CHICAGO, April 19, 2021 /PRNewswire/ -- United
Airlines (UAL) today announced first-quarter 2021 financial
results. The company has its eyes on the future, making continued
progress on its commitment to remove $2
billion in structural costs and investing in key customer
programs that will position the airline to capitalize on the
recovery of business travel and long-haul international demand.
Following its return to positive core cash flow1 in
the month of March, the company is focused on returning to positive
adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) margins, even if business and long-haul
international demand remain as much as 70% below 2019 levels.
United is already moving to capitalize on emerging pent-up demand
for travel to countries where vaccinated travelers are welcome. In
fact, the company announced new international flying to
Greece, Iceland and Croatia earlier today, subject to government
approval. These opportunistic steps help position United to return
to positive net income even if business and long-haul international
demand only returns to about 35% below 2019 levels.
"The United team has now spent a year facing down the most
disruptive crisis our industry has ever faced and because of their
skill and dedication to our customers, we're poised to emerge from
this pandemic with a future that is brighter than ever," said
United Airlines CEO Scott Kirby.
"We've shifted our focus to the next milestone on the horizon and
now see a clear path to profitability. We're encouraged by the
strong evidence of pent-up demand for air travel and our continued
ability to nimbly match it, which is why we're as confident as ever
that we'll hit our goal to exceed 2019 adjusted EBITDA margins in
2023, if not sooner."
United's efforts to improve the customer experience resulted in
the company achieving its highest ever customer satisfaction in the
first quarter. Looking ahead, the company is planning continued
investment in customers, including continuing the United Polaris®
retrofit program and starting retrofit on narrowbody aircraft,
modernizing gates, upgrading and expanding United Club℠ locations
in Newark and Denver, and rolling out tools that give
customers the opportunity to pre-order onboard meals.
|
|
* Adjusted EBITDA
margin is a non-GAAP financial measure calculated as Earnings
Before Interest, Taxes, Depreciation and Amortization (EBITDA),
excluding special charges and unrealized (gains) losses on
investments, divided by total operating revenue. We are not
providing a target or a reconciliation to profit margin (net
income/total operating revenue), the most directly comparable GAAP
measure, because we are unable to predict certain items contained
in the GAAP measure without unreasonable efforts. Adjusted EBITDA
margin does not reflect certain items, including special charges
and unrealized (gains) losses on investments, which may be
significant. For a reconciliation of adjusted EBITDA to net income
for the three months ended March 31, 2021 and 2019 and the 12
months ended December 31, 2020 and 2019, please see the
accompanying tables to this release.
|
First-Quarter Financial Results
- Reported first-quarter 2021 net loss of $1.4 billion, adjusted net loss2 of
$2.4 billion.
- Reported first-quarter total operating revenue of $3.2 billion, down 66% versus first-quarter
2019.
- Reported first-quarter operating expenses down 49% versus
first-quarter 2019, down 34% excluding special charges.
- Reported first-quarter 2021 ending available
liquidity3 of $21
billion.
- Reported first-quarter capacity down 54% versus first-quarter
2019.
- Reported first-quarter average core cash burn of $9 million per day, an improvement of about
$10 million per day versus the
fourth-quarter 2020.
Second-Quarter 2021 Outlook
- Based on current trends, the company expects second quarter
2021 Total Revenue Per Available Seat Mile (TRASM) to be down
approximately 20% versus the second quarter 2019.
- Expects second quarter 2021 capacity to be down around 45%
versus the second quarter 2019.
- Expects second quarter operating expenses excluding special
charges4 to be down approximately 32% versus the second
quarter 2019, with second quarter 2021 fuel price per gallon
estimated to be approximately $1.83.
- Expects second quarter 2021 adjusted EBITDA margin5
of around (20%).
Key Highlights
- Set a new diversity goal and plan for 50% of the 5,000 students
the airline has committed to train by 2030 at the new United Aviate
Academy to be women and people of color.
- Created the Eco-Skies Alliance℠, a first-of-its-kind program,
offering United's corporate customers the opportunity to help
reduce their environmental impact by allowing them to pay the
additional cost for sustainable aviation fuel (SAF). Additionally,
United is giving customers the ability to contribute funds for
additional SAF purchases by United or for use on initiatives United
believes will help decarbonize aviation – the first of any U.S.
airline to do so.
