NOTE 4—EMPLOYEE BENEFIT PLANS

Defined Benefit Pension and Other Postretirement Benefit Plans. The Company's net periodic benefit cost includes the following components (in millions):


	Pension Benefits Three Months Ended September 30,						Other Postretirement Benefits Three Months Ended September 30,
UAL	2011			2010			2011			2010
Service cost	$	22		$	1		$	11		$	8
Interest cost		44			2			32			29
Expected return on plan assets		(36	)		(2	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		(5	)		—			—			(3	)

Net periodic benefit costs	$	25		$	1		$	42		$	33


United
Service cost	$	2		$	1		$	8		$	8
Interest cost		2			2			29			29
Expected return on plan assets		(3	)		(2	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		—			—			—			(3	)

Net periodic benefit costs	$	1		$	1		$	36		$	33


Continental (a)
Service cost	$	20		$	17		$	3		$	3
Interest cost		42			40			3			3
Expected return on plan assets		(33	)		(29	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		(5	)		25			—			4

Net periodic benefit costs	$	24		$	53		$	6		$	10

(a)	For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.


	Pension Benefits						Other Postretirement Benefits
	Nine Months Ended September 30,						Nine Months Ended September 30,
UAL	2011			2010			2011			2010
Service cost	$	66		$	4		$	35		$	23
Interest cost		133			7			95			87
Expected return on plan assets		(105	)		(7	)		(2	)		(2	)
Amortization of unrecognized gain and prior service cost		(17	)		(1	)		(1	)		(9	)

Net periodic benefit costs	$	77		$	3		$	127		$	99


United
Service cost	$	5		$	4		$	25		$	23
Interest cost		7			7			85			87
Expected return on plan assets		(8	)		(7	)		(2	)		(2	)
Amortization of unrecognized gain and prior service cost		(1	)		(1	)		—			(9	)

Net periodic benefit costs	$	3		$	3		$	108		$	99


Continental (a)
Service cost	$	61		$	50		$	10		$	7
Interest cost		126			119			10			10
Expected return on plan assets		(97	)		(82	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		(16	)		72			(1	)		13

Net periodic benefit costs	$	74		$	159		$	19		$	30

(a)	For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

During the nine months ended September 30, 2011, Continental contributed $135 million to its tax-qualified defined benefit pension plans. Continental contributed an additional $31 million to its tax-qualified defined benefit pension plans in October 2011.

Share-Based Compensation. In February 2011, UAL granted share-based compensation awards pursuant to the United Continental Holdings, Inc. 2008 Incentive Compensation Plan. These share-based compensation awards include approximately 0.5 million shares of restricted stock that vest pro-rata over three years on the anniversary of the grant date. These awards also include approximately 3.0 million performance-based restricted stock units ("RSUs") (equivalent to approximately 1.9 million RSUs at the target performance level), consisting of approximately 1.2 million RSUs that vest based on UAL's return on invested capital for the period beginning January 1, 2011 and ending December 31, 2013, and 1.8 million RSUs that vest based on the achievement of merger-related goals. Vesting of a portion of the merger incentive RSUs is based on the achievement of certain merger-related milestones and vesting of the remainder of the merger incentive RSUs is based on the achievement of revenue and cost synergies over a three-year performance period ending December 31, 2013. If the specified performance conditions are achieved, cash payments will be made shortly after the end of the performance period or achievement of the specified merger milestone, as applicable, based on the 20-day average closing price of UAL common stock immediately prior to the vesting date. The Company accounts for the performance-based RSUs as liability awards. The table below presents information related to share-based compensation expense (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Share-based compensation expense
UAL (a)	$	13	$	9	$	40	$	30
Continental Predecessor				49				57


	September 30, 2011		December 31, 2010
Unrecognized share-based compensation expense	$	57	$	43

(a)	Includes expense recognized in integration-related costs for the three and nine months ended September 30, 2011.

