What changed in this filing

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Item 1A. Risk Factors

2023-02-16 compared with 2022-02-18 · 135 added, 117 removed, 294 unchanged (46% of the section changed)

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Additional risks and uncertainties that are not presently known to us, or risks that we currently consider immaterial, could also impair our business operations, financial condition, operating results, cash flows, prospects, reputation or credit ratings.

COVID-19 Pandemic Risks

The COVID-19 pandemic has materially and adversely impacted our business, operating results, financial condition and liquidity.

The full extent of the impact will depend on future developments and how quickly we can return to more normal operations, among other things.

If the impacts from the COVID-19 pandemic extend beyond our assumed timelines, our actual results may vary significantly from our expectations.

The COVID-19 pandemic prompted governments and businesses to take unprecedented measures in response that have included international and domestic travel restrictions or advisories, restrictions on business operations, limitations on public gatherings, social distancing recommendations, temporary closures of businesses, remote work arrangements, closures of tourist destinations and attractions as well as quarantine and shelter-in-place orders.

As a result, we experienced a precipitous decline in passenger demand and bookings for both business and leisure travel, which has had an adverse impact that has been material to the Company's business, operating results, financial condition and liquidity and has materially disrupted our strategic operating plans.

The Company has seen increasing demand for travel both domestically and internationally;

however, as the situation surrounding the COVID-19 pandemic remains fluid, the pandemic has continued to negatively impact travel demand.

It remains difficult to reasonably predict the full extent of the ongoing impact of the COVID-19 pandemic on the Company's longer-term operational and financial performance, which will depend on a number of future developments, many of which are outside the Company's control, such as the ultimate duration of and factors impacting the recovery from the pandemic (including the efficacy and speed of vaccination programs in curbing the spread of the virus in different markets, the efficacy and availability of various treatment options, the introduction and spread of new variants of the virus that may be resistant to currently approved vaccines or treatment options and the continuation of existing or implementation of new government travel restrictions), the volatility of aircraft fuel prices, customer behavior changes and fluctuations in demand for air travel, among others.

The COVID-19 pandemic and the measures taken in response may continue to impact many aspects of our business, operating results, financial condition and liquidity in a number of ways, including labor shortages (including reductions in available staffing and related impacts to the Company's flight schedules and reputation), facility closures and related costs and disruptions to the Company's and its business partners' operations, reduced travel demand and consumer spending, increased fuel and other operating costs (including due to inflation), supply chain disruptions, logistics constraints, volatility in the price of our securities, our ability to access capital markets and volatility in the global economy and financial markets generally.

If the negative impacts from the COVID-19 pandemic extend beyond our assumed timelines, our actual results may vary significantly from our expectations.

In addition, the outbreak and spread of the COVID-19 pandemic have adversely impacted customer perceptions of the health, safety, ease and predictability of air travel and these negative perceptions could continue even after the pandemic subsides.

Actual or perceived risk of infection on our flights, at airports and during other travel-related activities has had, and may continue to have, a material adverse effect on the public's perception of air travel, which has harmed, and may continue to harm, our reputation and brand and result in reduced demand for the Company's flights or the flights of its codeshare partners or regional carriers.

We have incurred, and expect that we will continue to incur, COVID-19-related costs as we sanitize aircraft, implement additional hygiene-related protocols and take other actions to limit the threat of infection among our employees and passengers and combat negative customer perceptions of the health and safety of travel on our aircraft and at our terminals.

Our level of indebtedness has increased as we managed through the effects of the COVID-19 pandemic and may continue to increase.

As a result of the Company's various financing activities in response to the pandemic, the Company is subjected to more substantial risk of default, cross-default and cross-acceleration in the event of breach of its covenants under such financings.

For example, under certain of the Company's credit card processing agreements with financial institutions, the financial institutions in certain circumstances have the right to require that the Company maintain certain cash or other collateral reserves related to advance ticket sales.

The COVID-19 pandemic has resulted in an increase in demand from consumers for refunds on their tickets, and if increased demand for refunds continues, we are at risk of triggering liquidity covenants in these processing agreements.

If such covenants were triggered, it could force us to post cash collateral.

In addition, under the terms of certain assistance received by the Company under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") and related legislation, the Company's business is subject to certain restrictions, including requirements to maintain certain levels of scheduled service.

Moreover, the Company may plan to seek additional liquidity in the near-term and the Company's ability to obtain additional financing is subject to certain limitations, including covenants in several of the

Company's debt agreements that limit its ability to incur additional indebtedness.

In addition, the terms of any additional financing may subject the Company to additional covenants limiting its operational and financial flexibility.

We, as well as our partners, are facing and could continue to face potential other negative consequences stemming from the COVID-19 pandemic, including but not limited to increased cyber threats, such as phishing, social engineering and malware attacks partly due to the increase in remote work arrangements, supply chain constraints and an increasingly competitive labor market due to an industry-wide sustained labor shortage, including for skilled labor.

If a regional carrier, supplier, third party vendor or service provider were unable to timely provide adequate products or support for its products (including aircraft), or otherwise fulfill its commitments to the Company, the Company's operations could be materially adversely affected.

It is possible that COVID-19 could exacerbate any of the other risks described in this Form 10-K as well.

At this time, we cannot predict the full extent of the negative impact that the COVID-19 pandemic will have on our business, operating results, financial condition, and liquidity.

Strategic and Business Development Risks

We may not be successful in executing elements of our strategic operating plan, which may have a material adverse impact on our business, financial results and market capitalization.

In June 2021, the Company announced its United Next plan, including firm orders of 270 aircraft, retrofitting plans and plans to increase mainline daily departures and available seats across the Company's North American network.

In developing our United Next plan, we made certain assumptions including, but not limited to, those related to the duration and scope of the continued impacts from the COVID-19 pandemic, customer demand, delivery of aircraft, potential labor and supply chain shortages, inflation rates, voluntary or mandatory groundings of aircraft, our regional network, competition, market consolidation and other macroeconomic and geopolitical factors.

In June 2021, the Company announced its United Next plan, including initial firm orders of 270 aircraft, retrofitting plans and plans to increase mainline daily departures and available seats across the Company's North American network.

In developing our United Next plan, we made certain assumptions including, but not limited to, those related to the duration and scope of the impacts from the COVID-19 pandemic, customer demand (in light of the COVID-19 pandemic, inflation and changing economic conditions), fuel costs, delivery of aircraft, labor market constraints and related costs, supply chain constraints, inflationary pressures, voluntary or mandatory groundings of aircraft, our regional network, competition, market consolidation and other macroeconomic and geopolitical factors.

Actual conditions may be different from our assumptions and could cause the Company to adjust its strategic operating plan.

In addition, we cannot provide any assurance that we will be able to successfully execute our strategic plan, our strategic plan will not result in additional unanticipated costs, the growth that we anticipate will occur through execution of our strategic plan will not exacerbate any other risk described in this Form 10-K (especially relating to our supply chain or our ability to attract, train and retain talent), our partners will timely provide adequate products or support for our products (including delivery of aircraft) or our strategic plan will result in improvements in future financial performance.

In addition, we cannot provide any assurance that we will be able to successfully execute our strategic plan, our strategic plan will not result in additional unanticipated costs, the growth that we anticipate will occur through execution of our strategic plan will not exacerbate any other risk described in this Form 10-K (especially relating to fuel costs, the impact of inflationary pressures, our supply chain or our ability to attract, train and retain talent), our suppliers will timely provide adequate products or support for our products (including delivery of aircraft) or our strategic plan will result in improvements in future financial performance.