- Launched industry-exclusive "Travel-Ready Center" to ease the
burden of COVID-19 travel restrictions. Customers can review
COVID-19 entry requirements, find local testing options and upload
any required testing and vaccination records for domestic and
international travel, all in one place. United is the first airline
to integrate all these features into its mobile app and
website.
- Announced an agreement to work with air mobility company Archer
as part of the company's broader effort to invest in emerging
technologies that decarbonize air travel rather than relying on
traditional combustion engines.
- Returned to John F. Kennedy Airport after a five-year absence,
and are now operating direct service to the airline's West Coast
hubs – Los Angeles International
Airport and San Francisco
International Airport.
- Announced a new luxury bus collaboration for customers to
travel to Breckenridge and
Fort Collins, Colorado with
convenient year-round ground transportation service connecting
through its Denver hub. This is
the first time Breckenridge has
ever been served by an airline and will be Fort Collins' first global network carrier
service in 25 years.
Taking Care of Our Customers
- The only airline that lets customers upload travel documents to
the United app and have them certified allowing customers to get
their boarding pass before arriving at the airport.
- Announced plans to introduce United Premium Plus® service on
seven Hawaii routes to
Honolulu (Oahu), Kahului (Maui), and Kona (Hawaii) beginning in May 2021.
- Expanded COVID-19 testing and pre-clearance program to make
Hawaii travel easier.
- Reducing stress of international travel by starting a test on
Houston to Brazil flights, allowing customers to take an
Abbott BinaxNOW test prior to their re-entry into the United States.
- In partnership with the Centers for Disease Control and
Prevention (CDC), launched a program to collect information from
passengers, allowing them to be contacted in the event they are
near a Covid-19 positive passenger while on a United aircraft.
- Expanded rollout of virtual, on-demand customer service, now
available at all U.S. hub airports.
- Recognized by the Airline Passenger Experience Association
(APEX) and SimpliFlying for providing a hospital-grade standard of
cleanliness and safety during the travel journey. United is the
first airline among the four largest U.S. carriers to receive the
highest possible certification.
Reimagining the Route Network
- In the first quarter, announced 41 new domestic routes and two
new international routes and launched six domestic routes and four
international routes, with 13 more international routes planned to
launch in 2021.
- The company resumed nonstop service on 12 domestic routes and
five international routes compared to the fourth quarter of
2020.
- Compared to December 2020, United
had nonstop service in 12 more domestic and three more
international routes in March
2021.
- Announced plans to fly roughly 52% of its full schedule in
May 2021 compared to May 2019.
- Announced plans to expand the company's global route network
with new, nonstop service between Boston Logan International
Airport and London Heathrow – the only U.S. carrier to offer
nonstop service between the nation's top seven business markets and
London Heathrow.
Assisting the Communities We Serve
- More than 7 million miles donated to charities in need of
travel through United's Miles on a Mission program.
- Over 65,000 lbs. of food and beverages ($322,549 value) donated to Houston Food Bank for
winter storm relief.
- Unique Black History Month campaign raised over $255,000 for The Thurgood Marshall College Fund,
The Leadership Conference Education Fund, The NAACP Legal Defense
and Educational Fund, and United Negro College Fund.
- In the first quarter of 2021, through a combination of
cargo-only flights and passenger flights, United has transported
nearly 290 million pounds of freight, which includes nearly 60
million pounds of vital shipments, such as medical kits, PPE,
pharmaceuticals, and medical equipment, and more than 800,000
pounds of military mail and packages.
Additional Noteworthy Accomplishments
- For the tenth consecutive year received a perfect score of 100%
on the Corporate Equality Index (CEI), a premier benchmarking
survey and report on corporate policies and practices related to
LGBTQ+ workplace equality, administered by the Human Rights
Campaign (HRC) Foundation.
- Teamed up with Chase and Visa in honor of Black History Month
to encourage and reward United Credit Cardmembers to make donations
to non-profits focused on providing access to educational
opportunities for Black students and supporting human and civil
rights policies.
