What changed in this filing

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Item 1. Financial Statements

2023-10-18 compared with 2023-07-20 · 125 added, 102 removed, 572 unchanged (28% of the section changed)

3 unchanged sentences

(In millions, except per share amounts)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

16 unchanged sentences

Total operating expense 12,745 11,419 36,878 31,595

Operating income (loss) 1,517 878 1,474 ( 498 )

Operating income 1,739 1,458 3,213 960

Nonoperating income (expense):

14 unchanged sentences

(In millions)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

9 unchanged sentences

(In millions, except shares)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Current assets:

30 unchanged sentences

(In millions, except shares)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

LIABILITIES AND STOCKHOLDERS' EQUITY

26 unchanged sentences

authorized 1,000,000,000 shares;

outstanding 327,979,189 and 326,930,321 shares at June 30, 2023 and December 31, 2022, respectively

outstanding 328,013,283 and 326,930,321 shares at September 30, 2023 and December 31, 2022, respectively

Additional capital invested 8,968 8,986

8 unchanged sentences

(In millions)

Six Months Ended June 30,

Nine Months Ended

September 30,

Cash Flows from Operating Activities:

34 unchanged sentences

Shares Amount

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

Balance at June 30, 2023 328.0 $ 4 $ 8,945 $ ( 3,442 ) $ 2,095 $ 103 $ 7,705

Net income — — — — 1,137 — 1,137

1 unchanged sentence

Stock-settled share-based compensation — — 23 — — — 23

Stock issued for share-based awards, net of shares withheld for tax — — ( 2 ) 1 — — ( 1 )

Balance at June 30, 2023 328.0 $ 4 $ 8,945 $ ( 3,442 ) $ 2,095 $ 103 $ 7,705

Balance at September 30, 2023 328.0 $ 4 $ 8,968 $ ( 3,442 ) $ 3,232 $ 91 $ 8,853

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 — ( 73 ) 92 ( 51 ) — ( 32 )

Balance at September 30, 2023 328.0 $ 4 $ 8,968 $ ( 3,442 ) $ 3,232 $ 91 $ 8,853

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

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

Net income — — — — 942 — 942

2 unchanged sentences

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

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

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

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

3 unchanged sentences

Stock issued for share-based awards, net of shares withheld for tax 3.1 — ( 256 ) 281 ( 98 ) — ( 73 )

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

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

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

2 unchanged sentences

(In millions)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

16 unchanged sentences

Total operating expense 12,745 11,418 36,877 31,593

Operating income (loss) 1,518 878 1,475 ( 497 )

Operating income 1,739 1,459 3,214 962

Nonoperating income (expense):

12 unchanged sentences

(In millions)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

9 unchanged sentences

(In millions, except shares)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Current assets:

29 unchanged sentences

(In millions, except shares)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

LIABILITIES AND STOCKHOLDER'S EQUITY

25 unchanged sentences

authorized 1,000 shares;

issued and outstanding 1,000 shares at both June 30, 2023 and December 31, 2022

issued and outstanding 1,000 shares at both September 30, 2023 and December 31, 2022

Additional capital invested 458 403

8 unchanged sentences

(In millions)

Six Months Ended June 30,

Nine Months Ended

September 30,

Cash Flows from Operating Activities:

32 unchanged sentences

Other Comprehensive Income (Loss) Payable to Parent Total

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

Balance at June 30, 2023 $ 435 $ 4,597 $ 103 $ 2,539 $ 7,674

Net income — 1,138 — — 1,138

1 unchanged sentence

Stock-settled share-based compensation 23 — — — 23

Other — — — — —

Balance at June 30, 2023 $ 435 $ 4,597 $ 103 $ 2,539 $ 7,674

Balance at September 30, 2023 $ 458 $ 5,735 $ 91 $ 2,539 $ 8,823

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

3 unchanged sentences

Other — — — ( 32 ) ( 32 )

Balance at September 30, 2023 $ 458 $ 5,735 $ 91 $ 2,539 $ 8,823

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

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

Net income — 942 — — 942

2 unchanged sentences

Other — — — ( 3 ) ( 3 )

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

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

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

3 unchanged sentences

Other — — — ( 75 ) ( 75 )

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

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

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

15 unchanged sentences

The financial statements include all adjustments, including normal recurring adjustments and other adjustments, which are considered necessary for a fair presentation of the Company's financial position and results of operations for interim periods presented.

