United Airlines 2007 Annual Report Download - page 118
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UAL Corporation and Subsidiary Companies
Combined Notes to Consolidated Financial Statements (Continued)
(9) Retirement and Postretirement Plans (Continued)
In April 2005, United and the PBGC entered into a global settlement agreement which provided for the settlement and compromise of various disputes and
controversies with respect to the Company's domestic pension plans. In May 2005, the Bankruptcy Court approved the settlement agreement, including
modifications requested by certain creditors. The PBGC assumed responsibility for the assets of the Ground Plan effective May 23, 2005 (with a termination date
of March 11, 2005), the Flight Attendant and the MAPC Plans effective June 30, 2005 and the Pilot Plan effective October 26, 2005, and the Company has no
further duties or rights with respect to these plans. In 2005, the Company recorded $640 million in curtailment charges related to these pension plans and
reclassified $1.9 billion of pension obligations to Liabilities subject to compromise. The Company recorded approximately $7.2 billion of PBGC allowable
claims in Liabilities subject to compromise in accordance with the confirmed Plan of Reorganization. In addition, the Company recognized net settlement losses
of approximately $1.1 billion in 2005 in accordance with SFAS 88. See Note 1, "Voluntary Reorganization Under Chapter 11" for more information.
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 the Statements of Consolidated Financial Position for the defined benefit and other postretirement plans ("Other Benefits"):
Pension Benefits
Other Benefits
Successor
Predecessor
Successor
Predecessor
(In millions)
Year Ended
December 31,
2007
Period from
February 1 to
December 31,
2006
Period from
January 1 to
January 31,
2006
Year Ended
December 31,
2007
Period from
February 1 to
December 31,
2006
Period from
January 1 to
January 31,
2006
Change in Benefit
Obligation
Benefit obligation at
beginning of period $ 251 $ 247 $ 241 $ 2,116 $ 2,223 $ 2,256
Service cost 8 9 1 39 33 3
Interest cost 9 8 1 121 116 11
Plan participants'
contributions 1 1 — 56 52 4
Amendments (16) — — — — —
Actuarial (gain) loss (18) (9) 2 (146) (123) (32)
Curtailments 1 — — — — —
Foreign currency
exchange rate
changes 11 8 3 — — —
Federal subsidy — — — 8 9 —
Gross benefits paid (11) (13) (1) (207) (194) (19)
Benefit obligation at
end of period $ 236 $ 251 $ 247 $ 1,987 $ 2,116 $ 2,223
109
Source: UNITED AIR LINES INC, 10-K, February 29, 2008