_________________________________________________________________________
|
1. Core cash burn is
defined as: Net cash from operations, investing and financing
activities, adjusted to remove proceeds from the issuance of new
debt (excluding expected aircraft financing), government grants
associated with the Payroll Support Program of the CARES Act,
issuance of new stock, net proceeds from the sale of short-term and
other investments, changes in certain restricted cash balances,
debt principal payments, timing of certain payments, capital
expenditures (net of flight equipment purchase deposit returns),
and investments in the recovery and severance payments. Core cash
flow is defined in the same manner as core cash burn, except that
the result is positive. The company's management views "core cash
burn" or "core cash flow" as an important measure in monitoring
liquidity in order to assess the company's operational cash needs
without the impact of certain extraordinary actions or events, and
the company believes this measure provides useful information to
investors about the company's core operational performance. See the
tables accompanying this release for further
information.
|
2.
Excludes operating and non-operating special
charges, and unrealized gains and losses on investments.
Reconciliations of non-GAAP financial measures to the most directly
comparable GAAP measures are included in the tables accompanying
this release.
|
3. Includes cash,
cash equivalents, short-term investments, undrawn credit facilities
and $7 billion available under the CARES Act loan
program.
|
4. Excludes operating
special charges. We are not providing a reconciliation to operating
expenses, the most directly comparable GAAP measure, because we are
unable to predict certain items contained in the GAAP measure
without unreasonable efforts.
|
5. Adjusted EBITDA
margin is a non-GAAP financial measure calculated as Earnings
Before Interest, Taxes, Depreciation and Amortization (EBITDA),
excluding special charges and unrealized (gains) losses on
investments, divided by total operating revenue. We are not
providing a reconciliation to profit margin (net income/total
operating revenue), the most directly comparable GAAP measure,
because we are unable to predict certain items contained in the
GAAP measure without unreasonable efforts.
|
Earnings Call
UAL will hold a conference call to discuss first-quarter 2021
financial results as well as its financial and operational outlook
for the second-quarter 2021, on Tuesday,
April 20, at 9:30 a.m. CT/10:30
a.m. ET. A live, listen-only webcast of the conference call
will be available at ir.united.com.
The webcast will be available for replay within 24 hours of the
conference call and then archived on the website for three
months.
About United
United's shared purpose is "Connecting People. Uniting the
World." For more information, visit united.com, follow @United on
Twitter and Instagram or connect on Facebook. The common stock of
United's parent, United Airlines Holdings, Inc., is traded on the
Nasdaq under the symbol "UAL".
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: Certain statements in this release,
including statements regarding our outlook for the second quarter
2021 and our adjusted EBITDA margin targets, are forward-looking
and thus reflect our current expectations and beliefs with respect
to certain current and future events and anticipated financial and
operating performance. Such forward-looking statements are and will
be subject to many risks and uncertainties relating to our
operations and business environment that may cause actual results
to differ materially from any future results expressed or implied
in such forward-looking statements. Words such as "expects,"
"will," "plans," "intends," "anticipates," "indicates," "remains,"
"believes," "estimates," "forecast," "guidance," "outlook,"
"goals," "targets" and similar expressions are intended to identify
forward-looking statements. Additionally, forward-looking
statements include statements that do not relate solely to
historical facts, such as statements which identify uncertainties
or trends, discuss the possible future effects of current known
trends or uncertainties, or which indicate that the future effects
of known trends or uncertainties cannot be predicted, guaranteed or
