015. As of December 31, 2015, the Company\n had completed purchases under the 2014 Program and had $2.4 billion\n remaining to spend under the 2015 Program. See Part II,\n Item 5, “Market for registrant’s common equity,\n related stockholder matters and issuer purchases of equity\n securities” of this report for additional\n information.
\n\n
\nAt December 31, 2015,\n approximately 8 million shares of UAL’s common stock\n were reserved for future issuance related to the issuance of\n equity-based awards under the Company’s incentive\n compensation plans.
\nAs of December 31,\n 2015, UAL had two shares of junior preferred stock (par value $0.01\n per share) outstanding. In addition, UAL is authorized to issue\n 250 million shares of preferred stock (without par value)\n under UAL’s amended and restated certificate of\n incorporation.
\nThe table below presents\n disclosures about the fair value of financial assets and financial\n liabilities measured at fair value on a recurring basis in the\n Company’s financial statements as of December 31 (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | ||||||||||||||||||||||||||
| \n | \n | Total | \n\n | \n | Level 1 | \n\n | \n | Level 2 | \n\n | \n | Level 3 | \n\n | \n | Total | \n\n | \n | Level 1 | \n\n | \n | Level 2 | \n\n | \n | Level 3 | \n\n | ||||||||
| \n | \n | UAL | \n\n | |||||||||||||||||||||||||||||
| \n Cash and cash\n equivalents \n | \n \n | $ | \n3,006 | \n\n | \n | $ | \n3,006 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n— | \n\n | \n | $ | \n2,002 | \n\n | \n | $ | \n2,002 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n— | \n\n |
| \n Short-term\n investments: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Corporate debt \n | \n \n | \n | 891 | \n\n | \n | \n | — | \n\n | \n | \n | 891 | \n\n | \n | \n | — | \n\n | \n | \n | 876 | \n\n | \n | \n | — | \n\n | \n | \n | 876 | \n\n | \n | \n | — | \n\n |
| \n Asset-backed\n securities \n | \n \n | \n | 710 | \n\n | \n | \n | — | \n\n | \n | \n | 710 | \n\n | \n | \n | — | \n\n | \n | \n | 901 | \n\n | \n | \n | — | \n\n | \n | \n | 901 | \n\n | \n | \n | — | \n\n |
| \n \n Certificates of\n deposit placed \n\n through an\n account registry \n\n service\n (“CDARS”) \n | \n \n | \n | 281 | \n\n | \n | \n | — | \n\n | \n | \n | 281 | \n\n | \n | \n | — | \n\n | \n | \n | 256 | \n\n | \n | \n | — | \n\n | \n | \n | 256 | \n\n | \n | \n | — | \n\n |
| \n U.S. government and agency\n notes \n | \n \n | \n | 72 | \n\n | \n | \n | — | \n\n | \n | \n | 72 | \n\n | \n | \n | — | \n\n | \n | \n | 68 | \n\n | \n | \n | — | \n\n | \n | \n | 68 | \n\n | \n | \n | — | \n\n |
| \n Auction rate\n securities \n | \n \n | \n | 9 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 9 | \n\n | \n | \n | 26 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 26 | \n\n |
| \n Other fixed-income\n securities \n | \n \n | \n | 227 | \n\n | \n | \n | — | \n\n | \n | \n | 227 | \n\n | \n | \n | — | \n\n | \n | \n | 255 | \n\n | \n | \n | — | \n\n | \n | \n | 255 | \n\n | \n | \n | — | \n\n |
| \n \n Enhanced\n equipment trust \n\n certificates\n (“EETC”) \n | \n \n | \n | 26 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 26 | \n\n | \n | \n | 28 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 28 | \n\n |
| \n Fuel derivatives liability,\n net \n | \n \n | \n | 124 | \n\n | \n | \n | — | \n\n | \n | \n | 124 | \n\n | \n | \n | — | \n\n | \n | \n | 717 | \n\n | \n | \n | — | \n\n | \n | \n | 717 | \n\n | \n | \n | — | \n\n |
| \n Foreign currency\n derivatives \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 2 | \n\n | \n | \n | — | \n\n | \n | \n | 2 | \n\n | \n | \n | — | \n\n |
| \n Restricted cash \n | \n \n | \n | 206 | \n\n | \n | \n | 206 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 320 | \n\n | \n | \n | 320 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n |
| \n | \n | |||||||||||||||||||||||||||||||
| \n | \n | United | \n\n | |||||||||||||||||||||||||||||
| \n Cash and cash\n equivalents \n | \n \n | $ | \n3,000 | \n\n | \n | $ | \n3,000 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n— | \n\n | \n | $ | \n1,996 | \n\n | \n | $ | \n1,996 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n— | \n\n |
| \n Short-term\n investments: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Corporate debt \n | \n \n | \n | 891 | \n\n | \n | \n | — | \n\n | \n | \n | 891 | \n\n | \n | \n | — | \n\n | \n | \n | 876 | \n\n | \n | \n | — | \n\n | \n | \n | 876 | \n\n | \n | \n | — | \n\n |
| \n Asset-backed\n securities \n | \n \n | \n | 710 | \n\n | \n | \n | — | \n\n | \n | \n | 710 | \n\n | \n | \n | — | \n\n | \n | \n | 901 | \n\n | \n | \n | — | \n\n | \n | \n | 901 | \n\n | \n | \n | — | \n\n |
| \n CDARS \n | \n \n | \n | 281 | \n\n | \n | \n | — | \n\n | \n | \n | 281 | \n\n | \n | \n | — | \n\n | \n | \n | 256 | \n\n | \n | \n | — | \n\n | \n | \n | 256 | \n\n | \n | \n | — | \n\n |
| \n U.S. government and agency\n notes \n | \n \n | \n | 72 | \n\n | \n | \n | — | \n\n | \n | \n | 72 | \n\n | \n | \n | — | \n\n | \n | \n | 68 | \n\n | \n | \n | — | \n\n | \n | \n | 68 | \n\n | \n | \n | — | \n\n |
| \n Auction rate\n securities \n | \n \n | \n | 9 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 9 | \n\n | \n | \n | 26 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 26 | \n\n |
| \n Other fixed-income\n securities \n | \n \n | \n | 227 | \n\n | \n | \n | — | \n\n | \n | \n | 227 | \n\n | \n | \n | — | \n\n | \n | \n | 255 | \n\n | \n | \n | — | \n\n | \n | \n | 255 | \n\n | \n | \n | — | \n\n |
| \n EETC \n | \n \n | \n | 26 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 26 | \n\n | \n | \n | 28 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 28 | \n\n |
| \n Fuel derivatives liability,\n net \n | \n \n | \n | 124 | \n\n | \n | \n | — | \n\n | \n | \n | 124 | \n\n | \n | \n | — | \n\n | \n | \n | 717 | \n\n | \n | \n | — | \n\n | \n | \n | 717 | \n\n | \n | \n | — | \n\n |
| \n Foreign currency\n derivatives \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 2 | \n\n | \n | \n | — | \n\n | \n | \n | 2 | \n\n | \n | \n | — | \n\n |
| \n Restricted cash \n | \n \n | \n | 206 | \n\n | \n | \n | 206 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 320 | \n\n | \n | \n | 320 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n |
| \n Convertible debt derivative\n asset \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 712 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 712 | \n\n |
| \n Convertible debt derivative\n option liability \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 511 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 511 | \n\n |
\n
\n\n NOTE 18 -\n SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n UAL \n \n \n | \n \n | Quarter\n Ended | \n\n | |||||||||||||
| \n \n (In\n millions, except per share\n amounts) \n | \n \n | March 31 | \n\n | \n | June 30 | \n\n | \n | September 30 | \n\n | \n | December 31 | \n\n | ||||
| \n 2015 \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Operating\n revenue \n | \n \n | $ | \n8,608 | \n\n | \n | $ | \n9,914 | \n\n | \n | $ | \n10,306 | \n\n | \n | $ | \n9,036 | \n\n |
| \n Income from\n operations \n | \n \n | \n | 741 | \n\n | \n | \n | 1,445 | \n\n | \n | \n | 1,899 | \n\n | \n | \n | 1,081 | \n\n |
| \n Net income \n | \n \n | \n | 508 | \n\n | \n | \n | 1,193 | \n\n | \n | \n | 4,816 | \n\n | \n | \n | 823 | \n\n |
| \n Basic earnings per\n share \n | \n \n | \n | 1.33 | \n\n | \n | \n | 3.14 | \n\n | \n | \n | 12.83 | \n\n | \n | \n | 2.24 | \n\n |
| \n Diluted earnings per\n share \n | \n \n | \n | 1.32 | \n\n | \n | \n | 3.14 | \n\n | \n | \n | 12.82 | \n\n | \n | \n | 2.24 | \n\n |
| \n 2014 \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Operating\n revenue \n | \n \n | $ | \n8,696 | \n\n | \n | $ | \n10,329 | \n\n | \n | $ | \n10,563 | \n\n | \n | $ | \n9,313 | \n\n |
| \n Income (loss) from\n operations \n | \n \n | \n | (349) | \n\n | \n | \n | 906 | \n\n | \n | \n | 1,191 | \n\n | \n | \n | 625 | \n\n |
| \n Net income\n (loss) \n | \n \n | \n | (609) | \n\n | \n | \n | 789 | \n\n | \n | \n | 924 | \n\n | \n | \n | 28 | \n\n |
| \n Basic earnings (loss) per\n share \n | \n \n | \n | (1.66) | \n\n | \n | \n | 2.11 | \n\n | \n | \n | 2.49 | \n\n | \n | \n | 0.08 | \n\n |
| \n Diluted earnings (loss)\n per share \n | \n \n | \n | (1.66) | \n\n | \n | \n | 2.01 | \n\n | \n | \n | 2.37 | \n\n | \n | \n | 0.07 | \n\n |
\n
\n\n UAL’s\n quarterly financial data is subject to seasonal fluctuations and\n historically its second and third quarter financial results, which\n reflect higher travel demand, are better than its first and fourth\n quarter financial results. UAL’s quarterly results were\n impacted by the following significant items (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Quarter\n Ended | \n\n | |||||||||||||
| \n | \n | March 31 | \n\n | \n | June 30 | \n\n | \n | September 30 | \n\n | \n | December 31 | \n\n | ||||
| \n 2015 \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Operating: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Severance and benefit\n costs \n | \n \n | $ | \n50 | \n\n | \n | $ | \n25 | \n\n | \n | $ | \n28 | \n\n | \n | $ | \n4 | \n\n |
| \n Impairment of\n assets \n | \n \n | \n | 2 | \n\n | \n | \n | 11 | \n\n | \n | \n | 18 | \n\n | \n | \n | 48 | \n\n |
| \n Integration-related\n costs \n | \n \n | \n | 18 | \n\n | \n | \n | 14 | \n\n | \n | \n | 15 | \n\n | \n | \n | 13 | \n\n |
| \n (Gains) losses on sale of\n assets and other miscellaneous (gains) losses, net \n | \n \n | \n | (6) | \n\n | \n | \n | 5 | \n\n | \n | \n | 15 | \n\n | \n | \n | 66 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Special\n charges \n | \n \n | \n | 64 | \n\n | \n | \n | 55 | \n\n | \n | \n | 76 | \n\n | \n | \n | 131 | \n\n |
| \n Nonoperating and\n income taxes: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Loss on extinguishment of\n debt and other, net \n | \n \n | \n | 6 | \n\n | \n | \n | 128 | \n\n | \n | \n | 61 | \n\n | \n | \n | 7 | \n\n |
| \n Income tax benefit\n related to special charges \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | (11) | \n\n |
| \n Income tax expense\n (benefit) associated with valuation allowance release \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | (3,218) | \n\n | \n | \n | 88 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total operating and\n nonoperating special items, net of income taxes \n | \n \n | $ | \n70 | \n\n | \n | $ | \n183 | \n\n | \n | $ | \n(3,081) | \n\n | \n | $ | \n215 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n 2014 \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Operating: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Severance and benefit\n costs \n | \n \n | $ | \n14 | \n\n | \n | $ | \n38 | \n\n | \n | $ | \n6 | \n\n | \n | $ | \n141 | \n\n |
| \n Impairment of\n assets \n | \n \n | \n | 1 | \n\n | \n | \n | 32 | \n\n | \n | \n | — | \n\n | \n | \n | 16 | \n\n |
| \n Integration-related\n costs \n | \n \n | \n | 34 | \n\n | \n | \n | 17 | \n\n | \n | \n | 28 | \n\n | \n | \n | 17 | \n\n |
| \n Costs associated with\n permanently grounding Embraer ERJ 135 aircraft \n | \n \n | \n | — | \n\n | \n | \n | 66 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n |
| \n Losses on sale of assets\n and other special (gains) losses, net \n | \n \n | \n | 3 | \n\n | \n | \n | 16 | \n\n | \n | \n | 9 | \n\n | \n | \n | 5 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Special\n charges \n | \n \n | \n | 52 | \n\n | \n | \n | 169 | \n\n | \n | \n | 43 | \n\n | \n | \n | 179 | \n\n |
| \n Nonoperating and\n income taxes: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Loss on extinguishment of\n debt and other, net \n | \n \n | \n | 21 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 53 | \n\n |
| \n Income tax benefit\n related to special charges \n | \n \n | \n | (1) | \n\n | \n | \n | — | \n\n | \n | \n | (3) | \n\n | \n | \n | (6) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total operating and\n nonoperating special charges, net of income taxes \n | \n \n | $ | \n72 | \n\n | \n | $ | \n169 | \n\n | \n | $ | \n40 | \n\n | \n | $ | \n226 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n See Note 16\n of this report for additional information of these\n items.
\n\n NOTE 15 -\n COMMITMENTS AND CONTINGENCIES
\n\n Commitments. In January 2016, UAL\n entered into a purchase agreement amendment with The Boeing Company\n (“Boeing”) for a firm narrowbody aircraft order of 40\n Boeing 737 Next Generation (“737NG”) aircraft. As of\n December 31, 2015 (as adjusted to include the order discussed\n above), United had firm commitments and options to purchase\n aircraft from Boeing, Embraer and Airbus S.A.S.\n (“Airbus”) presented in the table\n below:
\n\n
\n\n
\n| \n | \n | \n | \n | \n |
| \n \n Aircraft\n Type \n | \n \n | Number of Firm \n Commitments (a) \n | \n \n | |
| \n Airbus\n A350-1000 \n | \n \n | \n | 35 | \n\n |
| \n Boeing 737NG/737 MAX\n 9 \n | \n \n | \n | 155 | \n\n |
| \n Boeing\n 777-300ER \n | \n \n | \n | 10 | \n\n |
| \n Boeing\n 787-8/-9/-10 \n | \n \n | \n | 30 | \n\n |
| \n Embraer E175 \n | \n \n | \n | 10 | \n\n |
| (a) United also has\n options and purchase rights for additional aircraft. | \n\n |
\n
\n\n The aircraft listed in\n the table above are scheduled for delivery from 2016 through\n 2024.
\n\n The table below\n summarizes United’s commitments as of December 31, 2015,\n which primarily relate to the acquisition of aircraft and related\n spare engines, aircraft improvements and include other commitments\n primarily to acquire information technology services and assets for\n the years ended December 31 (in billions). The table below is\n adjusted to include the impact of the January 2016 Boeing 737NG\n aircraft order discussed above. Any new firm aircraft orders,\n including through the exercise of purchase options and purchase\n rights, will increase the total future capital commitments of the\n Company.
