What changed in this filing

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Item 1. Financial Statements

2024-07-18 compared with 2024-04-17 · 171 added, 97 removed, 492 unchanged (35% of the section changed)

3 unchanged sentences

(In millions, except per share amounts)

Three Months Ended March 31,

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

2024 2023 2024 2023

Operating revenue:

15 unchanged sentences

Total operating expense 13,057 12,661 25,497 24,133

Operating income (loss) 99 ( 43 )

Operating income 1,929 1,517 2,028 1,474

Nonoperating income (expense):

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Total nonoperating expense, net ( 190 ) ( 130 ) ( 453 ) ( 343 )

Loss before income tax benefit ( 164 ) ( 256 )

Income tax benefit ( 40 ) ( 62 )

Net loss $ ( 124 ) $ ( 194 )

Loss per share, basic and diluted $ ( 0.38 ) $ ( 0.59 )

Income before income tax expense 1,739 1,387 1,575 1,131

Income tax expense 416 312 376 250

Net income $ 1,323 $ 1,075 $ 1,199 $ 881

Earnings per share, basic $ 4.02 $ 3.28 $ 3.65 $ 2.69

Earnings per share, diluted $ 3.96 $ 3.24 $ 3.60 $ 2.66

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

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(In millions)

Three Months Ended March 31,

Net loss $ ( 124 ) $ ( 194 )

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

2024 2023 2024 2023

Net income $ 1,323 $ 1,075 $ 1,199 $ 881

Other comprehensive income (loss), net of tax:

2 unchanged sentences

Total other comprehensive loss, net of tax ( 16 ) ( 58 ) ( 35 ) ( 72 )

Total comprehensive loss, net $ ( 143 ) $ ( 208 )

Total comprehensive income, net $ 1,307 $ 1,017 $ 1,164 $ 809

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

2 unchanged sentences

(In millions, except shares)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets:

29 unchanged sentences

(In millions, except shares)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

LIABILITIES AND STOCKHOLDERS' EQUITY

26 unchanged sentences

authorized 1,000,000,000 shares;

outstanding 328,803,086 and 328,018,739 shares at March 31, 2024 and December 31, 2023, respectively

outstanding 328,832,139 and 328,018,739 shares at June 30, 2024 and December 31, 2023, respectively

Additional capital invested 9,001 8,992

8 unchanged sentences

(In millions)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows from Operating Activities:

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Shares Amount

Balance at March 31, 2024 328.8 $ 4 $ 8,973 $ ( 3,372 ) $ 3,664 $ ( 81 ) $ 9,188

Net income — — — — 1,323 — 1,323

Other comprehensive loss — — — — — ( 16 ) ( 16 )

Stock-settled share-based compensation — — 31 — — — 31

Stock issued for share-based awards, net of shares withheld for tax — — ( 3 ) 4 ( 1 ) — —

Balance at June 30, 2024 328.8 $ 4 $ 9,001 $ ( 3,368 ) $ 4,986 $ ( 97 ) $ 10,526

Balance at December 31, 2023 328.0 $ 4 $ 8,992 $ ( 3,441 ) $ 3,831 $ ( 62 ) $ 9,324

Net loss — — — — ( 124 ) — ( 124 )

Net income — — — — 1,199 — 1,199

Other comprehensive loss — — — — — ( 35 ) ( 35 )

1 unchanged sentence

Stock issued for share-based awards, net of shares withheld for tax 0.8 — ( 47 ) 73 ( 44 ) — ( 18 )

Balance at June 30, 2024 328.8 $ 4 $ 9,001 $ ( 3,368 ) $ 4,986 $ ( 97 ) $ 10,526

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

Net income — — — — 1,075 — 1,075

Other comprehensive loss — — — — — ( 58 ) ( 58 )

Stock-settled share-based compensation — — 21 — — — 21

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

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

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

Net loss — — — — ( 194 ) — ( 194 )

Net income — — — — 881 — 881

Other comprehensive loss — — — — — ( 72 ) ( 72 )