assured. All forward-looking statements in this release are based
upon information available to us on the date of this release. We
undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events, changed circumstances or otherwise, except as
required by applicable law. Our actual results could differ
materially from these forward-looking statements due to numerous
factors including, without limitation, the following: the adverse
impacts of the ongoing COVID-19 global pandemic, and possible
outbreaks of another disease or similar public health threat in the
future, on our business, operating results, financial condition,
liquidity and near-term and long-term strategic operating plan,
including possible additional adverse impacts resulting from the
duration and spread of the pandemic; unfavorable economic and
political conditions in the United
States and globally; the highly competitive nature of the
global airline industry and susceptibility of the industry to price
discounting and changes in capacity; high and/or volatile fuel
prices or significant disruptions in the supply of aircraft fuel;
our reliance on technology and automated systems to operate our
business and the impact of any significant failure or disruption
of, or failure to effectively integrate and implement, the
technology or systems; our reliance on third-party service
providers and the impact of any failure of these parties to perform
as expected, or interruptions in our relationships with these
providers or their provision of services; adverse publicity, harm
to our brand; reduced travel demand and potential tort liability as
a result of an accident, catastrophe or incident involving us, our
regional carriers, our codeshare partners, or another airline;
terrorist attacks, international hostilities or other security
events, or the fear of terrorist attacks or hostilities, even if
not made directly on the airline industry; increasing privacy and
data security obligations or a significant data breach; disruptions
to our regional network and United Express flights provided by
third-party regional carriers; further changes to the airline
industry with respect to alliances and joint business arrangements
or due to consolidations; changes in our network strategy or other
factors outside our control resulting in less economic aircraft
orders, costs related to modification or termination of aircraft
orders or entry into less favorable aircraft orders; our reliance
on single suppliers to source a majority of our aircraft and
certain parts, and the impact of any failure to obtain timely
deliveries, additional equipment or support from any of these
suppliers; the impacts of union disputes, employee strikes or
slowdowns, and other labor-related disruptions on our operations;
extended interruptions or disruptions in service at major airports
where we operate; the impacts of the United Kingdom's withdrawal from the European
Union on our operations in the United
Kingdom and elsewhere; the impacts of seasonality and other
factors associated with the airline industry; our failure to
realize the full value of our intangible assets or our long-lived
assets, causing us to record impairments; any damage to our
reputation or brand image; the limitation of our ability to use our
net operating loss carryforwards and certain other tax attributes
to offset future taxable income for U.S. federal income tax
purposes; the costs of compliance with extensive government
regulation of the airline industry; costs, liabilities and risks
associated with environmental regulation and climate change; our
inability to accept or integrate new aircraft into our fleet as
planned; the impacts of our significant amount of financial
leverage from fixed obligations, the possibility we may seek
material amounts of additional financial liquidity in the
short-term and the impacts of insufficient liquidity on our
financial condition and business; failure to comply with the
covenants in the MileagePlus financing agreements, resulting in the
possible acceleration of the MileagePlus indebtedness, foreclosure
upon the collateral securing the MileagePlus indebtedness or the
exercise of other remedies; failure to comply with financial and
other covenants governing our other debt; changes in, or failure to
retain, our senior management team or other key employees; current
or future litigation and regulatory actions, or failure to comply
