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 June 30,				Three Months Ended June 30,
	2014		2013		2014		2013
Service cost	$	25	$	32	$	4	$	14
Interest cost		50		47		22		28
Expected return on plan assets		(44)		(40)		—		—
Amortization of unrecognized (gain) loss and prior service cost (credit)		2		15		(20)		2
Curtailment (gain) loss		—		2		—		—
Settlement (gain) loss		—		(1)		—		—

Total	$	33	$	55	$	6	$	44


	Pension Benefits				Other Postretirement Benefits
	Six Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Service cost	$	49	$	65	$	9	$	28
Interest cost		101		94		44		56
Expected return on plan assets		(89)		(80)		(1)		(1)
Amortization of unrecognized (gain) loss and prior service cost (credit)		5		33		(39)		5
Curtailment (gain) loss		—		2		—		—
Settlement (gain) loss		—		(1)		—		—

Total	$	66	$	113	$	13	$	88

During the three and six months ended June 30, 2014, the Company contributed $61 million and $118 million to its tax-qualified defined benefit pension plans.

Share-Based Compensation. In February 2014, UAL granted share-based compensation awards pursuant to the United Continental Holdings, Inc. 2008 Incentive Compensation Plan. These share-based compensation awards include approximately 0.3 million shares of restricted stock and 0.5 million restricted stock units (“RSUs”) that vest pro-rata over three years on the anniversary of the grant date. The time-vested RSUs are cash-settled based on the 20-day average closing price of UAL common stock immediately prior to the vesting date. In addition, the Company granted 0.6 million performance-based RSUs that will vest based on the Company’s return on invested capital for the three years ending December 31, 2016. 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 June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Share-based compensation expense (a)	$	14	$	13	$	46	$	40

	June 30, 2014		December 31, 2013
Unrecognized share-based compensation	$	74	$	44

(a) Includes $3 million of expense recognized in merger integration-related costs for the six months ended June 30, 2014. Includes $3 million and $11 million of expense recognized in merger integration-related costs for the three and six months ended June 30, 2013, respectively.

Profit Sharing Plans. Substantially all employees participated in profit sharing plans, which depending on the work group, pay from 5% to 20% 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 received 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. The international profit sharing plan paid eligible non-U.S. co-workers the same percentage of eligible pay that is calculated 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 consolidated statements of operations.