1 unchanged sentence

Stock issued for share-based awards, net of shares withheld for tax 1.1 — ( 73 ) 92 ( 51 ) — ( 32 )

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

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

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

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(In millions)

Three Months Ended March 31,

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

2024 2023 2024 2023

Operating revenue:

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Total operating expense 13,056 12,660 25,496 24,132

Operating income (loss) 99 ( 43 )

Operating income 1,930 1,518 2,029 1,475

Nonoperating income (expense):

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Total nonoperating expense, net ( 190 ) ( 130 ) ( 453 ) ( 343 )

Loss before income tax benefit ( 164 ) ( 256 )

Income tax benefit ( 40 ) ( 62 )

Net loss $ ( 124 ) $ ( 194 )

Income before income tax expense 1,740 1,388 1,576 1,132

Income tax expense 416 313 376 251

Net income $ 1,324 $ 1,075 $ 1,200 $ 881

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

2 unchanged sentences

(In millions)

Three Months Ended March 31,

Net loss $ ( 124 ) $ ( 194 )

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

2024 2023 2024 2023

Net income $ 1,324 $ 1,075 $ 1,200 $ 881

Other comprehensive income (loss), net of tax:

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Total other comprehensive loss, net of tax ( 16 ) ( 58 ) ( 35 ) ( 72 )

Total comprehensive loss, net $ ( 143 ) $ ( 208 )

Total comprehensive income, net $ 1,308 $ 1,017 $ 1,165 $ 809

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

2 unchanged sentences

(In millions, except shares)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets:

28 unchanged sentences

(In millions, except shares)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

LIABILITIES AND STOCKHOLDER'S EQUITY

25 unchanged sentences

authorized 1,000 shares;

issued and outstanding 1,000 shares at both March 31, 2024 and December 31, 2023

issued and outstanding 1,000 shares at both June 30, 2024 and December 31, 2023

Additional capital invested 538 482

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(In millions)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows from Operating Activities:

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Other Comprehensive Income (Loss) Payable to Parent Total

Balance at March 31, 2024 $ 507 $ 6,212 $ ( 81 ) $ 2,520 $ 9,158

Net income — 1,324 — — 1,324

Other comprehensive loss — — ( 16 ) — ( 16 )

Stock-settled share-based compensation 31 — — — 31

Other — — — ( 2 ) ( 2 )

Balance at June 30, 2024 $ 538 $ 7,536 $ ( 97 ) $ 2,518 $ 10,495

Balance at December 31, 2023 $ 482 $ 6,336 $ ( 62 ) $ 2,538 $ 9,294

Net loss — ( 124 ) — — ( 124 )

Net income — 1,200 — — 1,200

Other comprehensive loss — — ( 35 ) — ( 35 )

1 unchanged sentence

Other — — — ( 20 ) ( 20 )

Balance at June 30, 2024 $ 538 $ 7,536 $ ( 97 ) $ 2,518 $ 10,495

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

Net income — 1,075 — — 1,075

Other comprehensive loss — — ( 58 ) — ( 58 )

Stock-settled share-based compensation 21 — — — 21

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

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

Net loss — ( 194 ) — — ( 194 )

Net income — 881 — — 881

Other comprehensive loss — — ( 72 ) — ( 72 )

1 unchanged sentence

Other — — — ( 32 ) ( 32 )

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

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

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

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Department of Transportation) (in millions):

Three Months Ended March 31,

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

2024 2023 2024 2023

Domestic (U.S.

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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.

In the three months ended March 31, 2024 and 2023, the Company recognized approximately $ 4.0 billion and $ 3.5 billion, respectively, of passenger revenue for tickets that were included in Advance ticket sales at the beginning of those periods.

In the six months ended June 30, 2024 and 2023, the Company recognized approximately $ 5.0 billion and $ 4.6 billion, respectively, of passenger revenue for tickets that were included in Advance ticket sales at the beginning of those periods.

Ancillary Fees.

