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Item 1. Financial Statements

2023-04-20 compared with 2022-10-19 · 168 added, 246 removed, 422 unchanged (50% of the section changed)

3 unchanged sentences

(In millions, except per share amounts)

Three Months Ended September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Operating revenue:

4 unchanged sentences

Operating expense:

Aircraft fuel 3,755 1,710 9,796 3,793

Salaries and related costs 3,322 2,787

Aircraft fuel 3,174 2,230

Landing fees and other rent 717 612

7 unchanged sentences

Total operating expense 11,472 8,942

Operating income (loss) 1,458 1,037 960 ( 614 )

Operating loss ( 43 ) ( 1,376 )

Nonoperating income (expense):

Interest expense ( 486 ) ( 424 )

Interest capitalized 27 18 73 57

Interest income 170 5

Unrealized gains (losses) on investments, net 28 ( 34 ) ( 12 ) 91

Interest capitalized 38 24

Unrealized gains on investments, net 24 —

Miscellaneous, net 41 19

Total nonoperating expense, net ( 213 ) ( 376 )

Income (loss) before income tax expense (benefit) 1,153 603 ( 140 ) ( 1,712 )

Income tax expense (benefit) 211 130 ( 34 ) ( 394 )

Net income (loss) $ 942 $ 473 $ ( 106 ) $ ( 1,318 )

Earnings (loss) per share, basic $ 2.88 $ 1.46 $ ( 0.33 ) $ ( 4.10 )

Earnings (loss) per share, diluted $ 2.86 $ 1.44 $ ( 0.33 ) $ ( 4.10 )

Loss before income tax benefit ( 256 ) ( 1,752 )

Income tax benefit ( 62 ) ( 375 )

Net loss $ ( 194 ) $ ( 1,377 )

Loss per share, basic and diluted $ ( 0.59 ) $ ( 4.24 )

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

2 unchanged sentences

(In millions)

Three Months Ended September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net income (loss) $ 942 $ 473 $ ( 106 ) $ ( 1,318 )

Three Months Ended March 31,

Net loss $ ( 194 ) $ ( 1,377 )

Other comprehensive income (loss), net of tax:

2 unchanged sentences

Total other comprehensive income (loss), net of tax ( 14 ) 5

Total comprehensive income (loss), net $ 922 $ 463 $ ( 128 ) $ ( 1,303 )

Total comprehensive loss, net $ ( 208 ) $ ( 1,372 )

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

2 unchanged sentences

(In millions, except shares)

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Current assets:

30 unchanged sentences

(In millions, except shares)

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

LIABILITIES AND STOCKHOLDERS' EQUITY

5 unchanged sentences

Current maturities of long-term debt 3,206 2,911

Current maturities of other financial liabilities 906 834

Current maturities of operating leases 610 561

Current maturities of finance leases 75 104

Current maturities of other financial liabilities 29 23

Other 897 779

15 unchanged sentences

authorized 1,000,000,000 shares;

outstanding 326,926,963 and 323,810,825 shares at September 30, 2022 and December 31, 2021, respectively

outstanding 327,968,615 and 326,930,321 shares at March 31, 2023 and December 31, 2022, respectively

Additional capital invested 8,926 8,986

1 unchanged sentence

Retained earnings 1,020 1,265

Accumulated other comprehensive loss ( 964 ) ( 942 )

Accumulated other comprehensive income 161 175

Total stockholders' equity 6,668 6,896

4 unchanged sentences

(In millions)

Nine Months Ended

September 30,

Three Months Ended

Cash Flows from Operating Activities:

8 unchanged sentences

Cash Flows from Financing Activities:

Proceeds from issuance of debt, net of discounts and fees 210 11,098

Proceeds from equity issuance — 532

Proceeds from issuance of debt and other financing liabilities, net of discounts and fees 288 —

Payments of long-term debt, finance leases and other financing liabilities ( 820 ) ( 783 )

Other, net ( 31 ) ( 73 )

Net cash provided by (used in) financing activities ( 2,472 ) 6,971

Net increase (decrease) in cash, cash equivalents and restricted cash ( 7,006 ) 7,983

Net cash used in financing activities ( 563 ) ( 856 )

Net increase in cash, cash equivalents and restricted cash 611 190

Cash, cash equivalents and restricted cash at beginning of the period 7,421 18,533

2 unchanged sentences

Property and equipment acquired through the issuance of debt, finance leases and other $ 200 $ —

Lease modifications and lease conversions 61 111

Right-of-use assets acquired through operating leases 295 68

Lease modifications and lease conversions 23 59

Investment interests received in exchange for goods and services 21 42

13 unchanged sentences

Shares Amount

Balance at June 30, 2022 326.7 $ 4 $ 8,970 $ ( 3,551 ) $ ( 515 ) $ ( 944 ) $ 3,964

Net income — — — — 942 — 942

Other comprehensive loss — — — — — ( 20 ) ( 20 )

Stock-settled share-based compensation — — 15 — — — 15

Stock issued for share-based awards, net of shares withheld for tax 0.2 — ( 15 ) 18 ( 6 ) — ( 3 )

Balance at September 30, 2022 326.9 $ 4 $ 8,970 $ ( 3,533 ) $ 421 $ ( 964 ) $ 4,898

Balance at December 31, 2022 326.9 $ 4 $ 8,986 $ ( 3,534 ) $ 1,265 $ 175 $ 6,896

3 unchanged sentences

Stock issued for share-based awards, net of shares withheld for tax 1.1 — ( 71 ) 91 ( 51 ) — ( 31 )

Balance at September 30, 2022 326.9 $ 4 $ 8,970 $ ( 3,533 ) $ 421 $ ( 964 ) $ 4,898

Balance at June 30, 2021 323.6 $ 4 $ 9,042 $ ( 3,832 ) $ 804 $ ( 1,114 ) $ 4,904

Net income — — — — 473 — 473

Other comprehensive loss — — — — — ( 10 ) ( 10 )

Stock-settled share-based compensation — — 69 — — — 69

Stock issued for share-based awards, net of shares withheld for tax 0.2 — ( 17 ) 18 ( 6 ) — ( 5 )

Balance at September 30, 2021 323.8 $ 4 $ 9,094 $ ( 3,814 ) $ 1,271 $ ( 1,124 ) $ 5,431