If we do not successfully execute our United Next or other strategic plans, or if actual results vary significantly from our expectations, our business, operating results, financial condition and market capitalization could be materially and adversely impacted.

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however, the Company may be responsible for material liabilities to its counterparties if it were to attempt to modify or terminate any of its existing aircraft order commitments and our financial condition could be adversely impacted.

These risks are heightened as a result of the Company's United Next order in the second quarter of 2021, which was the largest order in the Company's history.

These risks are heightened as a result of the Company's United Next orders in the second quarter of 2021 and the fourth quarter of 2022.

Additionally, the Company may have a need for additional aircraft that are not available under its existing orders and may seek to acquire aircraft from other sources, such as through lease arrangements, which may result in higher costs or less favorable terms, or through the purchase or lease of used aircraft.

The Company may not be able to acquire such aircraft when needed on favorable terms or at all.

Furthermore, if, for any reason, the Company is unable to accept deliveries of new aircraft or integrate such new aircraft into its fleet as planned, the Company may face higher financing and operating costs than planned, or be required to seek extensions of the terms for certain leased aircraft or otherwise delay the exit of other aircraft from its fleet.

Such unanticipated extensions or delays may require the Company to operate existing aircraft beyond the point at which it is economically optimal to retire them, resulting in increased maintenance costs, or reductions to the Company's schedule, thereby reducing revenues.

Furthermore, if, for any reason, the Company is unable or does not want to accept deliveries of new aircraft or integrate such new aircraft into its fleet as planned, the Company may face higher financing and operating costs than planned or litigation risks, or be required to seek extensions of the terms for certain leased aircraft or otherwise delay the exit of other aircraft from its fleet.

Unanticipated extensions or delays may require the Company to operate existing aircraft beyond the point at which it is economically optimal to retire them, resulting in increased maintenance costs, or reductions to the Company's schedule, thereby reducing revenues.

The imposition of new tariffs, or any increase in existing tariffs, on the importation of commercial aircraft that the Company orders may also result in higher costs.

Failure to effectively manage acquisitions, divestitures, investments, joint ventures and other portfolio actions could adversely impact our operating results.

In addition, any businesses or assets that we acquire in the future may underperform.

Although we are committed to reducing our debt over the long term, an important part of the Company's strategy to expand its global network has included making significant investments, both domestically and in other parts of the world, including in other airlines and other aviation industry participants, producers of sustainable aviation fuel and manufacturers of electric and other new generation aircraft.

In addition, any businesses or assets that we acquire in the future increase our exposure to unknown liabilities or other issues and also may underperform as compared to expectations.

Although we are committed to reducing our debt over the long term, an important part of the Company's strategy to expand its global network has included making significant investments, both domestically and in other parts of the world, including in other airlines and other aviation industry participants, producers of SAF and manufacturers of electric and other new generation aircraft.

The Company plans to continue to make additional investments through its corporate venture capital arm, UAV.

However, increased competition in forming and maintaining relationships with other airlines (since there are a limited number of potential arrangements and other airlines and industry participants seek to enter into similar relationships) may make it difficult for the Company to complete strategic investments on commercially reasonable terms or at all.

Future revenues, profits and cash flows of these and future investments and repayment of invested or loaned funds may not materialize due to safety concerns, regulatory issues, supply chain problems or other factors beyond our control.

These investments are inherently risky and may not be successful.

Where we acquire debt or equity securities as all or part of the consideration for business development activities, such as in connection with a joint venture, the value of those securities will fluctuate and may depreciate in value.

We may not control the companies in which we make investments, and as a result, we will have limited ability to determine its management, operational decisions, internal controls and compliance and other policies, which can result in additional financial and reputational risks.

We may not control the companies in which we make investments, and as a result, we will have limited ability to determine their management, operational decisions, internal controls and compliance and other policies, which can result in additional financial and reputational risks.

Further, acquisitions and investments create exposure to assumed litigation and unknown liabilities, as well as undetected internal control, regulatory compliance or other issues, or additional costs not anticipated at the time the transaction was completed, and our due diligence efforts may not identify such liabilities or issues, or they may not be disclosed to us.

From time to time we also divest assets.

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Any divestitures also may result in continued financial exposure to the divested businesses following the transaction, such as through guarantees or other financial arrangements or potential litigation.

In addition, we may incur asset impairment charges related to acquisitions or divestitures that reduce our earnings.

For example, in 2020, United recorded a full credit loss allowance against the $515 million carrying value of the BRW Term Loan (as defined in Note 8 to the financial statements included in Part II, Item 8 of this report) and related receivable.

In addition, we may incur asset impairment charges related to acquisitions, divestitures, investments or joint ventures that reduce our earnings.

For example, in 2020, United recorded a full credit loss allowance against the $515 million carrying value of the Term Loan Agreement with, among others, BRW Aviation Holding LLC and BRW Aviation LLC ("BRW"), as guarantor and borrower, respectively, and the related receivable.

Moreover, new or revised accounting standards, rules and interpretations could result in changes to the recognition of income and expense that may materially and adversely affect our financial results.

If the execution or implementation of acquisitions, divestitures, investments, joint ventures and other portfolio actions is not successful, it could adversely impact our financial condition, cash flows and results of operations.

In addition, due to the Company's substantial amount of debt, there can be no assurance of when we will be able to expand our business development capacity.

Pursuing these opportunities may require us to obtain additional equity or debt financing and could result in increased leverage and/or a downgrade of our credit ratings.

In addition, due to the Company's substantial amount of debt, there are certain limitations on the Company's business development capacity.

Further, pursuing these opportunities may require us to obtain additional equity or debt financing and could result in increased leverage and/or a downgrade of our credit ratings.

Business, Operational and Industry Risks

The COVID-19 pandemic, and related governmental regulations and restrictions, has materially and adversely impacted our business, operating results, financial condition and liquidity.

The full extent of the impact will depend on future developments, among other things.

If the impacts from the COVID-19 pandemic extend beyond our assumed timelines, our actual results may vary significantly from our expectations.

As a result, we experienced a precipitous decline in passenger demand and bookings for both business and leisure travel, which had an adverse impact that was material to the Company's business, operating results, financial condition and liquidity and materially disrupted our strategic operating plans.

In 2022, the Company saw increasing demand for travel both domestically and internationally;

however, as the situation surrounding the COVID-19 pandemic remains fluid, the pandemic has continued to negatively impact travel demand.

It remains difficult to reasonably predict the full extent of the ongoing impact of the COVID-19 pandemic on the Company's longer-term operational and financial performance, which will depend on a number of future developments, many of which are outside the Company's control, such as the ultimate duration of and factors impacting the recovery from the pandemic (including the efficacy and speed of vaccination programs in curbing the spread of the virus in different markets, the efficacy and availability of various treatment options, the introduction and spread of new variants of the virus that may be resistant to currently approved vaccines or treatment options and the continuation of existing or implementation of new government travel restrictions), the volatility of aircraft fuel prices, customer behavior and preference changes and whether such changes are temporary or permanent, and fluctuations in demand for air travel, among others.

The COVID-19 pandemic, the measures taken in response

and related macroeconomic effects may continue to impact many aspects of our business, operating results, financial condition and liquidity in a number of ways, including labor market constraints and related costs (which impact available staffing and therefore the Company's flight schedules and reputation), facility closures and related costs, disruptions to the Company's and its business partners' operations, reduced travel demand and consumer spending, increased fuel and other operating costs (including due to rising inflationary pressures), supply chain constraints, logistics constraints, volatility in the price of our securities, our ability to access capital markets and volatility in the global economy and financial markets generally.