The UAL and United financial statements should be read together with the information included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the "2022 Form 10-K").

The UAL and United financial statements should be read together with the information included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

The Company's quarterly financial data is subject to seasonal fluctuations.

4 unchanged sentences

Department of Transportation) (in millions):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

1 unchanged sentence

and Canada) $ 8,379 $ 7,718 $ 23,963 $ 20,623

Atlantic (including Europe, Africa, India and Middle East destinations) 3,229 2,481 5,061 3,570

Atlantic 3,543 3,186 8,604 6,756

Latin America 1,184 1,162 3,773 3,266

11 unchanged sentences

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

In the six months ended June 30, 2023 and 2022, the Company recognized approximately $ 4.6 billion and $ 2.6 billion, respectively, of passenger revenue for tickets that were included in Advance ticket sales at the beginning of those periods.

In the nine months ended September 30, 2023 and 2022, the Company recognized approximately $ 5.3 billion and $ 3.0 billion, respectively, of passenger revenue for tickets that were included in Advance ticket sales at the beginning of those periods.

Ancillary Fees.

1 unchanged sentence

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 $ 1.0 billion and $ 1.9 billion of ancillary fees within passenger revenue in the three and six months ended

June 30, 2023, respectively.

The Company recorded $ 0.9 billion and $ 1.5 billion of ancillary fees within passenger revenue in the three and six months ended June 30, 2022, respectively.

The Company recorded $ 1.1 billion and $ 3.0 billion of ancillary fees within passenger revenue in the three and nine months ended

September 30, 2023, respectively.

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.

Frequent Flyer Accounting.

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

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

4 unchanged sentences

Total Frequent flyer deferred revenue - ending balance $ 7,076 $ 6,578 $ 7,076 $ 6,578

In the three and six months ended June 30, 2023, the Company recognized, in Other operating revenue, $ 0.7 billion and $ 1.3 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 and nine months ended September 30, 2023, the Company recognized, in Other operating revenue, $ 0.7 billion and $ 2.0 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.

MileagePlus co-brand agreement.

The Company recognized $ 0.6 billion and $ 1.1 billion, respectively, in the three and six months ended June 30, 2022, related to those agreements.

The Company recognized $ 0.6 billion and $ 1.7 billion, respectively, in the three and nine months ended September 30, 2022, 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 deferred revenue.

2 unchanged sentences

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 June 30, Six Months Ended June 30,

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

2023 2022 2023 2022

1 unchanged sentence

Basic weighted-average shares outstanding 328.0 326.8 327.8 326.2

Dilutive effect of employee stock awards 1.2 1.7 1.5 —

Dilutive effect of stock warrants (a) 2.7 1.0 2.5 —

Dilutive effect of employee stock awards 1.7 1.7 1.5 —

Diluted weighted-average shares outstanding 332.4 329.5 331.8 326.2

7 unchanged sentences

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 June 30, 2023.

All warrants were outstanding as of September 30, 2023.

(b) Weighted-average potentially dilutive securities outstanding excluded from the computation of diluted earnings per share because the securities would have had an antidilutive effect.

1 unchanged sentence

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.

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.

2 unchanged sentences

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

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

Balance at June 30, 2023 $ 539 $ ( 39 ) $ ( 397 ) $ 103

Changes in value 7 10 ( 3 ) 14

Amounts reclassified to earnings ( 33 ) (b) — 7 ( 26 )

Balance at June 30, 2023 $ 539 $ ( 39 ) $ ( 397 ) $ 103

Balance at September 30, 2023 $ 513 $ ( 29 ) $ ( 393 ) $ 91

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

1 unchanged sentence

Amounts reclassified to earnings ( 103 ) (b) — 22 ( 81 )

Balance at September 30, 2023 $ 513 $ ( 29 ) $ ( 393 ) $ 91

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

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

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

Amounts reclassified to earnings — (b) — — —

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

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

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

1 unchanged sentence

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

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

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

(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.

3 unchanged sentences

NOTE 4 — INCOME TAXES

The Company's effective tax rates for the three and six months ended June 30, 2023 were 22.5 % and 22.1 %, respectively.

