What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-07-18 compared with 2024-04-17 · 171 added, 63 removed, 222 unchanged (51% of the section changed)

14 unchanged sentences

mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C.

The Company transports people and cargo through its mainline operations, which utilize jet aircraft with at least 126 seats, and regional operations, which utilize smaller aircraft that are operated under contract by United Express carriers.

The Company serves virtually every major market around the world, either directly or through participation in Star Alliance ® , the world's largest airline alliance.

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

Risk Factors, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the "2023 Form 10-K").

25 unchanged sentences

increased oversight by the Federal Aviation Administration ("FAA") of the Company’s operations in connection with its evaluation of the Company;

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

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

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

4 unchanged sentences

RESULTS OF OPERATIONS

The following discussion provides an analysis of our results of operations and reasons for material changes therein for the three months ended March 31, 2024, as compared to the corresponding period in 2023.

First Quarter 2024 Compared to First Quarter 2023

The Company recorded a net loss of $124 million for the first quarter of 2024 as compared to a net loss of $194 million for the first quarter of 2023.

Significant components of the Company's operating results for the three months ended March 31 are as follows (in millions, except percentage changes):

The following discussion provides an analysis of our results of operations and reasons for material changes therein for the three and six months ended June 30, 2024, as compared to the corresponding period in 2023.

Second Quarter 2024 Compared to Second Quarter 2023

The Company recorded net income of $1.3 billion for the second quarter of 2024 as compared to net income of $1.1 billion for the second quarter of 2023.

Significant components of the Company's operating results for the three months ended June 30 are as follows (in millions, except percentage changes):

2024 2023 Increase (Decrease) % Change

1 unchanged sentence

Operating expense 13,057 12,661 396 3.1

Operating income (loss) 99 (43) 142 NM

Operating income 1,929 1,517 412 27.2

Nonoperating expense, net (190) (130) 60 46.2

Loss before income taxes (164) (256) (92) (35.9)

Income tax benefit (40) (62) (22) (35.5)

Net loss $ (124) $ (194) $ (70) (36.1)

Certain consolidated statistical information for the Company's operations for the three months ended March 31 is as follows:

Income before income taxes 1,739 1,387 352 25.4

Income tax expense 416 312 104 33.3

Net income $ 1,323 $ 1,075 $ 248 23.1

Certain consolidated statistical information for the Company's operations for the three months ended June 30 is as follows:

2024 2023 Increase (Decrease) % Change

10 unchanged sentences

Fuel gallons consumed (millions) 1,134 1,062 72 6.8

Employee headcount, as of March 31

Employee headcount, as of June 30

106,000 99,800 6,200 6.2

6 unchanged sentences

Operating Revenue.

The table below shows year-over-year comparisons by type of operating revenue for the three months ended March 31 (in millions, except for percentage changes):

The table below shows year-over-year comparisons by type of operating revenue for the three months ended June 30 (in millions, except for percentage changes):

2024 2023 Increase (Decrease) % Change

3 unchanged sentences

Total operating revenue $ 14,986 $ 14,178 $ 808 5.7

The table below presents selected first quarter passenger revenue and operating data, broken out by geographic region, expressed as year-over-year changes:

The table below presents selected second quarter passenger revenue and operating data, broken out by geographic region, expressed as year-over-year changes:

Increase (decrease) from 2023:

9 unchanged sentences

Passenger load factor (points) (0.6) (3.8) (5.9) (1.6) (2.2)

Passenger revenue increased $1.0 billion, or 10.1%, in the first quarter of 2024 as compared to the year-ago period, primarily due to a 9.1% increase in capacity and a 0.7% increase in Yield.

Other operating revenue increased $78 million, or 10.3%, in the first quarter of 2024 as compared to the year-ago period, primarily due to an increase in mileage revenue from non-airline partners, including credit card spending with our co-branded credit card partner, JPMorgan Chase Bank, N.A., as well as increases in the purchases of United Club memberships, visitor volume and purchases of one-time United Club passes.

Passenger revenue increased $0.7 billion, or 5.2%, in the second quarter of 2024 as compared to the year-ago period, primarily due to an 8.3% increase in capacity and a 5.8% increase in passengers.