\n\n
\n\n
\n| \n | \n | \n | \n | \n |
| \n 2016 \n | \n \n | $ | \n3.4 | \n\n |
| \n 2017 \n | \n \n | \n | 3.1 | \n\n |
| \n 2018 \n | \n \n | \n | 3.3 | \n\n |
| \n 2019 \n | \n \n | \n | 2.9 | \n\n |
| \n 2020 \n | \n \n | \n | 2.8 | \n\n |
| \n After 2020 \n | \n \n | \n | 7.7 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | $ | \n23.2 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
\n As of December 31,\n 2015 (as adjusted to include the order discussed above), United has\n secured backstop financing commitments from certain of its aircraft\n manufacturers for a limited number of its future aircraft\n deliveries, subject to certain customary conditions. Financing may\n be necessary to satisfy the Company’s capital commitments for\n its firm order aircraft and other related capital\n expenditures.
\n\n Legal and\n Environmental. The Company has\n certain contingencies resulting from litigation and claims incident\n to the ordinary course of business. As of December 31, 2015,\n management believes, after considering a number of factors,\n including (but not limited to) the information currently available,\n the views of legal counsel, the nature of contingencies to which\n the Company is subject and prior experience, that the ultimate\n disposition of the litigation and claims will not materially affect\n the Company’s consolidated financial position or results of\n operations. The Company records liabilities for legal and\n environmental claims when a loss is probable and reasonably\n estimable. These amounts are recorded based on the Company’s\n assessments of the likelihood of their eventual\n disposition.
\n\n Guarantees and\n Indemnifications. In the normal course of\n business, the Company enters into numerous real estate leasing and\n aircraft financing arrangements that have various guarantees\n included in the contracts. These guarantees are primarily in the\n form of indemnities under which the Company typically indemnifies\n the lessors and any tax/financing parties against tort liabilities\n that arise out of the use, occupancy, operation or maintenance of\n the leased premises or financed aircraft. Currently, the Company\n believes that any future payments required under these guarantees\n or indemnities would be immaterial, as most tort liabilities and\n related indemnities are covered by insurance\n (subject to deductibles). Additionally, certain leased premises\n such as fueling stations or storage facilities include indemnities\n of such parties for any environmental liability that may arise out\n of or relate to the use of the leased premises.
\n\n As of December 31,\n 2015, United is the guarantor of approximately $1.9 billion in\n aggregate principal amount of tax-exempt special facilities revenue\n bonds and interest thereon. These bonds, issued by various airport\n municipalities, are payable solely from rentals paid under\n long-term agreements with the respective governing bodies. The\n leasing arrangements associated with $1.5 billion of these\n obligations are accounted for as operating leases with the\n associated expense recorded on a straight-line basis resulting in\n ratable accrual of the lease obligation over the expected lease\n term. These tax-exempt special facilities revenue bonds are\n included in our lease commitments disclosed in Note 13 of this\n report. The leasing arrangements associated with $302 million of\n these obligations are accounted for as capital leases. All of these\n bonds are due between 2017 and 2038.
\n\n In United’s\n financing transactions that include loans, United typically agrees\n to reimburse lenders for any reduced returns with respect to the\n loans due to any change in capital requirements and, in the case of\n loans in which the interest rate is based on LIBOR, for certain\n other increased costs that the lenders incur in carrying these\n loans as a result of any change in law, subject in most cases to\n obligations of the lenders to take certain limited steps to\n mitigate the requirement for, or the amount of, such increased\n costs. At December 31, 2015, the Company had $2.4 billion of\n floating rate debt and $118 million of fixed rate debt, with\n remaining terms of up to 12 years, that are subject to these\n increased cost provisions. In several financing transactions\n involving loans or leases from non-U.S. entities, with remaining\n terms of up to 12 years and an aggregate balance of $2.4 billion,\n the Company bears the risk of any change in tax laws that would\n subject loan or lease payments thereunder to non-U.S. entities to\n withholding taxes, subject to customary\n exclusions.
\n\n Fuel\n Consortia. United participates in\n numerous fuel consortia with other air carriers at major airports\n to reduce the costs of fuel distribution and storage. Interline\n agreements govern the rights and responsibilities of the consortia\n members and provide for the allocation of the overall costs to\n operate the consortia based on usage. The consortia (and in limited\n cases, the participating carriers) have entered into long-term\n agreements to lease certain airport fuel storage and distribution\n facilities that are typically financed through tax-exempt bonds\n (either special facilities lease revenue bonds or general airport\n revenue bonds), issued by various local municipalities. In general,\n each consortium lease agreement requires the consortium to make\n lease payments in amounts sufficient to pay the maturing principal\n and interest payments on the bonds. As of December 31, 2015,\n approximately $1.3 billion principal amount of such bonds were\n secured by significant fuel facility leases in which United\n participates, as to which United and each of the signatory airlines\n has provided indirect guarantees of the debt. As of\n December 31, 2015, the Company’s contingent exposure was\n approximately $224 million principal amount of such bonds based on\n its recent consortia participation. The Company’s contingent\n exposure could increase if the participation of other air carriers\n decreases. The guarantees will expire when the tax-exempt bonds are\n paid in full, which ranges from 2017 to 2041. The Company did not\n record a liability at the time these indirect guarantees were\n made.
\n\n Regional Capacity\n Purchase. As of\n December 31, 2015, United had 279 call options to purchase\n regional jet aircraft being operated by certain regional carriers.\n At December 31, 2015, none of the call options was exercisable\n because none of the required conditions to make an option\n exercisable by United was met.
\n\n Credit Card\n Processing Agreements. The Company has\n agreements with financial institutions that process customer credit\n card transactions for the sale of air travel and other services.\n Under certain of the Company’s credit card processing\n agreements, the financial institutions in certain circumstances\n have the right to require that the Company maintain a reserve equal\n to a portion of advance ticket sales that has been processed by\n that financial institution, but for which the Company has not yet\n provided the air transportation. Such financial institutions may\n require additional cash or other collateral reserves to be\n established or additional withholding of payments related to\n receivables collected if the Company does not maintain certain\n minimum levels of unrestricted cash, cash equivalents and\n short-term investments (collectively, “Unrestricted\n Liquidity”). The Company’s current level of\n Unrestricted Liquidity is substantially in excess of these minimum\n levels.
\n\n Labor\n Negotiations. As of December 31, 2015,\n United, including its subsidiaries, had approximately 84,000\n employees. Approximately 80% of United’s employees were\n represented by various U.S. labor organizations as of\n December 31, 2015.
\n\n The Company has reached\n joint collective bargaining agreements with the majority of its\n employee groups since the merger transaction in 2010. The Company\n continues to negotiate in mediation for a joint flight attendant\n collective bargaining agreement, extensions to the IAM represented\n employees’ agreements and a joint technician and related\n employees’ collective bargaining agreement following the\n rejected proposal for ratification of a joint technician and\n related employees’ agreement. The Company can provide no\n assurance that a successful or timely resolution of these labor\n negotiations will be achieved.
\n\n
\n| (q) | \nUncertain Income Tax\n Positions—The Company has recorded reserves for income\n taxes and associated interest that may become payable in future\n years. Although management believes that its positions taken on\n income tax matters are reasonable, the Company nevertheless has\n established tax and interest reserves in recognition that various\n taxing authorities may challenge certain of the positions taken by\n the Company, potentially resulting in additional liabilities for\n taxes and interest. The Company’s uncertain tax position\n reserves are reviewed periodically and are adjusted as events occur\n that affect its estimates, such as the availability of new\n information, the lapsing of applicable statutes of limitation, the\n conclusion of tax audits, the measurement of additional estimated\n liability, the identification of new tax matters, the release of\n administrative tax guidance affecting its estimates of tax\n liabilities, or the rendering of relevant court decisions. The\n Company records penalties and interest relating to uncertain tax\n positions in Other operating expense and Interest expense,\n respectively, in its consolidated statements of operations. The\n Company has not recorded any significant expense or liabilities\n related to interest or penalties in its consolidated financial\n statements. | \n
A 1% change in the assumed\n health care trend rate for the Company would have the following\n additional effects (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | 1% Increase | \n\n | \n | 1% Decrease | \n\n | ||
| \n Effect on total service and\n interest cost for the year ended December 31, 2015 \n | \n \n | $ | \n13 | \n\n | \n | $ | \n(11) | \n\n |
| \n Effect on postretirement\n benefit obligation at December 31, 2015 \n | \n \n | \n | 219 | \n\n | \n | \n | (191) | \n\n |
The following information\n relates to all pension plans with an accumulated benefit obligation\n and a projected benefit obligation in excess of plan assets at\n December 31 (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | ||
| \n Projected benefit\n obligation \n | \n \n | $ | \n4,292 | \n\n | \n | $ | \n4,625 | \n\n |
| \n Accumulated benefit\n obligation \n | \n \n | \n | 3,655 | \n\n | \n | \n | 3,930 | \n\n |
| \n Fair value of plan\n assets \n | \n \n | \n | 2,794 | \n\n | \n | \n | 2,387 | \n\n |
\n NOTE 16 -\n SPECIAL ITEMS
\n\n Special items\n classified as special charges in the statements of consolidated\n operations consisted of the following for the years ended\n December 31 (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| Operating: | \n\n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2013 | \n\n | |||
| \n Severance and benefit\n costs \n | \n \n | $ | \n107 | \n\n | \n | $ | \n199 | \n\n | \n | $ | \n105 | \n\n |
| \n Impairment of\n assets \n | \n \n | \n | 79 | \n\n | \n | \n | 49 | \n\n | \n | \n | 33 | \n\n |
| \n Integration-related\n costs \n | \n \n | \n | 60 | \n\n | \n | \n | 96 | \n\n | \n | \n | 205 | \n\n |
| \n Labor agreement\n costs \n | \n \n | \n | 18 | \n\n | \n | \n | — | \n\n | \n | \n | 127 | \n\n |
| (Gains) losses on sale of assets and other miscellaneous\n (gains) losses, net | \n\n | \n | 62 | \n\n | \n | \n | 99 | \n\n | \n | \n | 50 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Special\n charges \n | \n \n | \n | 326 | \n\n | \n | \n | 443 | \n\n | \n | \n | 520 | \n\n |
| \n Nonoperating and\n income taxes: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| Loss on extinguishment of debt and other, net | \n\n | \n | 202 | \n\n | \n | \n | 74 | \n\n | \n | \n | — | \n\n |
| Income tax benefit related to special charges | \n\n | \n | (11) | \n\n | \n | \n | (10) | \n\n | \n | \n | (7) | \n\n |
| \n Income tax benefit\n associated with \nvaluation allowance\n release (Note 7) \n | \n \n | \n | (3,130) | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n \n Total\n operating and nonoperating \n\n special\n charges, net of income taxes \n | \n \n | $ | \n(2,613) | \n\n | \n | $ | \n507 | \n\n | \n | $ | \n513 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n 2015
\n\n The Company\n recorded $107 million of severance and benefit costs primarily\n related to a voluntary early-out program for its flight attendants.\n In 2014, more than 2,500 flight attendants elected to voluntarily\n separate from the Company and will receive a severance payment,\n with a maximum value of $100,000 per participant, based on years of\n service, with retirement dates through the end of 2016.
\n\n The Company\n recorded $33 million ($22 million net of related income tax\n benefit) related to its annual assessment of impairment of its\n indefinite-lived intangible assets (certain domestic slots and\n international Pacific routes), $8 million for the write-off of\n unexercised aircraft purchase options and $7 million for inventory\n held for sale. The Company also recorded other impairments,\n including $10 million for discontinued internal software projects\n and $10 million for the impairment of several engines held for\n sale.
\n\n Integration-related costs include compensation costs related\n primarily to systems integration and training for\n employees.
\n\n During 2015,\n the Company also recorded $32 million related to charges for legal\n matters, $18 million related to collective bargaining agreements,\n $16 million for the cease use of an aircraft under lease and $14\n million for losses on the sale of aircraft and other miscellaneous\n gains and losses.
\n\n The Company\n recorded $202 million of losses as part of Nonoperating income\n (expense): Miscellaneous, net due primarily to the write-off of\n $134 million related to the unamortized non-cash debt discount from\n the extinguishment of the 2026 Notes and the 2028 Notes. During\n 2015, the Company also recorded a $61 million foreign exchange loss\n related to its cash holdings in Venezuela. The Venezuelan\n government has maintained currency controls and fixed official\n exchange rates (i.e. Sistema Complementario de Administracion de\n Divisas (“SICAD”), and Sistema Marginal de Divisas\n (“SIMADI”)) for many years. Previously, airlines were\n permitted to use the more favorable SICAD rate (currently 13.5\n Venezuelan bolivars to one U.S. dollar) if repatriating profits and\n for payments of local goods and services in Venezuela. During 2015,\n many of the payments for local goods and services have transitioned\n to utilizing the SIMADI rate (currently 200 Venezuelan bolivars to\n one U.S. dollar) or have been required to be paid in U.S. dollars.\n Furthermore, the Venezuelan government has not permitted the\n exchange and repatriations of local currency since mid-2014. As a\n result, the Company changed the exchange rate from historical SICAD\n rates to a combination of SIMADI and SICAD rates based on\n projections of future cash payments. Including this adjustment, the\n Company’s resulting cash balance held in Venezuelan bolivars\n at December 31, 2015 is approximately $13 million.
\n\n 2014
\n\n The Company\n recorded $141 million of severance and benefit costs related\n primarily to a voluntary early-out program for its flight\n attendants. More than 2,500 participants elected a one-time\n opportunity to voluntarily separate from the Company and will\n receive a severance payment, with a maximum value of $100,000 per\n participant, based on years of service, with retirement dates\n through the end of 2016. In addition, the Company recorded $58\n million of severance and benefits primarily related to reductions\n of management and front-line employees, including from Hopkins\n International Airport (“Cleveland”), as part of its\n cost savings initiatives. The Company is currently evaluating its\n options regarding its long-term contractual lease commitments at\n Cleveland. The capacity reductions at Cleveland may result in\n further special charges, which could be significant, related to our\n contractual commitments.
\n\n The Company\n recorded a charge of $16 million ($10 million net of related income\n tax benefits) related to its annual assessment of impairment of its\n indefinite-lived intangible assets (certain international Pacific\n routes). In addition, the Company also recorded $33 million for\n charges related primarily to impairment of its flight equipment\n held for disposal associated with its Boeing 737-300 and 737-500\n fleets.
\n\n Integration-related costs included compensation costs related\n to systems integration, training, severance and relocation for\n employees.
\n\n The Company\n recorded $66 million for the permanent grounding of 21 of the\n Company’s Embraer ERJ 135 regional aircraft under lease\n through 2018, which included an accrual for remaining lease\n payments and an amount for maintenance return conditions. The\n Company decided to permanently ground these 21 Embraer ERJ 135\n aircraft as a result of new Embraer E175 regional jet deliveries,\n the impact of pilot shortages at regional carriers and fuel prices.\n In addition, the Company also recorded $33 million for losses on\n the sale of assets and other special charges.
\n\n United used\n cash to retire, at par, the entire $248 million principal balance\n of the 6% Convertible Debentures and the 6% Convertible Preferred\n Securities, Term Income Deferrable Equity Securities (TIDES) and\n incurred $64 million of expense primarily associated with the\n write-off of the related non-cash debt discounts. The Company also\n recorded $10 million of foreign exchange losses in Venezuela in\n 2014.
\n\n 2013
\n\n The Company\n offered a voluntary retirement program for its fleet service,\n passenger service, storekeeper and pilot work groups. Approximately\n 1,200 employees volunteered under the program during the fourth\n quarter of 2013 and United recorded approximately $64 million of\n severance and benefit costs for the programs. The Company also\n offered voluntary leave of absence programs which allowed for\n continued medical coverage for flight attendants who volunteered\n during the leave of absence period, resulting in a charge of\n approximately $26 million. The remaining $15 million of severance\n and benefit costs was related to involuntary severance programs\n associated with flight attendants and other work groups.