The Company's effective tax rates for the three and six months ended June 30, 2022 were 28.3 % and 18.9 %, respectively.

The provision for income taxes for the three and six months ended June 30, 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 and six months ended June 30, 2022 was 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 and six months ended June 30, 2022, since small changes in estimated income would have resulted in significant changes in the estimated annual effective tax rate.

The Company's effective tax rates for the three and nine months ended September 30, 2023 were 23.4 % and 22.9 %, respectively.

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

NOTE 5 — EMPLOYEE BENEFIT PLANS

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

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

9 unchanged sentences

Total $ 26 $ 53 $ ( 26 ) $ ( 21 )

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

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

Pension Benefits Other Postretirement Benefits Affected Line Item

9 unchanged sentences

Total $ 77 $ 157 $ ( 79 ) $ ( 66 )

Profit Sharing.

Substantially all employees participate in profit sharing based on a percentage of pre-tax earnings, excluding special or non-recurring charges, profit sharing expense and share-based compensation.

Profit sharing percentages range from 5 % to 20 % depending on the work group, and in some cases profit sharing percentages vary above and below certain thresholds.

As part of the new collective bargaining agreement with the Air Line Pilots Association ("ALPA"), the thresholds were lowered retroactive to January 1, 2023 for the pilot work group.

Eligible U.S.

co-workers in each participating work group receive a profit sharing payout using a formula based on the ratio of each qualified co-worker's annual eligible earnings to the eligible earnings of all qualified co-workers in all domestic work groups.

Eligible non-U.S.

co-workers receive profit sharing based on the calculation under the U.S.

profit sharing plan for management and administrative employees.

The Company recorded profit sharing and related payroll tax expense of $ 301 million and $ 521 million in the three and nine months ended September 30, 2023, respectively.

The Company recorded profit sharing expense of $ 8 million in both the three and nine months ended September 30, 2022.

Profit sharing expense is recorded as a component of Salaries and related costs in the Company's statements of consolidated operations.

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):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

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

12 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 two years 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 18 months or less.

Long-term investments:

4 unchanged sentences

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Carrying Amount Fair Value Carrying Amount Fair Value

7 unchanged sentences

Equity Method Investments.

As of June 30, 2023, United holds the following investments, accounted for using the equity method, with a combined carrying value of approximately $ 214 million:

As of September 30, 2023, United holds the following investments, accounted for using the equity method, with a combined carrying value of approximately $ 232 million:

• CommuteAir LLC.

9 unchanged sentences

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

As of June 30, 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.

As of September 30, 2023, the Company indirectly holds a 38 % ownership interest in the Fund and the Fund has approximately $ 200 million in commitments from United and other corporate investors.

Other Investments.

As of June 30, 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.

As of September 30, 2023, United has equity investments in Abra Group 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 June 30, 2023, the carrying value of these investments was $ 417 million.

As of September 30, 2023, the carrying value of these investments was $ 425 million.

NOTE 7 — COMMITMENTS AND CONTINGENCIES

As of June 30, 2023, United had firm commitments to purchase aircraft from The Boeing Company ("Boeing") and Airbus S.A.S.

As of September 30, 2023, United had firm commitments to purchase aircraft from The Boeing Company ("Boeing") and Airbus S.A.S.

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

1 unchanged sentence

Aircraft Type Number of Firm

Commitments (a) Last Six Months

of 2023 2024 After 2024 Last Six Months

Commitments (a) Last Three Months

of 2023 2024 After 2024 Last Three Months

of 2023 2024 After 2024

9 unchanged sentences

(i) the Company and the aircraft manufacturers, with whom the Company has existing orders for new aircraft, agree to modify the contracts governing those orders;

(ii) rights are exercised pursuant to the relevant agreements to modify the timing of deliveries;

(ii) rights are exercised pursuant to the relevant agreements to cancel deliveries or modify the timing of deliveries;

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

During the first half 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.

On September 28, 2023, United entered into a supplemental agreement with Boeing, pursuant to which United exercised options to purchase 50 Boeing 787-9 aircraft scheduled for delivery between 2028 and 2031 and was granted options to purchase up to an additional 50 Boeing 787 aircraft.