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

The Company recorded $ 984 million and $ 892 million of ancillary fees within passenger revenue in the three months ended March 31, 2024 and 2023, respectively.

The Company recorded $ 1.2 billion and $ 2.2 billion of ancillary fees within passenger revenue in the three and six months ended June 30, 2024, respectively.

The Company recorded $ 1.0 billion and $ 1.9 billion of ancillary fees within passenger revenue in the three and six months ended June 30, 2023, respectively.

Frequent Flyer Accounting.

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

Three Months Ended March 31,

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

2024 2023 2024 2023

Total Frequent flyer deferred revenue - beginning balance $ 7,279 $ 6,860 $ 7,143 $ 6,675

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Total Frequent flyer deferred revenue - ending balance $ 7,353 $ 7,024 $ 7,353 $ 7,024

In the three months ended March 31, 2024 and 2023, the Company recognized, in Other operating revenue, $ 714 million and $ 646 million, respectively, related to the marketing, advertising, non-travel miles redeemed (net of related costs) and other travel-related benefits of the mileage revenue associated with our various partner agreements including, but not limited to, our JPMorgan Chase Bank, N.A.

In the three and six months ended June 30, 2024, the Company recognized, in Other operating revenue, $ 0.7 billion and $ 1.5 billion, respectively, related to the marketing, advertising, non-travel miles redeemed (net of related costs) and other travel-related benefits of the mileage revenue associated with our various partner agreements including, but not limited to, our JPMorgan Chase Bank, N.A.

MileagePlus co-brand agreement.

The Company recognized $ 0.7 billion and $ 1.3 billion, respectively, in the three and six months ended June 30, 2023, related to those agreements.

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

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

NOTE 2 — LOSS PER SHARE

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

NOTE 2 — EARNINGS PER SHARE

The following table shows the computation of basic and diluted earnings per share, the latter of which uses the treasury stock method to calculate the dilutive effect of UAL's potential common stock (in millions, except per share amounts):

Three Months Ended March 31,

Loss available to common stockholders $ ( 124 ) $ ( 194 )

Weighted-average shares outstanding, basic and diluted 328.3 327.4

Loss per share, basic and diluted $ ( 0.38 ) $ ( 0.59 )

Potentially dilutive securities (a)

Stock warrants (b) 3.5 1.5

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

2024 2023 2024 2023

Earnings available to common stockholders $ 1,323 $ 1,075 $ 1,199 $ 881

Basic weighted-average shares outstanding 328.8 328.0 328.6 327.7

Dilutive effect of stock warrants (a) 2.7 2.3 2.2 2.3

Dilutive effect of employee stock awards 2.4 1.2 2.3 1.5

Diluted weighted-average shares outstanding 333.9 331.5 333.1 331.5

Earnings per share, basic $ 4.02 $ 3.28 $ 3.65 $ 2.69

Earnings per share, diluted $ 3.96 $ 3.24 $ 3.60 $ 2.66

Potentially dilutive securities (b)

Stock warrants (a) 1.5 1.5 1.5 1.5

Employee stock awards 0.6 0.7 0.6 0.7

(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.

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

(a) Represent warrants for purchase up to approximately 10 million shares of UAL common stock at exercise prices ranging from $ 31.50 to $ 53.92 and expiration dates ranging from April 20, 2025 to June 10, 2026.

These warrants were originally issued to the U.S.

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

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

All warrants were outstanding as of March 31, 2024.

Treasury sold these warrants at an auction held on June 6, 2024.

All warrants were outstanding as of June 30, 2024.