Balance at March 31, 2023 328.0 $ 4 $ 8,926 $ ( 3,443 ) $ 1,020 $ 161 $ 6,668

Balance at December 31, 2021 323.8 $ 4 $ 9,156 $ ( 3,814 ) $ 625 $ ( 942 ) $ 5,029

2 unchanged sentences

Stock-settled share-based compensation — — 38 — — — 38

Issuance of common stock 11.0 — 532 — — — 532

Warrants issued — — 99 — — — 99

Stock issued for share-based awards, net of shares withheld for tax 2.9 — ( 241 ) 262 ( 92 ) — ( 71 )

Balance at September 30, 2021 323.8 $ 4 $ 9,094 $ ( 3,814 ) $ 1,271 $ ( 1,124 ) $ 5,431

Balance at March 31, 2022 326.7 $ 4 $ 8,953 $ ( 3,552 ) $ ( 844 ) $ ( 937 ) $ 3,624

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

2 unchanged sentences

(In millions)

Three Months Ended September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Operating revenue:

4 unchanged sentences

Operating expense:

Aircraft fuel 3,755 1,710 9,796 3,793

Salaries and related costs 3,322 2,787

Aircraft fuel 3,174 2,230

Landing fees and other rent 717 612

7 unchanged sentences

Total operating expense 11,472 8,941

Operating income (loss) 1,459 1,037 962 ( 613 )

Operating loss ( 43 ) ( 1,375 )

Nonoperating income (expense):

Interest expense ( 486 ) ( 424 )

Interest capitalized 27 18 73 57

Interest income 170 5

Unrealized gains (losses) on investments, net 28 ( 34 ) ( 12 ) 91

Interest capitalized 38 24

Unrealized gains on investments, net 24 —

Miscellaneous, net 41 19

Total nonoperating expense, net ( 213 ) ( 376 )

Income (loss) before income tax expense (benefit) 1,154 604 ( 138 ) ( 1,711 )

Income tax expense (benefit) 212 130 ( 33 ) ( 394 )

Net income (loss) $ 942 $ 474 $ ( 105 ) $ ( 1,317 )

Loss before income tax benefit ( 256 ) ( 1,751 )

Income tax benefit ( 62 ) ( 374 )

Net loss $ ( 194 ) $ ( 1,377 )

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

2 unchanged sentences

(In millions)

Three Months Ended September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net income (loss) $ 942 $ 474 $ ( 105 ) $ ( 1,317 )

Three Months Ended March 31,

Net loss $ ( 194 ) $ ( 1,377 )

Other comprehensive income (loss), net of tax:

2 unchanged sentences

Total other comprehensive income (loss), net of tax ( 14 ) 5

Total comprehensive income (loss), net $ 922 $ 464 $ ( 127 ) $ ( 1,302 )

Total comprehensive loss, net $ ( 208 ) $ ( 1,372 )

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

2 unchanged sentences

(In millions, except shares)

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Current assets:

23 unchanged sentences

Investments in affiliates and other, less allowance for credit losses (2023 — $ 17 ;

2021 —$ 622 )

Total other assets 8,946 8,934

4 unchanged sentences

(In millions, except shares)

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

LIABILITIES AND STOCKHOLDER'S EQUITY

5 unchanged sentences

Current maturities of long-term debt 3,206 2,911

Current maturities of other financial liabilities 906 834

Current maturities of operating leases 610 561

Current maturities of finance leases 75 104

Current maturities of other financial liabilities 29 23

Other 900 781

14 unchanged sentences

authorized 1,000 shares;

issued and outstanding 1,000 shares at both September 30, 2022 and December 31, 2021

issued and outstanding 1,000 shares at both March 31, 2023 and December 31, 2022

Additional capital invested 414 403

Retained earnings 3,522 3,716

Accumulated other comprehensive loss ( 964 ) ( 942 )

Accumulated other comprehensive income 161 175

Payable to parent 2,539 2,571

5 unchanged sentences

(In millions)

Nine Months Ended

September 30,

Three Months Ended

Cash Flows from Operating Activities:

8 unchanged sentences

Cash Flows from Financing Activities:

Proceeds from issuance of debt, net of discounts and fees 210 11,098

Proceeds from issuance of parent company stock — 532

Proceeds from issuance of debt and other financing liabilities, net of discounts and fees 288 —

Payments of long-term debt, finance leases and other financing liabilities ( 820 ) ( 783 )

Other, net — ( 2 )

Net cash provided by (used in) financing activities ( 2,398 ) 6,998

Net increase (decrease) in cash, cash equivalents and restricted cash ( 7,006 ) 7,983

Net cash used in financing activities ( 532 ) ( 785 )

Net increase in cash, cash equivalents and restricted cash 611 190

Cash, cash equivalents and restricted cash at beginning of the period 7,421 18,533

2 unchanged sentences

Property and equipment acquired through the issuance of debt, finance leases and other $ 200 $ —

Lease modifications and lease conversions 61 111

Right-of-use assets acquired through operating leases 295 68

Lease modifications and lease conversions 23 59

Investment interests received in exchange for goods and services 21 42

11 unchanged sentences

Other Comprehensive Income (Loss) Payable to Parent Total

Balance at June 30, 2022 $ 373 $ 1,930 $ ( 944 ) $ 2,574 $ 3,933

Net income — 942 — — 942

Other comprehensive loss — — ( 20 ) — ( 20 )

Stock-settled share-based compensation 14 — — — 14

Other — — — ( 3 ) ( 3 )

Balance at September 30, 2022 $ 387 $ 2,872 $ ( 964 ) $ 2,571 $ 4,866

Balance at December 31, 2022 $ 403 $ 3,716 $ 175 $ 2,571 $ 6,865

3 unchanged sentences

Other — — — ( 32 ) ( 32 )

Balance at September 30, 2022 $ 387 $ 2,872 $ ( 964 ) $ 2,571 $ 4,866

Balance at June 30, 2021 $ 185 $ 3,148 $ ( 1,114 ) $ 2,653 $ 4,872

Net income — 474 — — 474

Other comprehensive loss — — ( 10 ) — ( 10 )

Stock-settled share-based compensation 69 — — — 69

Other — — — ( 6 ) ( 6 )

Balance at September 30, 2021 $ 254 $ 3,622 $ ( 1,124 ) $ 2,647 $ 5,399

Balance at March 31, 2023 $ 414 $ 3,522 $ 161 $ 2,539 $ 6,636

Balance at December 31, 2021 $ 317 $ 2,977 $ ( 942 ) $ 2,646 $ 4,998

2 unchanged sentences

Stock-settled share-based compensation 38 — — — 38

Impact of UAL common stock issuance — — — 532 532

Other — — — ( 71 ) ( 71 )

Balance at September 30, 2021 $ 254 $ 3,622 $ ( 1,124 ) $ 2,647 $ 5,399

Balance at March 31, 2022 $ 355 $ 1,600 $ ( 937 ) $ 2,575 $ 3,593

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

3 unchanged sentences

United Airlines Holdings, Inc.