Cargo revenue increased $52 million, or 14.4%, in the second quarter of 2024 as compared to the year-ago period, primarily due to higher tonnage and partially offset by lower yields.

Other operating revenue increased $78 million, or 9.6%, in the second quarter of 2024 as compared to the year-ago period, primarily due to an increase in mileage revenue from non-airline partners, including credit card spending with our co-branded

credit card partner, JPMorgan Chase Bank, N.A., as well as increases in the purchases of United Club memberships, visitor volume and purchases of one-time United Club passes.

Operating Expenses.

The table below includes data related to the Company's operating expenses for the three months ended March 31 (in millions, except for percentage changes):

The table below includes data related to the Company's operating expenses for the three months ended June 30 (in millions, except for percentage changes):

2024 2023 Increase (Decrease) % Change (a)

11 unchanged sentences

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

Salaries and related costs increased $610 million, or 18.4%, in the first quarter of 2024 as compared to the year-ago period, primarily due to annual wage rate increases across certain employee groups and an 8.5% increase in headcount largely due to increased flight activity.

Aircraft fuel expense decreased by $220 million, or 6.9%, in the first quarter of 2024 as compared to the year-ago period, due to a lower average price per gallon of fuel, partially offset by increased consumption from higher flight activity.

The table below presents the significant changes in aircraft fuel cost per gallon in the three months ended March 31, 2024 as compared to the year-ago period (in millions, except percentage change and per gallon data):

Salaries and related costs increased $388 million, or 10.5%, in the second quarter of 2024 as compared to the year-ago period, primarily due to annual wage rate increases across certain employee groups and a 6.2% increase in headcount largely due to increased flight activity.

Aircraft fuel expense increased by $313 million, or 11.1%, in the second quarter of 2024 as compared to the year-ago period, due to increased consumption from higher flight activity and a higher average price per gallon of fuel.

The table below presents the significant changes in aircraft fuel cost per gallon in the three months ended June 30 (in millions, except percentage change and per gallon data):

2024 2023 Increase (Decrease) % Change

2 unchanged sentences

Average price per gallon $ 2.76 $ 2.66 $ 0.10 3.8 %

Landing fees and other rent increased $87 million, or 12.1%, in the first quarter of 2024 as compared to the year-ago period, primarily due to rate increases at various airports, terminal expansions and other increases in the number of airport gates and higher landed weight volume due to increased flight activity.

Aircraft maintenance materials and outside repairs increased $71 million, or 10.1%, in the first quarter of 2024 as compared to the year-ago period, primarily due to an increased volume of engine overhauls.

Depreciation expense increased $53 million, or 8.1%, in the first quarter of 2024 as compared to the year-ago period, primarily due to induction of new aircraft and related spare parts and higher obsolescence due to higher inventory levels for expendable parts.

Distribution expenses increased $77 million, or 19.1%, in the first quarter of 2024 as compared to the year-ago period, primarily due to higher credit card fees driven by an increase in passenger revenue and $56 million of commissions that were recorded as contra-revenue in 2023.

Other operating expenses increased $334 million, or 18.4%, in the first quarter of 2024 as compared to the year ago period, primarily as a direct result of the increase in flight activity and the impacts of inflationary pressures.

Landing fees and other rent increased $101 million, or 13.2%, in the second quarter of 2024 as compared to the year-ago period, primarily due to rate increases at various airports, terminal expansions and other increases in the number of airport gates and higher landed weight volume due to increased flight activity.

Depreciation expense increased $50 million, or 7.5%, in the second quarter of 2024 as compared to the year-ago period, primarily due to the induction of new aircraft and related spare parts, as well as certain aircraft improvements.

Distribution expenses increased $139 million, or 28.5%, in the second quarter of 2024 as compared to the year-ago period, primarily due to higher credit card fees, agency commissions and global distribution fees driven by the overall increase in passenger revenue and $64 million of commissions that were recorded as contra-revenue in 2023.

Details of the Company's special charges include the following for the three months ended June 30 (in millions):

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

Labor contract ratification bonuses — 813

Special charges $ 36 $ 859

See Note 9 to the financial statements included in Part I, Item 1 of this report for additional information on the Company's special charges.

