Pension and Other Postretirement Plans (Tables)

12 Months Ended

Dec. 31, 2012

Reconciliation of Change in Projected Benefit Obligation and Plan Assets

The following table sets forth the reconciliation of the beginning and ending balances of the benefit obligation and plan assets, the funded status and the amounts recognized in these financial statements for the defined benefit and other postretirement plans (in millions):

Pension Benefits
	Year Ended December 31, 2012						Year Ended December 31, 2011
	UAL		United		Continental		UAL		United		Continental
Accumulated benefit obligation:	$	3,978	$	235	$	3,743	$	3,321	$	220	$	3,101
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	3,708	$	259	$	3,449	$	3,322	$	256	$	3,066
Service cost		99		7		92		88		7		81
Interest cost		184		9		175		178		10		168
Actuarial (gain) loss		702		21		681		251		(2)		253
Gross benefits paid		(162)		(12)		(150)		(137)		(8)		(129)
Other		(5)		(1)		(4)		6		(4)		10
Projected benefit obligation at end of year	$	4,526	$	283	$	4,243	$	3,708	$	259	$	3,449
Change in plan assets:
Fair value of plan assets at beginning of year	$	1,868	$	195	$	1,673	$	1,871	$	183	$	1,688
Actual gain (loss) on plan assets		223		19		204		(47)		5		(52)
Employer contributions		228		16		212		194		24		170
Benefits paid		(162)		(12)		(150)		(137)		(8)		(129)
Other		—		3		(3)		(13)		(9)	$	(4)
Fair value of plan assets at end of year	$	2,157	$	221	$	1,936	$	1,868	$	195	$	1,673
Funded status—Net amount recognized	$	(2,369)	$	(62)	$	(2,307)	$	(1,840)	$	(64)	$	(1,776)

	Other Postretirement Benefits
	Year Ended December 31, 2012						Year Ended December 31, 2011
	UAL		United		Continental		UAL		United		Continental
Change in benefit obligation:
Benefit obligation at beginning of year	$	2,541	$	2,233	$	308	$	2,494	$	2,225	$	269
Service cost		50		35		15		47		34		13
Interest cost		124		109		15		127		113		14
Plan participants’ contributions		77		75		2		73		70		3
Pilots’ liability transfer		—		76		(76)		—		—		—
Actuarial (gain) loss		110		120		(10)		(2)		(25)		23
Federal subsidy		13		13		—		13		13		—
Plan amendments		22		22		—		3		3		—
Gross benefits paid		(194)		(180)		(14)		(214)		(200)		(14)
Benefit obligation at end of year	$	2,743	$	2,503	$	240	$	2,541	$	2,233	$	308
Change in plan assets:
Fair value of plan assets at beginning of year	$	58	$	58	$	—	$	58	$	58	$	—
Actual return on plan assets		1		1		—		1		1		—
Employer contributions		116		104		12		141		129		12
Plan participants’ contributions		77		75		2		72		70		2
Benefits paid		(194)		(180)		(14)		(214)		(200)		(14)
Fair value of plan assets at end of year	$	58	$	58	$	—	$	58	$	58	$	—
Funded status—Net amount recognized	$	(2,685)	$	(2,445)	$	(240)	$	(2,483)	$	(2,175)	$	(308)

Amounts Recognized in Consolidated Balance Sheet and Accumulated Other Comprehensive Income (Loss)

	Pension Benefits
	December 31, 2012						December 31, 2011
	UAL		United		Continental		UAL		United		Continental
Amounts recognized in the consolidated balance sheets consist of:
Noncurrent asset	$	35	$	35	$	—	$	31	$	31	$	—
Current liability		(4)		—		(4)		(9)		(3)		(6)
Noncurrent liability		(2,400)		(97)		(2,303)		(1,862)		(92)		(1,770)
Total liability	$	(2,369)	$	(62)	$	(2,307)	$	(1,840)	$	(64)	$	(1,776)
Amounts recognized in accumulated other comprehensive income (loss) consist of:
Net actuarial gain (loss)	$	(826)	$	(22)	$	(804)	$	(231)	$	(10)	$	(221)
Prior service credit (cost)		2		15		(13)		3		18		(15)
Total accumulated other comprehensive income (loss)	$	(824)	$	(7)	$	(817)	$	(228)	$	8	$	(236)

	Other Postretirement Benefits
	December 31, 2012						December 31, 2011
	UAL		United		Continental		UAL		United		Continental
Amounts recognized in the consolidated balance sheets consist of:
Current liability	$	(71)	$	(61)	$	(10)	$	(76)	$	(60)	$	(16)
Noncurrent liability		(2,614)		(2,384)		(230)		(2,407)		(2,115)		(292)
Total liability	$	(2,685)	$	(2,445)	$	(240)	$	(2,483)	$	(2,175)	$	(308)
Amounts recognized in accumulated other comprehensive income (loss) consist of:
Net actuarial gain (loss)	$	(79)	$	(80)	$	1	$	33	$	46	$	(13)
Prior service cost		(24)		(24)		—		(2)		(2)		—
Total accumulated other comprehensive income (loss)	$	(103)	$	(104)	$	1	$	31	$	44	$	(13)