If the negative impacts from the COVID-19 pandemic extend beyond our assumed timelines, our actual results may vary significantly from our expectations.

Our level of indebtedness has increased as we managed through the effects of the COVID-19 pandemic and positioned the Company for recovery.

It is possible that COVID-19 could exacerbate any of the other risks described in this Form 10-K as well.

At this time, we cannot predict the full extent of the negative impact that the COVID-19 pandemic will have on our business, operating results, financial condition, and liquidity.

The Company could experience adverse publicity, harm to its brand, reduced travel demand, potential tort liability and operational restrictions as a result of an accident, catastrophe or incident involving its aircraft or its operations or the aircraft or operations of another airline, which may result in a material adverse effect on the Company's business, operating results or financial condition.

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Voluntary or involuntary groundings have also impacted, and could in the future impact, the Company's financial results and operations in numerous ways, including reduced revenue, redistributions of other aircraft and deferrals of capital expenditure and other spending.

For example, in February 2021, the FAA issued an Emergency Airworthiness Directive regarding certain Boeing 777 Pratt & Whitney powered aircraft, which required the Company to keep more than 50 aircraft out of service until required repairs were made to improve the safety of the engines.

A prolonged period of time operating a reduced fleet in these circumstances could result in a material adverse effect on the Company's business, operating results or financial condition.

For example, the Company decided to voluntarily ground its Boeing 737 aircraft following certain electrical issues, and in February 2021, the FAA issued an Emergency Airworthiness

Directive regarding certain Boeing 777 Pratt & Whitney powered aircraft.

The grounding of the Boeing 777 Pratt & Whitney powered aircraft and Boeing 737 aircraft has adversely affected our business and could adversely affect our business going forward if their return to service is significantly delayed.

The global airline industry is highly competitive and susceptible to price discounting and changes in capacity, which could have a material adverse effect on our business, operating results and financial condition.

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Consolidation in the airline industry, the rise of well-funded government sponsored international carriers, changes in international alliances, swaps of landing and slots and the creation of immunized JBAs have altered and are expected to continue to alter the competitive landscape in the industry, resulting in the formation of airlines and alliances with increased financial resources, more extensive global networks and services and competitive cost structures.

Open Skies agreements, including the longstanding agreements between the United States and each of the EU, Canada, Japan, Korea, New Zealand, Australia, Colombia and Panama, as well as the more recent agreements between the United States and each of Mexico and Brazil, may also give rise to better integration opportunities among international carriers.

Open Skies agreements, including the longstanding agreements between the United States and each of the EU, Canada, Japan, Korea, New Zealand, Australia, Colombia and Panama, as well as the more recent agreements between the United States and each of Mexico, Brazil and the UK, may also give rise to better integration opportunities among international carriers.

Movement of airlines between current global airline alliances could reduce joint network coverage for members of such alliances while also creating opportunities for JBAs and bilateral alliances that did not exist before such realignment.

Further airline and airline alliance consolidations or reorganizations could occur in the future, and other airlines participating in such activities may significantly improve their cost structures or revenue generation capabilities, thereby potentially making them stronger competitors of the Company and impairing the Company's ability to realize expected benefits from its own strategic relationships.

capabilities, thereby potentially making them stronger competitors of the Company and impairing the Company's ability to realize expected benefits from its own strategic relationships.

Airlines also compete by increasing or decreasing their capacity, including route systems and the number of destinations served.

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The Company is also dependent on a limited number of suppliers for engines and certain other aircraft parts and could, therefore, also be materially and adversely affected in the event of the unavailability or increased cost of these engines and other aircraft parts.

Many of our suppliers are experiencing inflationary pressures, as well as disruptions due to the lingering impacts of COVID-19, global supply chain and labor market constraints and related costs.

If one or more of our suppliers, our contractors or their subcontractors continue to experience financial difficulties, delivery delays or other performance problems, they may be unable to meet their commitments to us and our financial position, results of operations and cash flows may continue to be adversely impacted.

Disruptions to our regional network and United Express flights provided by third-party regional carriers could adversely affect our business, operating results and financial condition.

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A number of factors may impact the Company's regional network, including weather-related effects, seasonality, equipment or software failures and cybersecurity attacks and any significant declines in demand for air travel services, including as a result of the COVID-19 pandemic.

In addition, the decrease in qualified pilots driven primarily by changes to federal regulations has adversely impacted and could continue to affect the Company's regional flying.

In addition, the decrease in qualified pilots driven primarily by changes to federal regulations has adversely impacted and could continue to adversely impact the Company's regional flying.

For example, the FAA's expansion of minimum pilot qualification standards, including a requirement that a pilot have at least 1,500 total flight hours, as well as the FAA's revised pilot flight and duty time requirements under Part 117 of the Federal Aviation Regulations, have contributed to a smaller supply of pilots available to regional carriers.

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military from which to hire qualified pilots, has led to increased competition from large, mainline carriers attempting to meet their hiring needs and has adversely impacted our regional carriers.

Our regional partners have been unable to hire adequate numbers of pilots to meet their needs, resulting in a reduction in the number of flights offered, disruptions in scheduled flights, increased costs of operations, financial difficulties and other adverse effects and these circumstances may become more severe in the future and thereby cause a material adverse effect on our business.

United Express regional carriers have been unable to hire adequate numbers of pilots to meet their needs, resulting in a reduction in the number of flights offered, disruptions in scheduled flights, increased costs of operations, financial difficulties and other adverse effects and these circumstances may become more severe in the future and could cause a material adverse effect on our business.

In response, the Company has been and may in the future be required to provide additional financial compensation and other support to its regional carriers or reduce its regional carrier flying, which could require the Company to fly routes at a greater cost, reduce the number of destinations the Company is able to serve or lead to negative public perceptions of the Company.

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and global economies.

Robust demand for the Company's air transportation services depends largely on favorable economic conditions, including the strength of the domestic and foreign economies, low unemployment levels, strong consumer confidence levels and the availability of consumer and business credit.

Robust demand for air transportation depends largely on favorable economic conditions, including the strength of the domestic and foreign economies, low unemployment levels, strong consumer confidence levels and the availability of consumer and business credit.

Air transportation is often a discretionary purchase that leisure travelers may limit or eliminate during difficult economic times.

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In addition, during periods of unfavorable economic conditions, business travelers historically have reduced the volume of their travel, either due to cost-saving initiatives, the replacement of travel with alternatives such as videoconferencing or as a result of decreased business activity requiring travel.

In addition, an increase in price levels generally or in price levels in a particular sector (such as current inflation related to domestic and global supply chain issues, which has

led to both overall price increases and pronounced price increases in certain sectors) could result in a shift in consumer demand away from both leisure and business travel.

During such periods, the Company's business and operating results have been and may in the future be adversely affected.

In addition, an increase in price levels generally or in price levels in a particular sector (such as current rising inflationary pressures related to domestic and global supply chain constraints, which have led to both overall price increases and pronounced price increases in certain sectors) could result in a shift in consumer demand away from both leisure and business travel.

Reduced or flat consumer spending may drive us and our competitors to reduce or offer promotional prices, which would negatively impact our gross margin.

In addition, if inflation continues to rise, we may not be able to adjust prices sufficiently to offset the effect without further negatively impacting travel demand or our gross margin.

Any of the foregoing would adversely affect the Company's business and operating results.

Significant declines in industry passenger demand, particularly with respect to the Company's business and premium cabin travelers and a reduction in fare levels, could lead to a material reduction in revenue, changes to the Company's operations and deferrals of capital expenditure and other spending.

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The Company's business relies extensively on third-party service providers, including certain technology providers.