Profit Sharing Plans. In 2011, substantially all employees participate in profit sharing plans, which pay 15% of total pre-tax earnings, excluding special items and stock compensation expense, to eligible employees when pre-tax profit, excluding special items, profit sharing expense and stock-based compensation program expense, exceeds $10 million. Eligible U.S. co-workers in each participating work group will receive a profit sharing payout using a formula based on the ratio of each qualified co-worker's annual eligible earnings to the eligible earnings of all qualified co-workers in all domestic workgroups. The international profit sharing plan pays eligible non-U.S. co-workers the same percentage of annual pay that is calculated under the U.S. profit sharing plan. Assuming all work groups are eligible to participate in profit sharing, UAL recorded profit sharing and related payroll tax expense of $152 million and $242 million in the three and nine months ended September 30, 2011, respectively. The actual amount of profit sharing that the Company will distribute to eligible employees in 2012 depends on the Company's full year financial results and the pool of employees eligible to participate. Profit sharing expense is recorded as a component of salaries and related costs in the consolidated statements of operations.

During 2010, United and Continental maintained separate employee profit sharing plans for the employees of each respective subsidiary. During the three months ended September 30, 2010, United and Continental Predecessor recorded profit sharing and related payroll tax expense of $90 million and $58 million, respectively. During the nine months ended September 30, 2010, United and Continental Predecessor recorded profit sharing and related payroll tax expense of $153 million and $77 million, respectively.

Employee Benefit Plans

NOTE 4—EMPLOYEE BENEFIT PLANS

Defined Benefit Pension and Other Postretirement Benefit Plans. The Company's net periodic benefit cost includes the following components (in millions):


	Pension Benefits Three Months Ended September 30,						Other Postretirement Benefits Three Months Ended September 30,
UAL	2011			2010			2011			2010
Service cost	$	22		$	1		$	11		$	8
Interest cost		44			2			32			29
Expected return on plan assets		(36	)		(2	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		(5	)		—			—			(3	)

Net periodic benefit costs	$	25		$	1		$	42		$	33


United
Service cost	$	2		$	1		$	8		$	8
Interest cost		2			2			29			29
Expected return on plan assets		(3	)		(2	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		—			—			—			(3	)

Net periodic benefit costs	$	1		$	1		$	36		$	33


Continental (a)
Service cost	$	20		$	17		$	3		$	3
Interest cost		42			40			3			3
Expected return on plan assets		(33	)		(29	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		(5	)		25			—			4

Net periodic benefit costs	$	24		$	53		$	6		$	10

(a)	For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.


	Pension Benefits						Other Postretirement Benefits
	Nine Months Ended September 30,						Nine Months Ended September 30,
UAL	2011			2010			2011			2010
Service cost	$	66		$	4		$	35		$	23
Interest cost		133			7			95			87
Expected return on plan assets		(105	)		(7	)		(2	)		(2	)
Amortization of unrecognized gain and prior service cost		(17	)		(1	)		(1	)		(9	)

Net periodic benefit costs	$	77		$	3		$	127		$	99


United
Service cost	$	5		$	4		$	25		$	23
Interest cost		7			7			85			87
Expected return on plan assets		(8	)		(7	)		(2	)		(2	)
Amortization of unrecognized gain and prior service cost		(1	)		(1	)		—			(9	)

Net periodic benefit costs	$	3		$	3		$	108		$	99


Continental (a)
Service cost	$	61		$	50		$	10		$	7
Interest cost		126			119			10			10
Expected return on plan assets		(97	)		(82	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		(16	)		72			(1	)		13

Net periodic benefit costs	$	74		$	159		$	19		$	30

(a)	For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

During the nine months ended September 30, 2011, Continental contributed $135 million to its tax-qualified defined benefit pension plans. Continental contributed an additional $31 million to its tax-qualified defined benefit pension plans in October 2011.