In addition, on September 29, 2023, United entered into an amendment to the A320 Family Purchase Agreement, dated December 19, 2019, as amended, with Airbus, pursuant to which United exercised purchase rights to purchase 60 A321neo aircraft scheduled for delivery between 2028 and 2030 and was granted purchase rights to purchase up to an additional 40 A321neo aircraft.

The table above reflects the number of firm commitments related to these agreements as well as the contractual and expected aircraft deliveries.

During the nine months ended September 30, 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 June 30, 2023, which include aircraft and related spare engines, aircraft improvements and non-aircraft capital commitments.

As of September 30, 2023, United had additional leases for 47 Embraer E175/E175LL regional jets under a CPA, 12 A321neo mainline aircraft, airport facilities and office space, none of which had commenced as of such date.

These leases will commence between fourth quarter 2023 and 2026 with lease terms of up to 12 years.

The table below summarizes United's firm commitments as of September 30, 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 communicated by Boeing and Airbus or estimated by United.

(in billions)

Last six months of 2023 $ 6.8

Last three months of 2023 $ 4.6

After 2027 29.6

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 terminated its CPA and related regional flight operations with Air Wisconsin in June 2023.

During the nine months ended September 30, 2023 , United amended several of its CPAs with certain of its regional carriers to increase the contractually agreed fees (carrier costs) paid to those carriers and to add additional aircraft that will replace existing aircraft near the end of their contractual terms.

Separately , the Company terminated its CPA and related regional flight operations with Air Wisconsin in June 2023.

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

4 unchanged sentences

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 June 30, 2023 , our estimated future payments through the end of the terms of our CPAs are presented in the table below :

Based on these assumptions as of September 30, 2023 , our estimated future payments through the end of the terms of our CPAs are presented in the table below :

(in billions)

Last six months of 2023 $ 1.1

Last three months of 2023 $ 0.6

After 2027 5.7

As of June 30, 2023, United is the guarantor of approximately $ 2.0 billion in aggregate principal amount of tax-exempt special facilities revenue bonds and interest thereon.

As of September 30, 2023, United is the guarantor of approximately $ 1.9 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.

1 unchanged sentence

All of these bonds are due between 2024 and 2041.

As of June 30, 2023, United is the guarantor of $ 84 million of aircraft mortgage debt issued by one of United's regional carriers.

As of September 30, 2023, United is the guarantor of $ 81 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) 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 June 30, 2023, the Company had $ 11.6 billion of floating rate debt with remaining terms of up to approximately 12 years that are subject to these increased cost provisions.

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.

The Company elected to apply the guidance in Accounting Standards Codification 848, Reference Rate Reform, to contracts and transactions that transitioned from the London Interbank Offered Rate (LIBOR) to SOFR.

The application of this guidance did not have any material impact on the Company's financial statements.

At September 30, 2023, the Company had $ 11.4 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.

1 unchanged sentence

entities to withholding taxes, subject to customary exclusions.

As of June 30, 2023, the Company had approximately 99,800 employees, of whom approximately 83 % were represented by various U.S.

As of September 30, 2023, the Company had approximately 102,000 employees, of whom approximately 83 % 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.

On May 1, 2023, the Company and the International Association of Machinists & Aerospace Workers ("IAM") ratified five contracts covering nearly 30,000 IAM-represented fleet service, passenger service, storekeepers, maintenance instructors and fleet technical instructors and related employees.

The Company recorded a one-time $ 48 million expense in conjunction with the ratification.

Negotiations will continue for agreements to cover security guards in California and central load planners.

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

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

In May 2023, nearly 30,000 fleet service, passenger service, storekeepers, maintenance instructors and fleet technical instructors and related employees represented by the International Association of Machinists & Aerospace Workers ("IAM") ratified five agreements with United.

The ratified agreements are effective through 2025.

In July 2023, the Company reached an Agreement in Principle ("AIP") with its employees represented by the Air Line Pilots Association ("ALPA") regarding a contract that became amendable in January 2019.

The AIP includes numerous work rule changes and pay rate increases during the four-year term.

The agreement also includes a provision for a one-time payment upon ratification.

In the three and six months ended June 30, 2023, the Company recorded $ 765 million of expenses associated with this AIP relating to wages for 2022 and prior years.

The Company recorded a one-time $ 48 million expense in conjunction with the ratification.