Failure of these parties to perform as expected, or interruptions in the Company's relationships with these providers or their provision of services to the Company, could have a material adverse effect on the Company's business, operating results and financial condition.

Failure of these parties to perform as expected, or interruptions in the Company's relationships with these providers or their

provision of services to the Company, could have a material adverse effect on the Company's business, operating results and financial condition.

The Company has engaged third-party service providers to perform a large number of functions that are integral to its business, including regional operations, operation of customer service call centers, distribution and sale of airline seat inventory, provision of information technology infrastructure and services, transmitting or uploading of data, provision of aircraft maintenance and repairs, provision of various utilities and performance of airport ground services, aircraft fueling operations and catering services, among other vital functions and services.

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If we are not able to negotiate or renew agreements with third-party service providers, or if we renew existing agreements on less favorable terms, our operations and financial results may be adversely affected.

Extended interruptions or disruptions in service at major airports where we operate could have a material adverse impact on our operations, and space, facility and infrastructure constraints at our hubs or other airports may prevent the Company from maintaining existing service and/or implementing new service in a commercially viable manner.

Extended interruptions or disruptions in service at major airports where we operate could have a material adverse impact on our operations, including our ability to operate our existing flight schedule and to expand or change our route network in the future, and space, facility and infrastructure constraints at our hubs or other airports may prevent the Company from maintaining existing service and/or implementing new service in a commercially viable manner.

The airline industry is heavily dependent on business models that concentrate operations in major airports in the United States and throughout the world.

An extended interruption or disruption at one of our hubs or other airports where we have a significant presence resulting from ATC delays, weather conditions, natural disasters, growth constraints, relations with third-party service providers, failure of computer systems, disruptions to government agencies or personnel (including as a result of government shutdowns), disruptions at airport facilities or other key facilities used by us to manage our operations, labor relations, power supplies, fuel supplies, terrorist activities, international hostilities or otherwise could result in the cancellation or delay of a significant portion of our flights and, as a result, could have a material impact on our business, operating results and financial condition.

We have a significant portion of our maintenance operations at our SFO airport hub and any disruption or interruption at our SFO hub could have a serious impact on our overall operations.

For example, we have a significant portion of our maintenance operations at our SFO airport hub and any disruption or interruption at our SFO hub could have a serious impact on our overall operations.

An extended interruption or disruption at one of our hubs or other airports where we have a significant presence resulting from ATC delays, weather conditions, natural disasters, growth constraints, relations with third-party service providers, failure of computer systems, disruptions to government agencies or personnel (including as a result of government shutdowns), disruptions at airport facilities or other key facilities used by us to manage our operations, labor relations and market constraints, power supplies, fuel supplies, terrorist activities, international hostilities or otherwise could result in the cancellation or delay of a significant portion of our flights and, as a result, could have a material adverse impact on our business, operating results and financial condition.

We have minimal control over the operation, quality or maintenance of these services or whether vendors will improve or continue to provide services that are essential to our business.

For example, because we prioritize operational excellence and continually work to optimize our route network and schedule, in light of the industry-wide operational challenges at airports in our network that have limited our system-wide capacity (one of the more prominent being the grounding of a number of the Company's transatlantic flights in response to the capacity cut by London Heathrow airport during the summer of 2022), in 2022 we decided to reconfigure our proposed flight schedule and capacity to help improve our operational performance and our customers' experience.

These industry-wide operational challenges had a negative impact on our business and operating results and are expected to continue.

In the future, we may not be able to adjust our operations to mitigate their effect in the future, which may have a negative impact on our business, operating results, financial condition and liquidity and limit our ability to expand or change our route network in the future and execute our United Next strategy.

In addition, as airports around the world become more congested, space, facility and infrastructure constraints at our hubs or other airports may prevent the Company from maintaining existing service and/or implementing new service in a commercially viable manner because of a number of factors, including capital improvements at such airports being imposed by the relevant airport authority without the Company's approval.

Capital spending projects of airport authorities currently underway and

additional projects that we expect to commence over the next several years is expected to result in increased costs to airlines and the traveling public that use those facilities as the airports seek to recover their investments through increased rental, landing and other facility costs.

Capital spending projects of airport authorities currently underway and additional projects that we expect to commence over the next several years is expected to result in increased costs to airlines

and the traveling public that use those facilities as the airports seek to recover their investments through increased rental, landing and other facility costs.

These actions have caused and may continue to cause the Company to experience increased space rental rates at various airports in its network, including a number of our hubs and gateways, and increased operating costs.

Furthermore, the Company is not able to control decisions by other airlines to reduce their capacity, causing certain fixed airport costs to be allocated among fewer total flights and resulting in increased landing fees and other costs for the Company.

Although we currently have sufficient slots or analogous authorizations to operate our existing flights and we have generally, but not always, been able to obtain the rights to expand our operations and to change our schedules.

Geopolitical conflict, terrorist attacks or security events may adversely affect our business, financial condition and results of operations.

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We operate in a public-facing industry and maintaining a good reputation is critical to our business.

The Company's reputation or brand image could be adversely impacted by any failure to maintain satisfactory practices for all of our operations and activities, any failure to achieve and/or make progress toward our environmental and sustainability goals or our diversity, equity and inclusion goals, public pressure from investors or policy groups to change our policies, customer perceptions of our advertising campaigns, sponsorship arrangements or marketing programs, or customer perceptions of statements made by us, our employees and executives, agents or other third parties.

The Company's reputation or brand image could be adversely impacted by any failure to maintain satisfactory practices for all of our operations and activities;

any failure to achieve and/or make progress toward our environmental, safety, diversity, equity and inclusion or other social and governance ("ESG") goals, which are subject to risks and uncertainties that are outside of our control;

our stakeholders not being satisfied with our ESG goals or strategy or efforts to meet the goals;

public pressure from investors or policy groups to change our policies;

customer perceptions of our advertising campaigns, sponsorship arrangements or marketing programs, including greenwashing concerns regarding our advertising campaigns and marketing programs related to our sustainability initiatives;

or customer perceptions of statements made by us, our employees and executives, agents or other third parties.

Damage to our reputation or brand image or loss of customer confidence in our services could adversely affect our business and financial results, as well as require additional resources to rebuild our reputation.

Regulators, customers, investors, employees and other stakeholders are focusing more on ESG impacts of operations and related disclosures, which are subject to rules, regulations and standards for collecting, measuring and reporting that are still developing, involve internal controls and processes that continue to evolve, depend in part on third-party performance or data that is outside the Company's control and have resulted in, and are likely to continue to result in, increased general and administrative expenses and increased management time and attention spent complying with or meeting such expectations, rules, regulations and standards.

The ongoing relevance of our brand may depend on our ability to achieve our ESG goals, further our ESG initiatives and comply with related federal, state and international binding or non-binding legislation, regulation, standards and accords as well as on the accuracy, adequacy or completeness of our disclosures relating to our ESG goals and initiatives and progress against those goals.

Information Technology, Cybersecurity and Data Privacy Risks

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The Company depends on technology and automated systems to operate its business, including, but not limited to, computerized airline reservation systems, electronic tickets, electronic airport kiosks, demand prediction software, flight operations systems, in-flight wireless internet, cloud-based technologies, technical and business operations systems and commercial websites and applications, including www.united.com and the United Airlines mobile app.