\n\n The Company\n recorded $32 million of impairment charges of its flight equipment\n held for disposal associated with its Boeing 737-300 and 737-500\n fleets and $1 million on an intangible asset for a route to Manila\n in order to reflect the estimated fair value of this asset as part\n of the Company’s annual impairment test of indefinite-lived\n intangible assets.
\n\n Integration-related costs included compensation costs related\n to systems integration and training, branding activities, new\n uniforms, write-off or acceleration of depreciation on systems and\n facilities that were no longer used or planned to be used for\n significantly shorter periods, relocation for employees and\n severance primarily associated with administrative headcount\n reductions.
\n\n The fleet\n service, passenger service and storekeeper employees represented by\n the International Association of Machinists ratified a joint\n collective bargaining agreement with the Company during 2013. The\n Company recorded a $127 million special charge for lump sum\n payments made in conjunction with the ratification. The lump sum\n payments were not in lieu of future pay increases. The Company\n completed substantially all cash payments in 2013.
\n\n The Company\n recorded $18 million associated with the temporary grounding of its\n Boeing 787 aircraft. The charges were comprised of aircraft\n depreciation expense and dedicated personnel costs that the Company\n incurred while the aircraft were grounded. The aircraft returned to\n service in May 2013. In addition, the Company adjusted its reserves\n for certain legal matters by $29 million and recorded approximately\n $11 million in accruals for future rent associated with the early\n retirement of four leased Boeing 757-200 aircraft. Additionally,\n the Company recorded a $5 million gain related to a contract\n termination and $3 million in gains on the sale of\n assets.
\n\n Accrual\n Activity
\n\n Activity\n related to the accruals for severance and medical costs and future\n lease payments on permanently grounded aircraft is as follows (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Severance/ \n Medical Costs | \n \n | \n | Permanently \n \n Grounded Aircraft | \n \n | ||
| \n Balance at\n December 31, 2012 \n | \n \n | $ | \n65 | \n\n | \n | $ | \n5 | \n\n |
| \n Accrual \n | \n \n | \n | 120 | \n\n | \n | \n | 10 | \n\n |
| \n Payments \n | \n \n | \n | (94) | \n\n | \n | \n | (4) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Balance at\n December 31, 2013 \n | \n \n | \n | 91 | \n\n | \n | \n | 11 | \n\n |
| \n Accrual \n | \n \n | \n | 199 | \n\n | \n | \n | 102 | \n\n |
| \n Payments \n | \n \n | \n | (181) | \n\n | \n | \n | (11) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Balance at\n December 31, 2014 \n | \n \n | \n | 109 | \n\n | \n | \n | 102 | \n\n |
| \n Accrual \n | \n \n | \n | 107 | \n\n | \n | \n | 30 | \n\n |
| \n Payments \n | \n \n | \n | (189) | \n\n | \n | \n | (54) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Balance at\n December 31, 2015 \n | \n \n | $ | \n27 | \n\n | \n | $ | \n78 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n The\n Company’s accrual and payment activity is primarily related\n to severance and other compensation expense associated with\n voluntary employee early retirement programs.
\n\n
\n \n \nThe reconciliation of\n United’s defined benefit plan assets measured at fair value\n using unobservable inputs (Level 3) for the years ended\n December 31, 2015 and 2014 is as follows (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | ||
| \n Balance at beginning of\n year \n | \n \n | $ | \n312 | \n\n | \n | $ | \n293 | \n\n |
| \n Actual return on plan\n assets: \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Sold during the\n year \n | \n \n | \n | 11 | \n\n | \n | \n | 7 | \n\n |
| \n Held at year end \n | \n \n | \n | (1) | \n\n | \n | \n | 6 | \n\n |
| \n Purchases, sales, issuances\n and settlements (net) \n | \n \n | \n | 21 | \n\n | \n | \n | 6 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Balance at end of\n year \n | \n \n | $ | \n343 | \n\n | \n | $ | \n312 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n NOTE 11 -\n DEBT
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n (In\n millions) \n | \n \n | At\n December 31, | \n\n | |||||
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | ||
| \n Secured \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| Notes payable, fixed interest rates of 1.42% to 12.00%\n (weighted average rate of 5.37% as of December 31, 2015),\n payable through 2027 | \n\n | $ | \n7,971 | \n\n | \n | $ | \n7,464 | \n\n |
| Notes payable, floating interest rates of the London Interbank\n Offered Rate (“LIBOR”) plus 0.20% to 2.85%, payable\n through 2027 | \n\n | \n | 1,302 | \n\n | \n | \n | 1,151 | \n\n |
| Term loan, LIBOR subject to a 0.75% floor, plus 2.75%, or\n alternative rate based on certain market rates plus 1.75%, due\n 2019 | \n\n | \n | 875 | \n\n | \n | \n | 884 | \n\n |
| Term loan, LIBOR subject to a 0.75% floor, plus 3.00%, or\n alternative rate based on certain market rates plus 2%, due\n 2021 | \n\n | \n | 194 | \n\n | \n | \n | 499 | \n\n |
| Unsecured | \n\n | \n | \n | \n | \n | \n | \n | \n |
| 6% Notes due 2026 to 2028 (a) | \n\n | \n | — | \n\n | \n | \n | 632 | \n\n |
| 6% Senior Notes due 2020 (a) | \n\n | \n | 300 | \n\n | \n | \n | 300 | \n\n |
| 6.375% Senior Notes due 2018 (a) | \n\n | \n | 300 | \n\n | \n | \n | 300 | \n\n |
| 4.5% Convertible Notes due 2015 | \n\n | \n | — | \n\n | \n | \n | 202 | \n\n |
| Other | \n\n | \n | 100 | \n\n | \n | \n | 101 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | 11,042 | \n\n | \n | \n | 11,533 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Less: unamortized debt\n discount, premiums and debt issuance costs \n | \n \n | \n | (145) | \n\n | \n | \n | (267) | \n(b) | \n
| \n Less: current portion of\n long-term debt \n | \n \n | \n | (1,224) | \n\n | \n | \n | (1,313) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Long-term debt,\n net \n | \n \n | $ | \n9,673 | \n\n | \n | $ | \n9,953 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n
\n\n (a) UAL is\n the issuer of this debt. United is a guarantor.
\n\n (b) 2014\n amount differs from the amount reported in the Company’s Form\n 10-K for the fiscal year ended December 31, 2014 due to the\n adoption of an accounting standard update in 2015. See\n Note 1(t) Recently Issued Accounting Standards of this report\n for additional information.
\n\n The table\n below presents the Company’s contractual principal payments\n at December 31, 2015 under then-outstanding long-term debt\n agreements in each of the next five calendar years (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n |
| \n 2016 \n | \n \n | $ | \n1,224 | \n\n |
| \n 2017 \n | \n \n | \n | 822 | \n\n |
| \n 2018 \n | \n \n | \n | 1,359 | \n\n |
| \n 2019 \n | \n \n | \n | 1,788 | \n\n |
| \n 2020 \n | \n \n | \n | 942 | \n\n |
| \n After 2020 \n | \n \n | \n | 4,907 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | $ | \n11,042 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
\n As of\n December 31, 2015, a substantial portion of the\n Company’s assets, principally aircraft, route authorities and\n loyalty program intangible assets, was pledged under various loan\n and other agreements. As of December 31, 2015, UAL and United\n were in compliance with their respective debt covenants. Continued\n compliance depends on many factors, some of which are beyond the\n Company’s control, including the overall industry revenue\n environment and the level of fuel costs.
\n\n Secured\n debt
\n\n 2013\n Credit and Guaranty Agreement. United and UAL are\n parties to a Credit and Guaranty Agreement (the “Credit\n Agreement”) as the borrower and guarantor, respectively. The\n Credit Agreement consists of a $900 million term loan due\n April 2019 (of which $875 million was outstanding as of\n December 31, 2015) (the “Term Loan due 2019”), a\n $500 million term loan due September 2021 (of which $194 million\n was outstanding as of December 31, 2015) (the “Term Loan\n due 2021”) and a $1.35 billion revolving credit facility,\n with $1.35 billion being available for drawing until April 2018 and\n $1.315 billion being available for drawing until January\n 2019.
\n\n The term\n loans under the Credit Agreement bear interest at a variable rate\n equal to LIBOR plus a margin of, in the case of the Term Loan due\n 2019, 2.75% per annum and, in the case of the Term Loan due\n 2021, 3.0% per annum, subject in each case to a 0.75% floor.\n Borrowings under the revolving credit facility of the Credit\n Agreement bear interest at a variable rate equal to LIBOR plus a\n margin of 3.0% per annum, or another rate based on certain\n market interest rates, plus a margin of 2.0% per annum. The\n principal amount of the term loans must be repaid in consecutive\n quarterly installments of 0.25% of the original principal amount\n thereof, with any unpaid balance due, in the case of the Term Loan\n due 2019, on April 1, 2019 and, in the case of the Term Loan\n due 2021, on September 15, 2021. United may prepay all or a\n portion of the term loans from time to time, at par plus accrued\n and unpaid interest. United pays a commitment fee equal to\n 0.75% per-annum on the undrawn amount available under the\n revolving credit facility.
\n\n The Term Loan\n due 2021 ranks pari passu with the Term Loan due 2019 that United\n originally borrowed under the Credit Agreement. The Credit\n Agreement requires United to repay the term loans and any other\n outstanding borrowings under the Credit Agreement at par plus\n accrued and unpaid interest if certain changes of control of UAL\n occur.
\n\n As of\n December 31, 2015, United had its entire capacity of $1.35\n billion available under the revolving credit facility of the\n Company’s Credit Agreement.
\n\n As of\n December 31, 2015, United had cash collateralized $70 million\n of letters of credit. United also had $437 million of performance\n bonds relating to various real estate, customs and aircraft\n financing obligations at December 31, 2015. Most of the\n letters of credit have evergreen clauses and are expected to be\n renewed on an annual basis and the performance bonds have\n expiration dates through 2019.
\n\n EETCs. United has $7.8 billion\n principal amount of equipment notes outstanding issued under EETC\n financings included in notes payable in the table of outstanding\n debt above. Generally, the structure of these EETC financings\n consist of pass-through trusts created by United to issue\n pass-through certificates, which represent fractional undivided\n interests in the respective pass-through trusts and are not\n obligations of United. The proceeds of the issuance of the\n pass-through certificates are used to purchase equipment notes\n which are issued by United and secured by its aircraft. The payment\n obligations under the equipment notes are those of United. Proceeds\n received from the sale of pass-through certificates are initially\n held by a depositary in escrow for the benefit of the certificate\n holders until United issues equipment notes to the trust, which\n purchases such notes with a portion of the escrowed funds. These\n escrowed funds are not guaranteed by United and are not reported as\n debt on United’s consolidated balance sheet because the\n proceeds held by the depositary are not United’s\n assets.
\n\n
\n\n In November\n 2015 and August 2014, United created separate EETC pass-through\n trusts, each of which issued pass-through certificates. The\n proceeds of the issuance of the pass-through certificates are used\n to purchase equipment notes issued by United and secured by its\n aircraft. The Company records the debt obligation upon issuance of\n the equipment notes rather than upon the initial issuance of the\n pass-through certificates. United has received and recorded all of\n the proceeds from the November 2015 and August 2014 pass-through\n trusts as debt as of December 31, 2015. Certain details of the\n pass-through trusts with proceeds received from issuance of debt in\n 2015 are as follows (in millions, except stated interest\n rate):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n EETC\n Date \n | \n \n | \n \n Class \n | \n \n | Principal | \n\n | \n | \n \n Final\n expected | \n \n | Stated \n interest \n rate | \n \n | \n | Total debt \n recorded \n as of December 31, \n 2015 | \n \n | \n | Proceeds \n received from \n issuance of \n debt during \n 2015 | \n \n | \n | Remaining \n proceeds from \n issuance of debt \n to be received \n in future \n periods | \n \n | |||||
| \n November 2015 \n | \n \n | AA | \n\n | $ | \n334 | \n\n | \n | December 2027 | \n\n | \n | 3.45% | \n\n | \n | $ | \n334 | \n\n | \n | $ | \n334 | \n\n | \n | $ | \n— | \n\n |
| \n November 2015 \n | \n \n | A | \n\n | \n | 100 | \n\n | \n | December 2022 | \n\n | \n | 3.70% | \n\n | \n | \n | 100 | \n\n | \n | \n | 100 | \n\n | \n | \n | — | \n\n |
| \n August 2014 \n | \n \n | A | \n\n | \n | 823 | \n\n | \n | September 2026 | \n\n | \n | 3.75% | \n\n | \n | \n | 823 | \n\n | \n | \n | 711 | \n\n | \n | \n | — | \n\n |
| \n August 2014 \n | \n \n | B | \n\n | \n | 238 | \n\n | \n | September\n 2022 | \n\n | \n | 4.625% | \n\n | \n | \n | 238 | \n\n | \n | \n | 206 | \n\n | \n | \n | — | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | \n | $ | \n1,495 | \n\n | \n | \n | \n | \n | \n | \n | \n | $ | \n1,495 | \n\n | \n | $ | \n1,351 | \n\n | \n | $ | \n— | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n In 2015,\n United borrowed approximately $590 million aggregate principal\n amount from various financial institutions to finance the purchase\n of several aircraft delivered in 2015. The notes evidencing these\n borrowings, which are secured by the related aircraft, have\n maturity dates ranging from 2025 to 2027 and interest rates\n comprised of the LIBOR plus a specified margin.
\n\n Unsecured debt
\n\n 6%\n Notes due 2026. In 2015, UAL used cash\n to repurchase all $321 million par value 6% Notes due 2026 (the\n “2026 Notes”).
\n\n 6%\n Notes due 2028. In 2015, UAL used cash\n to repurchase all $311 million par value 6% Notes due 2028 (the\n “2028 Notes”).
\n\n In 2015, the\n Company recorded a nonoperating special charge of $134 million for\n the extinguishment of the 2026 Notes and the 2028 Notes. The\n nonoperating special charge is related to the write-off of\n unamortized debt discounts.
\n\n 4.5%\n Convertible Notes due 2015. The 4.5% Convertible\n Notes were convertible by holders into shares of UAL common stock\n at a conversion price of approximately $18.93 per share. During\n 2014, United used $62 million of cash to purchase and retire $28\n million aggregate principal amount of its 4.5% Convertible Notes in\n market transactions. UAL recorded $34 million of the repurchase\n cost as a reduction of additional paid-in capital. In January 2015,\n the holders of substantially all of the remaining $202 million\n principal amount of the 4.5% Convertible Notes exercised their\n conversion option resulting in the issuance of 11 million\n shares of UAL common stock.
\n\n 4.5%\n Senior Limited-Subordination Convertible Notes due\n 2021. In\n January 2014, holders of substantially all of the remaining $156\n million outstanding principal amount of the 4.5% Senior\n Limited-Subordination Convertible Notes due 2021 exercised their\n right to convert such notes into approximately 5 million\n shares of UAL common stock.
\n\n Convertible Debt Securities and\n Derivatives. UAL, United and the trustee\n for the 4.5% Convertible Notes were parties to a supplemental\n indenture that made United’s convertible debt convertible\n into shares of UAL common stock. For purposes of United\n separate-entity reporting, as a result of the remaining outstanding\n debt having been convertible into the\n stock of a non-consolidated entity, the embedded conversion options\n in United’s convertible debt were required to be separated\n and accounted for as though they were free-standing\n derivatives.
