Pension and Other Postretirement Plans (Tables)

12 Months Ended

Dec. 31, 2014

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, 2014		Year Ended December 31, 2013
Accumulated benefit obligation:	$	4,068	$	3,383
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	4,000	$	4,526
Service cost		98		121
Interest cost		201		191
Actuarial (gain) loss		807		(464)
Gross benefits paid and settlements		(281)		(269)
Curtailments		—		(84)
Other		(22)		(21)
Projected benefit obligation at end of year	$	4,803	$	4,000
Change in plan assets:
Fair value of plan assets at beginning of year	$	2,397	$	2,157
Actual gain on plan assets		151		239
Employer contributions		307		277
Gross benefits paid and settlements		(281)		(269)
Other		(12)		(7)
Fair value of plan assets at end of year	$	2,562	$	2,397
Funded status—Net amount recognized	$	(2,241)	$	(1,603)

	Other Postretirement Benefits
	Year Ended December 31, 2014		Year Ended December 31, 2013
Change in benefit obligation:
Benefit obligation at beginning of year	$	1,819	$	2,743
Service cost		19		52
Interest cost		88		110
Plan participants’ contributions		67		67
Actuarial (gain) loss		262		(640)
Federal subsidy		4		7
Plan amendments		(3)		(331)
Curtailments		8		8
Gross benefits paid		(212)		(197)
Benefit obligation at end of year	$	2,052	$	1,819
Change in plan assets:
Fair value of plan assets at beginning of year	$	57	$	58
Actual return on plan assets		1		1
Employer contributions		144		128
Plan participants’ contributions		67		67
Benefits paid		(212)		(197)
Fair value of plan assets at end of year		57		57
Funded status—Net amount recognized	$	(1,995)	$	(1,762)

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

	Pension Benefits
		December 31, 2014		December 31, 2013
Amounts recognized in the consolidated balance sheets consist of:
Noncurrent asset		$	2	$	49
Current liability			(17)		(2)
Noncurrent liability			(2,226)		(1,650)
Total liability		$	(2,241)	$	(1,603)
Amounts recognized in accumulated other comprehensive loss consist of:
Net actuarial loss		$	(982)	$	(162)
Prior service loss			(1)		—
Total accumulated other comprehensive loss		$	(983)	$	(162)

	Other Postretirement Benefits
	December 31, 2014		December 31, 2013
Amounts recognized in the consolidated balance sheets consist of:
Current liability	$	(62)	$	(59)
Noncurrent liability		(1,933)		(1,703)
Total liability	$	(1,995)	$	(1,762)
Amounts recognized in accumulated other comprehensive income consist of:
Net actuarial gain	$	233	$	555
Prior service credit		278		306
Total accumulated other comprehensive income	$	511	$	861

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):

	2014		2013
Projected benefit obligation	$	4,625	$	3,820
Accumulated benefit obligation		3,930		3,245
Fair value of plan assets		2,387		2,176

Components Of Net Periodic Benefit Cost

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

	2014				2013				2012
	Pension Benefits		Other Postretirement Benefits		Pension Benefits		Other Postretirement Benefits		Pension Benefits		Other Postretirement Benefits
Service cost	$	98	$	19	$	121	$	52	$	99	$	50
Interest cost		201		88		191		110		184		124
Expected return on plan assets		(180)		(2)		(163)		(2)		(138)		(2)
Curtailment loss		—		—		2		2		—		—
Amortization of prior service credits		—		(31)		—		(3)		(1)		—
Settlement (gain) loss		1		—		(10)		—		1		—
Amortization of unrecognized actuarial (gain) loss		12		(47)		48		3		21		(3)
Net periodic benefit cost	$	132	$	27	$	189	$	162	$	166	$	169

Amortized Accumulated Other Comprehensive Income Into Net Periodic Benefit Cost

The estimated amounts that will be amortized in 2015 out of accumulated other comprehensive income (loss) into net periodic benefit cost are as follows (in millions):

	Pension Benefits		Other Postretirement Benefits
Actuarial (gain) loss	$	87	$	(22)
Prior service credit		—		(32)

Assumptions Used for Benefit Plans

The assumptions used for the benefit plans were as follows:

	Pension Benefits
Assumptions used to determine benefit obligations	2014	2013
Discount rate	4.20%	5.09%
Rate of compensation increase	3.66%	3.49%
Assumptions used to determine net expense
Discount rate	5.10%	4.48%
Expected return on plan assets	7.36%	7.56%
Rate of compensation increase	3.50%	2.48%

	Other Postretirement Benefits
Assumptions used to determine benefit obligations	2014		2013
Discount rate		4.07%		4.94%
Assumptions used to determine net expense
Discount rate		4.94%		4.12%
Expected return on plan assets		4.00%		4.00%
Health care cost trend rate assumed for next year		7.00%		7.25%
Rate to which the cost trend rate is assumed to decline (ultimate trend rate in 2023)		5.00%		5.00%

Allocation of Plan Asset

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

	Percent of Total	Expected Long-Term Rate of Return
Equity securities	40-54    %	10    %
Fixed-income securities	26-34	4
Alternatives	14-20	7
Other	4-8	6

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):

	1% Increase		1% Decrease
Effect on total service and interest cost for the year ended December 31, 2014	$	13	$	(11)
Effect on postretirement benefit obligation at December 31, 2014		254		(220)

Pension and Other Postretirement Plan Assets

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

	2014								2013
Pension Plan Assets:	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Equity securities funds	$	1,181	$	388	$	793	$	—	$	1,158	$	389	$	769	$	—
Fixed-income securities		813		—		813		—		702		—		698		4
Alternatives		359		—		148		211		405		—		199		206
Insurance contract		21		—		—		21		26		—		—		26
Other investments		188		—		165		23		106		—		106		—
Total	$	2,562	$	388	$	1,919	$	255	$	2,397	$	389	$	1,772	$	236
Other Postretirement Benefit Plan Assets:
Deposit administration fund	$	57	$	—	$	—	$	57	$	57	$	—	$	—	$	57

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

The reconciliation of United’s defined benefit plan assets measured at fair value using unobservable inputs (Level 3) for the years ended December 31, 2014 and 2013 is as follows (in millions):

	2014		2013
Balance at beginning of year	$	293	$	256
Actual return on plan assets:
Sold during the year		7		15
Held at year end		6		7
Purchases, sales, issuances and settlements (net)		6		15
Balance at end of year	$	312	$	293

Estimated Future Benefit Payments

The estimated future benefit payments, net of expected participant contributions, in United’s pension plans and other postretirement benefit plans as of December 31, 2014 are as follows (in millions):

	Pension		Other    Postretirement		Other Postretirement—   subsidy receipts
2015	$	299	$	125	$	6
2016		283		126		7
2017		294		129		8
2018		291		132		9
2019		293		135		9
Years 2020 – 2024		1,581		732		56

Multi-Employer Plans

Pension Fund	IAM National Pension Fund
EIN/ Pension Plan Number	51-6031295 - 002
Pension Protection Act Zone Status (2014 and 2013)	Green Zone. Plans in the green zone are at least 80 percent funded.
FIP/RP Status Pending/Implemented	No
United’s Contributions	$39 million, $38 million and $36 million in the years ended December 31, 2014, 2013 and 2012, respectively
Surcharge Imposed	No
Expiration Date of Collective Bargaining Agreement	N/A