These systems could suffer substantial or repeated disruptions due to various events, some of which are beyond the Company's control (including natural disasters, power failures, terrorist attacks, dependencies on third-party technology services, equipment or software failures, cybersecurity attacks or other security breaches and the deployment by certain wireless carriers of new "5G" service networks), which could reduce the attractiveness of the Company's services versus those of our competitors, materially impair our ability to market our services and operate our flights, result in the unauthorized release of confidential or otherwise protected information, negatively impact our reputation among our customers and the public, subject us to liability to third parties, regulatory action or contract termination and result in other increased costs, lost revenue and the loss or compromise of important data.

These systems could suffer substantial or repeated disruptions due to various events, some of which are beyond the Company's control (including natural disasters (which may occur more frequently or intensely as a result of the impacts of climate change), power failures, terrorist attacks, dependencies on third-party technology services, equipment or software failures, cybersecurity attacks or other

security breaches and the deployment by certain wireless carriers of "5G" service networks), which could reduce the attractiveness of the Company's services versus those of our competitors, materially impair our ability to market our services and operate our flights, result in the unauthorized release of confidential or sensitive information, or information that should be protected from inadvertent disclosures, negatively impact our reputation among our customers and the public, subject us to liability to third parties, regulatory action or contract termination and result in other increased costs, lost revenue and the loss of, or compromise to the integrity, availability or confidentiality of, important data.

As a result, substantial or repeated systems failures or disruptions may adversely affect the Company's business, operating results and financial condition.

We have resiliency initiatives and disaster recovery plans in place to prevent and mitigate disruptions, and we continue to invest in improvements to these initiatives and plans.

We have cybersecurity frameworks, resiliency initiatives and disaster recovery plans in place to prevent and mitigate disruptions, and we continue to invest in improvements to these initiatives and plans.

We also maintain property and business interruption insurance.

However, these measures may not be adequate to prevent or mitigate disruptions or provide coverage for all of the Company's associated costs.

The Company may also face challenges in implementing, integrating and modifying the automated systems and technology required to operate its business, which may require significant expenditures, human resources, the development of effective

internal controls and the transformation of business and financial processes.

However, these measures may not be adequate to prevent or mitigate disruptions or provide coverage for all of the Company's associated costs, some of which may be unforeseeable.

If the Company is unable to timely or effectively implement, integrate or modify its systems and technology, the Company's operations could be adversely affected .

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For example, the EU's General Data Protection Regulation imposes significant privacy and data security requirements, as well as potential for substantial penalties for non-compliance that have resulted in substantial adverse financial consequences to non-compliant companies.

Depending on the regulatory interpretation and enforcement of emerging data protection regulations and industry standards, the Company's business operations could be impacted, up to and including being unable to operate, within certain jurisdictions.

Also, some of the Company's commercial partners, such as credit card companies, have imposed data security standards that the Company must meet.

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Additionally, the Company must manage the increasing threat of continually evolving cybersecurity risks.

Our network, systems and storage applications, and those systems and applications maintained by our third-party commercial partners (such as credit card companies, our regional carriers and international airline partners) may be subject to attempts to gain unauthorized access, breach, malfeasance or other system disruptions, including those involving criminal hackers, denial of service attacks, hacktivists, state-sponsored actors, corporate espionage, employee malfeasance and human or technological error.

Our network, systems and storage applications, and those systems and applications maintained by our third-party commercial partners (such as cloud computing companies, credit card companies, regional airline carriers and international airline partners) may be subject to attempts to gain unauthorized access, breach, malfeasance or other system disruptions, including those involving criminal hackers, denial of service attacks, hacktivists, state-sponsored actors, corporate espionage, employee malfeasance and human or technological error.

In some cases, it is difficult to anticipate or to detect immediately such incidents and the damage caused thereby.

In addition, as attacks by cybercriminals become more sophisticated, frequent and intense, the costs of proactive defense measures have increased and may continue to increase.

In addition, several large organizations recently have been affected by "ransomware" attacks, and these highly publicized events may embolden individuals or groups to target our systems or the third party systems on which we rely.

Furthermore, the Company's remote work arrangements make it more vulnerable to targeted activity from cybercriminals and significantly increase the risk of cyberattacks or other security breaches.

While we continually work to safeguard our network, systems and applications, including through risk assessments, system monitoring, cybersecurity and data protection security policies, processes and technologies and employee awareness and training, and require third-party security standards, there is no assurance that such actions will be sufficient to prevent cyberattacks or data breaches.

Any such cyberattacks or data breaches could result in significant costs, including monetary damages, operational impacts, including service interruptions and delays, and reputational harm.

Furthermore, the Company's remote work arrangements may make it more vulnerable to targeted activity from cybercriminals and significantly increase the risk of cyberattacks or other security breaches.

While we continually work to safeguard our network, systems and applications, including through risk assessments, system monitoring, cybersecurity and data protection policies, processes and technologies and employee awareness and training, and seek to require third-parties adhere to security standards, there is no assurance that such actions will be sufficient to prevent cybersecurity incidents or data breaches or the damages that result therefrom.

Any such cybersecurity incident or data breach could result in significant costs, including monetary damages, operational impacts, including service interruptions and delays, and reputational harm.

Furthermore, the loss, disclosure, misappropriation of or access to sensitive Company information, customers', employees' or business partners' information or the Company's failure to meet its privacy obligations could result in legal claims or proceedings, penalties and remediation costs.

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We are increasing our use of social media to communicate Company news and events.

The inappropriate and/or unauthorized use of certain media vehicles could cause brand damage or information leakage or could lead to legal implications, including from the improper collection and/or dissemination of personally identifiable information from employees, customers or other stakeholders.

The inappropriate and/or unauthorized use of certain media vehicles could cause brand damage or information leakage or could lead to legal implications, including

from the improper collection and/or dissemination of personally identifiable information from employees, customers or other stakeholders.

In addition, negative or inaccurate posts or comments about us on any social networking website could damage our reputation, brand image and goodwill.

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Human Capital Management Risks

Union disputes, employee strikes or slowdowns, and other labor-related disruptions could adversely affect the Company's operations and could result in increased costs that impair its financial performance.

Union disputes, employee strikes or slowdowns, and other labor-related disruptions or regulatory compliance costs could adversely affect the Company's operations and could result in increased costs that impair its financial performance.

United is a highly unionized company.

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There is a risk that unions or individual employees might pursue judicial or arbitral claims arising out of changes implemented as a result of the Company entering into collective bargaining agreements with its represented employee groups.

There is also a possibility that employees or unions could engage in job actions such as slowdowns, work-to-rule campaigns, sick-outs or other actions designed to disrupt the Company's normal operations, in an

attempt to pressure the Company in collective bargaining negotiations.

Although the RLA makes such actions unlawful until the parties have been lawfully released to self-help, and the Company can seek injunctive relief against premature self-help, such actions can cause significant harm even if ultimately enjoined.

Although the Railway Labor Act makes such actions unlawful until the parties have been lawfully released to self-help, and the Company can seek injunctive relief against premature self-help, such actions can cause significant harm even if ultimately enjoined.

Similarly, if the operations of our third-party regional carriers, ground handlers or other vendors are impacted by labor-related disruptions, our operations could be adversely affected.

In addition, collective bargaining agreements with the Company's represented employee groups increase the Company's labor costs, and such costs could become material.

Furthermore, there is increasing litigation in the airline industry over the application of state and local employment and labor laws to airline employees, particularly those based in California.

Most recently, the U.S.

Supreme Court denied review of a Ninth Circuit ruling which held that federal law did not preempt California state meal and rest break laws from applying to certain California based flight attendants.

This decision adversely affects the Company's defenses with respect to certain employee groups in California, and it may give rise to additional litigation in these and other areas previously found to be preempted by federal law.

The Company is a defendant in a number of proceedings regarding alleged non-compliance with wage and hour laws.