\n\n
\n\n In addition,\n UAL’s contractual commitment to provide common stock to\n satisfy United’s obligation upon conversion of the debt was\n an embedded call option on UAL common stock that was also required\n to be separated and accounted for as though it were a free-standing\n derivative. The fair value of the indenture derivative on a\n separate-entity reporting basis as of December 31, 2014 was an\n asset of $712 million. The fair value of the embedded conversion\n options as of December 31, 2014 was a liability of $511\n million. The 4.5% Convertible Notes and their related indenture\n derivative and conversion options were retired in 2015. The initial\n contribution of the indenture derivatives to United by UAL was\n accounted for as additional paid-in capital in United’s\n separate-entity financial statements. Changes in fair value of both\n the indenture derivative and the embedded conversion options\n subsequent to October 1, 2010 were recognized in Nonoperating\n income (expense).
\n\n 6%\n Convertible Senior Notes due 2029. In 2014, UAL issued\n approximately 12 million shares of UAL common stock in\n exchange for, or upon conversion of, $104 million in aggregate\n principal amount of UAL’s outstanding 6% Convertible Senior\n Notes due 2029 held by the holders of these notes.
\n\n
\n\n The\n collateral, covenants and cross default provisions of the\n Company’s principal debt instruments that contain such\n provisions are summarized in the table below:
\n\n
\n| \n | \n | \n |
| Debt\n Instrument | \n\n | Collateral, Covenants and Cross Default\n Provisions | \n
| \n Various equipment notes\n and other notes payable \n | \n \n | \nSecured by certain aircraft. The indentures contain events of\n default that are customary for aircraft financing, including in\n certain cases cross default to other related aircraft. | \n
| \n Credit\n Agreement \n | \n \n | \n\n Secured by certain of\n United’s international route authorities, specified take-off\n and landing slots at certain airports and certain other\n assets. \n\n \nThe Credit Agreement\n requires the Company to maintain at least $3.0 billion of\n unrestricted liquidity at all times, which includes unrestricted\n cash, short-term investments and any undrawn amounts under any\n revolving credit facility, and to maintain a minimum ratio of\n appraised value of collateral to the outstanding obligations under\n the Credit Agreement of 1.67 to 1.0 at all times. The Credit\n Agreement contains covenants that, among other things, restrict the\n ability of UAL and its restricted subsidiaries (as defined in the\n Credit Agreement) to incur additional indebtedness and to pay\n dividends on or repurchase stock, although the Company currently\n has ample ability under these restrictions to repurchase stock\n under the Company’s share repurchase program. \n\n \nThe Credit Agreement\n contains events of default customary for this type of financing,\n including a cross default and cross acceleration provision to\n certain other material indebtedness of the Company. \n | \n
| \n \n 6.375% Senior\n Notes due 2018 \n\n \n6% Senior Notes due\n 2020 \n | \n \n | \n\n The indentures for these\n notes contain covenants that, among other things, restrict the\n ability of the Company and its restricted subsidiaries (as defined\n in the indenture) to incur additional indebtedness and pay\n dividends on or repurchase stock, although the Company currently\n has ample ability under these restrictions to repurchase stock\n under the Company’s share repurchase program. \n\n \nThe indentures contain\n events of default that are customary for similar\n financings. \n | \n
\n
\nNOTE 10 - HEDGING\n ACTIVITIES
\nFuel\n Derivatives
\nThe Company may hedge a\n portion of its future fuel requirements to protect against\n increases in the price of fuel. The Company may restructure hedges\n in response to market conditions prior to their original settlement\n dates which may result in changes in hedge coverage levels and the\n potential recognition of gains or losses on such hedge contracts.\n As of December 31, 2015, the Company had hedged approximately\n 17% of its projected fuel requirements (652 million gallons) for\n 2016, with commonly used financial hedge instruments based on\n aircraft fuel or crude oil. As of December 31, 2015, the\n Company had fuel hedges expiring through December 2016.
\nAs required, the Company\n assesses the effectiveness of each of its individual hedges on a\n quarterly basis. The Company also examines the effectiveness of its\n entire hedging program on a quarterly basis utilizing statistical\n analysis. This analysis involves utilizing regression and other\n statistical analyses that compare changes in the price of aircraft\n fuel to changes in the prices of the commodities used for hedging\n purposes.
\nUpon proper qualification,\n the Company accounts for certain fuel derivative instruments as\n cash flow hedges. All derivatives designated as hedges that meet\n certain requirements are granted hedge accounting treatment. The\n types of instruments the Company utilizes that qualify for hedge\n accounting treatment typically include swaps, call options, collars\n (which consist of a purchased call option and a sold put option),\n four-way collars (a collar with a higher strike sold call option\n and a lower strike purchased put option) and other combinations of\n options. Generally, utilizing hedge accounting, all periodic\n changes in the fair value of derivatives designated as hedges that\n are considered to be effective are recorded in AOCI until the\n underlying fuel is consumed and recorded in fuel expense. The\n Company is exposed to the risk that its hedges may not be effective\n in offsetting changes in the cost of fuel and that its hedges may\n not continue to qualify for hedge accounting. Hedge ineffectiveness\n results when the change in the fair value of the derivative\n instrument exceeds the change in the value of the Company’s\n expected future cash outlay to purchase and consume fuel. To the\n extent that the periodic changes in the fair value of the\n derivatives are not effective, that ineffectiveness is classified\n as Nonoperating income (expense): Miscellaneous, net in the\n statements of consolidated operations.
\nThe Company also uses\n certain combinations of derivative contracts that are economic\n hedges but do not qualify for hedge accounting under GAAP.\n Additionally, the Company may enter into contracts at different\n times and later combine those contracts into structures designated\n for hedge accounting. As with derivatives that qualify for hedge\n accounting, the economic hedges and individual contracts are part\n of the Company’s program to mitigate the adverse financial\n impact of potential increases in the price of fuel. The Company\n records changes in the fair value of these various contracts that\n are not designated for hedge accounting to Nonoperating income\n (expense): Miscellaneous, net in the statements of consolidated\n operations.
\nIf the Company settles a\n derivative prior to its contractual settlement date, then the\n cumulative gain or loss recognized in AOCI at the termination date\n remains in AOCI until the forecasted transaction occurs. In a\n situation where it becomes probable that a hedged forecasted\n transaction will not occur, any gains and/or losses that have been\n recorded to AOCI would be required to be immediately reclassified\n into earnings. All cash flows associated with purchasing and\n settling derivatives are classified as operating cash flows in the\n statements of consolidated cash flows.
\nIn addition to cash flow\n hedges, the Company from time to time enters into fair value hedges\n related to its aircraft fuel inventory using derivatives such as\n swaps and futures contracts based on aircraft fuel. Under fair\n value hedge accounting, the Company records changes in the fair\n value of both the hedging derivative and the hedged aircraft fuel\n inventory as fuel expense. The Company records ineffectiveness on\n fair value hedges as Nonoperating income (expense): Miscellaneous,\n net in the statements of consolidated operations. As of\n December 31, 2015, fair value hedges related to aircraft fuel\n were not material to the Company’s financial\n statements.
\nThe Company records each\n derivative instrument as a derivative asset or liability (on a\n gross basis) in its consolidated balance sheets, and,\n accordingly, records any related collateral on a gross basis. The\n table below presents the fair value amounts of fuel derivative\n assets and liabilities and the location of amounts recognized in\n the Company’s financial statements.
\nAt December 31, the\n Company’s derivatives were reported in its consolidated\n balance sheets as follows (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n Classification \n | \n \n | \n \n Balance Sheet Location \n | \n \n | 2015 | \n\n | \n | 2014 | \n\n | ||
| \n Derivatives\n designated as cash flow hedges \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Liabilities: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Fuel contracts due within\n one year \n | \n \n | Fuel derivative instruments | \n\n | $ | \n119 | \n\n | \n | $ | \n450 | \n\n |
| \n Fuel contracts with\n maturities greater than one year \n | \n \n | Other liabilities and deferred credits: Other | \n\n | \n | — | \n\n | \n | \n | 27 | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | \n | $ | \n119 | \n\n | \n | $ | \n477 | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Derivatives not\n designated for hedge accounting \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Assets: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Fuel contracts due within\n one year \n | \n \n | Receivables | \n\n | $ | \n— | \n\n | \n | $ | \n6 | \n\n |
| \n Liabilities: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Fuel contracts due within\n one year \n | \n \n | Fuel derivative instruments | \n\n | $ | \n5 | \n\n | \n | $ | \n244 | \n\n |
| \n Fuel contracts with\n maturities greater than one year \n | \n \n | Other liabilities and deferred credits: Other | \n\n | \n | — | \n\n | \n | \n | 2 | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total\n liabilities \n | \n \n | \n | \n | $ | \n5 | \n\n | \n | $ | \n246 | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total\n derivatives \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Assets: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Fuel contracts due within\n one year \n | \n \n | Receivables | \n\n | $ | \n— | \n\n | \n | $ | \n6 | \n\n |
| \n Liabilities: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Fuel contracts due within\n one year \n | \n \n | Fuel derivative instruments | \n\n | $ | \n124 | \n\n | \n | $ | \n694 | \n\n |
| \n Fuel contracts with\n maturities greater than one year \n | \n \n | Other liabilities and deferred credits: Other | \n\n | \n | — | \n\n | \n | \n | 29 | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total\n liabilities \n | \n \n | \n | \n | $ | \n124 | \n\n | \n | $ | \n723 | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
Derivative Credit\n Risk and Fair Value
\nThe Company is exposed to\n credit losses in the event of non-performance by counterparties to\n its derivative instruments. While the Company records derivative\n instruments on a gross basis, the Company monitors its net\n derivative position with each counterparty to monitor credit risk.\n Based on the fair value of our fuel derivative instruments, our\n counterparties may require us to post collateral when the price of\n the underlying commodity decreases, and we may require our\n counterparties to provide us with collateral when the price of the\n underlying commodity increases. The Company had on deposit $26\n million and $577 million of collateral with fuel derivative\n counterparties as of December 31, 2015 and December 31,\n 2014, respectively. The collateral is recorded as Fuel hedge\n collateral deposits on the Company’s consolidated balance\n sheets.
\nWe have master trading\n agreements with all of our fuel hedging counterparties that allow\n us to net our fuel hedge derivative positions. We have elected not\n to net the fair value positions and collateral recorded on our\n consolidated balance sheets. The following table shows the\n potential net fair value positions (including fuel derivatives and\n related collateral) had we elected to offset. The table reflects\n offset at the counterparty level (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | December 31, 2015 | \n\n | \n | December 31, 2014 | \n\n | ||
| \n Fuel derivative\n instruments \n | \n \n | $ | \n98 | \n\n | \n | $ | \n209 | \n\n |
| \n Other liabilities and\n deferred credits: Other \n | \n \n | \n | — | \n\n | \n | \n | 30 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Hedge derivatives\n liabilities, net \n | \n \n | $ | \n98 | \n\n | \n | $ | \n239 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
The following tables\n present the fuel hedge gains (losses) recognized during the periods\n presented and their classification in the financial statements (in\n millions):
\nDerivatives\n designated as cash flow hedges
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Amount of\n Loss \n Recognized \n in AOCI on Derivatives \n (Effective Portion) | \n \n | \n | Loss\n Reclassified from \n AOCI into Income \n (Fuel\n Expense) \n (Effective Portion) | \n \n | \n | Amount of Loss \n Recognized in \n Nonoperating income \n (expense): Miscellaneous, \n net (Ineffective Portion) | \n \n | |||||||||||||||
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2015 | \n\n | \n | 2014 | \n\n | ||||||
| \n Fuel contracts \n | \n \n | $ | \n(320) | \n\n | \n | $ | \n(599) | \n\n | \n | $ | \n(604) | \n\n | \n | $ | \n(89) | \n\n | \n | $ | \n— | \n\n | \n | $ | \n(3) | \n\n |
Derivatives not\n designated for hedge accounting
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Amount of Gain (Loss) Recognized \n in Nonoperating income (expense): \n Miscellaneous, net | \n \n | \n | \n | |||||||||
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2013 | \n\n | \n | \n | |||
| \n Fuel contracts \n | \n \n | $ | \n(80) | \n\n | \n | $ | \n(462 | \n) | \n\n | $ | \n79 | \n\n | \n | \n |
Foreign Currency\n Derivatives
\nThe Company generates\n revenues and incurs expenses in numerous foreign currencies.\n Changes in foreign currency exchange rates impact the\n Company’s results of operations through changes in the dollar\n value of foreign currency-denominated operating revenues and\n expenses. Some of the Company’s more significant foreign\n currency exposures include the Canadian dollar, Chinese renminbi,\n European euro, British pound and Japanese yen. At times, the\n Company uses derivative financial instruments, such as options,\n collars and forward contracts, to hedge its exposure to foreign\n currency. At December 31, 2015, the Company had foreign\n currency derivative contracts in place to hedge European euro\n denominated sales. The notional amount of the hedges equates to 18%\n of the Company’s projected European euro denominated net cash\n inflows for 2016. Net cash relates primarily to passenger ticket\n sales inflows partially offset by expenses paid in local\n currencies. At December 31, 2015, the fair value of the\n Company’s foreign currency derivatives was not material to\n the Company’s financial statements.
\n| (g) | \nProperty and\n Equipment—The Company records additions to owned\n operating property and equipment at cost when acquired. Property\n under capital leases and the related obligation for future lease\n payments are recorded at an amount equal to the initial present\n value of those lease payments. Modifications that enhance the\n operating performance or extend the useful lives of airframes or\n engines are capitalized as property and equipment. It is the\n Company’s policy to record compensation from delays in\n delivery of aircraft as a reduction of the cost of the related\n aircraft. | \n
\n Depreciation and\n amortization of owned depreciable assets is based on the\n straight-line method over the assets’ estimated useful lives.\n Leasehold improvements are amortized over the remaining term of the\n lease, including estimated facility renewal options when renewal is\n reasonably assured at key airports, or the estimated useful life of\n the related asset, whichever is less. Properties under capital\n leases are amortized on the straight-line method over the life of\n the lease or, in the case of certain aircraft, over their estimated\n useful lives, whichever is shorter. Amortization of capital lease\n assets is included in depreciation and amortization expense. The\n estimated useful lives of property and equipment are as\n follows:
\n\n
\n| \n | \n | \n | \n | \n |
| \n | \n | Estimated Useful Life (in years) | \n\n | |
| \n Aircraft and related rotable\n parts \n | \n \n | \n | 25 to 30 | \n\n |
| \n Buildings \n | \n \n | \n | 25 to 45 | \n\n |
| \n Other property and\n equipment \n | \n \n | \n | 3 to 15 | \n\n |
| \n Computer software \n | \n \n | \n | 5 | \n\n |
| \n Building\n improvements \n | \n \n | \n | 1 to 40 | \n\n |
\n As of\n December 31, 2015 and 2014, the Company had a carrying value\n of computer software of $279 million and $281 million,\n respectively. For the years ended December 31, 2015, 2014 and\n 2013, the Company’s depreciation expense related to computer\n software was $93 million, $81 million and $72 million,\n respectively. Aircraft and aircraft spare parts were assumed to\n have residual values of approximately 10% of original cost, and\n other categories of property and equipment were assumed to have no\n residual value.
\nThe table below is adjusted\n to include the impact of the January 2016 Boeing 737NG aircraft\n order discussed above. Any new firm aircraft orders, including\n through the exercise of purchase options and purchase rights, will\n increase the total future capital commitments of the\n Company.
