Employee Benefit Plans

3 Months Ended

Mar. 31, 2018

Employee Benefit Plans

NOTE 6 - EMPLOYEE BENEFIT PLANS

Defined Benefit Pension and Other Postretirement Benefit Plans. The Company’s net periodic benefit cost includes the following components for the three months ended March 31 (in millions):

	Pension Benefits				Other Postretirement Benefits				Affected Line Item in the Statements of Consolidated Operations
	2018		2017		2018		2017
Service cost	$	57	$	49	$	3	$	2		Salaries and related costs
Interest cost		54		55		15		17		Miscellaneous, net
Expected return on plan assets		(73)		(60)		—		—		Miscellaneous, net
Amortization of unrecognized (gain) loss and prior service cost (credit)		33		31		(17)		(18)		Miscellaneous, net
Settlement loss		—		1		—		—		Miscellaneous, net
Total	$	71	$	76	$	1	$	1

During the three months ended March 31, 2018, the Company contributed $113 million to its U.S. domestic tax-qualified defined benefit pension plans.

Share-Based Compensation. In the three months ended March 31, 2018, UAL granted share-based compensation awards pursuant to the United Continental Holdings, Inc. 2017 Incentive Compensation Plan. These share-based compensation awards include 1.7 million RSUs consisting of 1.0 million time-vested RSUs and 0.7 million performance-based RSUs. The time-vested RSUs vest pro-rata, on February 28th of each year, over a three-year period from the date of grant. These RSUs are generally equity awards settled in stock for domestic employees and liability awards settled in cash 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 performance-based RSUs vest based on the Company’s relative improvement in pre-tax margin, as compared to a group of industry peers, for the three years ending December 31, 2020. 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,
	2018		2017
Share-based compensation expense	$	17	$	23
	March 31, 2018		December 31, 2017
Unrecognized share-based compensation	$	102	$	53