(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 3 — ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

1 unchanged sentence

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

Balance at March 31, 2024 $ 267 $ ( 6 ) $ ( 342 ) $ ( 81 )

Changes in value 3 1 ( 1 ) 3

Amounts reclassified to earnings ( 25 ) (b) — 6 ( 19 )

Balance at June 30, 2024 $ 245 $ ( 5 ) $ ( 337 ) $ ( 97 )

Balance at December 31, 2023 $ 289 $ ( 4 ) $ ( 347 ) $ ( 62 )

1 unchanged sentence

Amounts reclassified to earnings ( 50 ) (b) — 11 ( 39 )

Balance at June 30, 2024 $ 245 $ ( 5 ) $ ( 337 ) $ ( 97 )

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

Changes in value ( 8 ) ( 31 ) 8 ( 31 )

Amounts reclassified to earnings ( 35 ) (b) — 8 ( 27 )

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

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

1 unchanged sentence

Amounts reclassified to earnings ( 70 ) (b) — 15 ( 55 )

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

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

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

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NOTE 4 — INCOME TAXES

The Company's effective tax rates for the three months ended March 31, 2024 and 2023 were 24.4 % and 24.2 %, respectively.

The Company's effective tax rates for the three and six months ended June 30, 2024 were 23.9 % and 23.9 %, respectively.

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

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

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Defined Benefit Pension and Other Postretirement Benefit Plans.

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

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

Pension Benefits Other Postretirement Benefits Affected Line Item

7 unchanged sentences

Amortization of prior service credit — — ( 24 ) ( 28 ) Miscellaneous, net

Other — 1 — — Miscellaneous, net

Total $ 28 $ 26 $ ( 20 ) $ ( 27 )

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

Pension Benefits Other Postretirement Benefits Affected Line Item

in the Statements of

Consolidated Operations

2024 2023 2024 2023

Service cost $ 68 $ 62 $ 3 $ 2 Salaries and related costs

Interest cost 115 110 19 21 Miscellaneous, net

Expected return on plan assets ( 138 ) ( 126 ) ( 1 ) ( 1 ) Miscellaneous, net

Amortization of unrecognized (gain) loss 10 4 ( 13 ) ( 19 ) Miscellaneous, net

Amortization of prior service credit — — ( 47 ) ( 56 ) Miscellaneous, net

Other — 1 — — Miscellaneous, net

Total $ 55 $ 51 $ ( 39 ) $ ( 53 )

NOTE 6 — FAIR VALUE MEASUREMENTS, INVESTMENTS AND NOTES RECEIVABLE

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

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

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Certificates of deposit placed through an account registry service (CDARS) 73 — 73 — 73 — 73 —

Corporate Debt 249 — 249 — — — — —

Long-term investments:

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

Short-term investments — The short-term investments shown in the table above are classified as available-for-sale and have remaining maturities of 17 months or less.

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

Long-term investments:

4 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Carrying Amount Fair Value Carrying Amount Fair Value

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

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

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

Equity Method Investments.

As of March 31, 2024, United holds investments, accounted for using the equity method, with a combined carrying value of approximately $ 230 million.

As of June 30, 2024, United holds investments, accounted for using the equity method, with a combined carrying value of approximately $ 231 million.

Significant equity method investments are described below:

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

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

As of March 31, 2024, the Company indirectly holds a 33 % ownership interest in the Fund.

United holds, through its corporate venture capital arm, United Airlines Ventures, Ltd., a 33 % ownership interest in the Fund.

The Fund is an investment vehicle designed to invest in start-ups developing technologies focused on decarbonizing aviation and its associated energy supply chains, including through research and production, and technologies associated with sustainable aviation fuel (SAF).

Other Investments.

As of March 31, 2024, 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.

As of June 30, 2024, United has equity investments in Abra Group Limited, a multinational airline holding company, JetSuiteX, Inc., an independent air carrier doing business as JSX, as well as a number of companies with emerging technologies and sustainable solutions.

None of these investments have readily determinable fair values.

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

As of March 31, 2024, the carrying value of these investments was $ 421 million.

As of June 30, 2024, the carrying value of these investments was $ 423 million.

Notes Receivable.

As of March 31, 2024, the Company has $ 86 million of notes receivable, net of allowance for credit losses, the majority of which is from certain of its regional carriers.

As of June 30, 2024, the Company has $ 86 million of notes receivable, net of allowance for credit losses, the majority of which is from certain of its regional carriers.