\n\n
\n| \n | \n | \n | \n | \n |
| \n 2016 \n | \n \n | $ | \n3.4 | \n\n |
| \n 2017 \n | \n \n | \n | 3.1 | \n\n |
| \n 2018 \n | \n \n | \n | 3.3 | \n\n |
| \n 2019 \n | \n \n | \n | 2.9 | \n\n |
| \n 2020 \n | \n \n | \n | 2.8 | \n\n |
| \n After 2020 \n | \n \n | \n | 7.7 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | $ | \n23.2 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
The tables below present\n the components of the Company’s accumulated other\n comprehensive income (loss) (“AOCI”), net of tax (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | Deferred\n Taxes | \n\n | \n | \n | \n | |||||||||
| \n \n UAL\n (a) \n | \n \n | Pension and \n Other \n Postretirement \n Unrecognized \n Actuarial \n Gains (Losses) \n and Prior \n Service Cost | \n \n | \n | Unrealized \n Gains \n (Losses) \n on\n Derivatives | \n \n | \n | Investments \n and Other | \n \n | \n | Pension and \n Other \n Postretirement \n Liabilities | \n \n | \n | Derivative \n Contracts | \n \n | \n | Total | \n\n | ||||||
| \n Balance at\n December 31, 2012 \n | \n \n | $ | \n(927) | \n\n | \n | $ | \n(10) | \n\n | \n | $ | \n6 | \n\n | \n | $ | \n(115) | \n\n | \n | $ | \n— | \n(d) | \n\n | $ | \n(1,046) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Other comprehensive income\n before reclassifications (b) \n | \n \n | \n | 1,584 | \n(c) | \n\n | \n | 39 | \n\n | \n | \n | 7 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 1,630 | \n\n |
| \n Amounts reclassified from\n accumulated other comprehensive income (b) \n | \n \n | \n | 42 | \n\n | \n | \n | (18) | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 24 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Net current-period other\n comprehensive income (loss) \n | \n \n | \n | 1,626 | \n\n | \n | \n | 21 | \n\n | \n | \n | 7 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 1,654 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Balance at\n December 31, 2013 \n | \n \n | $ | \n699 | \n\n | \n | $ | \n11 | \n\n | \n | $ | \n13 | \n\n | \n | $ | \n(115) | \n\n | \n | $ | \n— | \n(d) | \n\n | $ | \n608 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Other comprehensive loss\n before reclassifications (b) \n | \n \n | \n | (1,106) | \n(c) | \n\n | \n | (599) | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | (1,705) | \n\n |
| \n Amounts reclassified from\n accumulated other comprehensive income (b) \n | \n \n | \n | (65) | \n\n | \n | \n | 89 | \n\n | \n | \n | (6) | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 18 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Net current-period other\n comprehensive income (loss) \n | \n \n | \n | (1,171) | \n\n | \n | \n | (510) | \n\n | \n | \n | (6) | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | (1,687) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Balance at\n December 31, 2014 \n | \n \n | $ | \n(472) | \n\n | \n | $ | \n(499) | \n\n | \n | $ | \n7 | \n\n | \n | $ | \n(115) | \n\n | \n | $ | \n— | \n(d) | \n\n | $ | \n(1,079) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Other comprehensive income\n (loss) before reclassifications \n | \n \n | \n | 78 | \n(c) | \n\n | \n | (320) | \n\n | \n | \n | (4) | \n\n | \n | \n | (28) | \n\n | \n | \n | 115 | \n\n | \n | \n | (159) | \n\n |
| \n Amounts reclassified from\n accumulated other comprehensive income \n | \n \n | \n | 31 | \n\n | \n | \n | 604 | \n\n | \n | \n | — | \n\n | \n | \n | (11) | \n\n | \n | \n | (217) | \n\n | \n | \n | 407 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Net current-period other\n comprehensive income (loss) \n | \n \n | \n | 109 | \n\n | \n | \n | 284 | \n\n | \n | \n | (4) | \n\n | \n | \n | (39) | \n\n | \n | \n | (102) | \n\n | \n | \n | 248 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Balance at\n December 31, 2015 \n | \n \n | $ | \n(363) | \n\n | \n | $ | \n(215) | \n\n | \n | $ | \n3 | \n\n | \n | $ | \n(154) | \n\n | \n | $ | \n(102) | \n\n | \n | $ | \n(831) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n Details\n about AOCI Components \n | \n \n | Amount Reclassified from\n AOCI to \n Income | \n \n | \n | Affected Line Item\n in \n the Statement Where \n Net Income is Presented | \n |||||||||
| \n | \n | Year Ended December\n 31, | \n\n | \n | \n | |||||||||
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2013 | \n\n | \n | \n | |||
| \n Derivatives designated as\n cash flow hedges \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Fuel\n contracts-reclassifications of (gains) losses into\n earnings \n | \n \n | $ | \n604 | \n\n | \n | $ | \n89 | \n\n | \n | $ | \n(18) | \n\n | \n | Aircraft fuel | \n
| \n Amortization of pension and\n postretirement items \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n Amortization of\n unrecognized (gains) losses and prior \n\n service cost\n and the effect of curtailments and settlements (e) \n | \n \n | \n | 31 | \n\n | \n | \n | (65) | \n\n | \n | \n | 42 | \n\n | \n | Salaries and related costs | \n
| \n Investments and\n other \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Available-for-sale\n securities—reclassifications of gains into\n earnings \n | \n \n | \n | — | \n\n | \n | \n | (6) | \n\n | \n | \n | — | \n\n | \n | Miscellaneous, net | \n
\n
\n\n
\n(a) UAL and United amounts\n are substantially the same except for an additional $1 million and\n $6 million of additional gains related to investments and other and\n an income tax benefit, respectively, at United in 2013.
\n(b) Income tax expense for\n these items was offset by the Company’s valuation\n allowance.
\n(c) Prior service credits\n increased by $0 million, $3 million and $331 million and actuarial\n gains (losses) increased by approximately $78 million, $(1.1)\n billion and $1.3 billion for 2015, 2014 and 2013,\n respectively.
\n(d) Deferred tax balance\n was offset by the Company’s valuation allowance.
\n(e) This accumulated other\n comprehensive income component is included in the computation of\n net periodic pension and other postretirement costs (see Note 8 of\n this report for additional information).
\nNOTE 8 - PENSION AND\n OTHER POSTRETIREMENT PLANS
\nThe following summarizes\n the significant pension and other postretirement plans of\n United:
\nPension\n Plans
\nUnited maintains two\n primary defined benefit pension plans, one covering certain pilot\n employees and another covering certain U.S. non-pilot employees.\n Each of these plans provide benefits based on a combination of\n years of benefit accruals service and an employee’s final\n average compensation. Additional benefit accruals were frozen under\n the plan covering certain pilot employees during 2005 and\n management and administrative employees as of December 31,\n 2013 at which time any existing accrued benefits for those\n employees were preserved. Benefit accruals for certain non-pilot\n employees under its other primary defined benefit pension plan\n continue. United maintains additional defined benefit pension\n plans, which cover certain international employees.
\nOther Postretirement\n Plans
\nWe maintain postretirement\n medical programs which provide medical benefits to certain retirees\n and eligible dependents, as well as life insurance benefits to\n certain retirees participating in the plan. Benefits provided are\n subject to applicable contributions, co-payments, deductibles and\n other limits as described in the specific plan\n documentation.
\nChanges in benefits that\n either qualified as curtailments (which reduced prior actuarial\n losses) or negative plan amendments are detailed in the tables\n below. Actuarial assumption changes are reflected as a component of\n the net actuarial gains/(losses) during 2015 and 2014. These\n amounts will be amortized over the average remaining service life\n of the covered active employees or the average life expectancy of\n inactive participants and will impact 2015 and 2014 pension and\n retiree medical expense as described below.
\n\n
\nThe following table sets\n forth the reconciliation of the beginning and ending balances of\n the benefit obligation and plan assets, the funded status and the\n amounts recognized in these financial statements for the defined\n benefit and other postretirement plans (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Pension\n Benefits | \n\n | |||||
| \n | \n | Year Ended \n December 31, 2015 | \n \n | \n | Year Ended \n December 31, 2014 | \n \n | ||
| \n Accumulated benefit\n obligation: \n | \n \n | $ | \n3,795 | \n\n | \n | $ | \n4,068 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Change in projected benefit\n obligation: \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Projected benefit\n obligation at beginning of year \n | \n \n | $ | \n4,803 | \n\n | \n | $ | \n4,000 | \n\n |
| \n Service cost \n | \n \n | \n | 124 | \n\n | \n | \n | 98 | \n\n |
| \n Interest cost \n | \n \n | \n | 200 | \n\n | \n | \n | 201 | \n\n |
| \n Actuarial (gain)\n loss \n | \n \n | \n | (298) | \n\n | \n | \n | 807 | \n\n |
| \n Gross benefits paid and\n settlements \n | \n \n | \n | (343) | \n\n | \n | \n | (281) | \n\n |
| \n Other \n | \n \n | \n | (13) | \n\n | \n | \n | (22) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Projected benefit\n obligation at end of year \n | \n \n | $ | \n4,473 | \n\n | \n | $ | \n4,803 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Change in plan\n assets: \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Fair value of plan assets\n at beginning of year \n | \n \n | $ | \n2,562 | \n\n | \n | $ | \n2,397 | \n\n |
| \n Actual gain (loss) on plan\n assets \n | \n \n | \n | (59) | \n\n | \n | \n | 151 | \n\n |
| \n Employer\n contributions \n | \n \n | \n | 824 | \n\n | \n | \n | 307 | \n\n |
| \n Gross benefits paid and\n settlements \n | \n \n | \n | (343) | \n\n | \n | \n | (281) | \n\n |
| \n Other \n | \n \n | \n | (9) | \n\n | \n | \n | (12) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Fair value of plan assets\n at end of year \n | \n \n | $ | \n2,975 | \n\n | \n | $ | \n2,562 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Funded status—Net\n amount recognized \n | \n \n | $ | \n(1,498) | \n\n | \n | $ | \n(2,241) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Pension\n Benefits | \n\n | |||||
| \n | \n | December 31, 2015 | \n\n | \n | December 31, 2014 | \n\n | ||
| \n Amounts recognized in the\n consolidated balance sheets consist of: \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Noncurrent asset \n | \n \n | $ | \n2 | \n\n | \n | $ | \n2 | \n\n |
| \n Current\n liability \n | \n \n | \n | (12) | \n\n | \n | \n | (17) | \n\n |
| \n Noncurrent\n liability \n | \n \n | \n | (1,488) | \n\n | \n | \n | (2,226) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total liability \n | \n \n | $ | \n(1,498) | \n\n | \n | $ | \n(2,241) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Amounts recognized in\n accumulated other comprehensive loss consist of: \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Net actuarial\n loss \n | \n \n | $ | \n(844) | \n\n | \n | $ | \n(982) | \n\n |
| \n Prior service\n loss \n | \n \n | \n | (1) | \n\n | \n | \n | (1) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total accumulated other\n comprehensive loss \n | \n \n | $ | \n(845) | \n\n | \n | $ | \n(983) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Other Postretirement\n Benefits | \n\n | |||||
| \n | \n | Year Ended \n December 31, 2015 | \n \n | \n | Year Ended \n December 31, 2014 | \n \n | ||
| \n Change in benefit\n obligation: \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Benefit obligation at\n beginning of year \n | \n \n | $ | \n2,052 | \n\n | \n | $ | \n1,819 | \n\n |
| \n Service cost \n | \n \n | \n | 21 | \n\n | \n | \n | 19 | \n\n |
| \n Interest cost \n | \n \n | \n | 82 | \n\n | \n | \n | 88 | \n\n |
| \n Plan participants’\n contributions \n | \n \n | \n | 68 | \n\n | \n | \n | 67 | \n\n |
| \n Benefits paid \n | \n \n | \n | (205) | \n\n | \n | \n | (212) | \n\n |
| \n Actuarial (gain)\n loss \n | \n \n | \n | (22) | \n\n | \n | \n | 262 | \n\n |
| \n Other \n | \n \n | \n | 6 | \n\n | \n | \n | 9 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Benefit obligation at end\n of year \n | \n \n | $ | \n2,002 | \n\n | \n | $ | \n2,052 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Change in plan\n assets: \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Fair value of plan assets\n at beginning of year \n | \n \n | $ | \n57 | \n\n | \n | $ | \n57 | \n\n |
| \n Actual return on plan\n assets \n | \n \n | \n | 1 | \n\n | \n | \n | 1 | \n\n |
| \n Employer\n contributions \n | \n \n | \n | 135 | \n\n | \n | \n | 144 | \n\n |
| \n Plan participants’\n contributions \n | \n \n | \n | 68 | \n\n | \n | \n | 67 | \n\n |
| \n Benefits paid \n | \n \n | \n | (205) | \n\n | \n | \n | (212) | \n\n |
| \n Fair value of plan assets\n at end of year \n | \n \n | \n | 56 | \n\n | \n | \n | 57 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Funded status—Net\n amount recognized \n | \n \n | $ | \n(1,946) | \n\n | \n | $ | \n(1,995) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Other Postretirement Benefits | \n\n | |||||
| \n | \n | December 31, 2015 | \n\n | \n | December 31, 2014 | \n\n | ||
| \n Amounts recognized in the\n consolidated balance sheets consist of: \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Current\n liability \n | \n \n | $ | \n(64) | \n\n | \n | $ | \n(62) | \n\n |
| \n Noncurrent\n liability \n | \n \n | \n | (1,882) | \n\n | \n | \n | (1,933) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total liability \n | \n \n | $ | \n(1,946) | \n\n | \n | $ | \n(1,995) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| Amounts recognized in accumulated other comprehensive income\n consist of: | \n\n | \n | \n | \n | \n | \n | \n | \n |
| \n Net actuarial\n gain \n | \n \n | $ | \n236 | \n\n | \n | $ | \n233 | \n\n |
| \n Prior service\n credit \n | \n \n | \n | 246 | \n\n | \n | \n | 278 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total accumulated other\n comprehensive income \n | \n \n | $ | \n482 | \n\n | \n | $ | \n511 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
The following information\n relates to all pension plans with an accumulated benefit obligation\n and a projected benefit obligation in excess of plan assets at\n December 31 (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | ||
| \n Projected benefit\n obligation \n | \n \n | $ | \n4,292 | \n\n | \n | $ | \n4,625 | \n\n |
| \n Accumulated benefit\n obligation \n | \n \n | \n | 3,655 | \n\n | \n | \n | 3,930 | \n\n |
| \n Fair value of plan\n assets \n | \n \n | \n | 2,794 | \n\n | \n | \n | 2,387 | \n\n |
\n
\nNet periodic benefit cost\n for the years ended December 31 included the following\n components (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2013 | \n\n | |||||||||||||||
| \n | \n | Pension \n Benefits | \n \n | \n | Other \n Postretirement \n Benefits | \n \n | \n | Pension \n Benefits | \n \n | \n | Other \n Postretirement \n Benefits | \n \n | \n | Pension \n Benefits | \n \n | \n | Other \n Postretirement \n Benefits | \n \n | ||||||
| Service cost | \n\n | $ | \n124 | \n\n | \n | $ | \n21 | \n\n | \n | $ | \n98 | \n\n | \n | $ | \n19 | \n\n | \n | $ | \n121 | \n\n | \n | $ | \n52 | \n\n |
| Interest cost | \n\n | \n | 200 | \n\n | \n | \n | 82 | \n\n | \n | \n | 201 | \n\n | \n | \n | 88 | \n\n | \n | \n | 191 | \n\n | \n | \n | 110 | \n\n |
| Expected return on plan assets | \n\n | \n | (194) | \n\n | \n | \n | (2) | \n\n | \n | \n | (180) | \n\n | \n | \n | (2) | \n\n | \n | \n | (163) | \n\n | \n | \n | (2) | \n\n |
| Amortization of unrecognized actuarial (gain) loss | \n\n | \n | 85 | \n\n | \n | \n | (22) | \n\n | \n | \n | 12 | \n\n | \n | \n | (47) | \n\n | \n | \n | 48 | \n\n | \n | \n | 3 | \n\n |
| Amortization of prior service credits | \n\n | \n | — | \n\n | \n | \n | (32) | \n\n | \n | \n | — | \n\n | \n | \n | (31) | \n\n | \n | \n | — | \n\n | \n | \n | (3) | \n\n |
| Other | \n\n | \n | 4 | \n\n | \n | \n | — | \n\n | \n | \n | 1 | \n\n | \n | \n | — | \n\n | \n | \n | (8) | \n\n | \n | \n | 2 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| Net periodic benefit cost | \n\n | $ | \n219 | \n\n | \n | $ | \n47 | \n\n | \n | $ | \n132 | \n\n | \n | $ | \n27 | \n\n | \n | $ | \n189 | \n\n | \n | $ | \n162 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
The estimated amounts that\n will be amortized in 2016 out of accumulated other comprehensive\n income (loss) into net periodic benefit cost are as follows (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Pension \n Benefits | \n \n | \n | Other \n Postretirement \n Benefits | \n \n | ||
| \n Actuarial (gain)\n loss \n | \n \n | $ | \n71 | \n\n | \n | $ | \n(22) | \n\n |
| \n Prior service\n credit \n | \n \n | \n | — | \n\n | \n | \n | (32) | \n\n |
The assumptions used for\n the benefit plans were as follows:
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n | \n \n | \n | Pension Benefits | \n\n | ||||
| \n \n Assumptions\n used to determine benefit obligations \n | \n \n | \n | \n2015 | \n\n | \n | \n | \n2014 | \n\n |
| \n Discount rate \n | \n \n | \n | 4.58% | \n\n | \n | \n | 4.20% | \n\n |
| \n Rate of compensation\n increase \n | \n \n | \n | 3.66% | \n\n | \n | \n | 3.66% | \n\n |
| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Assumptions used to\n determine net expense \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Discount rate \n | \n \n | \n | 4.20% | \n\n | \n | \n | 5.10% | \n\n |
| \n Expected return on plan\n assets \n | \n \n | \n | 7.40% | \n\n | \n | \n | 7.36% | \n\n |
| \n Rate of compensation\n increase \n | \n \n | \n | 3.51% | \n\n | \n | \n | 3.50% | \n\n |
\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n | \n \n | Other Postretirement Benefits | \n\n | |||||
| \n Assumptions used to\n determine benefit obligations \n | \n \n | 2015 | \n\n | \n | 2014 | \n\n | ||
| \n Discount rate \n | \n \n | \n | 4.49% | \n\n | \n | \n | 4.07% | \n\n |
| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Assumptions used to\n determine net expense \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Discount rate \n | \n \n | \n | 4.07% | \n\n | \n | \n | 4.94% | \n\n |
| \n Expected return on plan\n assets \n | \n \n | \n | 3.00% | \n\n | \n | \n | 4.00% | \n\n |
| \n Health care cost trend rate\n assumed for next year \n | \n \n | \n | 6.75% | \n\n | \n | \n | 7.00% | \n\n |
| \n Rate to which the cost\n trend rate is assumed to decline (ultimate trend rate in\n 2023) \n | \n \n | \n | 5.00% | \n\n | \n | \n | 5.00% | \n\n |
\n
\nDuring 2015, the Company\n experienced changes in its benefit obligations related to changes\n in discount rates and mortality tables in its pension plans and\n other postretirement benefit plans. The Company used the Society of\n Actuaries’ 2014 mortality tables, modified to reflect the\n Social Security Administration Trustee’s Report on current\n projections regarding expected longevity improvements.