Adverse decisions in these cases could adversely impact our operational flexibility, uniform application of our negotiated collective bargaining agreements, and result in imposition of damages and fines which could be significant.

If we are unable to attract, train or retain skilled personnel, including our senior management team or other key employees, our business could be adversely affected.

Much of our future success is largely dependent on our continued ability to attract, train and retain skilled personnel with industry experience and knowledge, including our senior management team and other key employees.

Competition for qualified talent in the aviation industry is intense, especially during the COVID-19 pandemic, and the tight labor markets have led to operational challenges that we expect to continue during 2022.

Competition for qualified talent in the aviation industry is intense and labor market constraints have impacted our operations in 2022, which may continue during 2023.

If we are unable to attract, train and retain talented, highly qualified employees or experience a shortage of skilled labor, the cost of hiring and retaining quality talent could materially increase and our operations could continue to be impacted, which could impair our ability to adjust capacity or otherwise execute our strategic operating plan.

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The DOT also regulates consumer protection and, through its investigations or rulemaking authority (including, for example, any rulemakings or initiatives in response to the Executive Order on Promoting Competition in the American Economy issued by the President on July 9, 2021), could impose restrictions that materially impact the Company's business.

United also operates pursuant to an air carrier operating certificate issued by the FAA, and FAA orders and directives have previously resulted in the temporary grounding of an entire aircraft type when the FAA identifies design, manufacturing, maintenance or other issues requiring immediate corrective action (including the FAA Emergency Airworthiness Directive grounding our Boeing 777 Pratt & Whitney powered aircraft), which has had an effect that has been material to the Company's business, operating results and financial condition.

& Whitney powered aircraft), which has had an effect that has been material to the Company's business, operating results and financial condition.

In 2018, the U.S.

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Additionally, the U.S.

Congress may consider legislation related to environmental issues or increases to the U.S.

Congress may consider legislation related to environmental issues relevant to the airline industry, such as implementation of CORSIA, or increases to the U.S.

federal corporate income tax rate, as outlined in the proposed Build Back Better Act or otherwise, which could negatively impact the Company and the airline industry.

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Similarly, a government or regulatory agency, including DOT, could choose to impose slots at one of our hubs or other airports or grant increased access to another carrier and limit or reduce our operations at an airport, whether or not slot-controlled, which could have significant impact on our operations.

The DOT (including FAA) may limit the Company's airport access by limiting the number of

departure and arrival slots at congested airports, which could affect the Company's ownership and transfer rights, and local airport authorities may have the ability to control access to certain facilities or the cost to access their facilities, which could have an adverse effect on the Company's business.

The DOT (including FAA) may limit the Company's airport access by limiting the number of departure and arrival slots at congested airports, which could affect the Company's ownership and transfer rights, and local airport authorities may have the ability to control access to certain facilities or the cost to access their facilities, which could have an adverse effect on the Company's business.

If the DOT were to take actions that adversely affect the Company's slot holdings, the Company could incur substantial costs to preserve its slots or may lose slots.

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and around the globe, which include closure of international borders to flights and/or passengers from specific countries, passenger and crew quarantine requirements and other regulations promulgated to protect public health but that have had and may continue to have a negative impact on travel and airline operations.

In addition, disruptions to the Company's business could result from the deployment by certain wireless carriers of new "5G" cellular networks, which, due to potential interference with aircraft systems, could cause flights to be cancelled or diverted, which in turn could affect consumer perceptions of the safety of air travel.

In addition, disruptions to the Company's business could result from the deployment by certain wireless carriers of "5G" cellular networks, which, due to potential interference with aircraft systems, could cause flights to be cancelled or diverted, which in turn could affect consumer perceptions of the safety of air travel.

Thus far, regulators have addressed potential "5G" interference on a temporary and piecemeal basis tailored to specific aircraft and airports and uncertainty over the nature, extent, timing and duration of limitations on aircraft operations as a result of "5G" deployment is anticipated to continue over the near term.

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In addition, failure to achieve or demonstrate progress towards our climate goals may expose us to liability and reputational harm.

Many aspects of the Company's operations are subject to increasingly stringent federal, state, local and international laws protecting the environment, including those relating to water discharges, safe drinking water and the use and management of

hazardous materials and wastes.

Compliance with existing and future environmental laws and regulations can require significant expenditures and operational changes and violations can lead to significant fines and penalties and reputational harm.

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As discussed in Part I, Item 1.

Business—Environmental, Social and Governance Approach and Highlights—Climate Strategy, the Company has made several commitments regarding its intended reduction of carbon emissions, including becoming 100% green by eliminating its GHG emissions by 2050 and by reducing its carbon intensity by 50% by 2035 compared to 2019.

The Company has incurred, and expects to continue to incur, costs to achieve its goal of net zero carbon emissions and to comply with environmental sustainability legislation and regulation and non-binding standards and accords.

Business—Environmental, Social and Governance Approach and Highlights—Climate Strategy, the Company has made several commitments regarding its intended reduction of carbon emissions, including eliminating its GHG emissions by 100% by 2050 and by reducing its carbon intensity by 50% by 2035 compared to 2019.

The Company has incurred, and expects to continue to incur, costs to achieve its goal of net zero carbon emissions, which will involve a transition to lower-carbon technologies (such as SAF), and to comply with environmental sustainability legislation and regulation and non-binding standards and accords.

Such activity may require the Company to modify its supply chain practices, make capital investments to modify certain aspects of its operations or increase its operating costs (including fuel costs).

The precise nature of future binding or non-binding legislation, regulation, standards and accords, which is an increased focus of global, national and regional regulators, is difficult to predict and the financial impact to the Company would likely be significant if future legal standards do not align with the Company's plans to achieve its climate goals or if proposed U.S.

The potential transition cost to a lower-carbon economy could be prohibitively expensive without appropriate government policies and incentives in place.

The precise nature of future binding or non-binding legislation, regulation, standards and accords in this area of increased focus by global, national and regional regulators is difficult to predict and the financial impact to the Company would likely be significant if future legal standards do not align with the Company's plans to achieve its climate goals or if proposed U.S.

legislation to accelerate the production of SAF development fails to be enacted into law.

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There is also a risk that the increased regulatory focus on airline GHG emissions could result in a patchwork of inconsistent or conflicting regional requirements that could unduly shift excessive cost burden to airlines and inhibit the development of carbon reduction technologies that the Company needs to reach its climate goals.

There can be no assurance of the extent to which any of our climate goals will be achieved or that any future investments that we make in furtherance of achieving our climate goals will produce the expected results or meet increasing stakeholder environmental, social and governance expectations.

Moreover, future events could lead the Company to prioritize other nearer-term interests over progressing toward our current climate goals based on business strategy, economic, regulatory and social factors, business strategy or potential pressure from investors, activist groups or other stakeholders.

If we are unable to meet or properly report on our progress toward achieving our climate change goals and commitments, we could face adverse publicity and reactions from other investors, activist groups, or other stakeholders, which could result in reputational harm or other adverse effects to the Company.

The Company is likely to incur substantial costs and operational disruptions as a result of increases in the frequency, severity or duration of severe weather events caused by climate change (including thunderstorms, hurricanes, flooding, typhoons, tornados and other severe weather events) that could result in increases in delays and cancellations, turbulence-related injuries and fuel consumption to avoid such weather, any of which could result in significant loss of revenue and higher costs.

In addition, we could incur significant costs to improve the climate resiliency of our infrastructure and supply chain and otherwise prepare for, respond to, and mitigate the effects of climate change.