Accumulated Benefit Obligation and Projected Benefit Obligation in Excess of Plan Assets

The following information relates to all pension plans with an accumulated benefit obligation and a projected benefit obligation in excess of plan assets at December 31 (in millions):

	UAL				United				Continental
	2012		2011		2012		2011		2012		2011
Projected benefit obligation	$	4,387	$	3,594	$	144	$	145	$	4,243	$	3,449
Accumulated benefit obligation		3,869		3,230		125		129		3,744		3,101
Fair value of plan assets		1,991		1,731		55		58		1,936		1,673

Components Of Net Periodic Benefit Cost

Net periodic benefit cost for the years ended December 31, included the following components (in millions):

	2012
	Pension Benefits						Other Postretirement Benefits
	UAL		United		Continental		UAL		United		Continental
Service cost	$	99	$	7	$	92	$	50	$	35	$	15
Interest cost		184		9		175		124		109		15
Expected return on plan assets		(138)		(11)		(127)		(2)		(2)		—
Amortization of prior service cost (credit)		(1)		(2)		1		—		—		—
Settlement (gain) loss		1		—		1		—		—		—
Amortization of unrecognized actuarial (gain) loss		21		1		20		(3)		(4)		1
Net periodic benefit cost	$	166	$	4	$	162	$	169	$	138	$	31

	2011
	Pension Benefits						Other Postretirement Benefits
	UAL		United		Continental		UAL		United		Continental
Service cost	$	88	$	7	$	81	$	47	$	34	$	13
Interest cost		178		10		168		127		113		14
Expected return on plan assets		(140)		(11)		(129)		(2)		(2)		—
Amortization of prior service cost (credit)		(2)		(2)		—		—		—		—
Settlement (gain) loss		1		1		—		—		—		—
Amortization of unrecognized actuarial (gain) loss		(20)		1		(21)		(2)		(1)		(1)
Net periodic benefit cost	$	105	$	6	$	99	$	170	$	144	$	26

	2010
	Pension Benefits								Other Postretirement Benefits
	UAL		United		Continental Successor		Continental Predecessor		UAL		United		Continental Successor		Continental Predecessor
Service cost	$	27	$	6	$	21	$	50	$	33	$	30	$	3	$	7
Interest cost		51		9		42		119		120		116		4		10
Expected return on plan assets		(39)		(9)		(30)		(82)		(2)		(2)		—		—
Curtailment gain		(7)		—		(7)		—		—		—		—		—
Amortization of prior service cost (credit)		(2)		(2)		—		7		—		—		—		16
Special termination benefits		4		—		4		—		—		—		—		—
Amortization of unrecognized actuarial (gain) loss		1		1		—		65		(12)		(12)		—		(3)
Net periodic benefit cost	$	35	$	5	$	30	$	159	$	139	$	132	$	7	$	30

Amortized Accumulated Other Comprehensive Income Into Net Periodic Benefit Cost

The estimated amounts that will be amortized in 2013 for actuarial losses are as follows (in millions):

	Pension Benefits						Other Postretirement Benefits
	UAL		United		Continental		UAL		United		Continental
Actuarial loss to be reclassified from accumulated other comprehensive income into net periodic benefit cost	$	73	$	2	$	71	$	7	$	7	$	—

Weighted Average Assumption Used for Benefit Plans

The weighted-average assumptions used for the benefit plans were as follows:

		Pension Benefits
	United			Continental
Weighted-average assumptions used to determine benefit obligations		2012	2011		2012	2011
Discount rate		3.25%	3.34%		4.25%	5.13%
Rate of compensation increase		3.28%	3.11%		2.44%	2.44%
Weighted-average assumptions used to determine net expense
Discount rate		3.40%	3.67%		5.13%	5.52%
Expected return on plan assets		5.65%	5.82%		7.75%	7.75%
Rate of compensation increase		3.15%	3.32%		2.44%	2.44%

	Other Postretirement Benefits
	United				Continental
Weighted-average assumptions used to determine benefit obligations	2012		2011		2012		2011
Discount rate		4.13%		4.93%		3.97%		4.78%
Weighted-average assumptions used to determine net expense
Discount rate		4.93%		5.15%		4.78%		4.97%
Expected return on plan assets		4.00%		4.00%		N/A		N/A
Health care cost trend rate assumed for next year		6.75%		7.00%		6.75%		7.00%
Rate to which the cost trend rate is assumed to decline (ultimate trend rate in 2020)		5.00%		5.00%		5.00%		5.00%

Allocation of Plan Asset

Continental’s plan assets are allocated within the following guidelines:

	Percent of Total	Expected Long-Term Rate of Return
Equity securities	38-54    %	9.5    %
Fixed-income securities	27-33	6.0
Alternatives	17-23	7.3
Other	2-6	3.8

Effect of One-Percentage-Point Change in Assumed Health Care Trend Rate

A 1% change in the assumed health care trend rate for the Company would have the following additional effects (in millions):