(together with its consolidated subsidiaries, "UAL" or the "Company") is a holding company, and its principal, wholly-owned subsidiary is United Airlines, Inc.

(together with its consolidated subsidiaries, "UAL" or the "Company") is a holding company and its wholly-owned subsidiary is United Airlines, Inc.

(together with its consolidated subsidiaries, "United").

16 unchanged sentences

Department of Transportation) (in millions):

Three Months Ended September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Domestic (U.S.

and Canada) $ 7,167 $ 5,086

Atlantic 3,186 1,116 6,756 2,111

Atlantic (including Europe, Africa, India and Middle East destinations) 1,832 1,089

Latin America 1,316 909

2 unchanged sentences

Advance Ticket Sales.

All tickets sold at any given point in time have travel dates through the next 12 months.

The Company defers amounts related to future travel in its Advance ticket sales liability account.

The Company's Advance ticket sales liability also includes credits issued to customers on future flight credits ("FFCs") and electronic travel certificates ("ETCs"), primarily for ticket cancellations, which can be applied towards a purchase of a new ticket.

All tickets sold at any given point in time have travel dates through the next 12 months.

The Company's Advance ticket sales liability also includes credits issued to customers for future flights ("FFCs") and electronic travel certificates ("ETCs"), primarily for ticket cancellations, which can be applied towards a purchase of a new ticket.

FFCs and ETCs are valid up to one year from the date of issuance;

however, all credits issued on or before December 31, 2022 have been extended to December 31, 2023.

The Company is unable to estimate the amount of the FFCs and ETCs that will be used within the next 12 months and has classified the entire amount of the Advance ticket sales liability in current liabilities even though some of the FFCs and ETCs could be used after the next 12 months.

The Company estimates the value of Advance tickets sales that will expire unused ("breakage") and recognizes revenue at the scheduled flight date.

To determine breakage, the Company uses its historical experience with expired tickets and other facts, such as recent aging trends, program changes and modifications that could affect the ultimate expiration patterns of tickets.

Given the uncertainty of travel demand caused by the novel coronavirus ("COVID-19") pandemic, changes in our estimates of FFCs and ETCs that may expire unused could have a significant impact on revenue.

The Company estimates the value of Advance tickets sales that will expire unused ("breakage") and recognizes revenue in proportion to the usage of the related tickets.

To determine breakage, the Company uses its historical experience with expired tickets and certificates and other facts, such as recent aging trends, program changes and modifications that could affect the ultimate expiration patterns.

Changes in our estimates of FFCs and ETCs that may expire unused could have a material impact on revenue.

Changes in estimates of breakage are recognized prospectively in proportion to the remaining usage of the related tickets.

In the three and nine months ended September 30, 2022, the Company recognized approximately $ 5.1 billion and $ 3.0 billion, respectively, of passenger revenue for tickets that were included in Advance ticket sales at the beginning of those periods.

In the three and nine months ended September 30, 2021, the Company recognized approximately $ 2.8 billion and $ 1.6 billion, respectively, of passenger revenue for tickets that were included in Advance ticket sales at the beginning of those periods.

In the three months ended March 31, 2023 and 2022, the Company recognized approximately $ 3.5 billion and $ 1.9 billion, respectively, of passenger revenue for tickets that were included in Advance ticket sales at the beginning of those periods.

Ancillary Fees.

The Company charges fees, separately from ticket sales, for certain ancillary services that are directly related to passengers' travel, such as baggage fees, premium seats, inflight amenities and other ticket-related fees.

The Company charges fees, separately from ticket sales, for certain ancillary services that are directly related to passengers' travel, such as baggage fees, premium seat fees, inflight amenity fees and other ticket-related fees.

These ancillary fees are part of the travel performance obligation and, as such, are recognized as passenger revenue when the travel occurs.

The Company recorded $ 0.9 billion and $ 2.4 billion of ancillary fees within passenger revenue in the three and nine months ended September 30, 2022, respectively.

The Company recorded $ 0.7 billion and $ 1.5 billion of ancillary fees within passenger revenue in the three and nine months ended September 30, 2021, respectively.

The Company recorded $ 892 million and $ 661 million of ancillary fees within passenger revenue in the three months ended March 31, 2023 and 2022, respectively.

Frequent Flyer Accounting.

The table below presents a roll forward of Frequent flyer deferred revenue (in millions):

Three Months Ended September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Total Frequent flyer deferred revenue - beginning balance $ 6,675 $ 6,282

3 unchanged sentences

Total Frequent flyer deferred revenue - ending balance $ 6,860 $ 6,417

In the three and nine months ended September 30, 2022, the Company recognized, in Other operating revenue, $ 0.6 billion and $ 1.7 billion, respectively, related to the marketing, advertising, non-travel miles redeemed (net of related costs) and other travel-related benefits of the mileage revenue associated with our various partner agreements including, but not limited to, our JPMorgan Chase Bank, N.A.

In the three months ended March 31, 2023 and 2022, the Company recognized, in Other operating revenue, $ 646 million and $ 519 million, respectively, related to the marketing, advertising, non-travel miles redeemed (net of related costs) and other travel-related benefits of the mileage revenue associated with our various partner agreements including, but not limited to, our JPMorgan Chase Bank, N.A.

MileagePlus co-brand agreement.