with the terms of any settlement, order or arrangement relating to
these actions; increases in insurance costs or inadequate insurance
coverage; and other risks and uncertainties set forth under Part I,
Item 1A., "Risk Factors," of our Annual Report on Form 10-K for the
fiscal year ended December 31, 2020,
as well as other risks and uncertainties set forth from time to
time in the reports we file with the U.S. Securities and Exchange
Commission.
-tables attached-
UNITED AIRLINES
HOLDINGS, INC
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
|
|
|
|
Three Months Ended
March 31,
|
|
%
Increase/
(Decrease)
|
|
(In millions, except
per share data)
|
|
2021
|
|
2020
|
|
|
Operating
revenue:
|
|
|
|
|
|
|
|
Passenger
revenue
|
|
$
|
2,316
|
|
|
$
|
7,065
|
|
|
(67.2)
|
|
|
Cargo
|
|
497
|
|
|
264
|
|
|
88.3
|
|
|
Other operating
revenue
|
|
408
|
|
|
650
|
|
|
(37.2)
|
|
|
Total operating
revenue
|
|
3,221
|
|
|
7,979
|
|
|
(59.6)
|
|
|
|
|
|
|
|
|
|
|
Operating
expense:
|
|
|
|
|
|
|
|
Salaries and related
costs
|
|
2,224
|
|
|
2,955
|
|
|
(24.7)
|
|
|
Aircraft
fuel
|
|
851
|
|
|
1,726
|
|
|
(50.7)
|
|
|
Depreciation and
amortization
|
|
623
|
|
|
615
|
|
|
1.3
|
|
|
Landing fees and other
rent
|
|
519
|
|
|
623
|
|
|
(16.7)
|
|
|
Regional capacity
purchase
|
|
479
|
|
|
737
|
|
|
(35.0)
|
|
|
Aircraft maintenance
materials and outside repairs
|
|
269
|
|
|
434
|
|
|
(38.0)
|
|
|
Distribution
expenses
|
|
85
|
|
|
295
|
|
|
(71.2)
|
|
|
Aircraft
rent
|
|
55
|
|
|
50
|
|
|
10.0
|
|
|
Special charges
(credits)
|
|
(1,377)
|
|
|
63
|
|
|
NM
|
|
Other operating
expenses
|
|
874
|
|
|
1,453
|
|
|
(39.8)
|
|
|
Total operating
expense
|
|
4,602
|
|
|
8,951
|
|
|
(48.6)
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
(1,381)
|
|
|
(972)
|
|
|
42.1
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
|
(353)
|
|
|
(171)
|
|
|
106.4
|
|
|
Interest
capitalized
|
|
17
|
|
|
21
|
|
|
(19.0)
|
|
|
Interest
income
|
|
7
|
|
|
26
|
|
|
(73.1)
|
|
|
Unrealized losses on
investments, net
|
|
(22)
|
|
|
(319)
|
|
|
(93.1)
|
|
|
Miscellaneous,
net
|
|
(19)
|
|
|
(699)
|
|
|
(97.3)
|
|
|
Total nonoperating
expense, net
|
|
(370)
|
|
|
(1,142)
|
|
|
(67.6)
|
|
|
|
|
|
|
|
|
|
|
Loss before income
tax benefit
|
|
(1,751)
|
|
|
(2,114)
|
|
|
(17.2)
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
(394)
|
|
|
(410)
|
|
|
(3.9)
|
|
|
Net loss
|
|
$
|
(1,357)
|
|
|
$
|
(1,704)
|
|
|
(20.4)
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share
|
|
$
|
(4.29)
|
|
|
$
|
(6.86)
|
|
|
(37.5)
|
|
|
Diluted weighted
average shares
|
|
316.6
|
|
|
248.5
|
|
|
27.4
|
|
|
|
|
|
|
|
|
|
|
NM Not
meaningful
|
|
|
|
|
|
|
|
UNITED AIRLINES
HOLDINGS, INC.
PASSENGER REVENUE INFORMATION AND STATISTICS
|
|
Passenger revenue
information is as follows (in millions, except for percentage
changes):
|
|
|
1Q 2021
Passenger
Revenue
|
|
Passenger
Revenue
vs.
1Q 2020
|
|
PRASM vs.
1Q 2020
|
|
Yield vs.
1Q 2020
|
|
Available
Seat Miles
vs.
1Q 2020
|
|
Available
Seat Miles
vs.
1Q 2019
|
|
1Q 2021
Available
Seat Miles
|
|
1Q 2021
Revenue
Passenger
Miles
|
Domestic
|
$
|
1,712
|
|
|
(62.0%)
|
|
(27.6%)
|
|
(21.1%)
|
|
(47.5%)
|
|
(48.6%)
|
|
18,871
|
|
|
12,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Atlantic
|
206
|
|
|
(80.8%)
|
|
(54.4%)
|
|
(33.6%)
|
|
(57.8%)
|
|
(59.3%)
|
|
4,329
|
|
|
2,031
|
|
Pacific
|
89
|
|
|
(87.1%)
|
|
(49.9%)
|
|
86.3%
|
|
(74.2%)
|
|
(81.6%)
|
|
2,013
|
|
|
380
|
|
Latin
America
|
309
|
|
|
(61.4%)
|
|
(48.0%)
|
|
(20.9%)
|
|
(25.7%)
|
|
(30.0%)
|
|
5,157
|
|
|
2,547
|
|
International
|
604
|
|
|
(76.4%)
|
|
(48.7%)
|
|
(15.7%)
|
|
(54.0%)
|
|
(60.2%)
|
|
11,499
|
|
|
4,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
$
|
2,316
|
|
|
(67.2%)
|
|
(34.2%)
|
|
(17.8%)
|
|
(50.2%)
|
|
(53.7%)
|
|
30,370
|
|
|
17,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select operating
statistics are as follows:
|
|
|
|
Three Months Ended
March 31,
|
|
%
Increase/
(Decrease)
|
|
|
|
2021
|
|
2020
|
|
|
Passengers
(thousands)
|
|
14,674
|
|
|
30,359
|
|
|
(51.7)
|
|
|
Revenue passenger
miles (millions)
|
|
17,248
|
|
|
43,229
|
|
|
(60.1)
|
|
|
Available seat miles
(millions)
|
|
30,370
|
|
|
60,938
|
|
|
(50.2)
|
|
|
Passenger load
factor:
|
|
|
|
|
|
|
|
Consolidated
|
|
56.8
|
%
|
|
70.9
|
%
|
|
(14.1)
|
|
pts.
|
Domestic
|
|
65.1
|
%
|
|
71.0
|
%
|
|
(5.9)
|
|
pts.