	UAL				United				Continental
	1% Increase		1% Decrease		1% Increase		1% Decrease		1% Increase		1% Decrease
Effect on total service and interest cost for the year ended December 31, 2012	$	22	$	(18)	$	17	$	(14)	$	5	$	(4)
Effect on postretirement benefit obligation at December 31, 2012		338		(280)		296		(247)		42		(33)

Pension and Other Postretirement Plan Assets

The following tables present information about the Company’s pension and other postretirement plan assets at December 31 (in millions):

	UAL - 2012								UAL - 2011
Pension Plan Assets:	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Equity securities funds	$	1,034	$	383	$	651	$	—	$	872	$	355	$	517	$	—
Fixed-income securities		611		—		609		2		530		—		530		—
Alternatives		394		—		234		160		344		—		195		149
Insurance contract		36		—		—		36		42		—		—		42
Other investments		82		—		82		—		80		—		80		—
Total	$	2,157	$	383	$	1,576	$	198	$	1,868	$	355	$	1,322	$	191
Other Postretirement Benefit Plan Assets:
Deposit administration fund	$	58	$	—	$	—	$	58	$	58	$	—	$	—	$	58

	United - 2012								United - 2011
Pension Plan Assets:	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Equity securities funds	$	125	$	—	$	125	$	—	$	102	$	—	$	102	$	—
Fixed-income securities		56		—		56		—		47		—		47		—
Insurance contract		36		—		—		36		42		—		—		42
Other investments		4		—		4		—		4		—		4		—
Total	$	221	$	—	$	185	$	36	$	195	$	—	$	153	$	42
Other Postretirement Benefit Plan Assets:
Deposit administration fund	$	58	$	—	$	—	$	58	$	58	$	—	$	—	$	58

	Continental - 2012								Continental - 2011
Pension Plan Assets:	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Equity securities funds	$	909	$	383	$	526	$	—	$	770	$	355	$	415	$	—
Fixed-income securities		555		—		553		2		483		—		483		—
Alternatives		394		—		234		160		344		—		195		149
Other investments		78		—		78		—		76		—		76		—
Total	$	1,936	$	383	$	1,391	$	162	$	1,673	$	355	$	1,169	$	149

Defined Benefit Plan Assets Measured at Fair Value Using Unobservable Inputs (Level Three)

The reconciliation of our defined benefit plan assets measured at fair value using unobservable inputs (Level 3) for the years ended December 31, 2012 and 2011 is as follows (in millions):

	2012						2011
	UAL		United		Continental		UAL		United		Continental
Balance at beginning of year	$	249	$	100	$	149	$	250	$	100	$	150
Actual return on plan assets:
Unrealized gains (losses) relating to assets   still held at year end		(47)		2		(49)		6		3		3
Purchases, sales, issuances and settlements (net)		54		(8)		62		(7)		(3)		(4)
Balance at end of year	$	256	$	94	$	162	$	249	$	100	$	149

Expected Employer Contributions to Pension And Postretirement Plans

Expected 2013 employer contributions to all of the Company’s pension and postretirement plans are as follows (in millions):

	Pension		Other   Postretirement Benefits
UAL	$	217	$	134
United		17		124
Continental		200		10

Estimated Future Benefit Payments

Each of UAL’s, United’s and Continental’s estimated future benefit payments, net of expected participant contributions, in all of the pension plans and other postretirement benefit plans as of December 31, 2012 are as follows (in millions):

	Pension		Other   Postretirement		Other Postretirement—         subsidy  receipts
UAL
2013	$	312	$	136	$	7
2014		317		143		8
2015		321		150		9
2016		320		159		10
2017		317		166		11
Years 2018 – 2022		1,579		964		61
United
2013	$	11	$	126	$	7
2014		11		131		8
2015		9		137		9
2016		10		144		10
2017		11		150		11
Years 2018 – 2022		67		865		61
Continental
2013	$	301	$	10	$	—
2014		306		12		—
2015		312		13		—
2016		310		15		—
2017		306		16		—
Years 2018 – 2022		1,512		99		—

Schedule of Defined Contribution

The Company’s contributions to its defined contribution plans for the years ended December 31 were as follows (in millions):

	UAL (a)		United (a)		Continental       Successor		Continental       Predecessor
2012	$	366	$	254	$	112
2011		325		230		95
2010		254		231		23	$	74

(a) UAL and United amounts include International Association of Machinists (“IAM”) multi-employer plan contributions of $36 million, $34 million and $34 million for years ended December 31, 2012, 2011 and 2010, respectively.

Multi-Employer Plans

Pension Fund	IAM National Pension Fund
EIN/ Pension Plan Number	51-6031295 - 002
Pension Protection Act Zone Status (2012 and 2011)*	Green Zone
FIP/RP Status Pending/Implemented	No
United’s Contributions	$36 million and $34 million in the years ended December 31, 2012 and 2011, respectively
Surcharge Imposed	No
Expiration Date of Collective Bargaining Agreement	N/A

* Plans in the green zone are at least 80 percent funded.