\nThe Company selected the\n 2015 discount rate for substantially all of its plans by using a\n hypothetical portfolio of high quality bonds at December 31,\n 2015, that would provide the necessary cash flows to match\n projected benefit payments.
\nWe develop our expected\n long-term rate of return assumption for such plans based on\n historical experience and by evaluating input from the trustee\n managing the plans’ assets. Our expected long-term rate of\n return on plan assets for these plans is based on a target\n allocation of assets, which is based on our goal of earning the\n highest rate of return while maintaining risk at acceptable levels.\n The plans strive to have assets sufficiently diversified so that\n adverse or unexpected results from one security class will not have\n an unduly detrimental impact on the entire portfolio. Plan\n fiduciaries regularly review our actual asset allocation and the\n pension plans’ investments are periodically rebalanced to our\n targeted allocation when considered appropriate. United’s\n plan assets are allocated within the following\n guidelines:
\n\n
\n| \n | \n | \n | \n | \n |
| \n | \n | \n Percent of Total \n | \n \n | \n \n Expected Long-Term \nRate of Return \n | \n
| \n | \n | \n | \n | \n |
| \n Equity\n securities \n | \n \n | 30-40 % | \n\n | 9.5 % | \n
| \n Fixed-income\n securities \n | \n \n | 34-44 | \n\n | 5.0 | \n
| \n Alternatives \n | \n \n | 14-27 | \n\n | 7.3 | \n
| \n Other \n | \n \n | 0-10 | \n\n | 7.0 | \n
One-hundred percent of\n other postretirement plan assets are invested in a deposit\n administration fund.
\nAssumed health care cost\n trend rates have a significant effect on the amounts reported for\n the other postretirement plans. A 1% change in the assumed health\n care trend rate for the Company would have the following additional\n effects (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | 1% Increase | \n\n | \n | 1% Decrease | \n\n | ||
| \n Effect on total service and\n interest cost for the year ended December 31, 2015 \n | \n \n | $ | \n13 | \n\n | \n | $ | \n(11) | \n\n |
| \n Effect on postretirement\n benefit obligation at December 31, 2015 \n | \n \n | \n | 219 | \n\n | \n | \n | (191) | \n\n |
A one percentage point\n decrease in the weighted average discount rate would increase the\n postretirement benefit liability by approximately $227 million and\n increase the estimated 2015 benefits expense by approximately $12\n million.
\nFair Value\n Information. Accounting standards require us to use\n valuation techniques to measure fair value that maximize the use of\n observable inputs and minimize the use of unobservable inputs.\n These inputs are prioritized as follows:
\n\n
\n| \n | \n | \n |
| \n Level 1 \n | \n \n | Unadjusted quoted prices in active markets for assets or\n liabilities identical to those to be reported at fair\n value | \n
| \n Level 2 \n | \n \n | Other inputs that are observable directly or indirectly,\n such as quoted prices for similar assets or liabilities or\n market-corroborated inputs | \n
| \n Level 3 \n | \n \n | Unobservable inputs for which there is little or no market\n data and which require us to develop our own assumptions about how\n market participants would price the assets or\n liabilities | \n
\n
\nAssets and liabilities\n measured at fair value are based on the valuation techniques\n identified in the tables below. The valuation techniques are as\n follows:
\n(a) Market approach.\n Prices and other relevant information generated by market\n transactions involving identical or comparable assets and\n liabilities; and
\n(b) Income approach.\n Techniques to convert future amounts to a single current value\n based on market expectations (including present value techniques,\n option-pricing and excess earnings models).
\nThe following tables\n present information about United’s pension and other\n postretirement plan assets at December 31 (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | 2015 | \n\n | \n | \n | \n\n | 2014 | \n\n | ||||||||||||||||||||||||||
| Pension Plan Assets: | \n\n | Total | \n\n | \n | Level 1 | \n\n | \n | Level 2 | \n\n | \n | Level 3 | \n\n | \n | \n | \n\n | Total | \n\n | \n | Level 1 | \n\n | \n | Level 2 | \n\n | \n | Level 3 | \n\n | ||||||||
| \n Equity securities\n funds \n | \n \n | $ | \n1,135 | \n\n | \n | $ | \n254 | \n\n | \n | $ | \n881 | \n\n | \n | $ | \n— | \n\n | \n | \n | \n\n | $ | \n1,181 | \n\n | \n | $ | \n388 | \n\n | \n | $ | \n793 | \n\n | \n | $ | \n— | \n\n |
| \n Fixed-income\n securities \n | \n \n | \n | 1,109 | \n\n | \n | \n | — | \n\n | \n | \n | 1,100 | \n\n | \n | \n | 9 | \n\n | \n | \n | \n\n | \n | 813 | \n\n | \n | \n | — | \n\n | \n | \n | 813 | \n\n | \n | \n | — | \n\n |
| \n Alternatives \n | \n \n | \n | 527 | \n\n | \n | \n | — | \n\n | \n | \n | 267 | \n\n | \n | \n | 260 | \n\n | \n | \n | \n\n | \n | 359 | \n\n | \n | \n | — | \n\n | \n | \n | 148 | \n\n | \n | \n | 211 | \n\n |
| \n Insurance\n contract \n | \n \n | \n | 18 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 18 | \n\n | \n | \n | \n\n | \n | 21 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 21 | \n\n |
| \n Other\n investments \n | \n \n | \n | 186 | \n\n | \n | \n | 37 | \n\n | \n | \n | 149 | \n\n | \n | \n | — | \n\n | \n | \n | \n\n | \n | 188 | \n\n | \n | \n | — | \n\n | \n | \n | 165 | \n\n | \n | \n | 23 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n\n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total \n | \n \n | $ | \n2,975 | \n\n | \n | $ | \n291 | \n\n | \n | $ | \n2,397 | \n\n | \n | $ | \n287 | \n\n | \n | \n | \n\n | $ | \n2,562 | \n\n | \n | $ | \n388 | \n\n | \n | $ | \n1,919 | \n\n | \n | $ | \n255 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n\n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| Other Postretirement Benefit Plan Assets: | \n\n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n\n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Deposit administration\n fund \n | \n \n | $ | \n56 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n— | \n\n | \n | $ | \n56 | \n\n | \n | \n | \n\n | $ | \n57 | \n\n | \n | $ | \n— | \n\n | \n | $ | \n— | \n\n | \n | $ | \n57 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n\n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
Equity and\n Fixed-Income. Equities include investments in both developed\n market and emerging market equity securities. Fixed-income includes\n primarily U.S. and non-U.S. government fixed-income securities and\n U.S. and non-U.S corporate fixed-income securities.
\nInsurance Contract and\n Deposit Administration Fund. Each of these investments are\n stable value investment products structured to provide investment\n income.
\nAlternatives.\n Alternative investments consist primarily of investments in hedge\n funds, real estate and private equity interests.
\nOther investments.\n Other investments consist of cash and other funds.
\nThe reconciliation of\n United’s defined benefit plan assets measured at fair value\n using unobservable inputs (Level 3) for the years ended\n December 31, 2015 and 2014 is as follows (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | ||
| \n Balance at beginning of\n year \n | \n \n | $ | \n312 | \n\n | \n | $ | \n293 | \n\n |
| \n Actual return on plan\n assets: \n | \n \n | \n | \n | \n | \n | \n | \n | \n |
| \n Sold during the\n year \n | \n \n | \n | 11 | \n\n | \n | \n | 7 | \n\n |
| \n Held at year end \n | \n \n | \n | (1) | \n\n | \n | \n | 6 | \n\n |
| \n Purchases, sales, issuances\n and settlements (net) \n | \n \n | \n | 21 | \n\n | \n | \n | 6 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Balance at end of\n year \n | \n \n | $ | \n343 | \n\n | \n | $ | \n312 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
Funding requirements for\n tax-qualified defined benefit pension plans are determined by\n government regulations. United’s contributions reflected\n above have satisfied its required contributions through the 2015\n calendar year. In 2016, employer anticipated contributions to all\n of United’s pension and postretirement plans are at least\n $400 million and approximately $120 million,\n respectively.
\n\n
\nThe estimated future\n benefit payments, net of expected participant contributions, in\n United’s pension plans and other postretirement benefit plans\n as of December 31, 2015 are as follows (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Pension | \n\n | \n | Other \n \n Postretirement | \n \n | \n | Other Postretirement— \n \n subsidy\n receipts | \n \n | |||
| \n 2016 \n | \n \n | $ | \n282 | \n\n | \n | $ | \n125 | \n\n | \n | $ | \n5 | \n\n |
| \n 2017 \n | \n \n | \n | 287 | \n\n | \n | \n | 128 | \n\n | \n | \n | 5 | \n\n |
| \n 2018 \n | \n \n | \n | 286 | \n\n | \n | \n | 131 | \n\n | \n | \n | 6 | \n\n |
| \n 2019 \n | \n \n | \n | 292 | \n\n | \n | \n | 135 | \n\n | \n | \n | 6 | \n\n |
| \n 2020 \n | \n \n | \n | 293 | \n\n | \n | \n | 140 | \n\n | \n | \n | 7 | \n\n |
| \n Years 2021 –\n 2025 \n | \n \n | \n | 1,577 | \n\n | \n | \n | 761 | \n\n | \n | \n | 40 | \n\n |
Defined Contribution\n Plans
\nDepending upon the employee\n group, employer contributions consist of matching contributions\n and/or non-elective employer contributions. United’s employer\n contribution percentages vary from 1% to 16% of eligible earnings\n depending on the terms of each plan. United recorded contributions\n to its defined contribution plans of $522 million, $503 million and\n $433 million in the years ended December 31, 2015, 2014 and\n 2013, respectively.
\nMulti-Employer\n Plans
\nUnited’s\n participation in the IAM National Pension Plan (“IAM\n Plan”) for the annual period ended December 31, 2015 is\n outlined in the table below. There have been no significant changes\n that affect the comparability 2015 and 2014 contributions. The\n risks of participating in these multi-employer plans are different\n from single-employer plans, as United may be subject to additional\n risks that others do not meet their obligations, which in certain\n circumstances could revert to United. The IAM Plan reported $382\n million in employers’ contributions for the year ended\n December 31, 2014. For 2014, the Company’s contributions\n to the IAM Plan represented more than 5% of total contributions to\n the IAM Plan.
\n\n
\n| \n | \n | \n |
| \n Pension Fund \n | \n \n | IAM National Pension Fund | \n
| \n EIN/ Pension Plan\n Number \n | \n \n | 51-6031295 - 002 | \n
| \n Pension Protection Act Zone\n Status (2015 and 2014) \n | \n \n | Green Zone. Plans in the green zone are at least 80\n percent funded. | \n
| \n FIP/RP Status\n Pending/Implemented \n | \n \n | No | \n
| \n United’s\n Contributions \n | \n \n | $40 million, $39 million and $38 million in the years\n ended December 31, 2015, 2014 and 2013, respectively | \n
| \n Surcharge\n Imposed \n | \n \n | No | \n
| \n Expiration Date of\n Collective Bargaining Agreement \n | \n \n | N/A | \n
At the date the financial\n statements were issued, Forms 5500 were not available for the plan\n year ending in 2015.
\nProfit\n Sharing
\nSubstantially all employees\n participate in profit sharing based on a percentage of pre-tax\n earnings, excluding special items, profit sharing expense and\n share-based compensation. Profit sharing percentages range from 5%\n to 20% depending on the work group, and in some cases profit\n sharing percentages vary above and below certain pre-tax margin\n thresholds. Eligible U.S. co-workers in each participating work\n group receive a profit sharing payout using a formula based on the\n ratio of each qualified co-worker’s annual eligible earnings\n to the eligible earnings of all qualified co-workers in all\n domestic work groups. Eligible non-U.S. co-workers receive profit\n sharing based on the calculation under the U.S. profit sharing plan\n for management and administrative employees. The Company recorded\n profit sharing and related payroll tax expense of $698 million,\n $235 million and $190 million in 2015, 2014 and 2013, respectively.\n Profit sharing expense is recorded as a component of Salaries and\n related costs in the Company’s statements of consolidated\n operations.
