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Item 7. Management’s Discussion and Analysis

2024-02-29 compared with 2023-02-16 · 141 added, 179 removed, 300 unchanged (52% of the section changed)

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This section generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.

Discussions of 2020 items and year-to-year comparisons between 2021 and 2020 are not included in this Form 10-K and can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the U.S.

Securities and Exchange Commission (the "SEC") on February 18, 2022 (the "2021 Annual Report").

Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 are not included in this Form 10-K and can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on February 16, 2023 (the "2022 Annual Report").

Executive Summary

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United's operating revenues and operating expenses comprise nearly 100% of UAL's revenues and operating expenses.

In addition, United comprises approximately the entire balance of UAL's assets, liabilities and operating

When appropriate, UAL and United are named specifically for their individual contractual obligations and related disclosures and any significant differences between the operations and results of UAL and United are separately disclosed and explained.

In addition, United comprises approximately the entire balance of UAL's assets, liabilities and operating cash flows.

When appropriate, UAL and United are named specifically for their individual contractual obligations and related

disclosures and any significant differences between the operations and results of UAL and United are separately disclosed and explained.

We sometimes use the words "we," "our," "us," and the "Company" in this report for disclosures that relate to all of UAL and United.

Our business and operating results for 2022 continued to be negatively impacted by the COVID-19 pandemic, particularly in the first half of the year.

Given the more significant impact of the pandemic on our business and operating results in 2020 and 2021, we believe that a comparison of our 2022 results to 2019 for certain key metrics in this financial overview discussion is more reflective of the impact of the COVID-19 pandemic.

Our current expectations described below are forward-looking statements and our actual results and timing may vary materially based on various factors that include, but are not limited to, those discussed below under "Economic and Market Factors" and "Cautionary Statement Regarding Forward-Looking Statements" and in Part I, Item 1A.

Our current expectations described below are forward-looking statements and our actual results and timing may vary materially based on various factors that include, but are not limited to, those discussed below under "Strategy," "Economic and Market Factors," "Governmental Actions," "Cautionary Statement Regarding Forward-Looking Statements" and in Part I, Item 1A.

Risk Factors, of this Form 10-K .

The results presented in this report are not necessarily indicative of future operating results.

Our shared purpose is "Connecting People.

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Our United Next plan is our fundamental strategic evolution for driving future growth that we believe will have a transformational effect on the customer experience and earnings power of our business.

As part of our United Next plan, in June 2021 we announced our firm order for the purchase of 270 new Boeing and Airbus aircraft, which at the time was the largest combined order in the airline's history and the biggest by an individual carrier in the last decade.

In December 2022, we announced the largest widebody order by a U.S.

carrier in commercial aviation history (100 Boeing 787 Dreamliners with options to purchase 100 more), the exercise of options to purchase 44 Boeing 737 MAX aircraft for delivery between 2024 and 2026, the firm orders of 56 more Boeing 737 MAX aircraft for delivery between 2027 and 2028 and the acquisition of an additional 100 options to purchase additional Boeing 737 MAX aircraft.

We now expect to take delivery of about 700 new narrow and widebody aircraft by the end of 2033.

As part of our United Next plan, in September 2023, 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, 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.

We now expect to take delivery of over 700 new narrow and widebody aircraft by the end of 2033.

Our groundbreaking United Next strategy is expected to increase United's average gauge in North America, to increase the total number of available seats per departure and to significantly lower carbon emissions per seat.

United will retrofit 100% of its mainline, narrow-body planes with its signature interior that includes seat-back entertainment in every seat, larger overhead bins for every passenger's carry-on bag and the industry's fastest available in-flight WiFi, as well as a bright look-and-feel with LED lighting.

United is in the process of retrofitting its mainline, narrow-body planes with its signature interior that includes seat-back entertainment in every seat, larger overhead bins for every passenger's carry-on bag and the industry's fastest available in-flight Wi-Fi, as well as a bright look-and-feel with LED lighting.

The carrier's international widebodies will feature the United Polaris® business class seat as well as United Premium Plus® seating.

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We believe that United Next will allow us to differentiate our network and segment our products with a greater premium offering while also maintaining fare competitiveness with low-cost carriers.

The Company remains squarely focused on delivering on four strategic pillars:

The Company will be squarely focused on delivering on four strategic pillars:

• United Next:

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That backdrop means that United needs to be a leader at using technology to overcome these challenges.

We believe that we have been doing that, but we have a lot of ideas to continue making advancements in this area.

• Adjusted cost per available seat mile ("CASM-ex"):

We believe that our CASM-ex (a non-GAAP financial measure defined as cost or operating expense per available seat mile ("CASM") excluding fuel, profit sharing, third-party business expense and special charges (credits)) targets in connection with our United Next plan will be key in driving absolute and relative margin improvement.

Moreover, having best-in-class CASM-ex performance is expected to provide the cash flow needed to support our planned investments in growth.

We believe that we have been working strategically to overcome operational challenges, but we continue to innovate in order to make advancements in this area.

• Pre-tax margin:

We believe that best-in-class margin performance will enable us to provide the cash flow needed to support our planned investments in growth.

• Customer service:

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Our people are our greatest asset and they are by far the most important part of our product.

A great route network, new aircraft, great

are a necessary but not sufficient condition for a great brand.

Aspects of the customer experience such as a great route network, new aircraft, and great Wi-Fi are necessary, but not sufficient, conditions for a great airline brand.

Ultimately our people provide customers with the service they expect.

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We expect to continue to remain vulnerable to a number of industry-specific and global macroeconomic factors that may cause our actual results of operations to differ from our historical results of operations or current expectations.

