United Airlines 2008 Annual Report Download - page 120
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Defined Contribution Plans
In place of the domestic defined benefit pension plans that were terminated during bankruptcy, the
Company enhanced its contributions to the defined contribution plans for most employee groups.
Depending upon the employee group, contributions consist of matching contributions and/or
non-elective employer contributions. The Company’s contribution percentages vary from 1 to 16% of
eligible earnings depending on the terms of each plan.
Effective March 1, 2006, an International Association of Machinists (“IAM”) replacement plan was
implemented. The IAM replacement plan is a multi-employer plan whereby the assets contributed by
the Company (based on hours worked) may be used to provide benefits to employees of other
participating companies, since assets contributed by all participating companies are not segregated or
restricted to provide benefits specifically to employees of one participating company. In accordance with
the applicable accounting for multi-employer plans, the Company would only recognize a withdrawal
obligation if it becomes probable it would withdraw from the plan. The Predecessor Company recorded
expense from defined contribution plans of $16 million for the month of January 2006. The Successor
Company recognized $248 million, $232 million and $206 million of expense for the years ended
December 31, 2008 and 2007 and the eleven months ended December 31, 2006, respectively, for all of
the Company’s defined contribution employee retirement plans, of which $34 million, $28 million and
$21 million, respectively, related to the IAM multi-employer plan.
(10) Segment Information
Segments. The Company manages its business by two reporting segments: Mainline and United
Express. The Company manages its business as an integrated network with assets deployed across
various regions. See Note 1(i), “Summary of Significant Accounting Policies—United Express” for
additional information related to United Express expenses.
The accounting policies for each of these reporting segments are the same as those described in
Note 1, “Summary of Significant Accounting Policies,” except that segment financial information has
been prepared using a management approach which is consistent with how the Company internally
disperses financial information for the purpose of making internal operating decisions. The Company
evaluates segment financial performance based on earnings before income taxes, special items,
reorganization items and gain on sale of investments. As discussed in the notes to the tables below, the
Company does not allocate corporate overhead to its United Express segment; although certain selling
and operational costs are allocated to United Express.
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