Employee Benefit Plans

3 Months Ended

Mar. 31, 2012

Employee Benefit Plans

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,
	2012			2011			2012			2011
UAL
Service cost	$	25		$	21		$	13		$	12
Interest cost		46			44			31			31
Expected return on plan assets		(35	)		(34	)		(1	)		(1	)
Amortization of unrecognized (gain) loss and prior service cost		5			(5	)		(1	)		—
Net periodic benefit costs	$	41		$	26		$	42		$	42
United
Service cost	$	2		$	1		$	9		$	9
Interest cost		2			2			27			28
Expected return on plan assets		(3	)		(2	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		—			—			(1	)		—
Net periodic benefit costs	$	1		$	1		$	34		$	36
Continental
Service cost	$	23		$	20		$	4		$	3
Interest cost		44			42			4			3
Expected return on plan assets		(32	)		(32	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		5			(5	)		—			—
Net periodic benefit costs	$	40		$	25		$	8		$	6

During the three months ended March 31, 2012, Continental contributed $33 million to its tax-qualified defined benefit pension plans. Continental contributed an additional $42 million to its tax-qualified defined benefit pension plans in April 2012.

Share-Based Compensation. In February 2012, 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 and 0.6 million restricted stock units ("RSUs") that vest pro-rata over three years on the anniversary of the grant date. In addition, UAL granted 1.3 million performance-based RSUs which will vest based on UAL's return on invested capital for the three years ending December 31, 2014. 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 RSUs as liability awards. The table below presents information related to share-based compensation (in millions):

	Three Months Ended March 31,
	2012		2011
Share-based compensation expense (a)	$	15	$	13

	March 31, 2012		December 31, 2011
Unrecognized share-based compensation expense	$	49	$	43

(a) Includes $4 million and $3 million of expense recognized in integration-related costs for three months ended March 31, 2012 and 2011, respectively.

Profit Sharing Plans. In 2012, substantially all employees participate in profit sharing, which pays 15% of total pre-tax earnings, excluding special items and share-based compensation expense, to eligible employees when pre-tax profit, excluding special items, profit sharing expense and share-based compensation program expense, exceeds $10 million. 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 workgroups. The international profit sharing plan pays eligible non-U.S. co-workers the same percentage of eligible pay that is calculated under the U.S. profit sharing plan. UAL recorded no profit sharing and related payroll tax expense in the three months ended March 31, 2012 and 2011, respectively. Profit sharing expense is recorded as a component of salaries and related costs in the consolidated statements of operations.

United Airlines Inc [Member]

Employee Benefit Plans

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,
	2012			2011			2012			2011
UAL
Service cost	$	25		$	21		$	13		$	12
Interest cost		46			44			31			31
Expected return on plan assets		(35	)		(34	)		(1	)		(1	)
Amortization of unrecognized (gain) loss and prior service cost		5			(5	)		(1	)		—
Net periodic benefit costs	$	41		$	26		$	42		$	42
United
Service cost	$	2		$	1		$	9		$	9
Interest cost		2			2			27			28
Expected return on plan assets		(3	)		(2	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		—			—			(1	)		—
Net periodic benefit costs	$	1		$	1		$	34		$	36
Continental
Service cost	$	23		$	20		$	4		$	3
Interest cost		44			42			4			3
Expected return on plan assets		(32	)		(32	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		5			(5	)		—			—
Net periodic benefit costs	$	40		$	25		$	8		$	6

During the three months ended March 31, 2012, Continental contributed $33 million to its tax-qualified defined benefit pension plans. Continental contributed an additional $42 million to its tax-qualified defined benefit pension plans in April 2012.

Share-Based Compensation. In February 2012, 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 and 0.6 million restricted stock units ("RSUs") that vest pro-rata over three years on the anniversary of the grant date. In addition, UAL granted 1.3 million performance-based RSUs which will vest based on UAL's return on invested capital for the three years ending December 31, 2014. 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 RSUs as liability awards. The table below presents information related to share-based compensation (in millions):

	Three Months Ended March 31,
	2012		2011
Share-based compensation expense (a)	$	15	$	13

	March 31, 2012		December 31, 2011
Unrecognized share-based compensation expense	$	49	$	43

(a) Includes $4 million and $3 million of expense recognized in integration-related costs for three months ended March 31, 2012 and 2011, respectively.

Profit Sharing Plans. In 2012, substantially all employees participate in profit sharing, which pays 15% of total pre-tax earnings, excluding special items and share-based compensation expense, to eligible employees when pre-tax profit, excluding special items, profit sharing expense and share-based compensation program expense, exceeds $10 million. 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 workgroups. The international profit sharing plan pays eligible non-U.S. co-workers the same percentage of eligible pay that is calculated under the U.S. profit sharing plan. UAL recorded no profit sharing and related payroll tax expense in the three months ended March 31, 2012 and 2011, respectively. Profit sharing expense is recorded as a component of salaries and related costs in the consolidated statements of operations.

Continental Airlines Inc [Member]

Employee Benefit Plans

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,
	2012			2011			2012			2011
UAL
Service cost	$	25		$	21		$	13		$	12
Interest cost		46			44			31			31
Expected return on plan assets		(35	)		(34	)		(1	)		(1	)
Amortization of unrecognized (gain) loss and prior service cost		5			(5	)		(1	)		—
Net periodic benefit costs	$	41		$	26		$	42		$	42
United
Service cost	$	2		$	1		$	9		$	9
Interest cost		2			2			27			28
Expected return on plan assets		(3	)		(2	)		(1	)		(1	)
Amortization of unrecognized gain and prior service cost		—			—			(1	)		—
Net periodic benefit costs	$	1		$	1		$	34		$	36
Continental
Service cost	$	23		$	20		$	4		$	3
Interest cost		44			42			4			3
Expected return on plan assets		(32	)		(32	)		—			—
Amortization of unrecognized (gain) loss and prior service cost		5			(5	)		—			—
Net periodic benefit costs	$	40		$	25		$	8		$	6

During the three months ended March 31, 2012, Continental contributed $33 million to its tax-qualified defined benefit pension plans. Continental contributed an additional $42 million to its tax-qualified defined benefit pension plans in April 2012.

Share-Based Compensation. In February 2012, 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 and 0.6 million restricted stock units ("RSUs") that vest pro-rata over three years on the anniversary of the grant date. In addition, UAL granted 1.3 million performance-based RSUs which will vest based on UAL's return on invested capital for the three years ending December 31, 2014. 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 RSUs as liability awards. The table below presents information related to share-based compensation (in millions):

	Three Months Ended March 31,
	2012		2011
Share-based compensation expense (a)	$	15	$	13

	March 31, 2012		December 31, 2011
Unrecognized share-based compensation expense	$	49	$	43

(a) Includes $4 million and $3 million of expense recognized in integration-related costs for three months ended March 31, 2012 and 2011, respectively.

Profit Sharing Plans. In 2012, substantially all employees participate in profit sharing, which pays 15% of total pre-tax earnings, excluding special items and share-based compensation expense, to eligible employees when pre-tax profit, excluding special items, profit sharing expense and share-based compensation program expense, exceeds $10 million. 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 workgroups. The international profit sharing plan pays eligible non-U.S. co-workers the same percentage of eligible pay that is calculated under the U.S. profit sharing plan. UAL recorded no profit sharing and related payroll tax expense in the three months ended March 31, 2012 and 2011, respectively. Profit sharing expense is recorded as a component of salaries and related costs in the consolidated statements of operations.