The factors and trends that we currently believe are or will be most impactful to our results of operations and financial condition include the following:

the execution risks associated with our United Next plan;

The economic and market factors and trends that we currently

believe are or will be most impactful to our results of operations and financial condition include the following:

the execution risks associated with our United Next plan, especially relating to the growth in the scale of our operations as a result of the plan;

the impact on the Company of significant operational challenges by third parties on which we rely;

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aircraft delivery delays;

the lasting effects of the COVID-19 global pandemic and related governmental regulations and restrictions, that we believe will change how our customers fly in ways that we expect to be both positive and negative for the Company, including the lingering impact of the pandemic on the return of business and international—especially in our China market— travel demand to pre-COVID-19 levels;

the closure of our flying airspace and termination of other operations due to regional conflicts, including the continuation of the suspension of our overflying in Russian airspace as well as third-party general sales agent services in Russia as a result of the Russia-Ukraine military conflict and an escalation of the broader economic consequences of the conflict beyond their current scope;

increasing maintenance expenses;

high interest rates;

and changes in general economic conditions in the markets in which the Company operates, including an economic downturn leading to a decrease in demand for air travel or fluctuations in foreign currency exchange rates that may impact international travel demand.

We continue to monitor the potential favorable or unfavorable impacts of these and other factors on our business, operations, financial condition and future results of operations, which are dependent on future developments, including as a result of those factors discussed in Item 1A.

We continue to monitor the potential favorable or unfavorable impacts of these and other factors on our business, operations, financial condition, future results of operations, liquidity and financial flexibility, which are dependent on future developments, including as a result of those factors discussed in Part I, Item 1A.

Risk Factors, of this Form 10-K.

Our future results of operations may be subject to volatility and our growth plans may be delayed, particularly in the short term, due to the impact of the above factors and trends.

For instance, we have delayed a portion of our previously planned capacity increases for full year 2023 in response to several factors and trends noted above and may need to implement further modifications.

However, based on the current trend of our business operations, the Company believes that the long-term outlook for the Company remains positive due to the expected continued return of travel demand and the anticipated benefits by the United Next plan.

Absent significant and prolonged COVID-19 relapses or global economic disruptions, we believe that the expected long-term increase in travel demand will offset increased costs and that the expected operational challenges can be managed in a manner that will allow us to support increased demand.

Despite the lingering effects of COVID-19 induced business interruptions, which has caused the Company's recovery from the COVID-19 pandemic not to follow a linear path, we have seen increasing demand for travel both domestically and internationally in countries where entry is permitted as we operated at approximately 87% of our 2019 capacity during 2022.

However, it remains difficult to reasonably assess or predict the full extent of the impact of the COVID-19 pandemic on the broader economy and how consumer behavior may change—and whether such change is temporary or permanent.

As a result, the Company's operational and financial performance, particularly in the short-term, may be subject to volatility in the future.

Risks and uncertainties related to the COVID-19 pandemic are further described in Part I, Item 1A.

Risk Factors.

Governmental Actions

We operate in complex, highly regulated environments in the U.S., the European Union, the United Kingdom and other regions around the world.

Compliance with laws, regulations, administrative practices and other restrictions or legal requirements in the countries in which we do business is onerous and expensive.

In addition, changes to existing legal requirements or the implementation of new legal requirements and any failure to comply with such legal requirements could negatively impact our business, operations, financial condition, future results of operations, liquidity and financial flexibility by increasing the Company's costs, limiting the Company's ability to offer a product, service or feature to customers, impacting customer demand for the Company's products and services and requiring changes to the Company's supply chain and its business.

Legal requirements that we currently believe are or will be most impactful to our results of operations and financial condition include the following:

the closure of our flying airspace and termination of other operations due to regional conflicts, including the suspension of our overflying in Russian airspace as a result of the Russia-Ukraine military conflict and to Tel Aviv as a result of the Israeli-Hamas military conflict, as well as any escalation of the broader economic consequences of these conflicts beyond their current scope;

delays in aircraft certification (especially relating to the 737 MAX 10 aircraft);

increased FAA oversight of the aircraft production process;

and any legal requirement that would result in a reshaping of the benefits that we provide to our consumers through the co-branded credit cards issued by our partner.

Changes in existing applicable legal requirements or new applicable legal requirements as well as the related interpretations and enforcement practices regarding them, create uncertainty about how such laws and regulations will be understood and applied.

As a result, the impact of changing and new legal requirements generally cannot be reasonably predicted and those requirements may ultimately require extensive system and operational changes, be difficult to implement, increase our operating costs and require significant capital expenditures.

Results of Operations

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Nonoperating expense, net (824) (1,347) (1,535)

Income (loss) before income taxes 3,387 990 (2,557)

Income tax expense (benefit) 769 253 (593)

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Average yield per revenue passenger mile ("Yield") (cents) (f) 20.07 19.36 15.66

CASM (cents) 17.19 14.36 17.68 13.67

CASM-ex (Non-GAAP) (cents) 11.73 12.96 17.13 10.21

Cost per available seat mile ("CASM") (cents)

16.99 17.19 14.36

Average stage length (miles) (g) 1,479 1,437 1,315

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Passenger load factor (points) (0.4) (0.1) 10.2 2.8 0.5

Passenger revenue increased $19.8 billion, or 98.2%, in 2022 as compared to 2021, primarily due to the ongoing recovery in air travel which was impacted by the COVID-19 pandemic and strength in the pricing environment as a result of inflationary pressures on fuel prices and other costs.

Cargo revenue decreased $178 million, or 7.6%, in 2022 as compared to 2021, primarily due to lower yields as a result of increased market capacity.

Cargo revenue was especially high in 2021 due to the limited market capacity, lower passenger load factors and the utilization of cargo-only flights in the first half of 2021.

Other operating revenue increased $664 million, or 31.8%, in 2022 as compared to 2021, primarily due to an increase in mileage revenue from non-airline partners, including credit card spending recovery with our co-branded credit card partner,

JPMorgan Chase Bank, N.A.

("Chase"), as well as an increase in the purchases of United Club memberships and lounge passes in the current year.

Passenger revenue increased $9.0 billion, or 22.5%, in 2023 as compared to 2022, primarily due to a 17.5% increase in capacity, strength in yield, and a 0.5 point increase in passenger load factor.

Cargo revenue decreased $676 million, or 31.1%, in 2023 as compared to 2022, primarily due to lower yields as a result of increased market capacity and rate pressures.

Other operating revenue increased $424 million, or 15.4%, in 2023 as compared to 2022, primarily due to an increase in mileage revenue from non-airline partners, including credit card spending and new credit card member acquisitions with the co-branded credit card partner, JPMorgan Chase Bank, N.A., as well as increases in the purchases of United Club memberships and one-time lounge passes as compared to the year-ago period.

Operating Expense.

The table below includes data related to the Company's operating expense for the years ended December 31 (in millions, except percentage changes):

2022 2021 Increase (Decrease) % Change

Aircraft fuel $ 13,113 $ 5,755 $ 7,358 127.9

2023 2022 Increase (Decrease) % Change (a)

Salaries and related costs $ 14,787 $ 11,466 $ 3,321 29.0

Aircraft fuel 12,651 13,113 (462) (3.5)

Landing fees and other rent 3,076 2,576 500 19.4

Aircraft maintenance materials and outside repairs 2,736 2,153 583 27.1

Depreciation and amortization 2,671 2,456 215 8.8

Regional capacity purchase 2,400 2,299 101 4.4

Aircraft maintenance materials and outside repairs 2,153 1,316 837 63.6

Distribution expenses 1,977 1,535 442 28.8

Aircraft rent 197 252 (55) (21.8)

Special charges (credits) 140 (3,367) (3,507) NM

Special charges 949 140 809 NM

Other operating expenses 8,062 6,628 1,434 21.6

Total operating expenses $ 49,506 $ 42,618 $ 6,888 16.2

Aircraft fuel expense increased $7.4 billion, or 127.9%, in 2022 as compared to 2021, primarily due to both a higher average price per gallon of fuel and increased consumption from higher flight activity.

(a) NM - Greater than 100% change or otherwise not meaningful.

Salaries and related costs increased $3.3 billion, or 29.0%, in 2023 as compared to 2022, primarily due to an approximately 11% increase in headcount from increased flight activity, pay rate increases related to a new collective bargaining agreement with employees represented by ALPA, annual wage rate increases across employee groups and an increase of $548 million in profit sharing expense due to both an increase in pre-tax income and a change in the profit sharing formula as a result of the new collective bargaining agreement with employees represented by ALPA.

Aircraft fuel expense decreased $462 million, or 3.5%, in 2023 as compared to 2022, primarily due to a lower average price per gallon of fuel, partially offset by increased consumption from higher flight activity.

The table below presents the significant changes in aircraft fuel cost per gallon for the years ended December 31 (in millions, except percentage changes and per gallon data):

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Average price per gallon $ 3.01 $ 3.63 (17.1)

Salaries and related costs increased $1.9 billion, or 19.9%, in 2022 as compared to 2021, primarily due to an approximately 10% increase in headcount, volume-driven pay from increased flight activity, an increase in employee incentive accruals due to current year profitability (including profit sharing of $133 million in 2022) and $405 million of employee retention credits under the CARES Act in 2021 that did not reoccur in 2022.

Landing fees and other rent increased $160 million, or 6.6%, in 2022 as compared to 2021, primarily due to an increase in landed weight volume as a result of increased flight activity.

Regional capacity purchase costs increased $152 million, or 7.1%, in 2022 as compared to 2021, primarily due to rate increases.

Aircraft maintenance materials and outside repairs increased $837 million, or 63.6%, in 2022 as compared to 2021, primarily due to higher volumes of flying, increased engine overhauls, higher repair volumes, heavy airframe checks and contractual rate escalations.

Distribution expenses increased $858 million, or 126.7%, in 2022 as compared to 2021, primarily due to higher credit card fees, higher travel agency commissions and higher volumes of global distribution fees as a result of the overall increase in passenger revenue.

Distribution expenses were also impacted by a higher proportion of business travel as compared to leisure travel, which can result in higher cost distribution channels and forms of payment.

The table below presents special charges (credits) recorded by the Company during the years ended December 31 (in millions):

CARES Act grant $ — $ (4,021)

Severance and benefit costs — 438

Impairment of assets — 97

Landing fees and other rent increased $500 million, or 19.4%, in 2023 as compared to 2022, primarily due to increased rates and increased flight activity driving higher landed weight volume and a higher number of enplaned passengers as well as expansion in airport rental space at certain hubs.

Aircraft maintenance materials and outside repairs increased $583 million, or 27.1%, in 2023 as compared to 2022, primarily due to increased flight activity and increased volumes of both engine overhauls and airframe heavy maintenance checks.

Depreciation expense increased $215 million, or 8.8%, in 2023 as compared to 2022, primarily due to new aircraft inducted into service.

Regional capacity purchase costs increased $101 million, or 4.4%, in 2023 as compared to 2022, despite an approximately 13% reduction in regional capacity, primarily due to rate increases under various capacity purchase agreements with regional carriers.

Distribution expenses increased $442 million, or 28.8%, in 2023 as compared to 2022, primarily due to higher credit card fees, travel agency commissions and global distribution fees driven by the overall increase in passenger revenue.

Also, starting in the fourth quarter of 2023, the Company reclassified certain commissions totaling $80 million from contra-revenue to distribution expense as an immaterial reclassification correction.

The table below presents special charges recorded by the Company during the years ended December 31 (in millions):

Labor contract ratification bonuses $ 814 $ —

(Gains) losses on sale of assets and other special charges 135 140

Total special charges (credits) $ 140 $ (3,367)

Total special charges $ 949 $ 140

See Note 13 to the financial statements included in Part II, Item 8 of this report for additional information.

Other operating expenses increased $2.2 billion, or 49.5%, in 2022 as compared to 2021, primarily due to increases in ground handling, passenger services, food and beverage offerings, navigation fees and personnel-related costs as a direct result of the increase in flight activity and inflationary pressures and higher expenditures on information technology projects and services.

Other operating expenses increased $1.4 billion, or 21.6%, in 2023 as compared to 2022, primarily as a direct result of the increase in flight activity and the impacts of inflationary pressures.

Other operating expenses include expenditures related to ground handling, passenger services, food and beverage offerings, navigation fees, personnel-related costs and information technology projects and services.

Nonoperating Income (Expense).

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Interest capitalized 182 105 77 73.3

Unrealized gains (losses) on investments, net 20 (34) (54) (158.8)

Miscellaneous, net 8 40 (32) (80.0)

Unrealized gains on investments, net 27 20 7 35.0

Miscellaneous, net 96 8 88 NM

Total nonoperating expense, net $ (824) $ (1,347) $ (523) (38.8)

Interest expense increased $121 million, or 7.3%, in 2022 as compared to 2021, primarily due to higher interest rates on variable rate debt as well as a full year of interest expense in 2022 on certain debt incurred in the second quarter of 2021.

Interest income increased $262 million in 2022 as compared to 2021, primarily due to higher short-term investments in U.S.

Interest expense increased $178 million, or 10.0%, in 2023 as compared to 2022, primarily due to higher interest rates on variable rate debt and new debt issuances in the current period, partially offset by reduced interest expense on the prepayment of $1.0 billion of the outstanding principal amount under a 2021 term loan facility in the second quarter of 2023.

Interest income increased $529 million in 2023 as compared to 2022, primarily due to higher interest rates on the Company's cash balances and U.S.

government and agency notes.

See Note 8 to the financial statements included in Part II, Item 8 of this report for additional information.

Unrealized gains on investments, net was $20 million in 2022 as compared to unrealized losses on investments, net of $34 million in 2021, primarily due to the change in the market value of the Company's investments in equity securities.

Interest capitalized increased $77 million in 2023 as compared to 2022, primarily due to increased capitalization associated with aircraft purchases and increased interest rates.

Unrealized gains on investments, net was $27 million in 2023 as compared to $20 million in 2022, primarily due to the change in the market value of the Company's investments in equity securities.

See Notes 8 and 13 to the financial statements included in Part II, Item 8 of this report for additional information.

Miscellaneous, net changed by $88 million in 2023 as compared to the year-ago period, primarily due to lower foreign exchange losses and lower net cost from the pensions and postretirement benefit plans.

Income Taxes.

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Liquidity and Capital Resources

As of December 31, 2022, the Company had $16.4 billion in unrestricted cash, cash equivalents and short-term investments, a decrease of approximately $2.0 billion from December 31, 2021.

As of December 31, 2023, the Company had $14.4 billion in unrestricted cash, cash equivalents and short-term investments as compared to approximately $16.4 billion as of December 31, 2022.

We believe that our existing cash, cash equivalents and short-term investments, together with cash generated from operations, will be sufficient to satisfy our anticipated liquidity needs for the next twelve months and we expect to meet our long-term liquidity needs with our anticipated access to the capital markets and projected cash from operations.

We regularly assess our anticipated working capital needs, debt and leverage levels, debt maturities, capital expenditure requirements (including in connection with our capital commitments for our firm order aircraft) and future investments or acquisitions in order to maximize shareholder return, efficiently finance our ongoing operations and maintain flexibility for future strategic transactions.

We also regularly evaluate our liquidity and capital structure to ensure financial risks, adequate liquidity access and lower cost of capital are efficiently managed.

The Revolving Credit and Guaranty Agreement, under the Term Loan Credit and Guaranty Agreement (the "2021 Term Loan Facility"), provides revolving loan commitments of up to $1.75 billion until April 21, 2025, subject to certain customary conditions.

We also regularly evaluate our liquidity and capital structure to ensure financial risks, adequate liquidity access and cost of capital are efficiently managed.

The Revolving Credit and Guaranty Agreement, under the Term Loan Credit and Guaranty Agreement, provides revolving loan commitments of up to $1.75 billion until April 21, 2025, subject to certain customary conditions.

No borrowings were outstanding under this facility at December 31, 2023.

On February 15, 2024, the Company amended its 2021 revolving credit

facility to increase its borrowing capacity by $1.115 billion.

Also, on February 22, 2024, the Company refinanced its 2021 term loans by paying down $1.37 billion of its outstanding balance and lowering the margin applied to these term loans by 1.00%.

See Note 9 to the financial statements included in Part II, Item 8 of this report for additional information on these financing transactions.

We have a significant amount of fixed obligations, including debt, leases of aircraft, airport and other facilities, and pension funding obligations.

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See Note 9 to the financial statements included in Part II, Item 8 of this report for additional information on aircraft financing and other debt instruments.

For 2023, the Company expects approximately $8.5 billion of gross capital expenditures (including expenditures for assets acquired through the issuance of debt, finance leases and other financial liabilities).

The Company's estimate for aircraft expenditures reflects its assumptions regarding delayed aircraft deliveries.

For 2024, the Company expects approximately $8 billion of adjusted capital expenditures.

Adjusted capital expenditures is a financial measure not calculated in accordance of generally accepted accounting principles ("GAAP").

It is calculated as capital expenditures, net of flight equipment purchase deposit returns, plus property and equipment acquired through the issuance of debt, finance leases, and other financial liabilities.

We are not providing a target for or a reconciliation to capital expenditures, net of flight equipment purchase deposit returns, the most directly comparable GAAP measure, because we are not able to predict non-cash capital expenditures without unreasonable efforts, and therefore we also are not able to determine the probable significance of such items.

We believe that adjusting capital expenditures for assets acquired through the issuance of debt, finance leases and other financial liabilities is useful to investors in order to appropriately reflect the total amounts spent on capital expenditures.

The Company's estimate for aircraft expenditures reflects its current assumptions regarding delayed aircraft deliveries.

See Note 12 to the financial statements included in Part II, Item 8 of this report for additional information on commitments, including aircraft expenditures reflecting contractual delivery dates without adjustment for expected delays.

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Operating Activities.

Cash flows provided by operating activities for 2022 were $4.0 billion higher than 2021 primarily due to an approximately $3.4 billion increase in operating income as improvements in the demand for air travel continued and an approximately $0.6 billion increase in various working capital items.

In 2021, United entered into two Payroll Support Program Extension Agreements (collectively, the "PSP2 and PSP3 Agreements") with the U.S.

Treasury Department ("Treasury") providing the Company with total funding of approximately $5.8 billion, pursuant to the Payroll Support Program.

These funds were used to pay for the wages, salaries and benefits of United employees, including the payment of lost wages, salaries and benefits to returning employees who were previously impacted by involuntary furloughs.

Approximately $4.1 billion was provided as a direct grant and $1.7 billion as indebtedness evidenced by two 10-year senior unsecured promissory notes (collectively, the "PSP2 and PSP3 Notes").

See Note 2 to the financial statements included in Part II, Item 8 of this report for additional information on the warrants issued in connection with the PSP2 and PSP3 Notes and Note 9 to such financial statements for a discussion of the PSP2 and PSP3 Notes.

Cash flows provided by operating activities for 2023 were $0.8 billion higher than 2022 primarily due to an approximately $1.9 billion increase in operating income as improvements in the demand for air travel continued partially offset by a decrease in various working capital items.

Investing Activities.

Cash flows used in investing activities increased $12.2 billion in 2022 as compared to the year-ago period mainly related to an approximately $9.5 billion increase in net purchase and sales of short-term and other investments.

Capital expenditures increased by $2.7 billion in 2022, as compared to 2021, and totaled $4.8 billion attributable to the purchase of aircraft and aircraft spare parts, advance deposits for future aircraft purchases and spend on facility and technology related projects.

Capital expenditures for 2021 were $2.1 billion and were primarily attributable to advance deposits for future aircraft purchases.

Cash flows used in investing activities decreased $7.7 billion in 2023 as compared to the year-ago period mainly related to approximately $10.2 billion due to lower purchase and higher sales activity in short-term and other investments, partially offset by a $2.4 billion increase in capital expenditures.

Capital expenditures were primarily attributable to the purchase of aircraft, aircraft improvements and advance deposits for future aircraft purchases.

Financing Activities.

Significant financing events in 2023 were as follows:

Debt, Finance Lease and Other Financing Liability Principal Payments .

During 2022, the Company made $4.0 billion of principal payments on debt, finance leases, and other financing liabilities.

Debt, Finance Lease and Other Financial Liability Principal Payments .

During 2023, the Company made $4.2 billion of principal payments on debt, finance leases, and other financial liabilities.

The payments in 2023 included a prepayment of $1.0 billion of the outstanding principal amount under a 2021 term loan facility.

Debt Issuances.

During 2022, United borrowed $0.8 billion for aircraft financings.

See Note 9 to the financial statements included in Part II, Item 8 of this report for additional information.

In 2023, the Company and Wilmington Trust, National Association, as subordination agent and pass through trustee (the "Trustee") under a certain pass through trust newly formed by the Company, entered into the Note Purchase Agreement, dated as of June 20, 2023 (the "Note Purchase Agreement").

The Note Purchase Agreement provides for the

issuance by the Company of equipment notes (the "Equipment Notes") in the aggregate principal amount of $1.3 billion to finance 39 Boeing aircraft delivered new to the Company from August 2022 to May 2023.

Pursuant to the Note Purchase Agreement, the Trustee purchased Equipment Notes issued under a trust indenture and mortgage (each, an "Indenture" and, collectively, the "Indentures") with respect to each aircraft entered into by the Company and Wilmington Trust, National Association, as mortgagee.

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, 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.

The principal payments on the Equipment Notes are scheduled on January 15 and July 15 of each year, beginning on July 15, 2024.

The final payments on the Equipment Notes will be due on January 15, 2036.

Also, during 2023, United borrowed $1.1 billion for aircraft financings.

See Note 9 and Note 10 to the financial statements included in Part II, Item 8 of this report for additional information on aircraft financing.

Significant financing events in 2022 were as follows:

Debt, Finance Lease and Other Financing Liability Principal Payments.

During 2021, the Company made $5.2 billion in principal payments for debt, finance leases, and other financing liabilities.

• repaid in full $1.4 billion aggregate principal amount outstanding under a 2017 term loan facility;

• repaid in full $1.0 billion aggregate principal amount outstanding under a 2017 revolving credit facility;

• repaid in full $520 million aggregate principal amount outstanding under a CARES Act loan;

• made $1.9 billion of aircraft-related debt principal payments.

Debt, Finance Lease and Other Financial Liability Principal Payments.

During 2022, the Company made $4.0 billion of principal payments on debt, finance leases, and other financial liabilities.

Debt Issuances.

During 2021, United received and recorded:

• $5.0 billion from a new term loan;

• $4.0 billion from the issuance of 4.375% senior secured notes due 2026 and 4.625% senior secured notes due 2029;

• $1.7 billion from senior unsecured notes under the Payroll Support Program Extension Agreements of the CARES Act;

• $600 million of proceeds as debt from the enhanced equipment trust certificates pass-through trusts established in February 2021.

Share Issuances.

During 2021, the Company raised approximately $532 million in net cash proceeds from the issuance and sale of UAL common stock through "at the market offerings" under equity distribution agreements entered into in June 2020 and March 2021.

During 2022, United borrowed $0.8 billion for aircraft financings.

For additional information regarding these Liquidity and Capital Resource matters, see Notes 9, 10 and 12 to the financial statements included in Part II, Item 8 of this report.

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S&P Moody's Fitch

UAL B+ Ba2 B+

United B+ * B+

UAL BB- Ba2 BB-

United BB- * BB-

*The credit agency does not issue corporate credit ratings for subsidiary entities.

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Interline agreements govern the rights and responsibilities of the consortia members and provide for the allocation of the overall costs to operate the consortia based on usage.

The consortia (and in limited cases, the participating carriers) have entered into long-term agreements to lease certain airport fuel storage and distribution facilities that are typically financed through tax-exempt bonds, either special facilities lease revenue bonds or general airport revenue bonds, issued by various local municipalities.

In general, each consortium lease agreement requires the consortium to make lease payments in amounts sufficient to pay the maturing principal and interest payments on the bonds.

As of December 31, 2022, approximately $2.5 billion principal amount of such bonds was secured by significant fuel facility leases in which United participates, as to which United and each of the signatory airlines has provided indirect guarantees of the debt.

As of December 31, 2022, the Company's contingent exposure was approximately $400 million principal amount of such bonds based on its recent consortia participation.

In general, each consortium lease agreement requires the consortium to make lease payments in amounts sufficient to pay the maturing principal and interest payments on these debt obligations.

As of December 31, 2023, approximately $2.5 billion principal amount of such loans was secured by significant fuel facility leases in which United participates, as to which United and each of the signatory airlines has provided indirect guarantees of the debt.

As of December 31, 2023, the Company's contingent exposure was approximately $447 million principal amount of such obligations based on its recent consortia participation.

The Company's contingent exposure could increase if the participation of other air carriers decreases.

The guarantees will expire when the tax-exempt bonds are paid in full, which ranges from 2023 to 2056.

The guarantees will expire when these obligations are paid in full, which ranges from 2027 to 2056.

The Company concluded it was not necessary to record a liability for these indirect 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 LIBOR or 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 December 31, 2022, the Company had $12.9 billion of floating rate debt with remaining terms of up to 12 years that are subject to these increased cost provisions.

and, in the case of loans with respect to which the interest rate is based on 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.

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 December 31, 2023, the Company had $11.3 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.

entities, with remaining terms of up to 12 years and an aggregate balance of $9.8 billion, the Company bears the risk of any change in tax laws that would subject loan or lease payments thereunder to non-U.S.

entities, with remaining terms of up to approximately 12 years and an aggregate balance of $8.1 billion, the Company bears the risk of any change in tax laws that would subject loan or lease payments thereunder to non-U.S.

entities to withholding taxes, subject to customary exclusions.

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

The Company estimates the value of Advance ticket sales that will expire unused ("breakage") and recognizes revenue and any changes in estimates 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.

Given the uncertainty of travel demand caused by the COVID-19 pandemic, 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.

Frequent Flyer Accounting.

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Members can also earn miles by purchasing goods and services from our network of non-airline partners.

We have contracts to sell miles to these partners with the terms extending from one to seven years.

We have contracts to sell miles to these partners with the terms extending from one to six years.

These partners include domestic and international credit card issuers, retail merchants, hotels, car rental companies and our participating airline partners.

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• MileagePlus miles awarded – United has a performance obligation to provide MileagePlus cardholders with miles to be used for air travel and non-travel award redemptions.

The Company records Passenger revenue related to the travel awards when the transportation is provided and records Other revenue related to the non-travel awards when the goods or services are delivered.

The Company records Passenger revenue related to the travel awards when the transportation is provided and records Other revenue related to the non-travel awards when the goods

or services are delivered.

The Company records the cost associated with non-travel awards in Other operating revenue, as an agent.

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The Company has indefinite-lived intangible assets, including goodwill.

Goodwill and indefinite-lived intangible assets are not amortized but are reviewed for impairment on an annual basis as of October 1, or on an interim basis whenever a triggering event occurs.

An impairment occurs when the fair value of an intangible asset is less than its carrying value.

The Company determines the fair value using a variation of the income approach known as the excess earnings method, which discounts an asset's projected future net cash flows to determine the current fair value.

Assumptions used in the discounted cash flow methodology include a discount rate, which is based upon the Company's current weighted average cost of capital plus an asset-specific risk factor, and a projection of sales, expenses, gross margin, tax rates and contributory asset charges for several future years and a terminal growth rate.

The assumptions used for future projections are determined based upon the Company's asset-specific forecasts along with the Company's strategic plan.

These assumptions are inherently uncertain as they relate to future events and circumstances.

Goodwill and indefinite-lived intangible assets are not amortized but are reviewed for impairment on an annual basis as of October 1, or more frequently if events or circumstances indicate that the asset may be impaired.

When there is a triggering event, the Company typically determines fair value using either market or variation of the income approach valuation techniques.

These measurements include the following key assumptions:

(1) forecasted revenues, expenses, margin and cash flows, (2) terminal period growth rate, (3) an estimated weighted average cost of capital, (4) asset-specific risk factor and (5) a tax rate.

These assumptions are consistent with those that hypothetical market participants would use.

Because we are required to make estimates and assumptions when evaluating goodwill and indefinite-lived intangible assets for impairment, actual results may differ materially from these estimates.

Actual results will be influenced by the competitive environment, fuel costs and other expenses, and potentially other unforeseen events or circumstances that could have a material impact on future results.

In 2022, the Company evaluated its intangible assets for possible impairments.

We recognize an impairment when the fair value of an intangible asset is less than its carrying value.

Every year, the Company evaluates its indefinite-lived intangible assets for possible impairments.

For the Company's China route authority, the Company performed a quantitative assessment which involved determining the fair value of the asset and comparing that amount to the asset's carrying value.

For all other intangible assets, the Company performed a qualitative assessment of whether it was more likely than not that an impairment had occurred.

To determine fair value, the Company used discounted cash flow methods appropriate for each asset.

Key inputs into the models included forecasted capacity, revenues, fuel costs, other operating costs and an overall discount rate.

The assumptions used for future projections include that demand will continue to recover.

To determine the fair value of the China route authority, the Company used a discounted cash flow method.

Key inputs into the models included forecasted revenues, fuel costs, other operating costs, margin and an overall discount rate.

These assumptions are inherently uncertain as they relate to future events and circumstances.

See Notes 1 and 13 to the financial statements included in Part II, Item 8 of this report for additional information.

Tax valuation allowance .

A tax valuation allowance is recognized if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company's management assesses available positive and negative evidence regarding the Company's ability to realize its deferred tax assets and records a valuation allowance when it is more likely than not that deferred tax assets will not be realized.

In order to form a conclusion, management considers positive evidence in the form of taxable income in prior carryback years, reversing temporary differences, tax planning strategies and projections of future taxable income during the periods in which those temporary differences become deductible, as well as negative evidence such as historical losses.

Although the Company incurred losses in 2021 and 2020, management determined that these results were not indicative of future results due to the impact of the COVID-19 pandemic on its operations.

The Company concluded that the positive evidence outweighs the negative evidence, primarily driven by approval and distribution of COVID-19 vaccines as well as increased confidence with the timing of the recovery, as evidenced in our 2022 return to profitability.

The Company has $7.5 billion of deferred tax assets, of which $2.8 billion (tax effected) are attributable to federal net operating

losses ("NOLs") at December 31, 2022.

The majority of the NOLs do not expire and the Company expects to realize the benefits of the NOLs and other deferred tax assets through the reversal of certain existing deferred tax liabilities of $6.7 billion and the remaining $0.8 billion through projected future taxable income.

Assumptions about our future taxable income are consistent with the plans and estimates used to manage our business.

Therefore, we have not recorded a valuation allowance on our deferred tax assets other than the capital loss carryforwards and certain state attributes that have short expiration periods.

While the Company expects to generate sufficient future income to fully utilize its deferred tax assets (including NOLs), the Company may have to record a valuation allowance, which could be material, against deferred tax assets if negative evidence such as reduced forecasted income outweigh positive evidence.

Recording a valuation allowance against our NOLs would not impact our ability to use them to offset cash taxes payable.

However, our ability to use NOLs may be significantly limited due to various circumstances, as discussed in more detail in Part I, Item 1A.

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

federal income tax purposes may be significantly limited due to various circumstances, including certain possible future transactions involving the sale or issuance of UAL common stock, or if taxable income does not reach sufficient levels.

As of December 31, 2022, the Company has recorded $175 million of valuation allowance against its capital loss deferred tax assets.

Capital losses have a limited carryforward period of five years, and they can be utilized only to the extent of capital gains.

The Company does not anticipate generating sufficient capital gains to utilize the losses before they expire, therefore, a valuation allowance is necessary as of December 31, 2022.

Additionally, the Company recorded a valuation allowance of $24 million on certain state deferred tax assets primarily due to state NOLs that have short expiration periods.

Supplemental Information

The Company evaluates its financial performance utilizing various GAAP and non-GAAP financial measures, including CASM-ex.

The Company has provided CASM-ex, a non-GAAP financial measure, which is not calculated or presented in accordance with GAAP, as supplemental information and in addition to the financial measure that is calculated and presented in accordance with GAAP.

Management believes that adjusting for special charges (credits) is useful to investors because special charges (credits) are not indicative of UAL's ongoing performance.

Management also believes that excluding third-party business expenses, such as expenses associated with maintenance and ground handling for third parties from CASM, provides more meaningful disclosure because these expenses are not directly related to the Company's core business.

Management also believes that excluding fuel costs from CASM is useful to investors because it provides an additional measure of management's performance excluding the effects of a significant cost item over which management has limited influence.

Management also believes that excluding profit sharing from CASM allows investors to better understand and analyze the Company's operating cost performance and provides a more meaningful comparison of our core operating costs to the airline industry.

Because this non-GAAP financial measure is not calculated in accordance with GAAP, it should not be considered superior to, and is not intended to be considered in isolation or as a substitute for, the related GAAP financial measure and may not be the same as or comparable to any similarly titled measures presented by other companies due to possible differences in method and in the items being adjusted.

We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

Below is a reconciliation of the historical non-GAAP financial measure provided in this report (CASM-ex) to the most directly comparable GAAP financial measure (CASM) for the years ended December 31:

(in cents) 2022 2021 2020 2019

CASM (GAAP) 17.19 14.36 17.68 13.67

Fuel expense 5.29 3.22 2.57 3.14

Profit sharing 0.06 — — 0.17

Third-party business expenses 0.06 0.06 0.11 0.06

Special charges (credits) (a) 0.05 (1.88) (2.13) 0.09

CASM-ex (Non-GAAP) 11.73 12.96 17.13 10.21

(a) See Note 13 to the financial statements included in Part II, Item 8 of this report for additional information on special charges for 2020 to 2022.

Special charges for 2019 consist primarily of $171 million of impairment of assets, $16 million of severance and benefits and $59 million of losses on sale of assets and other special charges.

Cautionary Statement Regarding Forward-Looking Statements

This report contains certain "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including in Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere, relating to, among other things, the potential impacts of the COVID-19 pandemic and steps the Company plans to take in response thereto and goals, plans and projections regarding the Company's financial position, results of operations, market position, capacity, fleet, product development, ESG targets and business strategy.

Such forward-looking statements are based on historical performance and current expectations, estimates, forecasts and projections about the Company's future financial results, goals, plans and objectives and involve inherent risks, assumptions and uncertainties, known or unknown, including internal or external factors that could delay, divert or change any of them, that are difficult to predict, may be beyond the Company's control and could cause the Company's future financial results, goals, plans and objectives to differ materially from those expressed in, or implied by, the statements.

Words such as "should," "could," "would," "will," "may," "expects," "plans," "intends," "anticipates," "indicates," "remains," "believes," "estimates," "projects," "forecast," "guidance," "outlook," "goals", "targets" and other words and terms of similar meaning and expression are intended to identify forward-looking statements, although not all forward-looking statements contain such terms.

Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere, relating to, among other things, goals, plans and projections regarding the Company's financial position, results of operations, market position, capacity, fleet, product development, ESG-related strategy initiatives and business strategy.

Such forward-looking statements are based on historical performance and current expectations, estimates, forecasts and projections about the Company's future financial results, goals, plans, commitments, strategies and objectives and involve inherent risks, assumptions and uncertainties, known or unknown, including internal or external factors that could delay, divert or change any of them, that are difficult to predict, may be beyond the Company's control and could cause the Company's future financial results, goals, plans, commitments, strategies and objectives to differ materially from those expressed in, or implied by, the statements.

Words such as "should," "could," "would," "will," "may," "expects," "plans," "intends," "anticipates," "indicates," "remains," "believes," "estimates," "projects," "forecast," "guidance," "outlook," "goals," "targets," "pledge," "confident," "optimistic," "dedicated," "positioned," and other words and terms of similar meaning and expression are intended to identify forward-looking statements, although not

all forward-looking statements contain such terms.

All statements, other than those that relate solely to historical facts, are forward-looking statements.

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execution risks associated with our strategic operating plan;

changes in our network strategy or other factors outside our control resulting in less economic aircraft orders, costs related to modification or termination of aircraft orders or entry into less favorable aircraft orders, as well as any inability to accept or integrate new aircraft into our fleet as planned;

the adverse impacts of the ongoing COVID-19 global pandemic on our business, operating results, financial condition and liquidity;

adverse publicity, harm to our brand, reduced travel demand, potential tort liability and voluntary or mandatory operational restrictions as a result of an accident, catastrophe or incident involving us, our regional carriers, our codeshare partners or another airline;

any failure to effectively manage, and receive anticipated benefits and returns from, acquisitions, divestitures, investments, joint ventures and other portfolio actions, as well as related costs or other issues, or related exposures to unknown liabilities or other issues or underperformance as compared to our expectations;

adverse publicity, harm to our brand, reduced travel demand, potential tort liability and operational restrictions as a result of an accident, catastrophe or incident involving us, our regional carriers, our codeshare partners or another airline;

the highly competitive nature of the global airline industry and susceptibility of the industry to price discounting and changes in capacity, including as a result of alliances, joint business arrangements or other consolidations;

our reliance on a limited number of suppliers to source a majority of our aircraft and certain parts, and the impact of any failure to obtain timely deliveries, additional equipment or support from any of these suppliers;

our reliance on a limited number of suppliers to source a majority of our aircraft, engines and certain parts, and the impact of any failure to obtain timely deliveries, additional equipment or support from any of these suppliers;

disruptions to our regional network and United Express flights provided by third-party regional carriers;

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reliance on third-party service providers and the impact of any significant failure of these parties to perform as expected, or interruptions in our relationships with these providers or their provision of services;

extended interruptions or disruptions in service at major airports where we operate and space, facility and infrastructure constrains at our hubs or other airports;

geopolitical conflict, terrorist attacks or security events;

extended interruptions or disruptions in service at major airports where we operate and space, facility and infrastructure constraints at our hubs or other airports;

geopolitical conflict, terrorist attacks or security events (including the suspension of our overflying in Russian airspace as a result of the Russia-Ukraine military conflict and to Tel Aviv as a result of the Israeli-Hamas military conflict and an escalation of the broader economic consequences of the conflicts beyond their current scope);

any damage to our reputation or brand image;

our reliance on technology and automated systems to operate our business and the impact of any significant failure or disruption of, or failure to effectively integrate and implement, the technology or systems;

increasing privacy and data security obligations or a significant data breach;

increasing privacy, data security and cybersecurity obligations or a significant data breach;

increased use of social media platforms by us, our employees and others;

the impacts of union disputes, employee strikes or slowdowns, and other labor-related disruptions or compliance costs on our operations or financial performance;

the impacts of union disputes, employee strikes or slowdowns, and other labor-related disruptions or regulatory compliance costs on our operations or financial performance;

any failure to attract, train or retain skilled personnel, including our senior management team or other key employees;

the monetary and operational costs of compliance with extensive government regulation of the airline industry;

current or future litigation and regulatory actions, or failure to comply with the terms of any settlement, order or arrangement relating to these actions;

costs, liabilities and risks associated with environmental regulation and climate change, including our climate goals;

current or future litigation and regulatory actions, or failure to comply with the terms of any settlement, order or agreement relating to these actions;

costs, liabilities and risks associated with environmental regulation and climate change, and any failure to achieve or demonstrate progress towards our climate goals;

high and/or volatile fuel prices or significant disruptions in the supply of aircraft fuel;

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failure to comply with financial and other covenants governing our debt, including our MileagePlus® financing agreements;

the impacts of the proposed phase out of the London interbank offer rate;

limitations on our ability to use our net operating loss carryforwards and certain other tax attributes to offset future taxable income for U.S.

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increases in insurance costs or inadequate insurance coverage and other risks and uncertainties set forth under Part I, Item 1A.

Risk Factors, of this report, as well as other risks and uncertainties set forth from time to time in the reports we file with the SEC.

Risk Factors, of this Form 10-K, and under "Economic and Market Factors" and "Governmental Actions" in Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations, of this report, as well as other risks and uncertainties set forth from time to time in the reports we file with the SEC.

The foregoing list sets forth many, but not all, of the factors that could impact our ability to achieve results described in any forward-looking statements.

Investors should understand that it is not possible to predict or identify all such factors and should

not consider this list to be a complete statement of all potential risks and uncertainties.

Investors should understand that it is not possible to predict or identify all such factors and should not consider this list to be a complete statement of all potential risks and uncertainties.

It is routine for our internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections, beliefs and assumptions upon which we base our expectations may change.

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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-K

Item 7. Management’s Discussion and Analysis