Other operating expenses increased $194 million, or 9.6%, in the second quarter of 2024 as compared to the year ago period, primarily as a direct result of the increase in flight activity and onboard passengers as well as the impacts of inflationary pressures.

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

Nonoperating Income (Expense ).

The table below shows year-over-year comparisons of the Company's nonoperating income (expense) for the three months ended March 31 (in millions, except for percentage changes):

The table below shows year-over-year comparisons of the Company's nonoperating income (expense) for the three months ended June 30 (in millions, except for percentage changes):

2024 2023 Increase (Decrease) % Change

3 unchanged sentences

Unrealized gains (losses) on investments, net (33) 84 (117) NM

Miscellaneous, net (10) 41 (51) NM

Miscellaneous, net 20 21 (1) (4.8)

Total $ (190) $ (130) $ 60 46.2

Interest expense decreased $32 million, or 6.6%, in the first quarter of 2024 as compared to the year-ago period, primarily due to declining debt balances and lower interest rates on refinanced debt.

Unrealized losses on investments, net, was $37 million in the first quarter of 2024 as compared to $24 million in unrealized gains in the year-ago period, primarily due to the change in the market value of the Company's investments in equity securities.

Interest expense decreased $66 million, or 13.4%, in the second quarter of 2024 as compared to the year-ago period, primarily due to declining debt balances and lower interest rates on refinanced debt.

Interest income decreased $26 million, or 12.0%, in the second quarter of 2024 as compared to the year-ago period, primarily due to lower short-term investments in U.S.

government and agency notes, which was partially offset by higher interest rates.

Unrealized losses on investments, net, was $33 million in the second quarter of 2024 as compared to $84 million in unrealized gains in the year-ago period, primarily due to the change in the market value of the Company's investments in equity securities.

See Note 6 to the financial statements included in Part I, Item 1 of this report for information related to these equity investments.

Miscellaneous, net changed by $51 million in the first quarter of 2024 as compared to the year-ago period, primarily due to debt extinguishment and modification fees related to the refinancing of the Company's 2021 term loans, higher foreign exchange losses and a decrease in the benefit from the Company's net periodic benefit cost of its pensions and postretirement benefit plans.

I ncome Taxes.

See Note 4 to the financial statements included in Part I, Item 1 of this report for information related to income taxes.

First Six Months 2024 Compared to First Six Months 2023

The Company recorded net income of $1.2 billion in the first six months of 2024 as compared to net income of $0.9 billion in the first six months of 2023.

Significant components of the Company's operating results for the six months ended June 30 are as follows (in millions, except percentage changes):

2024 2023 Increase (Decrease) % Change

Operating revenue $ 27,525 $ 25,607 $ 1,918 7.5

Operating expense 25,497 24,133 1,364 5.7

Operating income 2,028 1,474 554 37.6

Nonoperating expense, net (453) (343) 110 32.1

Income before income taxes 1,575 1,131 444 39.3

Income tax expense 376 250 126 50.4

Net income $ 1,199 $ 881 $ 318 36.1

Certain consolidated statistical information for the Company's operations for the six months ended June 30 is as follows:

2024 2023 Increase (Decrease) % Change

Passengers (thousands) 83,700 78,767 4,933 6.3

RPMs (millions) 124,491 116,073 8,418 7.3

ASMs (millions) 151,346 139,258 12,088 8.7

Passenger load factor 82.3 % 83.4 % (1.1) pts.

PRASM (cents) 16.51 16.71 (0.20) (1.2)

TRASM (cents) 18.19 18.39 (0.20) (1.1)

Yield (cents) 20.08 20.05 0.03 0.1

CTM (millions) 1,742 1,499 243 16.2

CASM (cents) 16.85 17.33 (0.48) (2.8)

Average price per gallon of fuel, including fuel taxes $ 2.82 $ 2.98 $ (0.16) (5.4)

Fuel gallons consumed (millions) 2,159 2,014 145 7.2

Employee headcount, as of June 30

106,000 99,800 6,200 6.2

Operating Revenue.