\n\n NOTE 13 -\n LEASES AND CAPACITY PURCHASE AGREEMENTS
\n\n United leases\n aircraft, airport passenger terminal space, aircraft hangars and\n related maintenance facilities, cargo terminals, other airport\n facilities, other commercial real estate, office and computer\n equipment and vehicles.
\n\n At\n December 31, 2015, United’s scheduled future minimum\n lease payments under operating leases having initial or remaining\n noncancelable lease terms of more than one year, aircraft leases,\n including aircraft rent under CPAs and capital leases\n (substantially all of which are for aircraft) were as follows (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Capital Leases | \n\n | \n | Facility and Other \n Operating Leases | \n \n | \n | Aircraft Operating \n Leases | \n \n | |||
| \n 2016 \n | \n \n | $ | \n206 | \n\n | \n | $ | \n1,252 | \n\n | \n | $ | \n1,317 | \n\n |
| \n 2017 \n | \n \n | \n | 162 | \n\n | \n | \n | 1,161 | \n\n | \n | \n | 1,317 | \n\n |
| \n 2018 \n | \n \n | \n | 151 | \n\n | \n | \n | 899 | \n\n | \n | \n | 1,100 | \n\n |
| \n 2019 \n | \n \n | \n | 86 | \n\n | \n | \n | 809 | \n\n | \n | \n | 918 | \n\n |
| \n 2020 \n | \n \n | \n | 66 | \n\n | \n | \n | 920 | \n\n | \n | \n | 708 | \n\n |
| \n After\n 2020 \n | \n \n | \n | 747 | \n\n | \n | \n | 6,799 | \n\n | \n | \n | 2,660 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Minimum lease\n payments \n | \n \n | $ | \n1,418 | \n\n | \n | $ | \n11,840 | \n\n | \n | $ | \n8,020 | \n\n |
| \n | \n | \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Imputed\n interest \n | \n \n | \n | (556) | \n\n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Present value of minimum\n lease payments \n | \n \n | \n | 862 | \n\n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Current\n portion \n | \n \n | \n | (135) | \n\n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Long-term obligations\n under capital leases \n | \n \n | $ | \n727 | \n\n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n |
\n As of\n December 31, 2015, United’s aircraft capital lease\n minimum payments relate to leases of 47 mainline and 29 regional\n aircraft as well as to leases of nonaircraft assets. Imputed\n interest rate ranges are 3.5% to 20.8%.
\n\n Aircraft\n operating leases have initial terms of five to twenty-six years,\n with expiration dates ranging from 2016 through 2024. Under the\n terms of most leases, United has the right to purchase the aircraft\n at the end of the lease term, in some cases at fair market value,\n and in others, at fair market value or a percentage of cost. United\n has facility operating leases that extend to 2041.
\n\n During 2015,\n the Company reached an agreement with AerCap Holdings N.V., a major\n aircraft leasing company, to lease used Airbus A319s. Eleven\n aircraft will be delivered over the next two years beginning in\n early 2016. In addition, up to 14 more aircraft may be delivered\n over the next five years subject to certain conditions.
\n\n United is the\n lessee of real property under long-term operating leases at a\n number of airports where we are also the guarantor of approximately\n $1.5 billion of underlying debt and interest thereon as of\n December 31, 2015. These leases are typically with\n municipalities or other governmental entities, which are excluded\n from the consolidation requirements concerning a variable interest\n entity (“VIE”). To the extent United’s leases and\n related guarantees are with a separate legal entity other than a\n governmental entity, United is not the primary beneficiary because\n the lease terms are consistent with market terms at the inception\n of the lease and the lease does not include a residual value\n guarantee, fixed-price purchase option, or similar\n feature.
\n\n United’s nonaircraft rent expense was approximately $1.3\n billion, $1.4 billion and $1.3 billion for the years ended\n December 31, 2015, 2014 and 2013, respectively.
\n\n
\n\n In addition\n to nonaircraft rent and aircraft rent, which is separately\n presented in the consolidated statements of operations, United had\n aircraft rent related to regional aircraft operating leases, which\n is included as part of Regional capacity purchase expense in\n United’s consolidated statement of operations, of $461\n million, $442 million and $428 million for the years ended\n December 31, 2015, 2014 and 2013, respectively.
\n\n In connection\n with UAL Corporation’s and United Air Lines, Inc.’s\n fresh-start reporting requirements upon their exit from Chapter 11\n bankruptcy protection in 2006 and the Company’s acquisition\n accounting adjustments related to the Company’s merger\n transaction in 2010, lease valuation adjustments for operating\n leases were initially recorded in the consolidated balance sheet,\n representing the net present value of the differences between\n contractual lease rates and the fair market lease rates for similar\n leased assets at the time. An asset (liability) results when the\n contractual lease rates are more (less) favorable than market lease\n terms at the valuation date. The lease valuation adjustment is\n amortized on a straight-line basis as an increase (decrease) to\n rent expense over the individual applicable remaining lease terms,\n resulting in recognition of rent expense as if United had entered\n into the leases at market rates. The related remaining lease terms\n are one to nine years for United. The lease valuation adjustments\n are classified within other noncurrent liabilities and the net\n accretion amounts are $107 million, $160 million and $173 million\n for the years ended December 31, 2015, 2014 and 2013,\n respectively.
\n\n Regional\n CPAs
\n\n United has\n CPAs with certain regional carriers. We purchase all of the\n capacity from the flights covered by the CPA at a negotiated price.\n We pay the regional carrier a predetermined rate, subject to annual\n inflation adjustments, primarily for block hours flown (the hours\n from gate departure to gate arrival) and other operating factors\n and reimburse the regional carrier for various pass-through\n expenses related to the flights. Under the CPAs, we are responsible\n for the cost of providing fuel for all flights and for paying\n aircraft rent for all of the aircraft covered by the CPAs.\n Generally, the CPAs contain incentive bonus and rebate provisions\n based upon each regional carrier’s operational performance.\n United’s CPAs are for 521 regional aircraft, and the CPAs\n have terms expiring through 2029. Aircraft operated under CPAs\n include aircraft leased directly from the regional carriers and\n those owned by United or leased from third-party lessors and\n operated by the regional carriers. See Part I, Item 2,\n “Properties” of this report for additional\n information.
\n\n In 2015,\n United entered into amendments to the CPA with SkyWest Airlines,\n Inc. (“SkyWest”), a wholly-owned subsidiary of SkyWest,\n Inc., to operate an additional 25 new 76-seat Embraer S.A.\n (“Embraer”) E175 aircraft under the United Express\n brand. SkyWest will purchase all of these 76-seat aircraft directly\n from the manufacturer with deliveries in 2016 and 2017.
\n\n In 2015,\n United also entered into amendments to the CPA with Mesa Air Group,\n Inc. and Mesa Airlines, Inc. (“Mesa”), a wholly-owned\n subsidiary of Mesa Air Group, Inc., pursuant to which Mesa will\n operate under the United Express brand new Embraer E175 aircraft,\n 15 of which have delivered or are scheduled to deliver in 2016.\n United will assign its purchase obligations to Mesa with respect to\n 10 Embraer E175 aircraft at the time of each aircraft’s\n delivery, subject to certain conditions. Mesa will purchase the\n remaining five aircraft directly from Embraer; however, United has\n agreed that United will, under certain conditions, purchase these\n five aircraft directly from Embraer.
\n\n In 2015,\n United entered into a new Embraer ERJ 145 CPA with Champlain\n Enterprises, Inc. operating as CommutAir, pursuant to which\n CommutAir will operate under the United Express brand 40 used\n Embraer ERJ145 aircraft that are currently being operated by a\n different carrier operating under the United Express brand, with\n transfers that started in December 2015 and will continue through\n 2017.
\n\n In 2014 and\n 2015, United entered into amendments to a contract with Shuttle\n America Corporation (“Shuttle America”), a wholly-owned\n subsidiary of Republic Airways Holdings, for Shuttle America to\n operate 40 new Embraer E175 aircraft under the United Express brand\n and extend the term of 38 existing Embraer 170 aircraft operating\n under the United Express brand. Shuttle America will acquire forty\n 76-seat Embraer E175 aircraft with remaining deliveries from 2016\n through 2017, although United has the right to acquire the aircraft\n under certain circumstances and lease the aircraft to Shuttle\n America. These 40 aircraft are in addition to United’s other\n 113 Embraer E175 aircraft that are currently being operated or will\n in the future be operated by different United Express carriers\n under CPAs. In a separate but related amendment with Republic\n Airways Holdings Inc. and its subsidiary, Republic Airline Inc.\n (“Republic”), United and Republic agreed to remove the\n remaining 13 Q400 aircraft from United Express service by the\n second quarter of 2016.
\n\n Our future\n commitments under our CPAs are dependent on numerous variables, and\n are therefore difficult to predict. The most important of these\n variables is the number of scheduled block hours. Although we are\n not required to purchase a minimum number of block hours under\n certain of our CPAs, we have set forth below estimates of our\n future payments under the CPAs based on our assumptions.\n United’s estimates of its future payments under all of the\n CPAs do not include the portion of the underlying obligation for\n any aircraft leased to ExpressJet or deemed to be leased from other\n regional carriers and facility rent that are disclosed as part of\n aircraft and nonaircraft operating leases. For purposes of\n calculating these estimates, we have assumed (1) the number of\n block hours flown is based on our anticipated level of flight\n activity or at any contractual minimum utilization levels if\n applicable, whichever is higher, (2) that we will reduce the\n fleet as rapidly as contractually allowed under each CPA,\n (3) that aircraft utilization, stage length and load factors\n will remain constant, (4) that each carrier’s\n operational performance will remain at historic levels and\n (5) an annual projected inflation rate. These amounts exclude\n variable pass-through costs such as fuel and landing fees, among\n others. Based on these assumptions as of December 31, 2015,\n our future payments through the end of the terms of our CPAs are\n presented in the table below (in millions):
\n\n
\n| \n | \n | \n | \n | \n |
| \n 2016 \n | \n \n | $ | \n1,834 | \n\n |
| \n 2017 \n | \n \n | \n | 1,884 | \n\n |
| \n 2018 \n | \n \n | \n | 1,550 | \n\n |
| \n 2019 \n | \n \n | \n | 1,290 | \n\n |
| \n 2020 \n | \n \n | \n | 1,155 | \n\n |
| \n After 2020 \n | \n \n | \n | 4,932 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | $ | \n12,645 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
\n It is\n important to note that the actual amounts we pay to our regional\n operators under CPAs could differ materially from these estimates.\n For example, a 10% increase or decrease in scheduled block hours\n for all of United’s regional operators (whether as a result\n of changes in average daily utilization or otherwise) in 2016 would\n result in a corresponding change in annual cash obligations under\n the CPAs of approximately $144 million (7.9%).