|
International
|
|
43.1
|
%
|
|
70.9
|
%
|
|
(27.8)
|
|
pts.
|
Passenger revenue per
available seat mile (cents)
|
|
7.63
|
|
|
11.59
|
|
|
(34.2)
|
|
|
Total revenue per
available seat mile (cents)
|
|
10.61
|
|
|
13.09
|
|
|
(18.9)
|
|
|
Average yield per
revenue passenger mile (cents)
|
|
13.43
|
|
|
16.34
|
|
|
(17.8)
|
|
|
Cargo revenue ton
miles (millions)
|
|
765
|
|
|
695
|
|
|
10.1
|
|
|
Aircraft in fleet at
end of period
|
|
1,320
|
|
|
1,388
|
|
|
(4.9)
|
|
|
Average stage length
(miles)
|
|
1,282
|
|
|
1,399
|
|
|
(8.4)
|
|
|
Employee headcount, as
of March 31 (in thousands)
|
|
84.1
|
|
|
95.2
|
|
|
(11.7)
|
|
|
Average aircraft fuel
price per gallon
|
|
$
|
1.74
|
|
|
$
|
1.90
|
|
|
(8.4)
|
|
|
Fuel gallons consumed
(millions)
|
|
490
|
|
|
910
|
|
|
(46.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: See
Part II, Item 6, Selected Financial Data, of UAL's Annual Report on
Form 10-K for the fiscal year ended December 31, 2020, for
definitions of these
statistics.
|
Core cash flow (burn): The company's management
views "core cash burn" or "core cash flow" as an important measure
in monitoring liquidity in order to assess the company's cash needs
without the impact of certain extraordinary actions or events, and
the company believes this provides useful information to investors
about the company's core operational performance.
(in millions except
for the number of days in the period)
|
Three Months Ended
March 31,
2021
|
Net cash provided by
operating activities
|
$
|
447
|
|
Cash flows used by
investing activities
|
(329)
|
|
Cash flows provided
by financing activities
|
1,278
|
|
|
1,396
|
|
Adjusted to
remove:
|
|
CARES Act Payroll
Support Program ("PSP") grant and note
|
2,610
|
|
Secured debt (net of
discount and fees)
|
600
|
|
Equity
issuances
|
532
|
|
Net proceeds from sale
of short-term and other investments and increase in certain
restricted cash balances
|
105
|
|
Total
adjustments
|
3,847
|
|
Cash Flow
(Burn)
|
$
|
(2,451)
|
|
Days in the
period
|
90
|
|
Average daily cash
flow (burn)
|
$
|
(27)
|
|
Further adjusted to
remove:
|
|
Debt principal and
severance payments (a)
|
(615)
|
|
Timing of certain
payments (b)
|
(152)
|
|
Capital expenditures,
net of flight equipment purchase deposit returns
|
(444)
|
|
Investments in the
recovery (c)
|
(396)
|
|
Total additional
adjustments
|
(1,607)
|
|
Cash flow
(burn)
|
$
|
(844)
|
|
Days in the
period
|
90
|
|
Average daily core
cash flow (burn)
|
$
|
(9)
|
|
|
|
(a) Debt principal
payments and severance includes principal payments on indebtedness,
payments related to the workforce reduction and voluntary plans for
employee severance, pay continuance from voluntary retirements,
vacation payouts and benefits-related costs.
|
(b) Timing of certain
payments refers to exclusion of payments in the quarter that had
been deferred from prior periods or additions of payments that were
deferred to a future period to maximize cash
preservation.
|
(c) Investments
in the recovery primarily include, but are not limited to, spending
on engine and airframe maintenance and pay and benefits for
recalled employees in excess of operational need due to
PSP.
|
UNITED AIRLINES HOLDINGS, INC.
NON-GAAP
FINANCIAL RECONCILIATION
UAL evaluates its financial performance utilizing various
accounting principles generally accepted in the United States of America (GAAP) and
Non-GAAP financial measures, including adjusted earnings before
interest, taxes, depreciation and amortization (adjusted EBITDA),
adjusted operating income (loss), adjusted operating margin,
adjusted pre-tax income (loss), adjusted pre-tax margin, adjusted
net income (loss), adjusted diluted earnings (loss) per share and
CASM, excluding special charges, third-party business expenses,
fuel, and profit sharing, among others. UAL believes that adjusting
for special charges (credits) and for nonoperating credit losses
and nonoperating special termination benefits is useful to
investors because these items are not indicative of UAL's ongoing
performance. UAL believes that adjusting for unrealized (gains)
losses on investments, net is useful to investors because those
unrealized gains or losses may not ultimately be realized on a cash
basis.