We are not able to predict accurately the materiality of any potential losses or costs associated with the effects of climate change.

The Company believes that strategic opportunities exist for it as a result of climate change and that the sustainability-related solutions being pursued to advance its climate goals will help mitigate several of these potential risks posed by the transition to a lower-carbon economy.

There can be no assurance of the extent to which any of our climate goals will be achieved or that any current or future investments that we make in furtherance of achieving our climate goals will produce the expected results or meet increasing stakeholder expectations.

Moreover, future events could lead the Company to prioritize other nearer-term interests over progressing toward our current climate goals based on business strategy, economic, regulatory and social factors or pressure from investors, activist groups or other stakeholders.

If we fail—or are perceived to fail—to meet or properly report on our progress toward achieving our climate change goals and commitments, we could face adverse publicity and reactions from other investors, activist groups, or other stakeholders, which could result in reputational harm or other adverse effects to the

In addition, the Company believes it is possible that, in the future, segments of the public may choose to fly less frequently as a result of negative perception of the environmental impact of air travel or fly on an airline based on carriers' GHG emissions or which carrier they perceive as operating in a manner that is more sustainable to the climate, which presents both a challenge and an opportunity for the Company and is why the Company is resolute in attaining its mid-term and long-term climate goals;

if this trend materializes, the Company's results of operations could be adversely impacted and those impacts could be exacerbated if the Company fails to meet or properly report on its climate change goals and commitments.

Moreover, the Company's primary effort with respect to one of its key pathways to achieving its climate goals is reducing its fossil jet fuel consumption by working with strategic partners to employ and commercialize the use of SAF, which is aligned with the sustainability commitments of the Company's corporate customers to mitigate their travel emissions in accordance with their respective climate goals.

The Company has been able to increase its purchases of SAF in recent years due to its corporate customers' funding of the price premium for SAF through the Company's Eco-Skies Alliance, but the willingness of corporate customers to fund the price premium for SAF in the future could decrease, including based on economic factors or concerns regarding the validity of a book and claim approach for claiming the emissions reductions from SAF.

The Company may incur substantial costs and operational disruptions as a result of both its physical risks (such as extreme weather conditions or rising sea levels) and transition risks (such as regulatory or technological changes) associated with climate change.

Climate change is expected to increase the frequency, severity, unpredictability and duration of severe weather events and other natural cycles and could affect travel demand as well as result in increases in delays and cancellations, turbulence-related injuries and fuel consumption to avoid such weather, any of which could result in a significant loss of revenue and higher costs.

In addition, certain of our operations and facilities around the world are in locations that may be impacted by the physical impacts of climate change, increasing global chemical restrictions and bans and water and waste requirements and we could incur significant costs to improve the climate resiliency of our infrastructure and supply chain and otherwise prepare for, respond to, and mitigate the effects of climate change.

We are not able to reasonably predict the future materiality of any potential losses or costs associated with the effects of climate change.

See Part I, Item 1.

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The Company generally sources fuel at prevailing market prices, which have historically fluctuated substantially in short periods of time and continue to be highly volatile due to a multitude of unpredictable factors beyond the Company's control, including changes in global crude oil prices, the balance between aircraft fuel supply and demand, natural disasters, prevailing inventory levels and fuel production and transportation infrastructure.

Prices of fuel are also impacted by

indirect factors, such as geopolitical events, economic growth indicators, fiscal/monetary policies, fuel tax policies, changes in regulations, environmental concerns and financial investments in energy markets.

Prices of fuel are also impacted by indirect factors, such as geopolitical events, economic growth indicators, fiscal/monetary policies, fuel tax policies, changes in regulations, environmental concerns and financial investments in energy markets.

Both actual changes in these factors, as well as changes in related market expectations, can potentially drive rapid changes in fuel prices in short periods of time.

Rising fuel prices can also lead to constraints on the Company's regional partners, reduced capital available for other spending or other outcomes that could adversely impact the Company.

Given the highly competitive nature of the airline industry, the Company has not been able to previously, and may not be able to in the future, increase its fares and fees sufficiently to offset the full impact of increases in fuel prices, especially if these increases are significant, rapid and sustained.

Given the highly competitive nature of the airline industry, the Company historically had limited ability to, and may not be able to in the future, increase its fares and fees sufficiently to offset the full impact of increases in fuel prices, especially if these increases are significant, rapid and sustained.

Further, any such fare or fee increase may not be sustainable, may reduce the general demand for air travel and may also eventually impact the Company's operations, strategic growth and investment plans for the future.

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Additionally, deterioration in the Company's financial condition could negatively affect its ability to enter into hedge contracts in the future.

The Company has a significant amount of financial leverage from fixed obligations and may seek material amounts of additional financial liquidity in the short-term, and insufficient liquidity may have a material adverse effect on the Company's financial condition and business.

The Company has a significant amount of financial leverage from fixed obligations and insufficient liquidity may have a material adverse effect on the Company's financial condition and business.

The Company has a significant amount of financial leverage from fixed obligations, including aircraft lease and debt financings, leases of airport property, secured bonds, secured loan facilities and other facilities, and other material cash obligations.

In addition, the Company has substantial noncancelable commitments for capital expenditures, including for the acquisition of new and used aircraft and related spare engines.

In addition, the Company has substantial noncancelable commitments for capital expenditures, including for the acquisition of new aircraft and related spare engines.

If the Company's liquidity is materially diminished, the Company's substantial level of indebtedness, the Company's non-investment grade credit ratings and the lack of availability of Company assets as collateral for loans or other indebtedness may make it difficult for the Company to raise additional capital if needed to meet its liquidity needs on acceptable terms, or at all, and the Company may not be able to timely pay its leases and debts or comply with material provisions of its contractual obligations, including covenants under its financing and credit card processing agreements.

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UAL's or United's ability to comply with these covenants may be affected by events beyond its control, including the overall industry revenue environment, the level of fuel costs and the appraised value of the collateral.

In addition, our financing agreements contain other negative covenants

customary for such financings.

In addition, our financing agreements contain other negative covenants customary for such financings.

If we fail to comply with these covenants and are unable to remedy or obtain a waiver or amendment, an event of default would result.

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The proposed phase out of the London interbank offer rate could have a material adverse effect on us.

There is currently uncertainty around the phase out of London interbank offered rates ("LIBOR").

As of December 31, 2021, the Company had $13.0 billion in variable rate indebtedness, all or a portion of which uses LIBOR as a benchmark for establishing applicable rates.

The Company is subject to market risks relating to the phase out of the London interbank offered rates ("LIBOR") and the transition into an index calculated by short-term repurchase agreements – the Secured Overnight Financing Rate ("SOFR") or another alternate reference rate.

As of December 31, 2022, the Company had $12.8 billion in variable rate indebtedness, a significant portion of which still uses LIBOR as a benchmark for establishing applicable rates.

In July 2017, the United Kingdom regulator that regulates LIBOR announced its intention to phase out LIBOR rates by the end of 2021.

However, the ICE Benchmark Administration, in its capacity as administrator of USD-LIBOR, has announced that it intends to extend publication of USD LIBOR (other than one-week and two-month tenors) by 18 months to June 2023.

Notwithstanding this possible extension, a joint statement by key regulatory authorities calls on banks to cease entering into new contracts that use USD-LIBOR as a reference rate by no later than December 31, 2021.

Subsequently, the ICE Benchmark Administration, in its capacity as administrator of USD-LIBOR, announced an extension of the publication of USD-LIBOR (other than one-week and two-month tenors) by 18 months through June 2023.