\n \n \nNet periodic benefit cost\n for the years ended December 31 included the following\n components (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | 2015 | \n\n | \n | 2014 | \n\n | \n | 2013 | \n\n | |||||||||||||||
| \n | \n | Pension \n Benefits | \n \n | \n | Other \n Postretirement \n Benefits | \n \n | \n | Pension \n Benefits | \n \n | \n | Other \n Postretirement \n Benefits | \n \n | \n | Pension \n Benefits | \n \n | \n | Other \n Postretirement \n Benefits | \n \n | ||||||
| Service cost | \n\n | $ | \n124 | \n\n | \n | $ | \n21 | \n\n | \n | $ | \n98 | \n\n | \n | $ | \n19 | \n\n | \n | $ | \n121 | \n\n | \n | $ | \n52 | \n\n |
| Interest cost | \n\n | \n | 200 | \n\n | \n | \n | 82 | \n\n | \n | \n | 201 | \n\n | \n | \n | 88 | \n\n | \n | \n | 191 | \n\n | \n | \n | 110 | \n\n |
| Expected return on plan assets | \n\n | \n | (194) | \n\n | \n | \n | (2) | \n\n | \n | \n | (180) | \n\n | \n | \n | (2) | \n\n | \n | \n | (163) | \n\n | \n | \n | (2) | \n\n |
| Amortization of unrecognized actuarial (gain) loss | \n\n | \n | 85 | \n\n | \n | \n | (22) | \n\n | \n | \n | 12 | \n\n | \n | \n | (47) | \n\n | \n | \n | 48 | \n\n | \n | \n | 3 | \n\n |
| Amortization of prior service credits | \n\n | \n | — | \n\n | \n | \n | (32) | \n\n | \n | \n | — | \n\n | \n | \n | (31) | \n\n | \n | \n | — | \n\n | \n | \n | (3) | \n\n |
| Other | \n\n | \n | 4 | \n\n | \n | \n | — | \n\n | \n | \n | 1 | \n\n | \n | \n | — | \n\n | \n | \n | (8) | \n\n | \n | \n | 2 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| Net periodic benefit cost | \n\n | $ | \n219 | \n\n | \n | $ | \n47 | \n\n | \n | $ | \n132 | \n\n | \n | $ | \n27 | \n\n | \n | $ | \n189 | \n\n | \n | $ | \n162 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| (m) | \nLong-Lived Asset\n Impairments—The Company evaluates the carrying value of\n long-lived assets subject to amortization whenever events or\n changes in circumstances indicate that an impairment may exist. For\n purposes of this testing, the Company has generally identified the\n aircraft fleet type as the lowest level of identifiable cash flows.\n An impairment charge is recognized when the asset’s carrying\n value exceeds its net undiscounted future cash flows and its fair\n market value. The amount of the charge is the difference between\n the asset’s carrying value and fair market value. See Note 16\n of this report for additional information related to asset\n impairments. | \n
Based on these assumptions\n as of December 31, 2015, our future payments through the end\n of the terms of our CPAs are presented in the table below (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n |
| \n 2016 \n | \n \n | $ | \n1,834 | \n\n |
| \n 2017 \n | \n \n | \n | 1,884 | \n\n |
| \n 2018 \n | \n \n | \n | 1,550 | \n\n |
| \n 2019 \n | \n \n | \n | 1,290 | \n\n |
| \n 2020 \n | \n \n | \n | 1,155 | \n\n |
| \n After 2020 \n | \n \n | \n | 4,932 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | $ | \n12,645 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n |
Certain details of the\n pass-through trusts with proceeds received from issuance of debt in\n 2015 are as follows (in millions, except stated interest\n rate):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n EETC\n Date \n | \n \n | \n \n Class \n | \n \n | Principal | \n\n | \n | \n \n Final\n expected | \n \n | Stated \n interest \n rate | \n \n | \n | Total debt \n recorded \n as of December 31, \n 2015 | \n \n | \n | Proceeds \n received from \n issuance of \n debt during \n 2015 | \n \n | \n | Remaining \n proceeds from \n issuance of debt \n to be received \n in future \n periods | \n \n | |||||
| \n November 2015 \n | \n \n | AA | \n\n | $ | \n334 | \n\n | \n | December 2027 | \n\n | \n | 3.45% | \n\n | \n | $ | \n334 | \n\n | \n | $ | \n334 | \n\n | \n | $ | \n— | \n\n |
| \n November 2015 \n | \n \n | A | \n\n | \n | 100 | \n\n | \n | December 2022 | \n\n | \n | 3.70% | \n\n | \n | \n | 100 | \n\n | \n | \n | 100 | \n\n | \n | \n | — | \n\n |
| \n August 2014 \n | \n \n | A | \n\n | \n | 823 | \n\n | \n | September 2026 | \n\n | \n | 3.75% | \n\n | \n | \n | 823 | \n\n | \n | \n | 711 | \n\n | \n | \n | — | \n\n |
| \n August 2014 \n | \n \n | B | \n\n | \n | 238 | \n\n | \n | September 2022 | \n\n | \n | 4.625% | \n\n | \n | \n | 238 | \n\n | \n | \n | 206 | \n\n | \n | \n | — | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n | \n | \n | \n | $ | \n1,495 | \n\n | \n | \n | \n | \n | \n | \n | \n | $ | \n1,495 | \n\n | \n | $ | \n1,351 | \n\n | \n | $ | \n— | \n\n |
| \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| (i) | \nLease Fair Value\n Adjustments—Lease fair value adjustments, which arose\n from recording operating leases at fair value under fresh start or\n business combination accounting, are amortized on a straight-line\n basis over the related lease term. | \n
| (j) | \nRegional Capacity\n Purchase—Payments made to regional carriers under CPAs\n are reported in Regional capacity purchase in our consolidated\n statements of operations. | \n
\n The following\n table provides additional information related to the frequent flyer\n program (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n \n Year\n Ended \n\n December 31, \n | \n \n | Cash Proceeds \n from Miles Sold \n and Earned | \n \n | \n | Other Revenue \n Recognized Upon \n Award of Miles \n to Third-Party \n Customers (a) | \n \n | \n | Increase in Frequent \n Flyer Deferred \n Revenue for Miles \n Awarded (b) | \n \n | \n | Increase \n (Decrease) in \n Advanced \n Purchase of \n Miles (c) | \n \n | ||||
| \n 2015 \n | \n \n | $ | \n2,999 | \n\n | \n | $ | \n1,050 | \n\n | \n | $ | \n2,173 | \n\n | \n | $ | \n(224) | \n\n |
| \n 2014 \n | \n \n | \n | 2,861 | \n\n | \n | \n | 882 | \n\n | \n | \n | 2,178 | \n\n | \n | \n | (199) | \n\n |
| \n 2013 \n | \n \n | \n | 2,903 | \n\n | \n | \n | 903 | \n\n | \n | \n | 2,174 | \n\n | \n | \n | (174) | \n\n |
| \n \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | |||
| (a) This amount represents\n other revenue recognized during the period from the sale of miles\n to third parties, representing the marketing-related deliverable\n services component of the sale. | \n\n | |||||||||||||||
| (b) This amount represents\n the increase to Frequent flyer deferred revenue during the\n period. | \n\n | |||||||||||||||
| (c) This amount represents\n the net increase (decrease) in the advance purchase of miles\n obligation due to cash payments for the sale of miles in excess of\n (less than) miles awarded to customers. | \n\n |
| (p) | \nRetirement of Leased\n Aircraft—The Company accrues for estimated lease costs\n over the remaining term of the lease at the present value of future\n minimum lease payments, net of estimated sublease rentals (if any),\n in the period that aircraft are permanently removed from service.\n When reasonably estimable and probable, the Company estimates\n maintenance lease return condition obligations for items such as\n minimum aircraft and engine conditions specified in leases and\n accrues these amounts over the lease term while the aircraft are\n operating, and any remaining unrecognized estimated obligations are\n accrued in the period that an aircraft is removed from\n service. | \n
At December 31, 2015,\n United’s scheduled future minimum lease payments under\n operating leases having initial or remaining noncancelable lease\n terms of more than one year, aircraft leases, including aircraft\n rent under CPAs and capital leases (substantially all of which are\n for aircraft) were as follows (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Capital Leases | \n\n | \n | Facility and Other \n Operating Leases | \n \n | \n | Aircraft Operating \n Leases | \n \n | |||
| \n 2016 \n | \n \n | $ | \n206 | \n\n | \n | $ | \n1,252 | \n\n | \n | $ | \n1,317 | \n\n |
| \n 2017 \n | \n \n | \n | 162 | \n\n | \n | \n | 1,161 | \n\n | \n | \n | 1,317 | \n\n |
| \n 2018 \n | \n \n | \n | 151 | \n\n | \n | \n | 899 | \n\n | \n | \n | 1,100 | \n\n |
| \n 2019 \n | \n \n | \n | 86 | \n\n | \n | \n | 809 | \n\n | \n | \n | 918 | \n\n |
| \n 2020 \n | \n \n | \n | 66 | \n\n | \n | \n | 920 | \n\n | \n | \n | 708 | \n\n |
| \n After\n 2020 \n | \n \n | \n | 747 | \n\n | \n | \n | 6,799 | \n\n | \n | \n | 2,660 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Minimum lease\n payments \n | \n \n | $ | \n1,418 | \n\n | \n | $ | \n11,840 | \n\n | \n | $ | \n8,020 | \n\n |
| \n | \n | \n | \n | \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Imputed interest \n | \n \n | \n | (556) | \n\n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Present value of minimum\n lease payments \n | \n \n | \n | 862 | \n\n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Current portion \n | \n \n | \n | (135) | \n\n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Long-term obligations under\n capital leases \n | \n \n | $ | \n727 | \n\n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n |
The collateral, covenants\n and cross default provisions of the Company’s principal debt\n instruments that contain such provisions are summarized in the\n table below:
\n\n
\n| \n | \n | \n |
| Debt\n Instrument | \n\n | Collateral, Covenants and Cross Default\n Provisions | \n
| \n Various equipment notes and\n other notes payable \n | \n \n | \nSecured by certain aircraft. The indentures contain events of\n default that are customary for aircraft financing, including in\n certain cases cross default to other related aircraft. | \n
| \n Credit Agreement \n | \n \n | \n\n Secured by certain of\n United’s international route authorities, specified take-off\n and landing slots at certain airports and certain other\n assets. \n\n \nThe Credit Agreement\n requires the Company to maintain at least $3.0 billion of\n unrestricted liquidity at all times, which includes unrestricted\n cash, short-term investments and any undrawn amounts under any\n revolving credit facility, and to maintain a minimum ratio of\n appraised value of collateral to the outstanding obligations under\n the Credit Agreement of 1.67 to 1.0 at all times. The Credit\n Agreement contains covenants that, among other things, restrict the\n ability of UAL and its restricted subsidiaries (as defined in the\n Credit Agreement) to incur additional indebtedness and to pay\n dividends on or repurchase stock, although the Company currently\n has ample ability under these restrictions to repurchase stock\n under the Company’s share repurchase program. \n\n \nThe Credit Agreement\n contains events of default customary for this type of financing,\n including a cross default and cross acceleration provision to\n certain other material indebtedness of the Company. \n | \n
| \n \n 6.375% Senior\n Notes due 2018 \n\n \n6% Senior Notes due\n 2020 \n | \n \n | \n\n The indentures for these\n notes contain covenants that, among other things, restrict the\n ability of the Company and its restricted subsidiaries (as defined\n in the indenture) to incur additional indebtedness and pay\n dividends on or repurchase stock, although the Company currently\n has ample ability under these restrictions to repurchase stock\n under the Company’s share repurchase program. \n\n \nThe indentures contain\n events of default that are customary for similar\n financings. \n | \n
| (f) | \nAircraft Fuel, Spare\n Parts and Supplies—The Company accounts for aircraft\n fuel, spare parts and supplies at average cost and provides an\n obsolescence allowance for aircraft spare parts with an assumed\n residual value of 10% of original cost. | \n
The following table shows\n the potential net fair value positions (including fuel derivatives\n and related collateral) had we elected to offset. The table\n reflects offset at the counterparty level (in millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | December 31, 2015 | \n\n | \n | December 31, 2014 | \n\n | ||
| \n Fuel derivative\n instruments \n | \n \n | $ | \n98 | \n\n | \n | $ | \n209 | \n\n |
| \n Other liabilities and\n deferred credits: Other \n | \n \n | \n | — | \n\n | \n | \n | 30 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Hedge derivatives\n liabilities, net \n | \n \n | $ | \n98 | \n\n | \n | $ | \n239 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| (r) | \nLabor Costs—The\n Company records expenses associated with amendable labor agreements\n when the amounts are probable and estimable. These include costs\n associated with lump sum cash payments that would be made in\n conjunction with the ratification of labor agreements. To the\n extent these upfront costs are in lieu of future pay increases,\n they would be capitalized and amortized over the term of the labor\n agreements. If not, these amounts would be expensed. | \n
\n NOTE 12 -\n ADVANCED PURCHASE OF MILES
\n\n United\n previously sold MileagePlus miles to Chase which United recorded as\n Advanced purchase of miles. The balance of pre-purchased miles is\n eligible to be allocated by Chase to MileagePlus members’\n accounts by a maximum of $249 million in 2016 and the remainder in\n 2017. The Co-Brand Agreement contains termination penalties that\n may require United to make certain payments and repurchase\n outstanding pre-purchased miles in cases such as United’s\n insolvency, bankruptcy or other material breaches. The Company has\n recorded these amounts as Advanced purchase of miles in the\n liabilities section of the Company’s consolidated balance\n sheets.
\n\n
\n\n The\n obligations of UAL, United and Mileage Plus Holdings, LLC to Chase\n under the Co-Brand Agreement are joint and several. Certain of\n United’s obligations under the Co-Brand Agreement are secured\n by a junior lien in all collateral pledged by United under the\n Credit Agreement. United also provides a first priority lien to\n Chase on its MileagePlus assets to secure certain of its\n obligations under the Co-Brand Agreement and its obligations under\n the credit card processing agreement among United, Paymentech, LLC\n and JPMorgan Chase Bank, N.A.
\n| (s) | \nThird-Party\n Business—The Company has third-party business revenue\n that includes fuel sales, catering, ground handling, maintenance\n services and frequent flyer award non-air redemptions, and\n third-party business revenue is recorded in Other operating\n revenue. The Company also incurs third-party business expenses,\n such as maintenance, ground handling and catering services for\n third parties, fuel sales and non-air mileage redemptions, and\n those third-party business expenses are recorded in Other operating\n expenses. | \n
| (o) | \nTicket\n Taxes—Certain governmental taxes are imposed on the\n Company’s ticket sales through a fee included in ticket\n prices. The Company collects these fees and remits them to the\n appropriate government agency. These fees are recorded on a net\n basis (excluded from operating revenue). | \n
| (e) | \nShort-term\n Investments—Short-term investments are classified as\n available-for-sale and are stated at fair value. Realized gains and\n losses on sales of investments are reflected in nonoperating income\n (expense) in the consolidated statements of operations. Unrealized\n gains and losses on available-for-sale securities are reflected as\n a component of accumulated other comprehensive income\n (loss). | \n
UAL’s quarterly\n results were impacted by the following significant items (in\n millions):
\n\n
\n| \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n | \n | Quarter\n Ended | \n\n | |||||||||||||
| \n | \n | March 31 | \n\n | \n | June 30 | \n\n | \n | September 30 | \n\n | \n | December 31 | \n\n | ||||
| \n 2015 \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Operating: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Severance and benefit\n costs \n | \n \n | $ | \n50 | \n\n | \n | $ | \n25 | \n\n | \n | $ | \n28 | \n\n | \n | $ | \n4 | \n\n |
| \n Impairment of\n assets \n | \n \n | \n | 2 | \n\n | \n | \n | 11 | \n\n | \n | \n | 18 | \n\n | \n | \n | 48 | \n\n |
| \n Integration-related\n costs \n | \n \n | \n | 18 | \n\n | \n | \n | 14 | \n\n | \n | \n | 15 | \n\n | \n | \n | 13 | \n\n |
| \n (Gains) losses on sale of\n assets and other miscellaneous (gains) losses, net \n | \n \n | \n | (6) | \n\n | \n | \n | 5 | \n\n | \n | \n | 15 | \n\n | \n | \n | 66 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Special charges \n | \n \n | \n | 64 | \n\n | \n | \n | 55 | \n\n | \n | \n | 76 | \n\n | \n | \n | 131 | \n\n |
| \n Nonoperating and income\n taxes: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Loss on extinguishment of\n debt and other, net \n | \n \n | \n | 6 | \n\n | \n | \n | 128 | \n\n | \n | \n | 61 | \n\n | \n | \n | 7 | \n\n |
| \n Income tax benefit related\n to special charges \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | (11) | \n\n |
| \n Income tax expense\n (benefit) associated with valuation allowance release \n | \n \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | (3,218) | \n\n | \n | \n | 88 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total operating and\n nonoperating special items, net of income taxes \n | \n \n | $ | \n70 | \n\n | \n | $ | \n183 | \n\n | \n | $ | \n(3,081) | \n\n | \n | $ | \n215 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n 2014 \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Operating: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Severance and benefit\n costs \n | \n \n | $ | \n14 | \n\n | \n | $ | \n38 | \n\n | \n | $ | \n6 | \n\n | \n | $ | \n141 | \n\n |
| \n Impairment of\n assets \n | \n \n | \n | 1 | \n\n | \n | \n | 32 | \n\n | \n | \n | — | \n\n | \n | \n | 16 | \n\n |
| \n Integration-related\n costs \n | \n \n | \n | 34 | \n\n | \n | \n | 17 | \n\n | \n | \n | 28 | \n\n | \n | \n | 17 | \n\n |
| \n Costs associated with\n permanently grounding Embraer ERJ 135 aircraft \n | \n \n | \n | — | \n\n | \n | \n | 66 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n |
| \n Losses on sale of assets\n and other special (gains) losses, net \n | \n \n | \n | 3 | \n\n | \n | \n | 16 | \n\n | \n | \n | 9 | \n\n | \n | \n | 5 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Special charges \n | \n \n | \n | 52 | \n\n | \n | \n | 169 | \n\n | \n | \n | 43 | \n\n | \n | \n | 179 | \n\n |
| \n Nonoperating and income\n taxes: \n | \n \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n |
| \n Loss on extinguishment of\n debt and other, net \n | \n \n | \n | 21 | \n\n | \n | \n | — | \n\n | \n | \n | — | \n\n | \n | \n | 53 | \n\n |
| \n Income tax benefit related\n to special charges \n | \n \n | \n | (1) | \n\n | \n | \n | — | \n\n | \n | \n | (3) | \n\n | \n | \n | (6) | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
| \n Total operating and\n nonoperating special charges, net of income taxes \n | \n \n | $ | \n72 | \n\n | \n | $ | \n169 | \n\n | \n | $ | \n40 | \n\n | \n | $ | \n226 | \n\n |
| \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n | \n | \n \n | \n \n \n | \n \n |
As of December 31,\n 2015 (as adjusted to include the order discussed above), United had\n firm commitments and options to purchase aircraft from Boeing,\n Embraer and Airbus S.A.S. (“Airbus”) presented in the\n table below:
\n\n
\n| \n | \n | \n | \n | \n |
| \n \n Aircraft\n Type \n | \n \n | Number of Firm \n Commitments (a) \n | \n \n | |
| \n Airbus A350-1000 \n | \n \n | \n | 35 | \n\n |
| \n Boeing 737NG/737 MAX\n 9 \n | \n \n | \n | 155 | \n\n |
| \n Boeing 777-300ER \n | \n \n | \n | 10 | \n\n |
| \n Boeing\n 787-8/-9/-10 \n | \n \n | \n | 30 | \n\n |
| \n Embraer E175 \n | \n \n | \n | 10 | \n\n |
| (a) United also has options\n and purchase rights for additional aircraft. | \n\n |