CASM is a common metric used in the airline industry to measure
an airline's cost structure and efficiency. UAL reports CASM
excluding special charges (credits), third-party business expenses,
fuel and profit sharing. UAL believes that adjusting for special
charges (credits) is useful to investors because special charges
(credits) are not indicative of UAL's ongoing performance. UAL also
believes that excluding third-party business expenses, such as
maintenance, ground handling and catering services for third
parties, provides more meaningful disclosure because these expenses
are not directly related to UAL's core business. UAL also believes
that excluding fuel costs from certain measures is useful to
investors because it provides an additional measure of management's
performance excluding the effects of a significant cost item over
which management has limited influence. UAL excludes profit sharing
because this exclusion allows investors to better understand and
analyze our operating cost performance and provides a more
meaningful comparison of our core operating costs to the airline
industry.
Reconciliations of reported non-GAAP financial measures to the
most directly comparable GAAP financial measures are included
below.
|
|
Three Months Ended
March 31,
|
|
%
Increase/
(Decrease)
|
|
|
2021
|
|
2020
|
|
CASM
(cents)
|
|
|
|
|
|
|
Cost per available
seat mile (CASM) (GAAP)
|
|
15.15
|
|
|
14.69
|
|
|
3.1
|
|
Special charges
(credits)
|
|
(4.54)
|
|
|
0.10
|
|
|
NM
|
Third-party business
expenses
|
|
0.09
|
|
|
0.08
|
|
|
12.5
|
|
Fuel
expense
|
|
2.80
|
|
|
2.83
|
|
|
(1.1)
|
|
Profit
sharing
|
|
—
|
|
|
—
|
|
|
NM
|
CASM, excluding
special charges, third-party business expenses, fuel, and profit
sharing (Non-GAAP)
|
|
16.80
|
|
|
11.68
|
|
|
43.8
|
|
|
Adjusted
EBITDA
|
Three Months Ended
March 31,
|
|
Twelve Months
Ended
December 31,
|
|
2021
|
|
|
2019
|
|
2020
|
|
2019
|
Net income
(loss)
|
$
|
(1,357)
|
|
|
|
$
|
292
|
|
|
$
|
(7,069)
|
|
|
3,009
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
623
|
|
|
|
547
|
|
|
2,488
|
|
|
2,288
|
|
Interest expense, net
of capitalized interest and interest income
|
329
|
|
|
|
137
|
|
|
942
|
|
|
513
|
|
Income tax expense
(benefit)
|
(394)
|
|
|
|
75
|
|
|
(1,753)
|
|
|
905
|
|
Special charges
(credits)
|
(1,377)
|
|
|
|
18
|
|
|
(2,616)
|
|
|
246
|
|
Nonoperating special
termination benefits and settlement losses
|
46
|
|
|
|
—
|
|
|
687
|
|
|
—
|
|
Nonoperating
unrealized (gains) losses on investments, net
|
22
|
|
|
|
(17)
|
|
|
194
|
|
|
(153)
|
|
Nonoperating credit
loss on BRW term loan and guarantee
|
—
|
|
|
|
—
|
|
|
697
|
|
|
—
|
|
Adjusted EBITDA,
excluding operating and nonoperating special charges (credits)
and unrealized losses on investments
|
$
|
(2,108)
|
|
|
|
$
|
1,052
|
|
|
$
|
(6,430)
|
|
|
$
|
6,808
|
|
Adjusted EBITDA
margin
|
(65.4)
|
%
|
|
|
11.0
|
%
|
|
(41.9)
|
%
|
|
15.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM Not
Meaningful
|
UNITED AIRLINES HOLDINGS, INC.