The Company recognized $ 0.5 billion and $ 1.3 billion, respectively, in the three and nine months ended September 30, 2021, related to those agreements.

The portion related to the MileagePlus miles awarded of the total amounts received from our various partner agreements is deferred and presented in the table above as an increase to the frequent flyer liability.

We determine the current portion of our frequent flyer liability based on expected redemptions in the next 12 months.

NOTE 2 — EARNINGS (LOSS) PER SHARE

The computations of UAL's basic and diluted earnings (loss) per share are set forth below (in millions, except per share amounts):

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Earnings (loss) available to common stockholders $ 942 $ 473 $ ( 106 ) $ ( 1,318 )

Basic weighted-average shares outstanding 326.8 323.7 326.2 321.3

Dilutive effect of employee stock awards 1.7 3.0 — —

Dilutive effect of stock warrants 1.0 2.3 — —

Diluted weighted-average shares outstanding 329.5 329.0 326.2 321.3

Earnings (loss) per share, basic $ 2.88 $ 1.46 $ ( 0.33 ) $ ( 4.10 )

Earnings (loss) per share, diluted $ 2.86 $ 1.44 $ ( 0.33 ) $ ( 4.10 )

We determine the current portion of that account based on expected redemptions in the next 12 months.

NOTE 2 — LOSS PER SHARE

The computations of UAL's basic and diluted loss per share are set forth below (in millions, except per share amounts):

Three Months Ended March 31,

Loss available to common stockholders $ ( 194 ) $ ( 1,377 )

Weighted-average shares outstanding, basic and diluted 327.4 325.0

Loss per share, basic and diluted $ ( 0.59 ) $ ( 4.24 )

Potentially dilutive securities (a)

3 unchanged sentences

(b) Represent warrants issued to the U.S.

Treasury Department ("Treasury") pursuant to the payroll support program, including extensions, and the loan program established under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act").

Treasury Department ("Treasury") pursuant to the payroll support program, including extensions, and the loan program established under the Coronavirus Aid, Relief, and Economic Security Act.

The Company issued, to Treasury, warrants to purchase up to approximately 10 million shares of UAL common stock at exercise prices ranging from $ 31.50 to $ 53.92 and expiration dates ranging from April 20, 2025 to June 10, 2026.

All warrants were outstanding as of September 30, 2022.

All warrants were outstanding as of March 31, 2023.

On March 3, 2021, the Company entered into an equity distribution agreement (the "Distribution Agreement") with several financial institutions (collectively, the "Managers"), relating to the issuance and sale from time to time by UAL (the "2021 ATM Offering"), through the Managers, of up to 37 million shares of UAL common stock (the "2021 ATM Shares").

Sales of the 2021 ATM Shares under the Distribution Agreement were allowed to be made in any transactions that were deemed to be "at the market offerings" as defined in Rule 415 under the Securities Act of 1933, as amended.

During 2021, approximately 4 million shares were sold in the 2021 ATM Offering at an average price of $ 57.50 per share, with net proceeds to the Company totaling approximately $ 250 million.

No shares were sold in 2022 or 2023 under the 2021 ATM Offering, which expired in March 2023.

NOTE 3 — ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

1 unchanged sentence

Pension and Other Postretirement Liabilities Investments and Other Deferred Taxes (a) Total

Balance at June 30, 2022 $ ( 834 ) $ ( 14 ) $ ( 96 ) $ ( 944 )

Changes in value ( 1 ) ( 25 ) 6 ( 20 )

Amounts reclassified to earnings — (b) — — —

Balance at September 30, 2022 $ ( 835 ) $ ( 39 ) $ ( 90 ) $ ( 964 )

Balance at December 31, 2022 $ 626 $ ( 35 ) $ ( 416 ) $ 175

1 unchanged sentence

Amounts reclassified to earnings ( 35 ) (b) — 7 ( 28 )

Balance at September 30, 2022 $ ( 835 ) $ ( 39 ) $ ( 90 ) $ ( 964 )

Balance at June 30, 2021 $ ( 1,068 ) $ 1 $ ( 47 ) $ ( 1,114 )

Changes in value ( 19 ) ( 1 ) 4 ( 16 )

Amounts reclassified to earnings 7 (b) — ( 1 ) 6

Balance at September 30, 2021 $ ( 1,080 ) $ — $ ( 44 ) $ ( 1,124 )

Balance at March 31, 2023 $ 582 $ ( 8 ) $ ( 413 ) $ 161

Balance at December 31, 2021 $ ( 847 ) $ — $ ( 95 ) $ ( 942 )

Changes in value 8 — ( 3 ) 5

Amounts reclassified to earnings 17 (b) — ( 4 ) 13

Balance at September 30, 2021 $ ( 1,080 ) $ — $ ( 44 ) $ ( 1,124 )

(a) Includes approximately $ 285 million of deferred income tax expense that will not be recognized in net income until the related pension and other postretirement benefit obligations are fully extinguished.

Balance at March 31, 2022 $ ( 839 ) $ — $ ( 98 ) $ ( 937 )

(a) Includes approximately $ 285 million of deferred income tax expense that will not be recognized in net income until the related pension and postretirement benefit obligations are fully extinguished.

We consider all income sources, including other comprehensive income, in determining the amount of tax benefit allocated to results from operations.

(b) This AOCI component is included in the computation of net periodic pension and other postretirement costs (see Note 5 of this report for additional information).

(b) This AOCI component is included in the computation of net periodic pension and other postretirement costs, specifically the following components:

amortization of unrecognized (gain) loss, amortization of prior service credit and other (see Note 5 of this report for additional information).

NOTE 4 — INCOME TAXES

The Company's effective tax rates for the three and nine months ended September 30, 2022 were 18.3 % and 24.3 %, respectively.

The effective tax rates for the three and nine months ended September 30, 2021 were 21.6 % and 23.0 %, respectively.

The provision for income taxes is based on the estimated annual effective tax rate, which represents a blend of federal, state and foreign taxes and includes the impact of certain nondeductible items.

The Company's effective tax rates for the three months ended March 31, 2023 and March 31, 2022 were 24.2 % and 21.4 %, respectively.

The provision for income taxes for the three months ended March 31, 2023 is based on the estimated annual effective tax rate, which represents a blend of federal, state and foreign taxes and includes the impact of certain nondeductible items.