The current portions of the notes receivable are recorded in Receivables, less allowance for credit losses.

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NOTE 7 — COMMITMENTS AND CONTINGENCIES

As of March 31, 2024, United had firm commitments to purchase aircraft from The Boeing Company ("Boeing") and Airbus S.A.S.

As of June 30, 2024, United had firm commitments to purchase aircraft from The Boeing Company ("Boeing") and Airbus S.A.S.

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

Contractual Aircraft Deliveries Expected Aircraft Deliveries (b)

Contractual Aircraft Deliveries (b) Expected Aircraft Deliveries (c)

Aircraft Type Number of Firm

Commitments (a) Last Nine Months

of 2024 2025 After 2025 Last Nine Months

Commitments (a) Last Six Months

of 2024 2025 After 2025 Last Six Months

of 2024 2025 After 2025

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

(b) Expected aircraft deliveries reflect adjustments to contractual delivery schedules as communicated by Boeing and Airbus or estimated by United.

(b) Contractual aircraft deliveries reflect an agreement United entered into with Airbus on July 16, 2024 to adjust delivery schedules for the A321neo ("Airbus Agreement").

(c) Expected aircraft deliveries reflect adjustments to contractual delivery schedules as communicated by Boeing and Airbus or estimated by United.

However, aircraft deliveries are subject to a number of variables, as further described in Part I, Item 1A.

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

On April 14, 2024, the Company entered into confidential arrangements with Boeing with respect to compensation for financial damages incurred in first quarter of 2024 due to the Federal Aviation Administration grounding of the Boeing 737 MAX 9 aircraft, and a confidential agreement to accommodate certification delays for the Boeing 737 MAX 10 aircraft.

The compensation provided by Boeing for the grounding damages and in connection with rescheduling deliveries is in the form of credit memos for use on future purchases from Boeing.

The Company plans to account for these arrangements as a reduction to the cost basis of the previously-delivered Boeing 737 MAX 9 aircraft and future deliveries of the MAX 9 and MAX 10 aircraft, which is expected to reduce future depreciation expense associated with these aircraft.

The table below summarizes United's firm commitments as of March 31, 2024, which include aircraft and related spare engines, aircraft improvements and non-aircraft capital commitments.

Aircraft commitments are based on contractual scheduled aircraft deliveries without any adjustments communicated by Boeing and Airbus or estimated by United but reflecting the discounts related to future deliveries offered as part of the April 14, 2024 arrangements between United and Boeing.

On April 14, 2024, the Company entered into confidential arrangements with Boeing with respect to compensation for financial damages incurred in the first quarter of 2024 due to the Federal Aviation Administration grounding of the Boeing 737 MAX 9 aircraft, and a confidential agreement to accommodate certification delays for the Boeing 737 MAX 10 aircraft.

The compensation provided by Boeing for the grounding damages and in connection with rescheduling deliveries was in the form of credit memos for use on future purchases from Boeing.

The Company is accounting for these arrangements as a reduction to the cost basis of the previously-delivered Boeing 737 MAX 9 aircraft and future deliveries of the Boeing 737 MAX 9 and Boeing 737 MAX 10 aircraft, which will reduce future depreciation expense associated with these aircraft.

The table below summarizes United's firm commitments as of June 30, 2024, which include aircraft and related spare engines, aircraft improvements and non-aircraft capital commitments.

Aircraft commitments are based on contractual scheduled aircraft deliveries without any adjustments communicated by Boeing and Airbus or estimated by United but reflecting the Airbus Agreement and the April 14, 2024 arrangements between United and Boeing.

(in billions)

Last nine months of 2024 $ 7.1

Last six months of 2024 $ 5.6

After 2028 27.8

In April 2024, the Company signed letters of intent to enter into future leasing arrangements with major aircraft leasing companies for 35 Airbus A321neo aircraft with expected deliveries in 2026 and 2027.