The table below shows year-over-year comparisons by type of operating revenue for the six months ended June 30 (in millions, except for percentage changes):

2024 2023 Increase (Decrease) % Change

Passenger revenue $ 24,993 $ 23,276 $ 1,717 7.4

Cargo 805 760 45 5.9

Other operating revenue 1,727 1,571 156 9.9

Total operating revenue $ 27,525 $ 25,607 $ 1,918 7.5

The table below presents selected passenger revenue and operating data, broken out by geographic region, expressed as year-over-year changes for the six months ended June 30, 2024 compared to the six months ended June 30, 2023:

Increase (decrease) from 2023:

Domestic Atlantic Pacific Latin Total

Passenger revenue (in millions) $ 687 $ 153 $ 697 $ 180 $ 1,717

Passenger revenue 4.8 % 3.3 % 33.6 % 7.6 % 7.4 %

Average fare per passenger 0.1 % 6.2 % (2.8) % (8.1) % 1.0 %

Yield 0.6 % 8.1 % (3.1) % (8.4) % 0.1 %

PRASM 1.8 % 5.8 % (11.6) % (10.6) % (1.2) %

Passengers 4.7 % (2.7) % 37.4 % 17.1 % 6.3 %

RPMs 4.2 % (4.4) % 37.8 % 17.3 % 7.3 %

ASMs 3.0 % (2.3) % 51.0 % 20.3 % 8.7 %

Passenger load factor (points) 1.0 (1.7) (7.2) (2.1) (1.1)

Passenger revenue increased $1.7 billion, or 7.4%, in the first six months of 2024 as compared to the year-ago period, primarily due to an 8.7% increase in capacity as well as a 6.3% increase in passengers.

Cargo revenue increased $45 million, or 5.9%, in the first six months of 2024 as compared to the year-ago period, primarily due to higher tonnage and partially offset by lower yields.

Other operating revenue increased $156 million, or 9.9%, in the first six months of 2024 as compared to the year-ago period, primarily due to an increase in mileage revenue from non-airline partners, including credit card spending with our co-branded credit card partner, JPMorgan Chase Bank, N.A., as well as increases in the purchases of United Club memberships, visitor volume and purchases of one-time United Club passes.

Operating Expenses.

The table below includes data related to the Company's operating expenses for the six months ended June 30 (in millions, except for percentage changes):

2024 2023 Increase (Decrease) % Change

Salaries and related costs $ 8,030 $ 7,032 $ 998 14.2

Aircraft fuel 6,087 5,994 93 1.6

Landing fees and other rent 1,670 1,482 188 12.7

Aircraft maintenance materials and outside repairs 1,489 1,388 101 7.3

Depreciation and amortization 1,427 1,324 103 7.8

Regional capacity purchase 1,197 1,214 (17) (1.4)

Distribution expenses 1,106 890 216 24.3

Aircraft rent 83 105 (22) (21.0)

Special charges 49 873 (824) NM

Other operating expenses 4,359 3,831 528 13.8

Total operating expenses $ 25,497 $ 24,133 $ 1,364 5.7

Salaries and related costs increased $1.0 billion, or 14.2%, in the first six months of 2024 as compared to the year-ago period, primarily due to annual wage rate increases across certain employee groups and a 6.2% increase in headcount largely due to increased flight activity.

Aircraft fuel expense increased $93 million, or 1.6%, in the first six months of 2024 as compared to the year-ago period, primarily due to increased consumption from higher flight activity and partially offset by a lower average price per gallon of fuel.

The table below presents the significant changes in aircraft fuel cost per gallon in the six months ended June 30 (in millions, except percentage change and per gallon data):

2024 2023 Increase (Decrease) % Change

Fuel expense $ 6,087 $ 5,994 $ 93 1.6 %

Fuel consumption (gallons) 2,159 2,014 145 7.2 %

Average price per gallon $ 2.82 $ 2.98 $ (0.16) (5.4) %

Landing fees and other rent increased $188 million, or 12.7%, in the first six months of 2024 as compared to the year-ago period, primarily due to rate increases at various airports, terminal expansions and other increases in the number of airport gates and higher landed weight volume due to increased flight activity.

Aircraft maintenance materials and outside repairs increased $101 million, or 7.3%, in the first six months of 2024 as compared to the year-ago period, primarily due to increased flight activity and increased volumes of engine overhauls, materials use, and component repair costs.