The provision for income taxes for the three months ended March 31, 2022 is calculated using a discrete effective tax rate method.

We determined that applying an estimate of the annual effective tax rate to income or loss for the interim reporting period would not provide a reliable estimate for the three months ended March 31, 2022, since small changes in estimated income would have resulted in significant changes in the estimated annual effective tax rate.

NOTE 5 — EMPLOYEE BENEFIT PLANS

Defined Benefit Pension and Other Postretirement Benefit Plans.

The Company's net periodic benefit cost includes the following components for the three months ended September 30 (in millions):

Pension Benefits Other Postretirement Benefits Affected Line Item

in the Statements of

Consolidated Operations

2022 2021 2022 2021

Service cost $ 51 $ 59 $ 2 $ 2 Salaries and related costs

Interest cost 47 46 8 6 Miscellaneous, net

Expected return on plan assets ( 76 ) ( 70 ) — — Miscellaneous, net

Amortization of unrecognized (gain) loss 29 42 ( 3 ) ( 7 ) Miscellaneous, net

Amortization of prior service credit — — ( 28 ) ( 30 ) Miscellaneous, net

Other 2 2 — — Miscellaneous, net

Total $ 53 $ 79 $ ( 21 ) $ ( 29 )

The Company's net periodic benefit cost includes the following components for the nine months ended September 30 (in millions):

The Company's net periodic benefit cost includes the following components for the three months ended March 31 (in millions):

Pension Benefits Other Postretirement Benefits Affected Line Item

7 unchanged sentences

Amortization of prior service credit — — ( 28 ) ( 28 ) Miscellaneous, net

Special termination benefits — — — 46 Miscellaneous, net

Other — 1 — — Miscellaneous, net

Total $ 25 $ 51 $ ( 26 ) $ ( 22 )

During the first quarter of 2021, the Company offered special separation benefits in the form of additional subsidies for retiree medical costs for certain U.S.-based front-line employees.

The subsidies are in the form of a one-time contribution to a notional Retiree Health Account of $ 125,000 for full-time employees and $ 75,000 for part-time employees.

As a result, the Company recorded $ 46 million for those additional benefits.

NOTE 6 — FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The table below presents disclosures about the financial assets and liabilities measured at fair value on a recurring basis in UAL's financial statements (in millions):

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3

11 unchanged sentences

Restricted cash - non-current — Primarily includes collateral associated with the MileagePlus Financing, collateral for letters of credit and collateral associated with facility leases and other insurance-related obligations.

Short-term investments — The short-term investments shown in the table above are classified as available-for-sale and have remaining maturities of approximately one year or less.

Short-term investments — The short-term investments shown in the table above are classified as available-for-sale and have remaining maturities of approximately two years or less.

Long-term investments:

Equity securities — Represents equity and equity-linked securities (such as vested warrants) that make up United's investments in Azul Linhas Aéreas Brasileiras S.A., Clear Secure, Inc., Archer Aviation Inc.

and Eve Holding, Inc.

Equity securities — Represents equity and equity-linked securities (such as vested warrants) that make up United's investments in Azul Linhas Aéreas Brasileiras S.A., Archer Aviation Inc., Eve Holding, Inc., Mesa Air Group, Inc.

and Clear Secure, Inc.

Other fair value information.

1 unchanged sentence

Carrying amounts include any related discounts, premiums and issuance costs:

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Carrying Amount Fair Value Carrying Amount Fair Value

4 unchanged sentences

Cash and cash equivalents and Restricted cash (current and non-current) The carrying amounts of these assets approximate fair value.

Short-term investments and Equity securities Fair value is based on (a) the trading prices of the investment or similar instruments, (b) an income approach, which uses valuation techniques to convert future amounts into a single present amount based on current market expectations about those future amounts when observable trading prices are not available, or (c) broker quotes obtained by third-party valuation services.

Short-term and Long-term investments Fair value is based on (a) the trading prices of the investment or similar instruments or (b) broker quotes obtained by third-party valuation services.

Long-term debt Fair values were based on either market prices or the discounted amount of future cash flows using our current incremental rate of borrowing for similar liabilities or assets.

Investments in Regional Carriers.

As of September 30, 2022, United holds investments in two regional carriers that fly for the Company as United Express under its capacity purchase agreements ("CPAs").

The combined carrying value of the investments was approximately $ 183 million as of September 30, 2022.

United accounts for each investment using the equity method.

Equity Method Investments.

As of March 31, 2023, United holds the following investments, accounted for using the equity method, with a combined carrying value of approximately $ 208 million:

• CommuteAir LLC.

United owns a 40 % minority ownership stake in CommuteAir LLC.

CommuteAir currently operates 61 regional aircraft under a capacity purchase agreement ("CPA") that has a term through 2026.

• Republic Airways Holdings Inc.

United holds a 19 % minority interest in Republic Holdings Inc., which is the parent company of Republic Airways Inc.

("Republic").

Republic currently operates 66 regional aircraft under CPAs that have terms through 2036.

• United Airlines Ventures Sustainable Flight Fund (the "Fund").

During the first quarter of 2023, United launched, through its corporate venture capital arm, United Airlines Ventures ("UAV"), an investment vehicle designed to support start-ups focused on decarbonizing air travel by accelerating the research, production and technologies associated with sustainable aviation fuel ("SAF").

The Fund started with more than $ 100 million in commitments from United and other corporate investors, collectively, as limited partners.

UAV transferred certain of its existing SAF investments to the Fund's portfolio.

As of March 31, 2023, the Company indirectly holds a 49.99 % ownership interest in the Fund.

• Blue Blade Energy, LLC ("Blue Blade").

UAV holds a 20 % minority interest in Blue Blade, a joint venture with Tallgrass Energy Partners, LP, and Green Plains Inc.

to develop and then commercialize a novel SAF technology that uses ethanol as its feedstock.

Other Investments.

United holds equity investments in a number of companies with emerging technologies and sustainable solutions.

United also has equity investments in Avianca Group International Limited, a multinational airline holding company, and JetSuiteX, Inc., an independent air carrier doing business as JSX.

