United Airlines 2015 Annual Report Download - page 107
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used or planned to be used for significantly shorter periods, relocation for employees and severance primarily associated with administrative headcount
reductions.
The fleet service, passenger service and storekeeper employees represented by the International Association of Machinists ratified a joint collective
bargaining agreement with the Company during 2013. The Company recorded a $127 million special charge for lump sum payments made in conjunction
with the ratification. The lump sum payments were not in lieu of future pay increases. The Company completed substantially all cash payments in 2013.
The Company recorded $18 million associated with the temporary grounding of its Boeing 787 aircraft. The charges were comprised of aircraft depreciation
expense and dedicated personnel costs that the Company incurred while the aircraft were grounded. The aircraft returned to service in May 2013. In addition,
the Company adjusted its reserves for certain legal matters by $29 million and recorded approximately $11 million in accruals for future rent associated with
the early retirement of four leased Boeing 757-200 aircraft. Additionally, the Company recorded a $5 million gain related to a contract termination and $3
million in gains on the sale of assets.
Activity related to the accruals for severance and medical costs and future lease payments on permanently grounded aircraft is as follows (in millions):
Balance at December 31, 2012 $ 65 $ 5
Accrual 120 10
Payments (94) (4)
Balance at December 31, 2013 91 11
Accrual 199 102
Payments (181) (11)
Balance at December 31, 2014 109 102
Accrual 107 30
Payments (189) (54)
Balance at December 31, 2015 $ 27 $ 78
The Company’s accrual and payment activity is primarily related to severance and other compensation expense associated with voluntary employee early
retirement programs.
106
Source: United Continental Holdings, Inc., 10-K, February 18, 2016 Powered by Morningstar® Document Research℠
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