Depreciation expense increased $103 million, or 7.8%, in the first six months of 2024 as compared to the year-ago period, primarily due the induction of new aircraft and related spare parts, as well as certain aircraft improvements.

Distribution expenses increased $216 million, or 24.3%, in the first six months of 2024 as compared to the year-ago period, primarily due to higher credit card fees driven by an increase in passenger revenue and $120 million of commissions that were recorded as contra-revenue in 2023.

Details of the Company's special charges include the following for the three months ended June 30 (in millions):

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

Labor contract ratification bonuses — 813

Special charges $ 49 $ 873

See Note 9 to the financial statements included in Part I, Item 1 of this report for additional information on the Company's special charges.

Other operating expenses increased $0.5 billion, or 13.8%, in the first six months of 2024 as compared to the year-ago period, primarily as a direct result of the increase in flight activity and onboard passengers, as well as the impacts of inflationary pressures.

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

Nonoperating Income (Expense).

The following table illustrates the year-over-year dollar and percentage changes in the Company's nonoperating income (expense) for the six months ended June 30 (in millions, except for percentage changes):

2024 2023 Increase (Decrease) % Change

Interest expense $ (881) $ (979) $ (98) (10.0)

Interest income 367 386 (19) (4.9)

Interest capitalized 121 80 41 51.3

Unrealized gains (losses) on investments, net (70) 108 (178) NM

Miscellaneous, net 10 62 (52) (83.9)

Total $ (453) $ (343) $ 110 32.1

Interest expense decreased $98 million, or 10.0%, in the first six months of 2024 as compared to the year-ago period, primarily due to declining debt balances and lower interest rates on refinanced debt.

Interest capitalized increased $41 million, or 51.3%, in the first six months of 2024 as compared to the year-ago period, primarily due to an increase in accumulated spend on capital projects and an increase in aircraft purchase deposit balances.

Unrealized losses on investments, net, was $70 million in the first six months of 2024 as compared to $108 million in unrealized gains in the year-ago period, primarily due to the change in the market value of the Company's investments in equity securities.

See Note 6 to the financial statements included in Part I, Item 1 of this report for information related to these equity investments.

Miscellaneous, net changed by $52 million in the first six months of 2024 as compared to the year-ago period, primarily due to debt extinguishment and modification fees related to the refinancing of the Company's 2021 term loans, higher foreign exchange losses and a decrease in the benefit from the Company's net periodic benefit cost of its pension and postretirement benefit plans.

Income Taxes.

See Note 4 to the financial statements included in Part I, Item 1 of this report for information related to income taxes.

LIQUIDITY AND CAPITAL RESOURCES

Current Liquidity

As of March 31, 2024, the Company had $14.0 billion in unrestricted cash, cash equivalents and short-term investments, as compared to $14.4 billion at December 31, 2023.

As of June 30, 2024, the Company had $15.2 billion in unrestricted cash, cash equivalents and short-term investments, as compared to $14.4 billion at December 31, 2023.

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

1 unchanged sentence

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

As of March 31, 2024, the Company has a $2.87 billion revolving credit facility (the "Revolving Credit Facility"), of which $2.7 billion expires February 15, 2029 and $165 million expires April 21, 2025.

On April 16, 2024, the Company increased its revolving credit facility (the "Revolving Credit Facility") loan commitments by $100 million for a total amount of $2.965 billion as of June 30, 2024, of which $2.8 billion expires February 15, 2029 and $165 million expires April 21, 2025.

The Revolving Credit Facility is secured by certain route authorities and airport slots and gates.

No borrowings were outstanding under the Revolving Credit Facility as of March 31, 2024.

On April 16, 2024, the Company increased the revolving loan commitments of the Extending Lenders (as defined in the Revolving Credit Facility) 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 (as defined in the Revolving Credit Facility) remain $165 million.

No borrowings were outstanding under the Revolving Credit Facility as of June 30, 2024.

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

As of March 31, 2024, the Company had approximately $34.8 billion of debt, finance lease, operating lease and other financial liabilities, including $4.7 billion that will become due in the next 12 months.

As of June 30, 2024, the Company had approximately $34.3 billion of debt, finance lease, operating lease and other financial liabilities, including $5.5 billion that will become due in the next 12 months.