As of March 31, 2023, United has equity investments in Avianca Group International Limited, a multinational airline holding company, JetSuiteX, Inc., an independent air carrier doing business as JSX as well as a number of companies with emerging technologies and sustainable solutions.

None of these investments have readily determinable fair values.

We account for these investments at cost less impairment, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same issuer.

As of September 30, 2022, the carrying value of these investments was $ 330 million.

As of March 31, 2023, the carrying value of these investments was $ 413 million.

NOTE 7 — COMMITMENTS AND CONTINGENCIES

As of September 30, 2022, United had firm commitments and options to purchase aircraft from The Boeing Company ("Boeing") and Airbus S.A.S.

As of March 31, 2023, United had firm commitments and options to purchase aircraft from The Boeing Company ("Boeing") and Airbus S.A.S.

("Airbus") as presented in the table below:

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Aircraft Type Number of Firm

Commitments (a) Last Three Months

Commitments (a) Last Nine Months

of 2023 2024 After 2024

Airbus A321XLR 50 — — 50

Airbus A321neo 70 — 12 58

Airbus A350 45 — — 45

Boeing 737 MAX 353 27 121 205

Boeing 787 7 7 — —

787 100 — 8 92

737 MAX 412 114 88 210

A321neo 70 12 31 27

A321XLR 50 — — 50

A350 45 — — 45

(a) United also has options and purchase rights for additional aircraft.

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or (iii) the aircraft manufacturers are unable to deliver in accordance with the terms of those orders.

Furthermore, Boeing notified United that three Boeing 787 aircraft scheduled for delivery in 2022 and 15 Boeing 737 MAX aircraft scheduled for delivery in 2023, all as shown in the table above, are now expected to deliver in 2023 and 2024, respectively.

In addition to Boeing’s notification, United estimates that seven additional Boeing 737 MAX aircraft scheduled for delivery in 2022, as shown in the table above, will deliver in 2023.

United intends to exercise options to purchase, in 2023, eight Boeing 737 MAX aircraft that are currently leased under sale and leaseback arrangements.

United has an agreement to purchase eight used Bombardier CRJ550 aircraft in the last three months of 2022.

The table below summarizes United's commitments as of September 30, 2022, which include aircraft and related spare engines, aircraft improvements and non-aircraft capital commitments.

Aircraft commitments are based on contractual scheduled aircraft deliveries without any adjustments for the delays communicated by Boeing or estimated by United.

Airbus notified United that eight Airbus A321neo aircraft scheduled for delivery in 2023, as shown in the table above, are now expected to deliver in 2024 and ten Airbus A321neo aircraft scheduled for delivery in 2024, as shown in the table above, are now expected to deliver in 2025.

Boeing notified United that 37 Boeing 737 MAX aircraft scheduled for delivery in 2023, as shown in the table above, are now expected to deliver in 2024.

Also, United estimates that an additional eleven Boeing 737 MAX aircraft scheduled for delivery in 2023, as shown in the table above, will deliver in 2024 and 30 Boeing 737 MAX aircraft scheduled for delivery in 2024, as shown in table above, will deliver in 2025.

Furthermore, Boeing recently notified United that due to a manufacturing process issue relating to certain Boeing 737 MAX fuselages, six Boeing 737 MAX 8 aircraft scheduled for delivery in the second quarter of 2023, as shown in the table above, will be delayed.

Boeing may inform United that additional Boeing 737 MAX 8 aircraft scheduled for delivery in the third quarter of 2023 may be delayed and/or that certain Boeing 737 MAX aircraft currently expected to be delivered in 2023 may deliver in 2024.

However, at this time, we do not expect these delays to be extensive or to have a significant impact on our capacity plan for 2023.

During the first quarter of 2023, United entered into agreements with third parties to finance through sale and leaseback transactions new Boeing model 737 MAX aircraft subject to purchase agreements between United and Boeing.

For certain aircraft, United assigned its right to purchase such aircraft to the buyer, and simultaneous with the buyer's purchase from Boeing, United entered into a long-term lease for such aircraft with the buyer as lessor.

Upon delivery of the aircraft in these sale and leaseback transactions, the Company accounted for these aircraft as part of Flight equipment on the Company's

consolidated balance sheet and the related obligation recorded in Current maturities of other financial liabilities and Other financial liabilities since they did not qualify for sale recognition (failed sale and leaseback).

The table below summarizes United's commitments as of March 31, 2023, which include aircraft and related spare engines, aircraft improvements and non-aircraft capital commitments.

Aircraft commitments are based on contractual scheduled aircraft deliveries without any adjustments for the delays communicated by Boeing and Airbus or estimated by United.

(in billions)

Last three months of 2022 $ 3.0

Last nine months of 2023 $ 8.3

After 2027 16.8

Legal Contingencies.

The Company has certain contingencies resulting from litigation and claims incident to the ordinary course of business.

As of September 30, 2022, management believes, after considering a number of factors, including (but not limited to) the information currently available, the views of legal counsel, the nature of the contingencies to which the Company is subject and prior experience, that its defenses and assertions in pending legal proceedings have merit and the ultimate disposition of any pending matter will not materially affect the Company's financial position, results of operations or cash flows.

The Company records liabilities for legal claims when it is probable that a loss will be incurred and the amount is reasonably estimable.

These amounts are recorded based on the Company's assessments of the likelihood of their eventual disposition.

During the nine months ended September 30, 2022, the Company recorded charges of $ 94 million as a result of a number of recent decisions, including one involving another carrier, that appear to impact the Company's ability to successfully assert, in certain cases, that federal law preempts state and local laws that conflict with union contracts and/or federal requirements.

As of September 30, 2022, United is the guarantor of approximately $ 2.0 billion in aggregate principal amount of tax-exempt special facilities revenue bonds and interest thereon.

Regional CPAs .

In the first quarter of 2023, United amended its CPA agreements with one of its regional carriers to increase the contractually agreed fees (carrier costs) paid to that carrier.

The Company expects to wind down its CPA with Air Wisconsin and terminate operations by early June 2023.

Our future commitments under our CPAs are dependent on numerous variables, and are, therefore, difficult to predict.

The most important of these variables is the number of scheduled block hours.

Although we are not required to purchase a minimum number of block hours under certain of our CPAs, we have set forth below estimates of our future payments under the CPAs based on our assumptions.