Notwithstanding this extension, a joint statement by key regulatory authorities called on banks to cease entering into new contracts that use USD-LIBOR as a reference rate by no later than December 31, 2021.

The Alternative Reference Rates Committee, a steering committee comprised of large U.S.

financial institutions, has proposed replacing USD-LIBOR with a new index calculated by short-term repurchase agreements - the Secured Overnight Financing Rate ("SOFR").

At this time, uncertainty remains as to what rate or rates may become accepted alternatives to LIBOR, and it is impossible to predict whether and to what extent banks will continue to provide LIBOR submissions to the administrator of LIBOR and whether LIBOR rates presently expected to be published until June 2023 will cease to be so published or supported before or after such time.

We have issued variable rate debt based on LIBOR and have undertaken interest rate swaps that contain a variable element based on LIBOR.

While many of our LIBOR-based obligations provide for alternative methods of calculating the interest rate payable if LIBOR is not reported, the extent and manner of any future changes with respect to methods of calculating LIBOR or replacing LIBOR with another benchmark remain uncertain and impossible to predict at this time, and changes to implement a replacement benchmark may require renegotiation of relevant agreements.

We have also entered into certain agreements that look to SOFR as an alternative interest rate method to LIBOR, with the potential for spread adjustments, and we cannot predict what the impact of these agreements and any transition to or use of SOFR could have on us.

Although SOFR appears to be the preferred replacement rate for USD LIBOR at this time, if the financial market coalesces around an alternative benchmark rate method to LIBOR that is different than SOFR, we may need to renegotiate these agreements.

financial institutions, has proposed replacing USD-LIBOR with SOFR.

In March 2022, the U.S.

enacted the Adjustable Interest Rate (LIBOR) Act, with publication in December 2022 by the Federal Reserve Board of related implementing rules, intended to provide a statutory framework to replace USD-LIBOR with a benchmark rate based on SOFR for contracts governed by U.S.

law that have no or ineffective fallback provisions.

Since January 1, 2022, our new floating rate debt facilities have generally utilized SOFR-based rates as the initial reference rate.

However, we still have variable rate debt based on LIBOR.

We have commenced the process of replacing LIBOR as a benchmark in such existing floating rate obligations, but there is no assurance that such replacements will be concluded, or will be concluded prior to LIBOR rates ceasing to be published.

While many of our remaining LIBOR-based obligations provide for alternative methods of calculating the interest rate payable if LIBOR is not published, the extent and manner of any future changes with respect to methods of calculating LIBOR or replacing LIBOR with SOFR or with another benchmark remain uncertain.

Although the Adjustable Interest Rate (LIBOR) Act provides for a SOFR fallback for certain such agreements, uncertainty exists around the extent to which this transition from USD-LIBOR, whether by amendment or application of this statute, will affect the interest rates in those agreements.

We also have certain agreements that look to SOFR as an alternative interest rate method to LIBOR, with the potential for spread adjustments, and we cannot predict what the impact of these agreements and any transition to or use of SOFR could have on us.

Although SOFR seems to be the most widely accepted replacement to LIBOR and SOFR based rates are presently the primary such replacement benchmark being implemented by the Company, both the application and the future of SOFR remain uncertain.

We may be negatively impacted by renegotiated terms in connection with any replacements to LIBOR as a benchmark, which may adversely affect our interest rates and result in higher borrowing costs that we cannot predict.

In addition, the phase out or replacement of LIBOR could cause disruptions in the credit markets that lead to a downgrade of our current credit rating, which could increase our future borrowing costs and our cost of capital, impair our ability to access capital and credit markets on terms commercially acceptable to us and adversely affect our liquidity and capital resources.

The Company's ability to use its net operating loss carryforwards and certain other tax attributes to offset future taxable income for U.S.

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Potential future transactions involving the sale or issuance of UAL common stock may increase the possibility that the Company will experience a future "ownership change" under Section 382.

Such transactions may include the exercise of warrants issued in connection with the CARES Act programs, the issuance of UAL common stock for cash, the conversion of any future convertible debt, the

repurchase of any debt with the Company's common stock, the acquisition or disposition of any stock by a stockholder owning 5% or more of the outstanding shares of UAL common stock, or a combination of the foregoing.

At the Company's annual meeting of stockholders held on May 26, 2021, the Company's stockholders approved a tax benefits preservation plan (the "Plan") in order to preserve the Company's ability to use its NOLs and certain other tax attributes to reduce potential future income tax obligations.

Such transactions may include the exercise of warrants issued in connection with the CARES Act programs, the issuance of UAL common stock for cash, the conversion of any future convertible debt, the repurchase of any debt with the Company's common stock, the acquisition or disposition of any stock by a stockholder owning 5% or more of the outstanding shares of UAL common stock, or a combination of the foregoing.

The Company's stockholders approved a tax benefits preservation plan (the "Plan") in order to preserve the Company's ability to use its NOLs and certain other tax attributes to reduce potential future income tax obligations.

The Plan is designed to reduce the likelihood that the Company experiences an "ownership change" by deterring certain acquisitions of Company securities.

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The Company may be required to recognize losses in the future due to, among other factors, extreme fuel price volatility, tight credit markets, government regulatory changes, decline in the fair values of certain tangible or intangible assets, such as our aircraft, route authorities, airport slots and frequent flyer database, unfavorable trends in historical or forecasted results of operations and cash flows and an uncertain economic environment, as well as other uncertainties.

For example, during the fiscal year ended December 31, 2021, the Company recorded $97 million of impairments, which includes impairments resulting from current market conditions for used aircraft that are being held for sale and the decision to retire 50-seat regional aircraft as a result of the United Next order.

For example, during 2021, the Company recorded $97 million of impairments, which includes impairments resulting from current market conditions for used aircraft that are being held for sale and the decision to retire single-cabin 50-seat regional aircraft as a result of the 2021 United Next order.

Also in 2020, the Company recognized $130 million of impairment charges related to its China routes, which were primarily caused by the COVID-19 pandemic, the Company's subsequent suspension of flights to China and a further delay in the expected return of full capacity to the China markets.

Adverse changes to our forecasted results caused by COVID-19 or other factors could require the Company to recognize additional impairments to its China route indefinite-lived intangible assets in future periods.

Adverse changes to our forecasted results could require the Company to recognize additional impairments to its China route indefinite-lived intangible assets in future periods.

The Company can provide no assurance that a material impairment loss of tangible or intangible assets will not occur in a future period.

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The market price of our common stock could fluctuate significantly for various reasons which include:

the market reaction to the COVID-19 pandemic and our responses thereto;

the market reaction to another COVID-19-like pandemic and our responses thereto;

the sale of substantial amounts of our common stock;

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The Company's operating results generally reflect this seasonality but have also been impacted by numerous other factors that are not necessarily seasonal, including, among others, extreme or severe weather, outbreaks of disease, public health issues (including global health epidemics or pandemics such as the COVID-19 pandemic as well as the potential increased government restrictions and regulation), ATC congestion, geological events, political instability, terrorism, natural disasters, changes in the competitive environment due to industry consolidation, tax obligations, general economic conditions and other factors, as well as related consumer perceptions.

As a result, the Company's quarterly operating results are not necessarily indicative of operating results for an entire year, and historical operating results in a quarterly or annual period

are not necessarily indicative of future operating results.

As a result, the Company's quarterly operating results are not necessarily indicative of operating results for an entire year, and historical operating results in a quarterly or annual period are not necessarily indicative of future operating results.

Major global public health issues, including pandemics such as the COVID-19 pandemic, have adversely affected, and could in the future adversely affect, the Company.

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What changed 10-K

Item 1A. Risk Factors