In the second quarter of 2024, the Company signed letters of intent to enter into future leasing arrangements with major aircraft leasing companies for 40 Airbus A321neo aircraft with expected deliveries in 2026 and 2027.

In July 2024, the Company entered into definitive agreements to lease 35 of the 40 Airbus A321neo aircraft, which will commence between 2026 and 2027.

As of the filing date of this report, we have leases of approximately $ 3.7 billion for several mainline aircraft, regional aircraft under CPAs, airport facility and office space leases, none of which had commenced as of such date.

These leases will commence between 2024 and 2038 with lease terms of up to 12 years.

Regional CPAs .

During the three months ended March 31, 2024 , 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 modify the terms for certain aircraft.

During the six months ended June 30, 2024 , 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 modify the terms for certain aircraft.

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

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

Based on these assumptions as of March 31, 2024 , our estimated future payments through the end of the terms of our CPAs are presented in the table below :

Based on these assumptions as of June 30, 2024 , our estimated future payments through the end of the terms of our CPAs are presented in the table below :

(in billions)

Last nine months of 2024 $ 1.9

Last six months of 2024 $ 1.3

After 2028 4.3

As of March 31, 2024, United is the guarantor of approximately $ 1.9 billion in aggregate principal amount of tax-exempt special facilities revenue bonds and interest thereon.

As of June 30, 2024, United is the guarantor of approximately $ 1.9 billion in aggregate principal amount of tax-exempt special facilities revenue bonds and interest thereon.

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

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All of these bonds are due between 2024 and 2041.

As of March 31, 2024, United is the guarantor of $ 73 million of aircraft mortgage debt issued by one of United's regional carriers.

As of June 30, 2024, United is the guarantor of $ 70 million of aircraft mortgage debt issued by one of United's regional carriers.

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

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

At March 31, 2024, the Company had $ 10.1 billion of floating rate debt with remaining terms of up to approximately 12 years that are subject to these increased cost provisions.

At June 30, 2024, the Company had $ 10.3 billion of floating rate debt with remaining terms of up to approximately 12 years that are subject to these increased cost provisions.

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

entities, with remaining terms of up to approximately 12 years and an aggregate balance of $ 6.9 billion, the Company

bears the risk of any change in tax laws that would subject loan or lease payments thereunder to non-U.S.

entities, with remaining terms of up to approximately 12 years and an aggregate balance of $ 7.2 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.

As of March 31, 2024, the Company had approximately 104,500 employees, of whom approximately 83 % were represented by various U.S.

As of June 30, 2024, the Company had approximately 106,000 employees, of whom approximately 82 % were represented by various U.S.

labor organizations.

On February 23, 2024, United and the International Association of Machinists and Aerospace Workers ratified agreements covering security guards in California and central load planners.

On February 23, 2024, United's International Association of Machinists and Aerospace Workers ("IAM") represented security guards in California and central load planners ratified new collective bargaining agreements.

The ratified agreements are effective through 2025.

On February 28, 2024, United and the International Brotherhood of Teamsters reached a tentative agreement for an extension to their labor contract.

The agreement, if ratified, becomes amendable in December 2028.

On February 28, 2024, United and the International Brotherhood of Teamsters (IBT) reached a tentative agreement for an extension to their labor contract, which covers United's technicians and related employees.

On April 17, 2024, the United technicians declined the proposed four-year contract extension and will continue to work under their current agreement, which becomes amendable in December 2024.

NOTE 8 — DEBT

1 unchanged sentence

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.

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.

As of March 31, 2024, we had $ 2.87 billion undrawn and available under the Revolving Credit Facility.

The Revolving Loans, if any, 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.

On April 16, 2024, the Company increased the revolving loan commitments of the Extending Lenders by $ 100 million.

The revolving loan commitments of the Extending Lenders now equal $ 2.8 billion and the revolving loan commitments of the 2024 Non-Extending Lenders remain $ 165 million.

As of June 30, 2024, we had $ 2.965 billion undrawn and available under the Revolving Credit Facility.