Share-Based Compensation. In February 2011, UAL granted share-based compensation awards pursuant to the United Continental Holdings, Inc. 2008 Incentive Compensation Plan. These share-based compensation awards include approximately 0.5 million shares of restricted stock that vest pro-rata over three years on the anniversary of the grant date. These awards also include approximately 3.0 million performance-based restricted stock units ("RSUs") (equivalent to approximately 1.9 million RSUs at the target performance level), consisting of approximately 1.2 million RSUs that vest based on UAL's return on invested capital for the period beginning January 1, 2011 and ending December 31, 2013, and 1.8 million RSUs that vest based on the achievement of merger-related goals. Vesting of a portion of the merger incentive RSUs is based on the achievement of certain merger-related milestones and vesting of the remainder of the merger incentive RSUs is based on the achievement of revenue and cost synergies over a three-year performance period ending December 31, 2013. If the specified performance conditions are achieved, cash payments will be made shortly after the end of the performance period or achievement of the specified merger milestone, as applicable, based on the 20-day average closing price of UAL common stock immediately prior to the vesting date. The Company accounts for the performance-based RSUs as liability awards. The table below presents information related to share-based compensation expense (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Share-based compensation expense
UAL (a)	$	13	$	9	$	40	$	30
Continental Predecessor				49				57


	September 30, 2011		December 31, 2010
Unrecognized share-based compensation expense	$	57	$	43

(a)	Includes expense recognized in integration-related costs for the three and nine months ended September 30, 2011.

Profit Sharing Plans. In 2011, substantially all employees participate in profit sharing plans, which pay 15% of total pre-tax earnings, excluding special items and stock compensation expense, to eligible employees when pre-tax profit, excluding special items, profit sharing expense and stock-based compensation program expense, exceeds $10 million. Eligible U.S. co-workers in each participating work group will receive a profit sharing payout using a formula based on the ratio of each qualified co-worker's annual eligible earnings to the eligible earnings of all qualified co-workers in all domestic workgroups. The international profit sharing plan pays eligible non-U.S. co-workers the same percentage of annual pay that is calculated under the U.S. profit sharing plan. Assuming all work groups are eligible to participate in profit sharing, UAL recorded profit sharing and related payroll tax expense of $152 million and $242 million in the three and nine months ended September 30, 2011, respectively. The actual amount of profit sharing that the Company will distribute to eligible employees in 2012 depends on the Company's full year financial results and the pool of employees eligible to participate. Profit sharing expense is recorded as a component of salaries and related costs in the consolidated statements of operations.

During 2010, United and Continental maintained separate employee profit sharing plans for the employees of each respective subsidiary. During the three months ended September 30, 2010, United and Continental Predecessor recorded profit sharing and related payroll tax expense of $90 million and $58 million, respectively. During the nine months ended September 30, 2010, United and Continental Predecessor recorded profit sharing and related payroll tax expense of $153 million and $77 million, respectively.

Employee Benefit Plans

NOTE 4—EMPLOYEE BENEFIT PLANS

Defined Benefit Pension and Other Postretirement Benefit Plans. The Company's net periodic benefit cost includes the following components (in millions):


	Pension Benefits Three Months Ended September 30,						Other Postretirement Benefits Three Months Ended September 30,
UAL	2011			2010			2011			2010
Service cost	$	22		$	1		$	11		$	8
Interest cost		44			2			32			29
Expected return on plan assets		(36	)		(2	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		(5	)		—			—			(3	)

Net periodic benefit costs	$	25		$	1		$	42		$	33


United
Service cost	$	2		$	1		$	8		$	8
Interest cost		2			2			29			29
Expected return on plan assets		(3	)		(2	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		—			—			—			(3	)

Net periodic benefit costs	$	1		$	1		$	36		$	33


Continental (a)
Service cost	$	20		$	17		$	3		$	3
Interest cost		42			40			3			3
Expected return on plan assets		(33	)		(29	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		(5	)		25			—			4

Net periodic benefit costs	$	24		$	53		$	6		$	10

(a)	For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.


