NOTE 8 - COMMITMENTS AND CONTINGENCIES

Commitments. As of March 31, 2018, United had firm commitments and options to purchase aircraft from The Boeing Company (“Boeing”) and Airbus S.A.S. (“Airbus”) presented in the table below:


Aircraft Type	Number of Firm Commitments (a)
Airbus A350		45
Boeing 737 MAX		161
Boeing 777-300ER		2
Boeing 787		14
(a) United also has options and purchase rights for additional aircraft.

The aircraft listed in the table above are scheduled for delivery through 2027. To the extent the Company and the aircraft manufacturers with whom the Company has existing orders for new aircraft agree to modify the contracts governing those orders, the amount and timing of the Company’s future capital commitments could change. For the remainder of 2018, United expects to take delivery of two Boeing 777-300ER aircraft, three Boeing 787 aircraft, 10 Boeing 737 MAX aircraft and three used Boeing 767-300ER aircraft. In March 2018, United entered into an agreement to purchase 20 used Airbus A319 aircraft with expected delivery dates scheduled in 2020 and 2021.

The table below summarizes United’s commitments as of March 31, 2018, which primarily relate to the acquisition of aircraft and related spare engines, aircraft improvements and include other capital purchase commitments. Any new firm aircraft orders, including through the exercise of purchase options and purchase rights, will increase the total future capital commitments of the Company.


	(in billions)
Last nine months of 2018	$	2.4
2019		3.7
2020		2.0
2021		2.7
2022		1.8
After 2022		9.8

	$	22.4

Facility and Other Operating Leases. In March 2018, United executed a new Airline Use and Lease Agreement at O’Hare International Airport with the City of Chicago with a lease term of approximately 15 years effective May 12, 2018 through December 31, 2033.

The table below summarizes the Company’s scheduled future minimum lease payments under facility operating leases having initial or remaining noncancelable lease terms of more than one year as of March 31, 2018 (in millions):


	Facility and Other Operating Leases
Last nine months of 2018	$	1,010
2019		1,209
2020		1,302
2021		1,068
2022		930
After 2022		7,576

	$	13,095

Guarantees. As of March 31, 2018, United is the guarantor of approximately $2.0 billion in aggregate principal amount of tax-exempt special facilities revenue bonds and interest thereon. These bonds, issued by various airport municipalities, are payable solely from rentals paid under long-term agreements with the respective governing bodies. The leasing arrangements associated with approximately $1.4 billion of these obligations are accounted for as operating leases with the associated expense recorded on a straight-line basis resulting in ratable accrual of the lease obligation over the expected lease term. The leasing arrangements associated with approximately $454 million of these obligations are accounted for as capital leases. All of these bonds are due between 2019 and 2038.

Increased Cost Provisions. In the Company’s financing transactions that include loans, the Company typically agrees to reimburse lenders for any reduced returns with respect to the loans due to any change in capital requirements and, in the case of loans in which the interest rate is based on the London Interbank Offered Rate, for certain other increased costs that the lenders incur in carrying these loans as a result of any change in law, subject, in most cases, to obligations of the lenders to take certain limited steps to mitigate the requirement for, or the amount of, such increased costs. At March 31, 2018, the Company had $3.4 billion of floating rate debt and $52 million of fixed rate debt with remaining terms of up to 11 years that are subject to these increased cost provisions. In several financing transactions involving loans or leases from non-U.S. entities, with remaining terms of up to 11 years and an aggregate balance of $3.3 billion, the Company bears the risk of any change in tax laws that would subject loan or lease payments thereunder to non-U.S. entities to withholding taxes, subject to customary exclusions.

As of March 31, 2018, United is the guarantor of $154 million of aircraft mortgage debt issued by one of United’s regional carriers. The aircraft mortgage debt is subject to similar increased cost provisions as described above for the Company’s debt, and the Company would potentially be responsible for those costs under the guarantees.

Labor Negotiations. As of March 31, 2018, United had approximately 90,800 employees, of whom approximately 79% were represented by various U.S. labor organizations. UNITE HERE is attempting to organize United’s Catering Operations employees, who are currently unrepresented, and filed an application to do so with the National Mediation Board on January 24, 2018.