In addition, we have substantial noncancelable commitments for capital expenditures, including the acquisition of certain new aircraft and related spare engines.

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 March 31, 2024, a substantial portion of the Company's assets, principally aircraft and certain related assets, its loyalty program, certain route authorities and airport slots and gates, was pledged under various loan and other agreements.

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

As of June 30, 2024, a substantial portion of the Company's assets, principally aircraft and certain related assets, its loyalty program, certain route authorities and airport slots and gates, was pledged under various loan and other agreements.

See Note 8 to the financial statements included in Part I, Item 1 of this report for additional information on aircraft financing and other debt instruments.

On July 2, 2024, the Company voluntarily prepaid in full the outstanding principal balance of the term loan facility of our MileagePlus term loan, 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.

The Company has backstop financing commitments available from certain of its aircraft manufacturers for a limited number of its future aircraft deliveries, subject to certain customary conditions.

See Note 7 to the financial statements included in Part I, Item 1 of this report for additional information on commitments.

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

7 unchanged sentences

(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.

5 unchanged sentences

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 FAA 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 FAA 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.

Sources and Uses of Cash

The following table summarizes our cash flows for the three months ended March 31 (in millions):

The following table summarizes our cash flows for the six months ended June 30 (in millions):

2024 2023 Increase (Decrease)

5 unchanged sentences

Operating Activities.

Cash flows provided by operations decreased $0.3 billion in the first three months of 2024 as compared to the year-ago period, primarily due to changes in various working capital items, including a $0.7 billion increase in employee incentive payments in the first three months of 2024 as compared to the year-ago period, which was partially offset by a $0.3 billion increase in advance ticket sales associated with overall traffic growth in the first three months of 2024 as compared to the year-ago period.

Cash flows provided by operations decreased $1.2 billion in the first six months of 2024 as compared to the year-ago period, primarily due to changes in various working capital items, including higher payments for employee wages and incentives in 2024 as compared to 2023.

Investing Activities.

Cash flows used in investing activities decreased $3.4 billion in the first three months of 2024 as compared to the year-ago period, primarily due to a $3.3 billion decrease in the purchase of short-term and other investments and a $0.5 billion decrease in capital expenditures, which was partially offset by a $0.4 billion decrease in sales of short-term and other investments.

Cash flows used in investing activities decreased $5.0 billion in the first six months of 2024 as compared to the year-ago period, primarily due to a decrease in the purchase of short-term and other investments.

Financing Activities.

Significant financing events in the three months ended March 31, 2024 were as follows:

Significant financing events in the six months ended June 30, 2024 were as follows:

Debt, Finance Lease and Other Financing Liability Principal Payments .

During the three months ended March 31, 2024, the Company made payments for debt, finance leases, and other financing liabilities of $5.0 billion, including the $3.9 billion prepayment of its 2021 term loan.

During the six months ended June 30, 2024, the Company made payments for debt, finance leases, and other financing liabilities of $6.2 billion, including the $3.9 billion prepayment of its 2021 term loan.

Debt and Other Financing Liabilities Issuances.

The Company borrowed the entire term loan commitment available under the new term loan facility in an amount equal to $2.5 billion.

Also, the Company borrowed $895 million for aircraft financings.

See Note 8 to the financial statements included in Part I, Item 1 of this report for additional information on these financing activities.

19 unchanged sentences

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

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

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

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

4 unchanged sentences

execution risks associated with our strategic operating plan;

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

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

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

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

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

4 unchanged sentences

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

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

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

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

geopolitical conflict, terrorist attacks or security events (including the suspension of our overflying in Russian airspace as a result of the Russia-Ukraine military conflict and interruptions of our flying to Tel Aviv as a result of the Israeli-Hamas military conflict, as well as

any escalation of the broader economic consequences of these conflicts beyond their current scope);

any damage to our reputation or brand image;

15 unchanged sentences

the impacts of seasonality and other factors associated with the airline industry;

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

increases in insurance costs or inadequate insurance coverage;

and other risks and uncertainties set forth under Part I, Item 1A.

Risk Factors, of the 2023 Form 10-K, and under "Economic and Market Factors" and "Governmental Actions" in Part I, Item 2.

8 unchanged sentences

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 2. Management’s Discussion and Analysis