NOTE 5 - 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				Other Postretirement Benefits
	Three Months Ended March 31,				Three Months Ended March 31,
	2017		2016		2017		2016
Service cost	$	49	$	28	$	2	$	4
Interest cost		55		51		17		22
Expected return on plan assets		(60)		(54)		—		—
Amortization of unrecognized (gain) loss and prior service cost (credit)		31		18		(18)		(13)
Settlement loss		1		1		—		—

Total	$	76	$	44	$	1	$	13

During the three months ended March 31, 2017, the Company contributed $80 million to its U.S. domestic tax-qualified defined benefit pension plans.

Share-Based Compensation. During the three months ended March 31, 2017, UAL granted share-based compensation awards pursuant to the United Continental Holdings, Inc. 2008 Incentive Compensation Plan. These share-based compensation awards include approximately 1.4 million restricted stock units (“RSUs”). A majority of the RSUs vest pro-rata, on February 28th of each year, over a three year period from the date of grant. These time-vested RSUs are generally stock-settled for domestic employees and cash-settled for international employees. The cash payments are based on the 20-day average closing price of UAL common stock immediately prior to the vesting date. The remainder of the RSUs are performance-based and vest based on the Company’s relative improvement in pre-tax margin for the three years ending December 31, 2019. If this performance condition is achieved, cash payments will be made after the end of the performance period 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 (in millions):


	Three Months Ended March 31,
	2017		2016
Share-based compensation expense	$	23	$	10

	March 31, 2017		December 31, 2016
Unrecognized share-based compensation	$	127	$	65

Profit Sharing Plans. Substantially all employees participate in profit sharing based on a percentage of pre-tax earnings, excluding special items, profit sharing expense and share-based compensation. Profit sharing percentages range from 5% to 20% depending on the work group, and in some cases profit sharing percentages vary above and below certain pre-tax margin thresholds. Eligible U.S. co-workers in each participating work group 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 work groups. Eligible non-U.S. co-workersreceive profit sharing based on the calculation under the U.S. profit sharing plan for management and administrative employees. Profit sharing expense is recorded as a component of Salaries and related costs in the Company’s statements of consolidated operations.