The actual amounts we pay to our regional operators under CPAs could differ materially from these estimates.

United's estimates of its future payments under all of the CPAs do not include the portion of the underlying obligation for any aircraft leased to a regional carrier or deemed to be leased from other regional carriers and facility rent that are disclosed as part of operating leases above.

For purposes of calculating these estimates, we have assumed (1) the number of block hours flown is based on our anticipated level of flight activity or at any contractual minimum utilization levels if applicable, whichever is higher, (2) that we will reduce the fleet as rapidly as contractually allowed under each CPA, (3) that aircraft utilization, stage length and load factors will remain constant, (4) that each carrier's operational performance will remain at recent historic levels and (5) an annual projected inflation rate.

Based on these assumptions as of March 31, 2023 , our estimated future payments through the end of the terms of our CPAs are presented in the table below :

(in billions)

Last nine months of 2023 $ 1.7

After 2027 3.9

As of March 31, 2023, United is the guarantor of approximately $ 2.0 billion in aggregate principal amount of tax-exempt special facilities revenue bonds and interest thereon.

These bonds, issued by various airport municipalities, are payable solely from rentals paid under long-term agreements with the respective governing bodies.

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All of these bonds are due between 2023 and 2041.

As of September 30, 2022, United is the guarantor of $ 95 million of aircraft mortgage debt issued by one of United's regional carriers.

As of March 31, 2023, United is the guarantor of $ 88 million of aircraft mortgage debt issued by one of United's regional carriers.

The aircraft mortgage debt is subject to similar increased cost provisions as described below for the Company's debt, and the Company would potentially be responsible for those costs under the guarantees.

Increased Cost Provisions.

In United's financing transactions that include loans in which United is the borrower, United typically agrees to reimburse lenders for any reduced returns with respect to the loans due to any change in capital requirements and, in the case of loans with respect to which the interest rate is based on the London Interbank Offered Rate (LIBOR), for certain other increased costs that the lenders incur in carrying these loans as a result of any change in law, subject, in most cases, to obligations of the lenders to take certain limited steps to mitigate the requirement for, or the amount of, such increased costs.

At September 30, 2022, the Company had $ 12.8 billion of floating rate debt with remaining terms of up to approximately 10 years that are subject to these increased cost provisions.

In United's financing transactions that include loans in which United is the borrower, United typically agrees to reimburse lenders for any reduced returns with respect to the loans due to any change in capital requirements and, in the case of loans with respect to which the interest rate is based on the London Interbank Offered Rate (LIBOR) or the Secured Overnight Financing Rate (SOFR), for certain other increased costs that the lenders incur in carrying these loans as a

result of any change in law, subject, in most cases, to obligations of the lenders to take certain limited steps to mitigate the requirement for, or the amount of, such increased costs.

At March 31, 2023, the Company had $ 12.9 billion of floating rate debt with remaining terms of up to approximately 12 years that are subject to these increased cost provisions.

In several financing transactions involving loans or leases from non-U.S.

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entities to withholding taxes, subject to customary exclusions.

Credit Card Processing Agreements.

The Company has agreements with financial institutions that process customer credit card transactions for the sale of air travel and other services.

Under certain of the Company's credit card processing agreements, the financial institutions in certain circumstances have the right to require that the Company maintain a reserve equal to a portion of advance ticket sales that has been processed by that financial institution, but for which the Company has not yet provided the air transportation.

Such financial institutions may require additional cash or other collateral reserves to be established or additional withholding of payments related to receivables collected if the Company does not maintain certain minimum levels of unrestricted cash, cash equivalents and short-term investments (collectively, "Unrestricted Liquidity").

The Company's level of Unrestricted Liquidity as of September 30, 2022 is substantially in excess of these minimum levels.

As of September 30, 2022, the Company had approximately 90,800 employees, of whom approximately 85 % were represented by various U.S.

As of March 31, 2023, the Company had approximately 96,300 employees, of whom approximately 84 % were represented by various U.S.

labor organizations.

In January 2023, United and the International Brotherhood of Teamsters ratified an extension to its labor contract covering the Company's more than 8,000 technicians and related employees.

The agreement becomes amendable in December 2024 and includes a one-year early opener that allows for bargaining on a successor agreement to begin in December 2023.

In April 2023, the Company and the International Association of Machinists & Aerospace Workers ("IAM") reached a tentative agreement covering nearly 30,000 IAM-represented employees in several workgroups.

The agreements, once ratified, will cover IAM-represented employees across our operations and be effective through 2025.

The Company has been in negotiations with its employees represented by the Air Line Pilots Association ("ALPA") regarding a contract that became amendable in January 2019.

Given the recent ratification of a new agreement by the pilot group of another major airline, the Company has determined that it is appropriate to accrue expense in the first quarter 2023 related to a potential new collective bargaining agreement with employees represented by ALPA.

NOTE 8 — DEBT

As of September 30, 2022, we had $ 1.75 billion undrawn and available under our revolving credit facility.

As of March 31, 2023, we had $ 1.75 billion undrawn and available under our revolving credit facility.

Our debt agreements contain customary terms and conditions as well as various affirmative, negative and financial covenants that, among other things, restrict the ability of the Company and its subsidiaries to incur additional indebtedness and pay dividends or repurchase stock.

As of September 30, 2022, UAL and United were in compliance with their respective debt covenants.

The table below presents the Company's contractual principal payments (not including $ 412 million of unamortized debt discount, premiums and debt issuance costs) at September 30, 2022 under then-outstanding long-term debt agreements (in millions):

Last three months of 2022 $ 759

As of March 31, 2023, UAL and United were in compliance with their respective debt covenants.

The table below presents the Company's contractual principal payments (not including $ 356 million of unamortized debt discount, premiums and debt issuance costs) at March 31, 2023 under then-outstanding long-term debt agreements (in millions):

Last nine months of 2023 $ 2,167

After 2027 13,883

During the nine months ended September 30, 2022, United borrowed $ 220 million aggregate principal amount from a financial institution to finance the purchase of aircraft.

The notes evidencing these borrowings, which are secured by the related aircraft, mature in 2034 and have interest rates of 4 %.