	Pension Benefits						Other Postretirement Benefits
	Nine Months Ended September 30,						Nine Months Ended September 30,
UAL	2011			2010			2011			2010
Service cost	$	66		$	4		$	35		$	23
Interest cost		133			7			95			87
Expected return on plan assets		(105	)		(7	)		(2	)		(2	)
Amortization of unrecognized gain and prior service cost		(17	)		(1	)		(1	)		(9	)

Net periodic benefit costs	$	77		$	3		$	127		$	99


United
Service cost	$	5		$	4		$	25		$	23
Interest cost		7			7			85			87
Expected return on plan assets		(8	)		(7	)		(2	)		(2	)
Amortization of unrecognized gain and prior service cost		(1	)		(1	)		—			(9	)

Net periodic benefit costs	$	3		$	3		$	108		$	99


Continental (a)
Service cost	$	61		$	50		$	10		$	7
Interest cost		126			119			10			10
Expected return on plan assets		(97	)		(82	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		(16	)		72			(1	)		13

Net periodic benefit costs	$	74		$	159		$	19		$	30

(a)	For Continental, the 2011 period represents Successor and the 2010 period represents Predecessor.

During the nine months ended September 30, 2011, Continental contributed $135 million to its tax-qualified defined benefit pension plans. Continental contributed an additional $31 million to its tax-qualified defined benefit pension plans in October 2011.

Share-Based Compensation. In February 2011, UAL granted share-based compensation awards pursuant to the United Continental Holdings, Inc. 2008 Incentive Compensation Plan. These share-based compensation awards include approximately 0.5 million shares of restricted stock that vest pro-rata over three years on the anniversary of the grant date. These awards also include approximately 3.0 million performance-based restricted stock units ("RSUs") (equivalent to approximately 1.9 million RSUs at the target performance level), consisting of approximately 1.2 million RSUs that vest based on UAL's return on invested capital for the period beginning January 1, 2011 and ending December 31, 2013, and 1.8 million RSUs that vest based on the achievement of merger-related goals. Vesting of a portion of the merger incentive RSUs is based on the achievement of certain merger-related milestones and vesting of the remainder of the merger incentive RSUs is based on the achievement of revenue and cost synergies over a three-year performance period ending December 31, 2013. If the specified performance conditions are achieved, cash payments will be made shortly after the end of the performance period or achievement of the specified merger milestone, as applicable, based on the 20-day average closing price of UAL common stock immediately prior to the vesting date. The Company accounts for the performance-based RSUs as liability awards. The table below presents information related to share-based compensation expense (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Share-based compensation expense
UAL (a)	$	13	$	9	$	40	$	30
Continental Predecessor				49				57


	September 30, 2011		December 31, 2010
Unrecognized share-based compensation expense	$	57	$	43

(a)	Includes expense recognized in integration-related costs for the three and nine months ended September 30, 2011.

Profit Sharing Plans. In 2011, substantially all employees participate in profit sharing plans, which pay 15% of total pre-tax earnings, excluding special items and stock compensation expense, to eligible employees when pre-tax profit, excluding special items, profit sharing expense and stock-based compensation program expense, exceeds $10 million. Eligible U.S. co-workers in each participating work group will receive a profit sharing payout using a formula based on the ratio of each qualified co-worker's annual eligible earnings to the eligible earnings of all qualified co-workers in all domestic workgroups. The international profit sharing plan pays eligible non-U.S. co-workers the same percentage of annual pay that is calculated under the U.S. profit sharing plan. Assuming all work groups are eligible to participate in profit sharing, UAL recorded profit sharing and related payroll tax expense of $152 million and $242 million in the three and nine months ended September 30, 2011, respectively. The actual amount of profit sharing that the Company will distribute to eligible employees in 2012 depends on the Company's full year financial results and the pool of employees eligible to participate. Profit sharing expense is recorded as a component of salaries and related costs in the consolidated statements of operations.

During 2010, United and Continental maintained separate employee profit sharing plans for the employees of each respective subsidiary. During the three months ended September 30, 2010, United and Continental Predecessor recorded profit sharing and related payroll tax expense of $90 million and $58 million, respectively. During the nine months ended September 30, 2010, United and Continental Predecessor recorded profit sharing and related payroll tax expense of $153 million and $77 million, respectively.