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Employee Benefit Plans | 9 Months Ended
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Sep. 30, 2016
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 September 30, |  |  | Three Months Ended September 30, |
|  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
Service cost |  | $ | 29 |  |  | $ | 31 |  |  | $ | 4 |  |  | $ | 5 |
Interest cost |  |  | 50 |  |  |  | 50 |  |  |  | 22 |  |  |  | 20 |
Expected return on plan assets |  |  | (54) |  |  |  | (49) |  |  |  | — |  |  |  | — |
Amortization of unrecognized (gain) loss and prior service cost (credit) |  |  | 19 |  |  |  | 21 |  |  |  | (13) |  |  |  | (13) |
Settlement loss |  |  | 2 |  |  |  | 1 |  |  |  | — |  |  |  | — |
Curtailment gain |  |  | — |  |  |  | — |  |  |  | (47) |  |  |  | — |
Total |  | $ | 46 |  |  | $ | 54 |  |  | $ | (34) |  |  | $ | 12 |
|  | Pension Benefits |  |  | Other Postretirement Benefits |
|  | Nine Months Ended September 30, 2016 |  |  | Nine Months Ended September 30, 2016 |
|  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
Service cost |  | $ | 84 |  |  | $ | 93 |  |  | $ | 14 |  |  | $ | 15 |
Interest cost |  |  | 151 |  |  |  | 150 |  |  |  | 66 |  |  |  | 61 |
Expected return on plan assets |  |  | (162) |  |  |  | (147) |  |  |  | (1) |  |  |  | (1) |
Amortization of unrecognized (gain) loss and prior service cost (credit) |  |  | 57 |  |  |  | 65 |  |  |  | (40) |  |  |  | (40) |
Settlement loss |  |  | 4 |  |  |  | 2 |  |  |  | — |  |  |  | — |
Curtailment gain |  |  | — |  |  |  | — |  |  |  | (47) |  |  |  | — |
Total |  | $ | 134 |  |  | $ | 163 |  |  | $ | (8) |  |  | $ | 35 |
During the three and nine months ended September 30, 2016, the Company contributed $240 million and $400 million, respectively, to its U.S. domestic tax-qualified defined benefit pension plans. Plan Curtailments. As part of the recently ratified contract with the Association of Flight Attendants (“AFA”), the Company amended its postretirement medical plans. The amendments triggered curtailment accounting, resulting in the recognition of a one-time $47 million gain for accelerated recognition of a prior service credit in the third quarter of 2016. The Company remeasured the plans’ liabilities using an average weighted discount rate of 3.43% compared to the year-end 2015 weighted average discount rate of 4.52%. As a result of the amendments, remeasurements and curtailments, the projected benefit obligation of the plans increased by $49 million and Other comprehensive loss increased by $96 million, respectively. Share-Based Compensation. During 2016, UAL granted share-based compensation awards pursuant to the United Continental Holdings, Inc. 2008 Incentive Compensation Plan. These share-based compensation awards include approximately 0.4 million stock options, 0.4 million shares of restricted stock and 1.9 million restricted stock units (“RSUs”). The stock options vest in one-third increments over either (i) the first three anniversaries of the date of grant (for seven-year term options) or (ii) the fourth, fifth and sixth anniversaries of the date of grant (for ten-year term options). The restricted stock awards and the time-vested RSUs vest in one-third increments over the first three anniversaries of the date of grant. The time-vested RSUs are generally stock-settled for domestic employees and cash-settled for international employees 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 return on invested capital and the Company’s relative improvement in pre-tax margin for the three years ending December 31, 2018. If the applicable performance conditions are 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 September 30, |  |  | Nine Months Ended September 30, |
|  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
Share-based compensation expense |  | $ | 23 |  |  | $ | 7 |  |  | $ | 36 |  |  | $ | 40 |
|  | September 30, 2016 |  |  | December 31, 2015 |  |  |  |  |  |  |
Unrecognized share-based compensation |  | $ | 79 |  |  | $ | 41 |  |  |  |  |  |  |  |  |
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-workers receive 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.

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