Negotiations with the IAM will continue for agreements to cover security guards in California and central load planners.

In September 2023, the Company's pilots represented by ALPA ratified an agreement with United.

The agreement includes numerous work rule changes and pay rate increases during the four-year term.

The agreement also includes a provision for a one-time $ 765 million payment upon ratification.

NOTE 8 — DEBT

As of June 30, 2023, we had $ 1.75 billion undrawn and available under our revolving credit facility.

As of September 30, 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 June 30, 2023, UAL and United were in compliance with their respective debt covenants.

As of September 30, 2023, UAL and United were in compliance with their respective debt covenants.

Equipment Notes .

3 unchanged sentences

Each Indenture provides for the issuance of Equipment Notes in a single series, Series A, bearing interest at the rate of 5.80 % per annum.

The Equipment Notes were purchased by the Trustee, using the proceeds from the sale of Pass Through Certificates, Series 2023-1A (the "Certificates"), issued by a pass through trust newly-formed by the Company to facilitate the financing of the aircraft.

The Equipment Notes were purchased by the Trustee, using the proceeds from the sale of Pass Through Certificates, Series 2023-1A, issued by a pass through trust newly-formed by the Company to facilitate the financing of the aircraft.

The interest on the Equipment Notes is payable semi-annually on each January 15 and July 15, beginning on January 15, 2024.

3 unchanged sentences

See Note 9 for information related to charges recorded as a result of this prepayment.

The table below presents the Company's contractual principal payments (not including $ 329 million of unamortized debt discount, premiums and debt issuance costs) at June 30, 2023 under then-outstanding long-term debt agreements (in millions):

Last six months of 2023 $ 1,451

The table below presents the Company's contractual principal payments (not including $ 303 million of unamortized debt discount, premiums and debt issuance costs) at September 30, 2023 under then-outstanding long-term debt agreements (in millions):

Last three months of 2023 $ 739

After 2027 14,046

NOTE 9 — SPECIAL CHARGES

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

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

9 unchanged sentences

Labor contract ratification bonuses.

During the three and six months ended June 30, 2023, the Company recorded $ 813 million of expense associated with the recently completed AIP with ALPA and ratified contracts with IAM.

During the nine months ended September 30, 2023, the Company recorded $ 814 million of expense associated with the agreements with ALPA, IAM and other work groups.

See Note 7 for additional information.

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

During the three and six months ended June 30, 2023, the Company recorded $ 46 million and $ 60 million, respectively, of net charges primarily comprised of reserves for various legal matters,

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.

During the three and nine months ended September 30, 2023, the Company recorded $ 28 million and $ 88 million, respectively, of net charges primarily comprised of reserves for various legal

matters, accelerated depreciation related to certain of the Company's assets that will be retired early, an impairment of flight training equipment that is being sold and other gains and losses on the sale of assets.

Nonoperating unrealized (gains) losses on investments, net.

During the three and six months ended June 30, 2023, the Company recorded gains of $ 84 million and $ 108 million, respectively, primarily for the change in the market value of its investments in equity securities.

During the three and nine months ended September 30, 2023, the Company recorded losses of $ 54 million and gains of $ 54 million, respectively, primarily for the change in the market value of its investments in equity securities.

Nonoperating debt extinguishment and modification fees .

During the three and six months ended June 30, 2023, the Company recorded $ 11 million of charges primarily related to the prepayment of $ 1.0 billion of the outstanding principal amount under a 2021 term loan facility.

During the nine months ended September 30, 2023, the Company recorded $ 11 million of charges primarily related to the prepayment of $ 1.0 billion of the outstanding principal amount under a 2021 term loan facility.

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

During the three and six months ended June 30, 2022, the Company recorded $ 112 million and $ 104 million, respectively, of net charges primarily comprised of $ 94 million for various legal matters.

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.

Nonoperating unrealized (gains) losses on investments, net.

During the three and six months ended June 30, 2022, the Company recorded losses of $ 40 million, primarily related to the change in the market value of its investments in equity securities.

During the three and nine months ended September 30, 2022, the Company recorded gains of $ 28 million and losses of $ 12 million, respectively, primarily related to the change in the market value of its investments in equity securities.

Nonoperating debt extinguishment and modification fees .

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

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 the outstanding principal amount of its 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