On February 22, 2024, the Company also entered into Amendment No.

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.

The Term Loans will bear interest at a variable rate equal to Term SOFR (subject to a floor of 0.0 %);

The Term Loans bear interest at a variable rate equal to Term SOFR (subject to a floor of 0.0 %);

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.

The remaining balance of the Term Loans will mature and be due and payable on February 22, 2031.

The table below presents the Company's contractual principal payments (not including $ 267 million of unamortized debt discount, premiums and debt issuance costs) as of March 31, 2024 under then-outstanding long-term debt agreements (in millions):

Last nine months of 2024 $ 2,936

The table below presents the Company's contractual principal payments (not including $ 249 million of unamortized debt discount, premiums and debt issuance costs) as of June 30, 2024 under then-outstanding long-term debt agreements (in millions):

Last six months of 2024 $ 3,349

After 2028 11,837

During the six months ended June 30, 2024, United borrowed $ 0.9 billion aggregate principal amount from financial institutions to finance the purchase of aircraft.

The notes evidencing these borrowings, which are secured by the related aircraft, mature between 2034 and 2036 and bear interest at variable rates equal to Term SOFR plus a margin of up to 2.00 %.

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

As of March 31, 2024, UAL and United were in compliance with their respective debt covenants.

As of June 30, 2024, UAL and United were in compliance with their respective debt covenants.

On July 2, 2024, the Company voluntarily prepaid in full the outstanding principal balance of the term loan facility of the MileagePlus Financing, which was $ 1.8 billion as of June 30, 2024, in addition to all accrued and unpaid interest and fees under the term loan facility and terminated all commitments thereunder .

NOTE 9 — SPECIAL CHARGES

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

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

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(Gains) losses on sale of assets and other special charges $ 36 $ 46 $ 49 $ 60

Labor contract ratification bonuses — 813 — 813

Total operating special charges 36 859 49 873

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

During the three months ended March 31, 2024, the Company incurred $ 13 million of charges primarily consisting of a settlement related to a certain pilot long term disability plan, accelerated depreciation on assets with shortened lives, and other losses on disposal of assets, which were partially offset by a gain from a favorable outcome related to a certain contract dispute as well as gains on sales of assets.

During the three and six months ended June 30, 2024, the Company incurred $ 36 million and $ 49 million, respectively, of charges primarily consisting of a write down to fair market value for assets held for sale, losses on the disposal of assets, a settlement related to a certain pilot long term disability plan, accelerated depreciation on assets with shortened lives and write-off of certain international slots no longer in use, which were partially offset by a gain from a favorable outcome related to a certain contract dispute as well as gains on sales of assets.

Nonoperating unrealized (gains) losses on investments, net.

During the three months ended March 31, 2024, the Company recorded losses of $ 37 million primarily for the change in the market value of its investments in equity securities.

During the three and six months ended June 30, 2024, the Company recorded losses of $ 33 million and $ 70 million, respectively, primarily related to the change in the market value of its investments in equity securities.

Nonoperating debt extinguishment and modification fees .

During the three months ended March 31, 2024, the Company recorded $ 35 million of charges primarily related to the refinancing of its 2021 term loans.

During the six months ended June 30, 2024, the Company recorded $ 35 million of charges primarily related to the refinancing of its 2021 term loans.

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

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

During the three and six months ended June 30, 2023, the Company recorded $ 46 million and $ 60 million, respectively, of net charges primarily comprised of reserves for various legal matters, accelerated depreciation related to certain of the Company's assets that were retired early and other gains and losses on the sale of assets.

Labor contract ratification bonuses.

During the three and six months ended June 30, 2023, the Company recorded $ 813 million of expense associated with an Agreement in Principle with its employees represented by the Air Line Pilots Association and ratified contracts with the IAM.

Nonoperating unrealized (gains) losses on investments, net.

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

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

Nonoperating debt extinguishment and modification fees .

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

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

What changed 10-Q

Item 1. Financial Statements