NOTE 9 — SPECIAL CHARGES (CREDITS)

For the three and nine months ended September 30, operating and nonoperating special charges (credits) and unrealized (gains) losses on investments in the statements of consolidated operations consisted of the following (in millions):

For the three months ended March 31, operating and nonoperating special charges (credits) and unrealized (gains) losses on investments in the statements of consolidated operations consisted of the following (in millions):

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

CARES Act grant $ — $ ( 1,132 ) $ — $ ( 4,021 )

Severance and benefit costs — 5 — 433

Impairment of assets — 46 — 105

(Gains) losses on sale of assets and other special charges $ 14 $ ( 8 )

Total operating special charges (credits) 14 ( 8 )

Nonoperating unrealized (gains) losses on investments, net ( 28 ) 34 12 ( 91 )

Nonoperating unrealized gains on investments, net ( 24 ) —

Nonoperating debt extinguishment and modification fees — 7

Nonoperating special termination benefits — — — 46

Total nonoperating special charges and unrealized (gains) losses on investments, net ( 28 ) 22 19 5

Total operating and nonoperating special charges (credits) and unrealized (gains) losses on investments, net ( 8 ) ( 1,076 ) 143 ( 3,418 )

Income tax (benefit) expense, net of valuation allowance ( 7 ) 274 ( 17 ) 768

Total operating and nonoperating special charges (credits) and unrealized (gains) losses on investments, net of income taxes $ ( 15 ) $ ( 802 ) $ 126 $ ( 2,650 )

Total nonoperating special charges and unrealized gains on investments, net ( 24 ) 7

Total operating and nonoperating special charges (credits) and unrealized gains on investments, net ( 10 ) ( 1 )

Income tax benefit, net of valuation allowance ( 3 ) —

Total operating and nonoperating special charges (credits) and unrealized gains on investments, net of income taxes $ ( 13 ) $ ( 1 )

(Gains) losses on sale of assets and other special charges.

During the three and nine months ended September 30, 2022, the Company recorded $ 20 million and $ 124 million, respectively, of net charges primarily comprised of $ 94 million for various legal matters.

See Note 7 of this report for a discussion of the legal matters.

During the three months ended March 31, 2023, the Company recorded $ 14 million of net charges primarily comprised of accelerated depreciation related to certain of the Company's assets that will be retired early and other gains and losses on the sale of assets.

Nonoperating unrealized (gains) losses on investments, net.

During the three and nine months ended September 30, 2022, the Company recorded gains of $ 28 million and losses of $ 12 million, respectively.

Nonoperating debt extinguishment and modification fees .

During the nine months ended September 30, 2022, the Company recorded $ 7 million of charges primarily related to the early redemption of $ 400 million of its outstanding principal amount of the 4.25% senior notes due 2022.

CARES Act grant.

During the nine months ended September 30, 2021, the Company received approximately $ 5.8 billion in funding pursuant to two Payroll Support Program Extension Agreements (collectively, the "PSP2 and PSP3 Agreements") under the CARES Act, which included approximately $ 1.7 billion aggregate principal amount of unsecured promissory notes.

The Company recorded $ 1.1 billion and $ 4.0 billion as grant income in Special charges (credits) during the three and nine months ended September 30, 2021, respectively.

The Company also recorded $ 99 million for warrants to purchase shares of UAL common stock issued to the U.S.

Treasury Department as part of the PSP2 and PSP3 Agreements, within stockholders' equity, as an offset to the grant income in the nine months ended September 30, 2021.

Severance and benefit costs .

During the three and nine months ended September 30, 2021, the Company recorded charges of $ 5 million and $ 433 million, respectively, related to pay continuation and benefits-related costs provided to employees who chose to voluntarily separate from the Company.

The Company offered, based on employee group, age and completed years of service, pay continuation, health care coverage, and travel privileges.

Approximately 4,500 employees elected to voluntarily separate from the Company.

Impairment of assets .

During the three months ended September 30, 2021, the Company recorded $ 46 million of impairment charges for nine Airbus A319 aircraft and 13 Boeing 737-700 airframes as a result of market conditions for used aircraft.

During the nine months ended September 30, 2021, in addition to the third quarter 2021 impairments, the Company recorded $ 59 million of impairments primarily related to 64 Embraer EMB 145LR aircraft and related engines that United retired from its regional aircraft fleet.

The decision to retire these aircraft was triggered by the United Next aircraft order.

During the three months ended March 31, 2023, the Company recorded gains of $ 24 million primarily for the change in the market value of its investments in equity securities.

(Gains) losses on sale of assets and other special charges.

During the three months ended September 30, 2021, the Company recorded net gains of $ 17 million primarily related to gains on aircraft sale-leaseback transactions and aircraft component manufacturer credits.

During the nine months ended September 30, 2021, the Company recorded net charges of $ 60 million primarily related to incentives for certain of its front-line employees to receive a COVID-19 vaccination and the termination of the lease associated with three floors of its headquarters at the Willis Tower in Chicago in the first quarter of 2021, which were partially offset by the net gains in the third quarter of 2021 described above.

Nonoperating unrealized (gains) losses on investments, net .

During the three and nine months ended September 30, 2021, the Company recorded losses of $ 34 million and gains of $ 91 million, respectively .

During the three months ended March 31, 2022, the Company recorded net gains of $ 8 million primarily related to sale-leaseback transactions and the sale of aircraft.

Nonoperating debt extinguishment and modification fees .

During the nine months ended September 30, 2021, the Company recorded $ 50 million of charges for fees and discounts related to the issuance of a new term loan and revolving credit facility and the prepayment of a CARES Act loan and a 2017 term loan and revolving credit facility.

Nonoperating special termination benefits.

During the nine months ended September 30, 2021, as part of the first quarter 2021 voluntary leave programs, the Company recorded $ 46 million of special termination benefits in the form of additional subsidies for retiree medical costs for certain U.S.-based front-line employees.

The subsidies were in the form of a one-time contribution into a notional Retiree Health Account of $ 125,000 for full-time employees and $ 75,000 for part-time employees.

During the three months ended March 31, 2022, the Company recorded $ 7 million of charges primarily related to the early redemption of $ 400 million of its outstanding principal amount of the 4.25 % senior notes due 2022.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements