4 unchanged sentences
We have audited the accompanying consolidated balance sheets of United Airlines Holdings, Inc.
−Removed: (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), cash flows, and stockholders' equity for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the "consolidated financial statements").
+Added: (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the "consolidated financial statements").
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.
12 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
−Removed: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
+Added: Critical Audit Matter
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that is communicated or required to be communicated to the audit committee and that:
+Added: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
+Added: The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Indefinite-lived Intangible Asset (China Route Authorities) Impairment Analysis
Description of the Matter
−Removed: At December 31, 2022, the carrying value of the Company's China route authorities indefinite-lived intangible assets (the China intangible assets) was $1.0 billion.
−Removed: As discussed in Note 1 of the consolidated financial statements, indefinite-lived assets are reviewed for impairment on an annual basis as of October 1, or on an interim basis whenever a triggering event occurs.
−Removed: Auditing management's annual China intangible assets impairment test was complex and highly judgmental due to the significant estimation required in determining the fair value of the assets.
−Removed: The fair value estimate was sensitive to significant assumptions such as revenue growth rate, operating margin and the discount rate, each of which is affected by expectations about future market or economic conditions.
+Added: As discussed in Note 1 of the consolidated financial statements, indefinite-lived assets 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.
+Added: 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.
+Added: At December 31, 2023, the carrying value of the Company's China route authority indefinite-lived intangible asset (the China intangible asset) was $1.0 billion.
+Added: Auditing management's annual China intangible asset impairment test was complex and highly judgmental due to the significant estimation required in determining the fair value of the asset.
+Added: The fair value estimate was sensitive to significant assumptions such as forecasted revenues, fuel costs, other operating costs, margin and an overall discount rate, each of which is affected by expectations about future market or economic conditions.
As a result of the subjectivity of the assumptions, adverse changes to management's estimates could reduce the underlying cash flows used to estimate fair value and trigger impairment charges.
We Addressed the Matter in Our Audit
−Removed: We tested the Company's design and operating effectiveness of internal controls that address the risk of material misstatement relating to the estimate of fair value of the China intangible assets used in the annual impairment test.
−Removed: This included testing controls over management's review of the significant assumptions used in the discounted cash flow methodology, including revenue growth rate, operating margin and the discount rate.
−Removed: To test the estimated fair value of the Company's China intangible assets, we performed audit procedures that included, among others, assessing the fair value methodology used by management and evaluating the significant assumptions used in the valuation model.
+Added: We tested the Company's design and operating effectiveness of internal controls that address the risk of material misstatement relating to the estimate of fair value of the China intangible asset used in the annual impairment test.
+Added: This included testing controls over management's review of the significant assumptions used in the discounted cash flow methodology, including forecasted revenues, fuel costs, other operating costs, margin and the overall discount rate.
+Added: To test the estimated fair value of the Company's China intangible asset, we performed audit procedures that included, among others, assessing the fair value methodology used by management and evaluating the significant assumptions used in the valuation model.
We compared significant assumptions to current industry, market and economic trends, and to the Company's historical results.
−Removed: We assessed the historical accuracy of management's estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the China intangible assets that would result from changes in assumptions.
−Removed: We also involved a valuation specialist to assist in our evaluation of the Company's valuation methodology and discount rate.
−Removed: Deferred Tax Assets—Valuation Allowance
−Removed: Description of the Matter
−Removed: As more fully described in Note 6 to the consolidated financial statements, at December 31, 2022, the Company had deferred tax assets of $7.5 billion.
−Removed: In addition, the Company had deferred tax liabilities available to offset deferred tax assets of $ 6.7 billion.
−Removed: Deferred tax assets are reduced by a valuation allowance if, based on the weight of all available evidence, in management's judgment it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.
−Removed: Auditing management's assessment of the realizability of its deferred tax assets involved complex auditor judgment because management's judgement involves significant assumptions about the ability to generate future taxable income that may be affected by future market or economic conditions.
−Removed: We Addressed the Matter in Our Audit
−Removed: We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls that address the risks of material misstatement relating to the realizability of deferred tax assets.
−Removed: This included controls over management's scheduling of the future reversal of existing taxable temporary differences (deferred tax liabilities) and projections of future taxable income.
−Removed: Among other audit procedures performed, we tested the Company's scheduling of the reversal of existing temporary taxable differences and tested the underlying data used to schedule the reversals.
−Removed: We evaluated the assumptions used by the Company to develop projections of future taxable income and tested the completeness and accuracy of the underlying data used in its projections.
−Removed: For example, we compared the projections of future taxable income with the actual results of prior periods, as well as management's consideration of current industry and economic trends.
+Added: We assessed the historical accuracy of management's estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the China intangible asset that would result from changes in assumptions.
+Added: We also involved a valuation specialist to assist in our evaluation of the Company's overall discount rate.
/s/ Ernst & Young LLP
6 unchanged sentences
We have audited the accompanying consolidated balance sheets of United Airlines, Inc.
−Removed: (the "Company") as of December 31, 2022 and 2021, and the related consolidated statements of operations, comprehensive income (loss), cash flows, and stockholder's equity, for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the "consolidated financial statements").
+Added: (the "Company") as of December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive income (loss), stockholder's equity and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the "consolidated financial statements").
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.
14 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
−Removed: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
+Added: Critical Audit Matter
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
+Added: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
+Added: The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Indefinite-lived Intangible Asset (China Route Authorities) Impairment Analysis
−Removed: Description of the Matter At December 31, 2022, the carrying value of the Company's China route authorities indefinite-lived intangible assets (the China intangible assets) was $1.0 billion.
−Removed: As discussed in Note 1 of the consolidated financial statements, indefinite-lived assets are reviewed for impairment on an annual basis as of October 1, or on an interim basis whenever a triggering event occurs.
−Removed: Auditing management's annual China intangible assets impairment test was complex and highly judgmental due to the significant estimation required in determining the fair value of the assets.
−Removed: The fair value estimate was sensitive to significant assumptions such as revenue growth rate, operating margin and the discount rate, each of which is affected by expectations about future market or economic conditions.
+Added: Description of the Matter As discussed in Note 1 of the consolidated financial statements, indefinite-lived assets 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.
+Added: 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.
+Added: At December 31, 2023, the carrying value of the Company's China route authority indefinite-lived intangible asset (the China intangible asset) was $1.0 billion.
+Added: Auditing management's annual China intangible asset impairment test was complex and highly judgmental due to the significant estimation required in determining the fair value of the asset.
+Added: The fair value estimate was sensitive to significant assumptions such as forecasted revenues, fuel costs, other operating costs, margin and an overall discount rate, each of which is affected by expectations about future market or economic conditions.
As a result of the subjectivity of the assumptions, adverse changes to management's estimates could reduce the underlying cash flows used to estimate fair value and trigger impairment charges.
−Removed: We Addressed the Matter in Our Audit We tested the Company's design and operating effectiveness of internal controls that address the risk of material misstatement relating to the estimate of fair value of the China intangible assets used in the annual impairment test.
−Removed: This included testing controls over management's review of the significant assumptions used in the discounted cash flow methodology, including revenue growth rate, operating margin and the discount rate.
−Removed: To test the estimated fair value of the Company's China intangible assets, we performed audit procedures that included, among others, assessing the fair value methodology used by management and evaluating the significant assumptions used in the valuation model.
+Added: We Addressed the Matter in Our Audit We tested the Company's design and operating effectiveness of internal controls that address the risk of material misstatement relating to the estimate of fair value of the China intangible asset used in the annual impairment test.
+Added: This included testing controls over management's review of the significant assumptions used in the discounted cash flow methodology, including forecasted revenues, fuel costs, other operating costs, margin and the overall discount rate.
+Added: To test the estimated fair value of the Company's China intangible asset, we performed audit procedures that included, among others, assessing the fair value methodology used by management and evaluating the significant assumptions used in the valuation model.
We compared significant assumptions to current industry, market and economic trends, and to the Company's historical results.
−Removed: We assessed the historical accuracy of management's estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the China intangible assets that would result from changes in assumptions.
−Removed: We also involved a valuation specialist to assist in our evaluation of the Company's valuation methodology and discount rate.
−Removed: Deferred Tax Assets - Valuation Allowance
−Removed: Description of the Matter As more fully described in Note 6 to the consolidated financial statements, at December 31, 2022, the Company had deferred tax assets of $7.4 billion.
−Removed: In addition, the Company had deferred tax liabilities available to offset deferred tax assets of $6.7 billion.
−Removed: Deferred tax assets are reduced by a valuation allowance if, based on the weight of all available evidence, in management’s judgment it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.
−Removed: Auditing management's assessment of the realizability of its deferred tax assets involved complex auditor judgment because management's judgement involves significant assumptions about the ability to generate future taxable income that may be affected by future market or economic conditions.
−Removed: We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls that address the risks of material misstatement relating to the realizability of deferred tax assets.
−Removed: This included controls over management's scheduling of the future reversal of existing taxable temporary differences (deferred tax liabilities) and projections of future taxable income.
−Removed: Among other audit procedures performed, we tested the Company's scheduling of the reversal of existing temporary taxable differences and tested the underlying data used to schedule the reversals.
−Removed: We evaluated the assumptions used by the Company to develop projections of future taxable income and tested the completeness and accuracy of the underlying data used in its projections.
−Removed: For example, we compared the projections of future taxable income with the actual results of prior periods, as well as management's consideration of current industry and economic trends.
+Added: We assessed the historical accuracy of management's estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the China intangible asset that would result from changes in assumptions.
+Added: We also involved a valuation specialist to assist in our evaluation of the Company's overall discount rate.
/s/ Ernst & Young LLP
13 unchanged sentences
Operating expense:
−Removed: Aircraft fuel 13,113 5,755 3,153
Salaries and related costs 14,787 11,466 9,566
+Added: Aircraft fuel 12,651 13,113 5,755
Landing fees and other rent 3,076 2,576 2,416
+Added: Aircraft maintenance materials and outside repairs 2,736 2,153 1,316
Depreciation and amortization 2,671 2,456 2,485
Regional capacity purchase 2,400 2,299 2,147
−Removed: Aircraft maintenance materials and outside repairs 2,153 1,316 858
Distribution expenses 1,977 1,535 677
Aircraft rent 197 252 228
−Removed: Special charges (credits) 140 ( 3,367 ) ( 2,616 )
+Added: Special charges 949 140 ( 3,367 )
Other operating expenses 8,062 6,628 4,433
80 unchanged sentences
Postretirement benefit liability 637 671
+Added: Deferred income taxes 594 0
Other financial liabilities 2,265 844
10 unchanged sentences
Retained earnings 3,831 1,265
−Removed: Accumulated other comprehensive income (loss) 175 ( 942 )
+Added: Accumulated other comprehensive income ( 62 ) 175
Total stockholders' equity 9,324 6,896
16 unchanged sentences
Changes in operating assets and liabilities -
−Removed: (Increase) decrease in receivables ( 158 ) ( 448 ) 135
−Removed: (Increase) decrease in other assets ( 86 ) ( 292 ) 484
−Removed: Increase in advance ticket sales 1,200 1,521 14
+Added: Increase in receivables ( 100 ) ( 158 ) ( 448 )
+Added: Increase in prepaids and other assets ( 463 ) ( 86 ) ( 292 )
+Added: Increase (decrease) in advance ticket sales ( 851 ) 1,200 1,521
Increase in frequent flyer deferred revenue 468 393 307
−Removed: Increase (decrease) in accounts payable 796 985 ( 1,079 )
+Added: Increase in accounts payable 572 796 985
Increase (decrease) in other liabilities 1,038 110 ( 403 )
−Removed: Net cash provided by (used in) operating activities 6,066 2,067 ( 4,133 )
+Added: Net cash provided by operating activities 6,911 6,066 2,067
Investing Activities:
4 unchanged sentences
Other, net ( 23 ) ( 69 ) ( 1 )
−Removed: Net cash provided by (used in) investing activities ( 13,829 ) ( 1,672 ) 50
+Added: Net cash used in investing activities ( 6,106 ) ( 13,829 ) ( 1,672 )
Financing Activities:
−Removed: Proceeds from issuance of debt, net of discounts and fees 736 11,096 15,676
−Removed: Payments of long-term debt, finance leases and other financing liabilities ( 4,011 ) ( 5,205 ) ( 4,449 )
−Removed: Repurchases of common stock — — ( 353 )
+Added: Proceeds from issuance of debt and other financial liabilities, net of discounts and fees 2,388 736 11,096
+Added: Payments of long-term debt, finance leases and other financial liabilities ( 4,248 ) ( 4,011 ) ( 5,205 )
Proceeds from equity issuance — — 532
7 unchanged sentences
Right-of-use assets acquired through operating leases 552 137 771
−Removed: Investment interests received in exchange for goods and services 103 295 —
Lease modifications and lease conversions 546 ( 84 ) 123
−Removed: Cash Paid (Refunded) During the Period for:
+Added: Investment interests received in exchange for goods and services 33 103 295
+Added: Cash Paid During the Period for:
Interest $ 1,848 $ 1,573 $ 1,424
10 unchanged sentences
Net loss — — — — ( 1,964 ) — ( 1,964 )
−Removed: Other comprehensive loss — — — — — ( 421 ) ( 421 )
+Added: Other comprehensive income — — — — — 197 197
Stock-settled share-based compensation — — 232 — — — 232
+Added: Warrants issued — — 99 — — — 99
Issuance of common stock 11.0 — 532 — — — 532
−Removed: Repurchases of common stock ( 4.4 ) — — ( 342 ) — — ( 342 )
Stock issued for share-based awards, net of shares withheld for tax 1.0 — ( 73 ) 83 ( 37 ) — ( 27 )
−Removed: Warrants issued — — 97 — — — 97
−Removed: Adoption of new accounting standard (a) — — — — ( 17 ) — ( 17 )
Balance at December 31, 2021 323.8 4 9,156 ( 3,814 ) 625 ( 942 ) 5,029
−Removed: Net loss — — — — ( 1,964 ) — ( 1,964 )
+Added: Net income — — — — 737 — 737
Other comprehensive income — — — — — 1,117 1,117
Stock-settled share-based compensation — — 86 — — — 86
−Removed: Warrants issued — — 99 — — — 99
−Removed: Issuance of common stock 11.0 — 532 — — — 532
Stock issued for share-based awards, net of shares withheld for tax 3.1 — ( 256 ) 280 ( 97 ) — ( 73 )
1 unchanged sentence
Net income — — — — 2,618 — 2,618
−Removed: Other comprehensive income — — — — — 1,117 1,117
+Added: Other comprehensive loss — — — — — ( 237 ) ( 237 )
Stock-settled share-based compensation — — 77 — — — 77
+Added: Proceeds from exercise of stock options 1 1
Stock issued for share-based awards, net of shares withheld for tax 1.1 — ( 72 ) 93 ( 52 ) — ( 31 )
Balance at December 31, 2023 328.0 $ 4 $ 8,992 $ ( 3,441 ) $ 3,831 $ ( 62 ) $ 9,324
−Removed: (a) Transition adjustment due to the adoption of Accounting Standards Update No.
−Removed: 2016-13, Financial Instruments — Credit Losses .
The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
10 unchanged sentences
Operating expense:
−Removed: Aircraft fuel 13,113 5,755 3,153
Salaries and related costs 14,787 11,466 9,566
+Added: Aircraft fuel 12,651 13,113 5,755
Landing fees and other rent 3,076 2,576 2,416
+Added: Aircraft maintenance materials and outside repairs 2,736 2,153 1,316
Depreciation and amortization 2,671 2,456 2,485
Regional capacity purchase 2,400 2,299 2,147
−Removed: Aircraft maintenance materials and outside repairs 2,153 1,316 858
Distribution expenses 1,977 1,535 677
24 unchanged sentences
Investments and other 24 ( 28 ) ( 2 )
−Removed: Total other comprehensive income (loss), net of tax 1,117 197 ( 421 )
+Added: Total other comprehensive income, net of tax ( 237 ) 1,117 197
Total comprehensive income (loss), net $ 2,383 $ 1,856 $ ( 1,765 )
54 unchanged sentences
Postretirement benefit liability 637 671
+Added: Deferred income taxes 622 —
Other financial liabilities 2,265 844
8 unchanged sentences
Retained earnings 6,336 3,716
−Removed: Accumulated other comprehensive income (loss) 175 ( 942 )
+Added: Accumulated other comprehensive income ( 62 ) 175
Payable to parent 2,538 2,571
17 unchanged sentences
Changes in operating assets and liabilities -
−Removed: Increase (decrease) in receivables ( 158 ) ( 448 ) 135
+Added: Increase in receivables ( 100 ) ( 158 ) ( 448 )
Increase in intercompany receivables ( 33 ) ( 76 ) ( 28 )
−Removed: (Increase) decrease in other assets ( 86 ) ( 293 ) 484
−Removed: Increase in advance ticket sales 1,200 1,521 14
+Added: Increase in prepaids and other assets ( 463 ) ( 86 ) ( 293 )
+Added: Increase (decrease) in advance ticket sales ( 851 ) 1,200 1,521
Increase in frequent flyer deferred revenue 468 393 307
−Removed: Increase (decrease) in accounts payable 796 985 ( 1,079 )
+Added: Increase in accounts payable 572 796 985
Increase (decrease) in other liabilities 1,035 110 ( 403 )
−Removed: Net cash provided by (used in) operating activities 5,992 2,040 ( 4,145 )
+Added: Net cash provided by operating activities 6,879 5,992 2,040
Investing Activities:
4 unchanged sentences
Other, net ( 23 ) ( 69 ) ( 1 )
−Removed: Net cash provided by (used in) investing activities ( 13,829 ) ( 1,672 ) 50
+Added: Net cash used in investing activities ( 6,106 ) ( 13,829 ) ( 1,672 )
Financing Activities:
−Removed: Proceeds from issuance of debt, net of discounts and fees 736 11,096 15,676
−Removed: Payments of long-term debt, finance leases and other financing liabilities ( 4,011 ) ( 5,205 ) ( 4,449 )
+Added: Proceeds from issuance of debt and other financial liabilities, net of discounts and fees 2,388 736 11,096
+Added: Payments of long-term debt, finance leases and other financial liabilities ( 4,248 ) ( 4,011 ) ( 5,205 )
Proceeds from issuance of parent company stock — — 532
−Removed: Dividend to UAL — — ( 353 )
−Removed: Other, net — — ( 2 )
Net cash provided by (used in) financing activities ( 1,860 ) ( 3,275 ) 6,423
5 unchanged sentences
Right-of-use assets acquired through operating leases 552 137 771
−Removed: Investment interests received in exchange for goods and services 103 295 —
Lease modifications and lease conversions 546 ( 84 ) 123
−Removed: Cash Paid (Refunded) During the Period for:
+Added: Investment interests received in exchange for goods and services 33 103 295
+Added: Cash Paid During the Period for:
Interest $ 1,848 $ 1,573 $ 1,424
9 unchanged sentences
Net loss — ( 1,962 ) — — ( 1,962 )
−Removed: Other comprehensive loss — — ( 421 ) — ( 421 )
−Removed: Dividend to UAL ( 12 ) ( 330 ) — — ( 342 )
+Added: Other comprehensive income — — 197 — 197
Stock-settled share-based compensation 232 — — — 232
−Removed: Adoption of new accounting standard (a) — ( 17 ) — — ( 17 )
Impact of UAL common stock issuance — — — 532 532
1 unchanged sentence
Balance at December 31, 2021 317 2,977 ( 942 ) 2,646 4,998
−Removed: Net loss — ( 1,962 ) — — ( 1,962 )
+Added: Net income — 739 — — 739
Other comprehensive income — — 1,117 — 1,117
Stock-settled share-based compensation 86 — — — 86
−Removed: Impact of UAL common stock issuance — — — 532 532
Other — — — ( 75 ) ( 75 )
1 unchanged sentence
Net income — 2,620 — — 2,620
−Removed: Other comprehensive income — — 1,117 — 1,117
+Added: Other comprehensive loss — — ( 237 ) — ( 237 )
Stock-settled share-based compensation 77 — — — 77
1 unchanged sentence
Balance at December 31, 2023 $ 482 $ 6,336 $ ( 62 ) $ 2,538 $ 9,294
−Removed: (a) Transition adjustment due to the adoption of Accounting Standards Update No.
−Removed: 2016-13, Financial Instruments — Credit Losses .
The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
28 unchanged sentences
United initially capitalizes the costs of selling airline travel tickets and then recognizes those costs as Distribution expense at the time of travel.
−Removed: Passenger ticket costs include credit card fees, travel agency and other commissions paid, as well as global distribution systems booking fees.
+Added: Costs to sell a ticket include credit card fees, travel agency and other commissions paid, as well as global distribution systems booking fees.
Advance Ticket Sales.
2 unchanged sentences
The Company defers amounts related to future travel in its Advance ticket sales liability account.
−Removed: 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.
−Removed: FFCs and ETCs are valid up to one year from the date of issuance;
−Removed: however, all credits issued on or before December 31, 2022 have been extended to December 31, 2023.
−Removed: 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.
+Added: 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.
−Removed: 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.
−Removed: Changes in estimates of breakage are recognized prospectively in proportion to the remaining usage of the related tickets.
In the years ended December 31, 2023, 2022 and 2021, the Company recognized approximately $ 5.7 billion, $ 3.3 billion and $ 1.8 billion, respectively, of passenger revenue for tickets that were included in Advance ticket sales at the beginning of those periods.
11 unchanged sentences
and Canada) $ 32,400 $ 28,474 $ 16,845
−Removed: Atlantic (including Africa, India and Middle East destinations) 9,072 3,414 2,226
+Added: Atlantic 10,982 9,072 3,414
Pacific 5,267 2,927 1,507
5 unchanged sentences
Ancillary Fees.
−Removed: The Company charges fees, separately from ticket sales, for certain ancillary services that are directly related to passengers' travel, such as baggage fees, premium seat fees, inflight amenities fees, and other ticket-related fees.
+Added: The Company charges fees, separately from ticket sales, for certain ancillary services that are directly related to passengers' travel, such as baggage fees, premium seat fees, inflight amenity fees, and other ticket-related fees.
These ancillary fees are part of the travel performance obligation and, as such, are recognized as passenger revenue when the travel occurs.
6 unchanged sentences
Members can also earn miles by purchasing goods and services from our network of non-airline partners.
−Removed: We have contracts to sell miles to these partners with the terms extending from one to seven years .
+Added: 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.
4 unchanged sentences
The total consideration from each ticket sale is then allocated to each of these elements, individually, on a pro-rata basis.
−Removed: At the time of travel, the Company records the
−Removed: portion allocated to the miles to Frequent flyer deferred revenue on the Company's consolidated balance sheet and subsequently recognizes it into revenue when miles are redeemed for air travel and non-air travel awards.
+Added: At the time of travel, the Company records the portion allocated to the miles to Frequent flyer deferred revenue on the Company's consolidated balance sheet and subsequently recognizes it into revenue when miles are redeemed for air travel and non-air travel awards.
Estimated Selling Price of Miles .
31 unchanged sentences
Of the miles expected to be redeemed, the Company expects the majority of these miles to be redeemed within two years .
+Added: The current portion of the Frequent flyer deferred revenue is based on expected redemptions in the next 12 months.
The table below presents a roll forward of Frequent flyer deferred revenue (in millions):
−Removed: Twelve Months Ended
Total Frequent flyer deferred revenue - beginning balance $ 6,675 $ 6,282
4 unchanged sentences
In the years ended December 31, 2023, 2022 and 2021, the Company recognized, in Other operating revenue, $ 2.7 billion, $ 2.4 billion and $ 1.8 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 Co-Brand Agreement.
−Removed: The portion related to the MileagePlus miles awarded of the total amounts received is deferred and presented in the table above as an increase to the frequent flyer liability.
−Removed: We determine the current portion of our frequent flyer liability based on expected redemptions in the next 12 months.
+Added: 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 Total Frequent flyer deferred revenue.
(e) Cash and Cash Equivalents and Restricted Cash— Highly liquid investments with a maturity of three months or less on their acquisition date are classified as cash and cash equivalents.
Restricted cash is classified as short-term or long-term in the consolidated balance sheets based on the expected timing of return of the assets to the Company or payment to an outside party.
−Removed: Restricted cash-current— The December 31, 2022 balance includes amounts to be used for the payment of fees, principal and interest on the $ 6.1 billion of senior secured notes and a secured term loan facility (the "MileagePlus Financing") secured by substantially all of the assets of Mileage Plus Holdings, LLC ("MPH"), a direct wholly-owned subsidiary of United.
+Added: Restricted cash-current— The December 31, 2023 balance includes amounts to be used for the payment of principal, interest and fees on the $ 4.8 billion of senior secured notes and a secured term loan facility (the "MileagePlus Financing") secured by substantially all of the assets of Mileage Plus Holdings, LLC ("MPH"), a direct wholly-owned subsidiary of United.
Restricted cash-non-current— The December 31, 2023 balance primarily includes collateral associated with the MileagePlus Financing, collateral for letters of credit and collateral associated with facility leases and other insurance-related obligations.
8 unchanged sentences
Total cash, cash equivalents and restricted cash shown in the statement of consolidated cash flows $ 6,334 $ 7,421 $ 18,533
−Removed: (f) Investments— Debt investments are classified as available-for-sale and are stated at fair value.
+Added: (f) Investments— Highly liquid investments with maturities of greater than three months to a year, at the time of purchase, are classified as short-term investments and are stated at fair value.
+Added: Investments with maturities beyond one year when purchased are classified as short-term investments if they are expected to be available to support our short-term liquidity needs.
+Added: Our short-term investments in debt securities are classified as available-for-sale and are stated at fair value.
Realized gains and losses on sales of these investments are reflected in Miscellaneous, net in the consolidated statements of operations.
4 unchanged sentences
See Note 8 of this report for additional information related to investments.
−Removed: (g) Securities received in connection with purchase agreements— The Company accounts for the value of securities received from vendors as deferred credits that will generally be recognized as a reduction to the cost of the asset received in future periods.
+Added: (g) Compensation received in connection with purchase agreements— The Company accounts for compensation received from vendors as deferred credits that will generally be recognized as a reduction to the cost of the asset received in future periods.
(h) Accounts Receivable— Accounts receivable primarily consist of amounts due from credit card companies, non-airline partners, and cargo customers.
27 unchanged sentences
The amount of the charge is the difference between the asset's carrying value and fair market value.
−Removed: The Company recorded impairment charges related to certain of its aircraft, related engines and spare parts of $ 97 million and $ 94 million for the years ended December 31, 2021 and 2020, respectively.
+Added: The Company recorded impairment charges related to certain of its aircraft of $ 97 million for the year ended December 31, 2021.
See Note 13 of this report for additional information related to impairments .
2 unchanged sentences
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.
−Removed: We value goodwill and indefinite-lived intangible assets primarily using market and income approach valuation techniques.
−Removed: These measurements include the following key assumptions:
−Removed: (1) forecasted revenues, expenses and cash flows, (2) terminal period revenue growth and cash flows, (3) an estimated weighted average cost of capital, (4)
−Removed: assumed discount rates depending on the asset and (5) a tax rate.
+Added: When there is a triggering event, the Company typically determines fair value using either market or a variation of the income approach valuation techniques.
+Added: measurements include the following key assumptions:
+Added: (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.
−Removed: Because we are required to make estimates and assumptions when evaluating goodwill and indefinite-lived intangible assets for impairment, actual transaction amounts may differ materially from these estimates.
−Removed: In 2022, the Company evaluated its intangible assets for possible impairments.
+Added: 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.
+Added: We recognize an impairment when the fair value of an intangible asset is less than its carrying value.
+Added: Every year, the Company evaluates its 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.
−Removed: To determine fair value, the Company used discounted cash flow methods appropriate for each asset.
−Removed: Key inputs into the models included forecasted capacity, revenues, fuel costs, other operating costs and an overall discount rate.
−Removed: The assumptions used for future projections include that demand will continue to recover.
+Added: To determine fair value of the China route authority, the Company used a discounted cash flow method.
+Added: 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.
−Removed: See Note 13 of this report for additional information related to impairments.
The following table presents information about the Company's goodwill and other intangible assets at December 31 (in millions):
4 unchanged sentences
Indefinite-lived intangible assets
−Removed: Route authorities $ 1,020 $ 1,020
+Added: China route authority $ 1,020 $ 1,020
Airport slots 574 574
35 unchanged sentences
See Note 6 of this report for additional information on UAL's uncertain tax positions.
+Added: (s) Recently Issued Accounting Standards— In June 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.
+Added: 2022-03, Fair Value Measurement (Topic 820):
+Added: Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.
+Added: Under this standard, a contractual restriction on the sale of an equity security is not considered in measuring the security's fair value.
+Added: The standard also requires certain disclosures for equity securities that are subject to contractual sale restrictions.
+Added: The ASU became effective January 1, 2024.
+Added: We do not expect this ASU to have a material impact on the valuation of our equity investments;
+Added: however, we may be required to include additional disclosures to the extent we have material equity investments subject to contractual sale restrictions.
NOTE 2 - COMMON STOCKHOLDERS' EQUITY AND PREFERRED SECURITIES
12 unchanged sentences
On March 3, 2021, the Company entered into an equity distribution agreement (the "Distribution Agreement") with several financial institutions (collectively, the "Managers"), relating to the issuance and sale from time to time by UAL (the "2021 ATM Offering"), through the Managers, of up to 37 million shares of UAL common stock (the "2021 ATM Shares").
−Removed: Sales of the 2021 ATM Shares under the Distribution Agreement may be made in any transactions that are deemed to be "at the market offerings" as defined in Rule 415 under the Securities Act of 1933, as amended.
−Removed: Under the terms of the Distribution Agreement, UAL may also sell the 2021 ATM Shares to any Manager, as principal for its own account, at a price agreed upon at the time of sale.
−Removed: If UAL sells the 2021 ATM Shares to a Manager as principal, UAL will enter into a separate terms agreement with such
+Added: 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.
−Removed: No shares were sold in 2022 under the 2021 ATM Offering.
+Added: No shares were sold in 2022 or 2023 under the 2021 ATM Offering, which expired in March 2023.
NOTE 3 - EARNINGS (LOSS) PER SHARE
3 unchanged sentences
Basic weighted-average shares outstanding 327.8 326.4 321.9
+Added: Dilutive effect of stock warrants (a) 2.2 1.5 —
Dilutive effect of employee stock awards 1.9 2.2 —
−Removed: Dilutive effect of stock warrants 1.5 — —
Diluted weighted-average shares outstanding 331.9 330.1 321.9
1 unchanged sentence
Earnings (loss) per share, diluted $ 7.89 $ 2.23 $ ( 6.10 )
−Removed: Potentially dilutive securities (a)
−Removed: Stock warrants (b) 3.5 0.9 —
+Added: Potentially dilutive securities (b)
+Added: Stock warrants (a) 1.5 3.5 0.9
Employee stock awards 0.6 0.7 0.7
−Removed: (a) Weighted-average potentially dilutive securities outstanding excluded from the computation of diluted earnings per share because the securities would have had an antidilutive effect.
−Removed: (b) Represent warrants issued to Treasury pursuant to the payroll support program, including extensions, and the loan program established under the CARES Act.
+Added: (a) Represent warrants issued to Treasury pursuant to the payroll support program, including extensions, and the loan program established under the CARES Act.
See Note 2 of this report for additional information about these warrants.
+Added: (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.
NOTE 4 - SHARE-BASED COMPENSATION PLANS
UAL maintains share-based compensation plans for our management employees and our non-employee directors.
−Removed: During 2021, UAL's Board of Directors and stockholders approved the United Airlines Holdings, Inc.
−Removed: 2021 Incentive Compensation Plan (the "2021 Plan").
−Removed: The 2021 Plan is an incentive compensation plan that allows the Company to use different forms of equity incentives to attract, retain and reward officers and employees.
−Removed: Under the 2021 Plan, the Company may grant:
−Removed: nonqualified stock options;
+Added: These plans provide for grants of nonqualified stock options;
incentive stock options (within the meaning of Section 422 of the Internal Revenue Code of 1986);
4 unchanged sentences
An award (other than an option, SAR or cash incentive award) may provide the holder with dividends or dividend equivalents.
−Removed: The 2021 Plan replaces the United Continental Holdings, Inc.
−Removed: 2017 Incentive Compensation Plan (the "2017 Plan").
−Removed: Any awards granted under the 2017 Plan prior to the approval of the 2021 Plan remain in effect pursuant to their terms.
−Removed: The number of shares of UAL common stock that remained available for issuance under the 2017 Plan as of the effective date of the 2021 Plan are now available for issuance under the 2021 Plan.
All awards are recorded as either equity or a liability in the Company's consolidated balance sheets.
The share-based compensation expense is recorded in salaries and related costs.
−Removed: During 2022, UAL granted share-based compensation awards pursuant to the 2021 Plan.
+Added: During 2023, UAL granted share-based compensation awards pursuant to the United Airlines Holdings, Inc.
+Added: 2021 Incentive Compensation Plan.
These share-based compensation awards included approximately 2.6 million RSUs consisting of approximately 2.0 million time-vested RSUs and approximately 0.6 million performance-based RSUs.
14 unchanged sentences
Stock options 3 2.7
−Removed: As of December 31, 2022, UAL had recorded a liability of approximately $ 3 million related to its cash-settled RSUs.
−Removed: UAL paid approximately $ 7 million, $ 29 million and $ 26 million related to its cash-settled RSUs during 2022, 2021 and 2020, respectively.
The table below summarizes UAL's RSU activity for the years ended December 31 (shares in millions):
7 unchanged sentences
Granted 0.1 2.3 31.96
+Added: Additional issuance due to achievement of performance metrics — 1.6 58.17
Vested ( 0.2 ) ( 4.8 ) 56.00
2 unchanged sentences
Granted 0.1 2.5 43.42
−Removed: Additional issuance due to achievement of performance metrics — 1.6 58.17
Vested ( 0.1 ) ( 1.6 ) 44.03
2 unchanged sentences
The fair value of RSUs that vested in 2023, 2022 and 2021 was approximately $ 76 million, $ 274 million and $ 104 million, respectively.
−Removed: Stock Options.
−Removed: UAL did no t grant any stock option awards during 2022, 2021 or 2020.
−Removed: As of December 31, 2022, there were approximately 0.7 million outstanding stock option awards, 0.4 million of which were exercisable, with weighted-average exercise prices of $ 82.12 and $ 59.58 , respectively, weighted-average remaining contractual lives of 4.3 years and 2.3 years, respectively, and intrinsic values of zero as all of the strike prices exceeded the closing stock price on that date.
+Added: As of December 31, 2023, UAL had recorded a liability of approximately $ 3 million related to its cash-settled RSUs.
+Added: UAL paid approximately $ 3 million, $ 7 million and $ 29 million related to its cash-settled RSUs during 2023, 2022 and 2021, respectively.
NOTE 5 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ("AOCI")
14 unchanged sentences
We consider all income sources, including other comprehensive income, in determining the amount of tax benefit allocated to results from operations.
−Removed: (b) This AOCI component is included in the computation of net periodic pension and other postretirement costs.
+Added: (b) This AOCI component is included in the computation of net periodic pension and other postretirement costs, specifically the following components:
+Added: amortization of unrecognized (gain) loss, amortization of prior service credit and other.
See Note 7 of this report for additional information on pensions and other postretirement liabilities.
19 unchanged sentences
Operating lease liabilities 1,134 1,118 1,134 1,118
−Removed: Other financing liabilities 141 327 141 327
+Added: Other financial liabilities 414 141 414 141
Interest expense carryforward 579 510 579 510
6 unchanged sentences
Total deferred tax liabilities $ ( 8,301 ) $ ( 7,376 ) $ ( 8,301 ) $ ( 7,376 )
−Removed: Net deferred tax asset $ 91 $ 659 $ 62 $ 631
+Added: Net deferred tax asset (liability) $ ( 594 ) $ 91 $ ( 622 ) $ 62
United and its domestic consolidated subsidiaries file a consolidated federal income tax return with UAL.
−Removed: Under an intercompany tax allocation policy, United and its subsidiaries compute, record and pay UAL for their own tax liability as if they were separate companies filing separate returns.
−Removed: In determining their own tax liabilities, United and each of its subsidiaries take into account all tax credits or benefits generated and utilized as separate companies and they are each compensated for the aforementioned tax benefits only if they would be able to use those benefits on a separate company basis.
−Removed: The Company recorded a deferred tax asset for a temporary interest expense limitation under Internal Revenue Code ("IRC") section 163(j) due to law changes resulting from the CARES Act.
−Removed: Interest expense disallowed under IRC section 163(j) can be carried forward indefinitely and deducted in future years.
+Added: Under an intercompany tax allocation policy, United and its subsidiaries compute, record and pay UAL for their own tax liabilities as if they were separate companies filing separate returns.
+Added: In determining their own tax liabilities, United and each of its subsidiaries take into account all tax credits or benefits generated and utilized as separate companies and they are each compensated for the aforementioned tax benefits on an annual basis.
The Company's federal and state NOL and tax credit carryforwards relate to current and prior years' NOLs and credits, which may be used to reduce tax liabilities in future years.
1 unchanged sentence
If not utilized these federal pre-tax NOLs will expire as follows (in billions):
−Removed: $ 0.1 in 2026, $ 0.5 in 2028, $ 0.4 in 2029, $ 0.2 in 2032 and $ 0.4 in 2033.
+Added: $ 0.2 in 2029 and $ 0.2 in 2033.
The remaining $ 11.6 billion of NOLs has no expiration date.
1 unchanged sentence
Federal tax credits of $ 50 million will expire over a 1 to 20-year period and state tax credits of $ 56 million will expire over a 1 to 15-year period.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: One of the Company's largest deferred tax assets was its federal pre-tax NOLs which were $ 13.2 billion ($ 2.8 billion tax effected) at December 31, 2022.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Assumptions about future taxable income are consistent with the plans and estimates used to manage our business.
−Removed: Management will continue to evaluate future financial performance to determine whether such
−Removed: performance is both sustained and significant enough to provide sufficient evidence to support not recording valuation allowance on these NOLs.
As of December 31, 2023, the Company has recorded $ 150 million of valuation allowance against its capital loss deferred tax assets.
3 unchanged sentences
The Company's unrecognized tax benefits related to uncertain tax positions were $ 66 million, $ 58 million and $ 55 million at December 31, 2023, 2022 and 2021, respectively.
−Removed: Included in the ending balance at December 31, 2022 is $ 58 million that would affect the Company's effective tax rate if recognized.
+Added: All of the uncertain tax positions would affect the Company's effective tax rate if recognized.
The changes in unrecognized tax benefits relating to settlements with taxing authorities, unrecognized tax benefits as a result of tax positions taken during a prior period and unrecognized tax benefits relating from a lapse of the statute of limitations were immaterial during 2023, 2022 and 2021.
2 unchanged sentences
The Company's federal income tax returns for tax years after 2002 remain subject to examination by the Internal Revenue Service (the "IRS") and state taxing jurisdictions.
−Removed: NOTE 7 - PENSION AND OTHER POSTRETIREMENT PLANS
+Added: NOTE 7 - PENSION, POSTRETIREMENT AND OTHER EMPLOYEE BENEFIT PLANS
The following summarizes the significant pension and other postretirement plans of United:
9 unchanged sentences
Benefits provided are subject to applicable contributions, co-payments, deductibles and other limits as described in the specific plan documentation.
−Removed: In 2021 and 2020, the Company offered several voluntary leave programs and voluntary separation programs ("Voluntary Programs") to certain eligible employees, which in some cases included a partially-paid leave of absence with active health benefits and travel privileges.
−Removed: Under these Voluntary Programs, employees generally separated (or will separate) from employment with certain post-employment health benefits and travel privileges.
+Added: In 2021, the Company offered several voluntary leave programs and voluntary separation programs ("Voluntary Programs") to certain eligible employees, which in some cases included a partially-paid leave of absence with active health benefits and travel privileges.
+Added: Under these Voluntary Programs, employees generally separated from employment with certain post-employment health benefits and travel privileges.
Included in the Voluntary Programs offered during the first quarter of 2021, the Company offered special separation benefits in the form of additional subsidies for retiree medical costs for certain U.S.-based front-line employees.
−Removed: The subsidies are in the form of a one-time contribution to a notional Retiree Health Account of $ 125,000 for full-time employees and $ 75,000 for part-time employees.
+Added: The subsidies were in the form of a one-time contribution to a notional retiree health account of $ 125,000 for full-time employees and $ 75,000 for part-time employees.
As a result, the Company recorded $ 31 million for those additional benefits in 2021.
−Removed: During 2020, the Company offered certain of its eligible front-line employees special separation benefits in the form of additional years of pension service and additional subsidies for retiree medical costs (based on employee group, age and completed years of service) as a part of the Voluntary Programs.
−Removed: As a result, the Company recorded, in 2020, $ 54 million for those additional pension benefits and $ 201 million for those additional retiree medical benefits.
−Removed: Also, the Company recognized, in 2020, $ 430 million in settlement losses related to the defined benefit pension plan covering certain U.S.
−Removed: non-pilot employees.
Actuarial assumption changes are reflected as a component of the net actuarial (gain) loss.
−Removed: The 2022 actuarial gains were mainly related to an increase in the discount rate applied at December 31, 2022 compared to December 31, 2021, which were partially offset by losses on pension plan assets due to asset returns being less than expected.
+Added: The 2023 actuarial losses were mainly related to a decrease in the discount rate applied at December 31, 2023 compared to December 31, 2022.
Actuarial (gains) losses will be amortized over the average remaining service life of the covered active employees.
8 unchanged sentences
Interest cost 217 188
−Removed: Actuarial gain ( 2,186 ) ( 188 )
+Added: Actuarial (gain) loss 204 ( 2,186 )
Benefits paid ( 177 ) ( 464 )
−Removed: Curtailment — ( 12 )
Other 1 ( 34 )
28 unchanged sentences
Actuarial (gain) loss 22 ( 270 )
−Removed: Special termination benefit — 31
Benefit obligation at end of year $ 746 $ 788
29 unchanged sentences
Amortization of prior service credits 1 ( 112 ) — ( 112 ) — ( 123 )
−Removed: Settlement loss - Voluntary Programs — — — — 430 —
Special termination benefits - Voluntary Programs — — — — — 31
108 unchanged sentences
The 2023 information is not available as the applicable Form 5500 is not final for the plan year.
−Removed: Pension Fund IAM National Pension Fund ("Fund")
+Added: Pension Fund IAM National Pension Fund ("IAM Fund")
EIN/ Pension Plan Number 51-6031295 — 002
1 unchanged sentence
A plan is in "critical" status if the funded percentage is less than 65 percent.
−Removed: On April 17, 2019, the IAM National Pension Fund Board of Trustees voluntarily elected for the Fund to be in critical status effective for the plan year beginning January 1, 2019 to strengthen the Fund's financial health.
−Removed: The Fund's funded percentage was 83.7 % as of January 1, 2021.
+Added: On April 17, 2019, the IAM National Pension Fund Board of Trustees voluntarily elected for the IAM Fund to be in critical status effective for the plan year beginning January 1, 2019 to strengthen the IAM Fund's financial health.
+Added: The IAM Fund's funded percentage was 87.1 % as of January 1, 2022.
FIP/RP Status Pending/Implemented A 10 -year Rehabilitation Plan effective, January 1, 2022, was adopted on April 17, 2019 that requires the Company to make an additional contribution of 2.5 % of the hourly contribution rate, compounded annually for the length of the Rehabilitation Plan, effective June 1, 2019.
3 unchanged sentences
Profit Sharing.
−Removed: Substantially all employees participate in profit sharing based on a percentage of pre-tax earnings, excluding special charges, profit sharing expense and share-based compensation.
+Added: 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 pre-tax margin thresholds.
+Added: 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.
3 unchanged sentences
profit sharing plan for management and administrative employees.
−Removed: The Company recorded profit sharing and related payroll tax expense of $ 133 million in 2022.
−Removed: As a result of the pre-tax losses in 2021 and 2020, no profit sharing was recorded.
+Added: The Company recorded profit sharing and related payroll tax expense of $ 681 million and $ 133 million in 2023 and 2022, respectively.
+Added: As a result of the pre-tax loss in 2021, no profit sharing was recorded.
Profit sharing expense is recorded as a component of Salaries and related costs in the Company's statements of consolidated operations.
11 unchanged sentences
Asset-backed securities — — — — 325 — 325 —
+Added: Certificates of deposit placed through an account registry service ("CDARS") 73 — 73 — — — — —
Corporate debt — — — — 9 — 9 —
2 unchanged sentences
Investments presented in the table above have the same fair value as their carrying value.
−Removed: Short-term investments — T he short-term investments shown in the table above are classified as available-for-sale and have remaining maturities of approximately one year or less.
+Added: Short-term investments — T he short-term investments shown in the table above are classified as available-for-sale and have remaining maturities of approximately 15 months or less.
Long-term investments:
−Removed: Equity securities — Represents equity and equity-linked securities (such as vested warrants) in Azul Linhas Aéreas Brasileiras S.A., Clear Secure, Inc., Archer Aviation Inc.
−Removed: and Eve Holding, Inc.
+Added: Equity securities — Represents equity and equity-linked securities (such as vested warrants) that make up United's investments in Azul Linhas Aéreas Brasileiras S.A., Archer Aviation Inc., Eve Holding, Inc., Mesa Air Group, Inc.
+Added: ("Mesa") and Clear Secure, Inc.
Other fair value information - The table below presents the carrying values and estimated fair values of financial instruments not presented in the tables above as of December 31 (in millions).
10 unchanged sentences
Long-term debt Fair values were based on either market prices or the discounted amount of future cash flows using our current incremental rate of borrowing for similar liabilities or assets.
−Removed: Investments in Regional Carriers.
−Removed: United holds investments in three regional carriers that fly for the Company as United Express under its CPAs.
−Removed: The combined carrying value of the investments was approximately $ 188 million as of December 31, 2022.
−Removed: Each investment and United's ownership stake are listed below.
+Added: Equity Method Investments.
+Added: As of December 31, 2023, United holds investments, accounted for using the equity method, with a combined carrying value of approximately $ 230 million.
+Added: Significant equity method investments are described below:
• CommuteAir LLC.
−Removed: United owns a 40 % minority ownership stake in CommuteAir LLC, which does business as CommuteAir.
+Added: United owns a 40 % minority ownership stake in CommuteAir LLC.
CommuteAir currently operates 53 regional aircraft under a CPA that has a term through 2026.
−Removed: We account for this investment using the equity method.
• Republic Airways Holdings Inc.
−Removed: ("Republic Holdings").
−Removed: United holds a 19 % minority interest in Republic Holdings.
−Removed: Republic Holdings is the parent company of Republic Airways Inc.
+Added: United holds a 19 % minority interest in Republic Airways Holdings Inc., which is the parent company of Republic Airways Inc.
("Republic").
Republic currently operates 66 regional aircraft under CPAs that have terms through 2035.
−Removed: We account for this investment using the equity method.
−Removed: • Mesa Air Group, Inc.
−Removed: ("Mesa Air Group").
−Removed: In January 2023, United obtained a 10 % minority interest in Mesa Air Group, the parent company of Mesa Airlines, Inc.
−Removed: Mesa currently operates 63 regional aircraft, with the opportunity to operate up to 80 regional aircraft, under a CPA that has a term through 2032.
+Added: • United Airlines Ventures Sustainable Flight Fund (the "Fund").
+Added: During the first quarter of 2023, United launched, through its corporate venture capital arm, United Airlines Ventures, the Fund, an investment vehicle designed to support start-ups focused on decarbonizing air travel by accelerating the research, production and technologies
+Added: associated with sustainable aviation fuel.
+Added: As of December 31, 2023, the Company indirectly holds a 38 % ownership interest in the Fund.
Other Investments.
−Removed: United holds equity investments in a number of companies with emerging technologies and sustainable solutions.
−Removed: United also has equity investments in Avianca Group International Limited, a multinational airline holding company, and JetSuiteX, Inc., an independent air carrier doing business as JSX.
+Added: 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.
2 unchanged sentences
Notes Receivable.
−Removed: The Company has $ 101 million of notes receivable, net of allowance for credit losses, the majority of which is from certain of its regional carriers.
−Removed: The loans are recorded in Investments in affiliates and other, less allowance for credit losses on the Company's consolidated balance sheet.
+Added: As of December 31, 2023, the Company has $ 103 million of notes receivable, net of allowance for credit losses, the majority of which is from certain of its regional carriers.
+Added: The current portions of the notes receivable are recorded in Receivables, less allowance for credit losses and the long-term portions are recorded in Investments in affiliates and other, less allowance for credit losses on the Company's consolidated balance sheet.
NOTE 9 - DEBT
15 unchanged sentences
Long-term debt, net $ 25,057 $ 28,283
−Removed: (a) Financing includes variable rate debt based on LIBOR (or another index rate), generally subject to a floor, plus a specified margin of 0.49 % to 2.25 % .
−Removed: (b) Financing includes variable rate debt based on LIBOR (or another index rate), subject to a floor, plus a specified margin of 3.75 % to 5.25 %.
+Added: (a) Financing includes variable rate debt based on the Secured Overnight Financing Rate ("SOFR") (or another index rate), generally subject to a floor, plus a specified margin of 0.49 % to 2.25 % .
+Added: (b) Financing includes variable rate debt based on SOFR (or another index rate), subject to a floor, plus a specified margin of 3.75 % to 5.25 %.
(c) The PSP Notes include $ 1.5 billion of indebtedness evidenced by a 10 -year senior unsecured promissory note with Treasury provided under the PSP of the CARES Act ("PSP1"), $ 0.9 billion of indebtedness evidenced by a 10 -year senior unsecured promissory note issued to Treasury pursuant to Payroll Support Program Extension Agreements under the CARES Act ("PSP2") and $ 0.8 billion of indebtedness evidenced by a 10 -year senior unsecured promissory note issued to Treasury pursuant to the Payroll Support Program established under Section 7301 of the American Rescue Plan Act of 2021 ("PSP3").
−Removed: These PSP Notes have a rate of 1.00 % in years 1 through 5, and a rate of the Secured Overnight Financing Rate ("SOFR") plus 2.00 % in years 6 through 10.
+Added: These PSP Notes have a rate of 1.00 % in years 1 through 5, and a rate of the SOFR plus 2.00 % in years 6 through 10.
The table below presents the Company's contractual principal payments (not including debt discount or debt issuance costs) at December 31, 2023 under then-outstanding long-term debt agreements in each of the next five calendar years (in millions):
After 2028 8,856
−Removed: During 2022, United borrowed $ 752 million aggregate principal amount from a financial institution to finance the purchase of aircraft.
−Removed: The notes evidencing these borrowings, which are secured by the related aircraft, mature in 2034 and have fixed and variable interest rates ranging from 4.0 % to 5.9 % at December 31, 2022.
+Added: Equipment Notes .
+Added: On June 20, 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").
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: The interest on the Equipment Notes is payable semi-annually on each January 15 and July 15, beginning on January 15, 2024.
+Added: The principal payments on the Equipment Notes are scheduled on January 15 and July 15 of each year, beginning on July 15, 2024.
+Added: The final payments on the Equipment Notes will be due on January 15, 2036.
+Added: These Equipment Notes are reflected as part of Aircraft notes in the table above.
+Added: In addition to the Equipment Notes described above, United borrowed $ 0.4 billion aggregate principal amounts from various financial institutions to finance the purchase of aircraft.
+Added: The notes evidencing these borrowings, which are secured by the related aircraft, mature in 2035 and have variable interest rates ranging from 7.31 % to 7.35 % at December 31, 2023.
+Added: In 2023, United prepaid $ 1.0 billion of the outstanding principal amount under the 2021 Term Loan Facility (as defined below).
+Added: See Note 13 for information related to charges recorded as a result of this prepayment.
In 2021, United entered into a new Term Loan Credit and Guaranty Agreement (the "2021 Term Loan Facility") initially providing term loans (the "2021 Term Loans") up to an aggregate amount of $ 5.0 billion and a new Revolving Credit and Guaranty Agreement (the "2021 Revolving Credit Facility" and, together with the 2021 Term Loan Facility, the "2021 Loan Facilities") initially providing revolving loan commitments of up to $ 1.75 billion.
As of December 31, 2023, we had $ 1.75 billion undrawn and available under our revolving credit facility.
+Added: On February 15, 2024, the Company entered into an Amended and Restated Revolving Credit and Guaranty Agreement (the "Revolving Credit Facility") amending its 2021 Revolving Credit Facility increasing the borrowing capacity by $ 1.115 billion, which may be drawn upon until February 15, 2029, in the case of any Revolving Loans (as defined in the Revolving Credit Facility) made by the Extending Lenders (as defined in the Revolving Credit Facility), and April 21, 2025, in the case of any Revolving Loans made by the 2024 Non-Extending Lenders (as defined in the Revolving Credit Facility).
+Added: The revolving loan commitments of the Extending Lenders equal $ 2.7 billion and the revolving loan commitments of the 2024 Non-Extending Lenders equal $ 165 million.
+Added: The Revolving Loans, if any, will bear interest at a variable rate equal to Term SOFR (as defined in the Revolving Credit Facility), generally subject to a floor, plus a credit adjustment spread described in the Revolving Credit Facility, or, at United's election, another rate based on certain market interest rates, also generally subject to a floor, in each case plus a variable margin ranging from 3.00 % to 3.50 %, in the case of Term SOFR loans, and 2.00 % to 2.50 %, in the case of loans at other market rates.
+Added: On February 22, 2024, the Company also entered into Amendment No.
+Added: 2 to Term Loan Credit and Guaranty Agreement (as amended, the "Term Loan Facility" and, together with the Revolving Credit Facility, the "Loan Facilities") and (i) used available cash in an amount equal to $ 1.37 billion to partially prepay the term loans under the 2021 Term Loans and (ii) borrowed the entire term loan commitment available under the Term Loan Facility in an amount equal to $ 2.5 billion and used the proceeds of such terms loans (the "Term Loans") to prepay in full the remaining outstanding principal balance under the Existing Term Loan Facility.
+Added: The Term Loans will bear interest at a variable rate equal to Term SOFR (subject to a floor of 0.0 %);
+Added: or, at United's election, another rate based on certain market interest rates (subject to a floor of 1.0 %), in each case plus a margin of 2.75 %, in the case of Term SOFR loans, and 1.75 %, in the case of loans at other market rates.
+Added: The remaining balance of the Term Loans will be due and payable on its maturity date on February 22, 2031.
+Added: The Loan Facilities are secured on a senior basis by continuing security interests granted by United to the Collateral Trustee for the benefit of the lenders under the Loan Facilities, among other parties, on the following (the "Collateral"), subject to certain exclusions:
+Added: (i) all of United's route authorities granted by the U.S.
+Added: Department of Transportation to operate scheduled service between any international airport located in the United States and any international airport located in any country other than the United States (except Cuba), (ii) United's rights to substantially all of its landing and take-off slots at foreign and domestic airports, including at John F.
+Added: Kennedy International Airport, LaGuardia Airport and Ronald Reagan Washington National Airport, and (iii) United's rights to use or occupy space at airport terminals, each to the extent necessary at the relevant time for servicing scheduled air carrier service authorized by an applicable route authority.
+Added: The Collateral securing the Loan Facilities also presently secures on a senior basis the 2026 and 2029 Notes.
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.
50 unchanged sentences
Under the terms of most aircraft leases, United has the right to purchase the aircraft at the end of the lease term, in some cases at fair market value, and in others, at a percentage of cost.
−Removed: Non-aircraft leases have remaining lease terms of 1 month to 30 years, with expiration dates ranging from 2023 through 2053.
+Added: In addition, United also has 42 leases of Boeing 737 MAX and Boeing 787 aircraft under various sale-leaseback transactions.
+Added: These transactions did not qualify as a sale under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers ("ASC Topic 606"), and, as such, the associated aircraft remain on the Company's consolidated balance sheet as part of Flight equipment.
+Added: The related obligations are recorded in Current maturities of other financial liabilities and Other financial liabilities.
+Added: Non-aircraft leases have remaining lease terms of 1 month to 29 years.
The table below summarizes the Company's scheduled future minimum lease payments under operating and finance leases, recorded on the balance sheet, as of December 31, 2023 (in millions):
7 unchanged sentences
Long-term lease obligations $ 4,503 $ 91
−Removed: As of December 31, 2022, we have additional leases of approximately $ 3.0 billion for several regional aircraft under CPAs and airport facility leases that have not yet commenced.
−Removed: These leases will commence starting in 2023 through 2025 with lease terms of up to 12 years.
−Removed: In 2020, United entered into agreements with third parties to finance through sale and leaseback transactions new Boeing model 787 aircraft and Boeing model 737 MAX aircraft subject to purchase agreements between United and Boeing.
−Removed: In connection with the delivery of each aircraft from Boeing, 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.
−Removed: Upon delivery of the aircraft in these sale and leaseback transactions, the Company accounted for several of these aircraft, which have a repurchase option at a price other than fair value, 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).
−Removed: The remaining aircraft that qualified for sale recognition were recorded as Operating lease right-of-use assets and Current/Long-term obligations under operating leases on the Company's consolidated balance sheet after recognition of related gains on such sale.
−Removed: In 2022, under these sale and leaseback agreements, United exercised repurchase options for six Boeing 787 aircraft.
−Removed: The table below presents the Company's contractual payments at December 31, 2022 under then-outstanding failed sale and leaseback agreements in each of the next five calendar years (in millions):
+Added: As of December 31, 2023, we have additional leases of approximately $ 1.6 billion for several regional aircraft under CPAs, mainline aircraft, airport facility and office space leases, none of which had commenced as of such date.
+Added: These leases will commence between 2024 and 2026 with lease terms of up to 12 years.
+Added: The table below presents the Company's contractual payments at December 31, 2023 under then-outstanding sale and leaseback agreements, for transactions that did not qualify as a sale under ASC Topic 606, in each of the next five calendar years (in millions):
Other Financial Liabilities
21 unchanged sentences
Under these CPAs, the Company pays the regional carriers contractually agreed fees (carrier costs) for operating these flights plus a variable rate adjustment based on agreed performance metrics, subject to annual adjustments.
−Removed: fees are based on specific rates multiplied by specific operating statistics (e.g., block hours, departures), as well as fixed monthly amounts.
+Added: The fees are based on specific rates multiplied by specific operating statistics (e.g., block hours, departures), as well as fixed monthly amounts.
Under these CPAs, the Company is also responsible for all fuel costs incurred, as well as landing fees and other costs, which are either passed through by the regional carrier to the Company without any markup or directly incurred by the Company.
5 unchanged sentences
United recorded approximately $ 1.1 billion, $ 0.9 billion and $ 0.6 billion in expenses related to its CPAs with its regional carriers in which United is a minority shareholder, for the years ended December 31, 2023, 2022 and 2021, respectively.
−Removed: United had notes receivables with carrying values of $ 62 million and $ 28 million due from these companies, as of December 31, 2022 and 2021, respectively.
−Removed: There were no accounts payable due to these companies as of December 31, 2022 and $ 102 million in accounts payable due to these companies as of December 31, 2021.
+Added: United had prepaid balances and notes receivables with combined carrying values of $ 84 million and $ 62 million with these companies, as of December 31, 2023 and 2022, respectively.
+Added: There were $ 122 million and $ 118 million of liabilities due to these companies as of December 31, 2023 and 2022, respectively.
The CPAs with these related parties were executed in the ordinary course of business.
−Removed: In 2022, United entered into an amended CPA with Mesa to operate, starting in 2023, up to 38 CRJ-900 aircraft with a five-year term, dependent upon the number of Embraer E175 aircraft that Mesa is flying on United's behalf.
−Removed: Additionally in 2022, United amended a majority of its CPA agreements to increase the contractually agreed fees (carrier costs) paid to its regional carriers.
−Removed: The Company plans to wind down its CPA with Air Wisconsin in 2023.
+Added: In 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.
+Added: 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.
5 unchanged sentences
These amounts exclude variable pass-through costs such as fuel and landing fees, among others.
−Removed: Based on these assumptions as of December 31, 2022, our future payments through the end of the terms of our CPAs are presented in the table below (in billions):
+Added: Based on these assumptions as of December 31, 2023, our estimated future payments through the end of the terms of our CPAs are presented in the table below (in billions):
After 2028 4.1
+Added: In January 2024, United amended several of its CPAs with certain of its regional carriers.
+Added: These amendments will result in an increase to its future commitments under its CPAs by approximately $ 0.6 billion.
NOTE 11 - VARIABLE INTEREST ENTITIES ("VIE")
21 unchanged sentences
Based on this analysis, the Company determined that it is not required to consolidate the pass-through trusts.
+Added: United concluded that Mesa is a VIE as of December 31, 2023.
+Added: United holds a variable interest in Mesa in the form of an approximately 10 % equity interest and several loans to Mesa, but United is not the primary beneficiary because it does not have power to direct the activities that most significantly impact Mesa's economic performance.
NOTE 12 - COMMITMENTS AND CONTINGENCIES
1 unchanged sentence
("Airbus") presented in the table below:
−Removed: Scheduled Aircraft Deliveries
+Added: Contractual Aircraft Deliveries Expected Aircraft Deliveries (b)
Aircraft Type Number of Firm
−Removed: Commitments (a) 2023 2024 After 2024
+Added: Commitments (a) 2024 2025 After 2025 2024 2025 After 2025
787 150 8 18 124 7 18 125
737 MAX 8 43 43 — — 37 6 —
+Added: 737 MAX 9 34 34 — — 19 15 —
+Added: 737 MAX 10 277 80 71 126 — (c) (c)
A321neo 126 26 38 62 25 24 77
2 unchanged sentences
(a) United also has options and purchase rights for additional aircraft.
+Added: (b) Expected aircraft deliveries reflect adjustments communicated by Boeing and Airbus or estimated by United.
+Added: (c) Due to the delay in the certification of the 737 MAX 10 aircraft, we are unable to accurately forecast the expected delivery period.
The aircraft listed in the table above are scheduled for delivery through 2033.
1 unchanged sentence
(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;
−Removed: (ii) rights are exercised pursuant to the relevant agreements to modify the timing of deliveries;
+Added: (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.
−Removed: Airbus notified United that eight Airbus A321neo aircraft scheduled for delivery in 2023, as shown in the table above, are now expected to deliver in 2024, and Boeing notified United that 37 Boeing 737 MAX aircraft scheduled for delivery in 2023, as shown in the table above, are now expected to deliver in 2024.
−Removed: Also, United estimates that an additional six Boeing 737 MAX aircraft scheduled for delivery in 2023, as shown in the table above, will deliver in 2024.
−Removed: In December 2022, the Company entered into a confidential settlement with Boeing with respect to compensation for aircraft manufacturer delivery delays in 2020 through 2022 related to Boeing 787 aircraft.
−Removed: The compensation is in the form of credit memos to be issued at future dates upon the satisfaction of certain conditions.
−Removed: The Company is accounting for this settlement as a reduction to the cost basis of certain existing and future firm order Boeing 787 aircraft, which is expected to reduce future depreciation expense associated with these aircraft.
−Removed: The table below summarizes United's commitments as of December 31, 2022, which include aircraft and related spare engines, aircraft improvements and all non-aircraft capital commitments (in billions):
+Added: The table below summarizes United's firm commitments as of December 31, 2023, which include aircraft and related spare engines, aircraft improvements and non-aircraft capital commitments.
+Added: Aircraft commitments are based on contractual scheduled aircraft deliveries without any adjustments communicated by Boeing and Airbus or estimated by United.
+Added: (in billions)
After 2028 23.5
9 unchanged sentences
Currently, the Company believes that any future payments required under these guarantees or indemnities would be immaterial, as most liabilities and related indemnities are covered by insurance (subject to deductibles).
−Removed: Additionally, certain real estate leases include indemnities for any environmental liability that may arise out of or relate to the use of the leased premises.
+Added: Additionally, certain real estate leases
+Added: include indemnities for any environmental liability that may arise out of or relate to the use of the leased premises.
As of December 31, 2023, United is the guarantor of approximately $ 1.9 billion in aggregate principal amount of tax-exempt special facilities revenue bonds and interest thereon.
7 unchanged sentences
Increased Cost Provisions.
−Removed: 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.
−Removed: 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.
+Added: 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 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.
+Added: 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.
+Added: The application of this guidance did not have any material impact on the Company's financial statements.
+Added: 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.
−Removed: 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.
+Added: 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.
2 unchanged sentences
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.
−Removed: 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
−Removed: are typically financed through tax-exempt bonds, either special facilities lease revenue bonds or general airport revenue bonds, issued by various local municipalities.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: 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 various debt obligations.
+Added: 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.
+Added: 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.
+Added: 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.
−Removed: The guarantees will expire when the tax-exempt bonds are paid in full, which ranges from 2023 to 2056.
+Added: 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.
11 unchanged sentences
labor organizations.
−Removed: In November 2022, United dispatchers represented by the Professional Airline Flight Control Association voted to ratify a two-year contract extension.
−Removed: Also, 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.
−Removed: 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.
+Added: 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.
+Added: The agreement becomes amendable in
+Added: December 2024.
+Added: On February 28, 2024, United and the IBT reached a tentative agreement for an extension to their labor contract.
+Added: The agreement, if ratified, becomes amendable in December 2028.
+Added: The tentative agreement provides competitive pay increases and improved several work rules.
+Added: 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.
+Added: The ratified agreements are effective through 2025.
+Added: The Company recorded a one-time $ 48 million expense in conjunction with the ratification.
+Added: On February 23, 2024, United and the IAM ratified agreements covering the security guards in California and central load planners.
+Added: The ratified agreements are effective through 2025.
+Added: In September 2023, the Company's pilots represented by ALPA ratified an agreement with United.
+Added: The agreement includes numerous work rule changes and pay rate increases during the four-year term.
+Added: The agreement also included a provision for a one-time $ 765 million payment upon ratification which was paid by December 31, 2023.
NOTE 13 - SPECIAL CHARGES (CREDITS)
1 unchanged sentence
2023 2022 2021
+Added: Labor contract ratification bonuses $ 814 $ — $ —
CARES Act grant — — ( 4,021 )
6 unchanged sentences
Nonoperating special termination benefits and settlement losses — — 31
−Removed: Nonoperating credit loss on BRW Term Loan and related guarantee — — 697
Total nonoperating special charges and unrealized (gains) losses on investments, net ( 16 ) ( 13 ) 115
2 unchanged sentences
Total operating and nonoperating special charges (credits) and unrealized (gains) losses on investments, net of income taxes $ 719 $ 94 $ ( 2,524 )
+Added: Labor contract ratification bonuses.
+Added: During 2023, the Company recorded $ 814 million of expense associated with the agreements with ALPA, IAM and other work groups.
+Added: See Note 12 for additional information.
(Gains) losses on sale of assets and other special charges.
−Removed: During 2022, the Company recorded $ 140 million of net charges primarily comprised of $ 94 million for various legal matters and $ 23 million related to certain contract disputes.
−Removed: See Note 12 of this report for a discussion of the legal matters.
+Added: During 2023, the Company recorded $ 135 million of net charges primarily comprised of accelerated depreciation related to certain of the Company's assets that will be retired early, reserves for various legal matters, a write-down 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.
1 unchanged sentence
Nonoperating debt extinguishment and modification fees .
−Removed: During 2022, the Company recorded $ 7 million of charges primarily related to the early redemption of $ 400 million of its outstanding principal amount of the 4.25 % senior notes due 2022.
+Added: During 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.
+Added: (Gains) losses on sale of assets and other special charges.
+Added: During 2022, the Company recorded $ 140 million of net charges primarily comprised of $ 94 million for various legal matters and $ 23 million related to certain contract disputes.
+Added: Nonoperating unrealized (gains) losses on investments, net.
+Added: During 2022, the Company recorded gains of $ 20 million primarily related to the change in the market value of its investments in equity securities.
+Added: Nonoperating debt extinguishment and modification fees .
+Added: During 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.
CARES Act grant.
12 unchanged sentences
(Gains) losses on sale of assets and other special charges.
−Removed: During 2021, the Company recorded net charges of $ 119 million primarily related to a one-time bonus paid to employees for their continued efforts during the COVID-19 pandemic, incentives
−Removed: for its employees to receive a COVID-19 vaccination and the termination of the lease associated with three floors of its headquarters at the Willis Tower in Chicago, partially offset by gains primarily related to the sale of its former headquarters in suburban Chicago, aircraft sale-leaseback transactions and aircraft component manufacturer credits.
+Added: During 2021, the Company recorded net charges of $ 119 million primarily related to a one-time bonus paid to employees for their continued efforts during the COVID-19 pandemic, incentives for its employees to receive a COVID-19 vaccination and the termination of the lease associated with three floors of its headquarters at the Willis Tower in Chicago, partially offset by gains primarily related to the sale of its former headquarters in suburban Chicago, aircraft sale-leaseback transactions and aircraft component manufacturer credits.
Nonoperating unrealized (gains) losses on investments, net .
6 unchanged sentences
See Note 7 of this report for additional information.
−Removed: CARES Act grant.
−Removed: During 2020, the Company received approximately $ 5.1 billion in funding pursuant to the Payroll Support Program under the CARES Act, which consisted of a $ 3.6 billion grant and a $ 1.5 billion unsecured loan.
−Removed: The Company recorded $ 3.5 billion as grant income in Special charges (credits).
−Removed: The Company also recorded $ 66 million for warrants issued to Treasury, within stockholders' equity, as an offset to the grant income.
−Removed: Severance and benefit costs .
−Removed: During 2020, the Company recorded $ 575 million related to its workforce reduction and voluntary plans for employee severance, pay continuance from voluntary retirements and benefits-related costs.
−Removed: Impairment of assets .
−Removed: During 2020, the Company recorded the following impairment charges:
−Removed: • $ 130 million for its China routes which were primarily caused by the COVID-19 pandemic, the Company's subsequent suspension of flights to China and a further delay in the expected return of full capacity to the China markets.
−Removed: • $ 94 million related to 11 permanently-grounded Boeing 757-200 aircraft and the related engines and spare parts.
−Removed: • $ 38 million related to the right-of-use assets associated with the embedded aircraft leases in one of the Company's CPAs.
−Removed: This impairment was primarily due to the impact to cash flows from the pandemic and the relatively short remaining term under the CPA.
−Removed: • $ 56 million related to various cancelled facility, aircraft induction and information technology capital projects.
−Removed: The decisions driving these impairments were the result of the COVID-19 pandemic's impact on the Company's operations.
−Removed: (Gains) losses on sale of assets and other special charges.
−Removed: During 2020, the Company recorded losses on certain asset sales and charges for legal reserves, partially offset by gains on aircraft sale-leaseback transactions.
−Removed: Nonoperating unrealized gains (losses) on investments, net.
−Removed: During 2020, the Company recorded losses of $ 194 million primarily for changes in the fair value of its investments in equity securities.
−Removed: Nonoperating special termination benefits and settlement losses.
−Removed: During 2020, the Company recorded $ 687 million of settlement losses related to the Company's primary defined benefit pension plan covering certain U.S.
−Removed: non-pilot employees, and special termination benefits offered, under voluntary leave programs.
−Removed: See Note 7 of this report for additional information.
−Removed: Nonoperating credit loss on BRW Term Loan and related guarantee.
−Removed: During 2020, the Company recorded a $ 697 million expected credit loss allowance for the Company's Term Loan Agreement (the "BRW Term Loan"), with, among others, BRW Aviation Holding LLC and BRW Aviation LLC, and the related guarantee.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
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.