NON-GAAP
FINANCIAL RECONCILIATION (Continued)
UAL believes that adjusting capital expenditures for assets
acquired through the issuance of debt, finance leases and other
financial liabilities is useful to investors in order to
appropriately reflect the total amounts spent on capital
expenditures. UAL also believes that adjusting net cash provided by
operating activities for capital expenditures, adjusted capital
expenditures, and aircraft operating lease additions is useful to
allow investors to evaluate the company's ability to generate cash
that is available for debt service or general corporate
initiatives.
|
Three Months Ended
March 31,
|
|
Capital
Expenditures (in millions)
|
2021
|
|
2020
|
|
Capital expenditures,
net of flight equipment purchase deposit returns (GAAP)
|
$
|
444
|
|
|
$
|
1,959
|
|
|
Property and equipment
acquired through the issuance of debt, finance leases, and other
financial liabilities
|
509
|
|
|
128
|
|
|
Adjustment to property
and equipment acquired through other financial liabilities
(a)
|
(40)
|
|
|
—
|
|
|
Adjusted capital
expenditures (Non-GAAP)
|
$
|
913
|
|
|
$
|
2,087
|
|
|
|
|
|
|
|
Free Cash
Flow (in millions)
|
|
|
|
|
Net cash provided by
operating activities (GAAP)
|
$
|
447
|
|
|
$
|
63
|
|
|
Less capital
expenditures, net of flight equipment purchase deposit
returns
|
444
|
|
|
1,959
|
|
|
Free cash flow, net
of financings (Non-GAAP)
|
$
|
3
|
|
|
$
|
(1,896)
|
|
|
|
|
|
|
|
Net cash provided by
operating activities (GAAP)
|
$
|
447
|
|
|
$
|
63
|
|
|
Less adjusted capital
expenditures (Non-GAAP)
|
913
|
|
|
2,087
|
|
|
Less aircraft
operating lease additions
|
142
|
|
|
21
|
|
|
Free cash flow
(Non-GAAP)
|
$
|
(608)
|
|
|
$
|
(2,045)
|
|
|
|
|
|
|
|
(a) United entered
into agreements with third parties to finance through sale and
leaseback transactions new Boeing model 787-9 aircraft and Boeing
model 737 MAX aircraft subject to purchase agreements between
United and Boeing. 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. Ten Boeing model aircraft were delivered in 2021
under these transactions (and each is presently subject to a
long-term lease to United). Upon delivery, the company accounted
for the aircraft, which have a repurchase option at a price other
than fair value, as part of Flight equipment on the company's
balance sheet and the related obligation as Other current
liabilities and Other financial liabilities from sale-leasebacks
(noncurrent) since they do not qualify for sale recognition. If the
repurchase option is not exercised, these aircraft will be
accounted for as leased assets at the time of the option expiration
and the related assets and liabilities will be adjusted to the
present value of the remaining lease payments at that time. This
adjustment reflects the difference between the recorded amounts and
the present value of future lease payments at inception.
|
UNITED AIRLINES
HOLDINGS, INC.
NON-GAAP FINANCIAL RECONCILIATION (Continued)
|
|
|
Three Months Ended
March 31,
|
|
Increase/
(Decrease)
|
|
%
Increase/
(Decrease)
|
(in
millions)
|
2021
|
|
2020
|
|
Operating expenses
(GAAP)
|
$
|
4,602
|
|
|
$
|
8,951
|
|
|
$
|
(4,349)
|
|
|
(48.6)
|
|
Special charges
(credits)
|
(1,377)
|
|
|
63
|
|
|
(1,440)
|
|
|
NM
|
Operating expenses,
excluding special charges
|
5,979
|
|
|
8,888
|
|
|
(2,909)
|
|
|
(32.7)
|
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
Third-party business
expenses
|
26
|
|
|
44
|
|
|
(18)
|
|
|
(40.9)
|
|
Fuel
expense
|
851
|
|
|
1,726
|
|
|
(875)
|
|
|
(50.7)
|
|
Adjusted operating
expenses (Non-GAAP)
|
$
|
5,102
|
|
|
$
|
7,118
|
|
|
$
|
(2,016)
|
|
|
(28.3)
|
|
|
|
|
|
|
|
|
|
Operating loss
(GAAP)
|
$
|
(1,381)
|
|
|
$
|
(972)
|
|
|
$
|
(409)
|
|
|
42.1
|
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
Special charges
(credits)
|
(1,377)
|
|
|
63
|
|
|
(1,440)
|
|
|
NM
|
Adjusted operating
loss (Non-GAAP)
|
$
|
(2,758)
|
|
|
$
|
(909)
|
|
|
$
|
(1,849)
|
|
|
203.4
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
(42.9)
|
%
|
|
(12.2)
|
%
|
|
(30.7)
|
|
|
pts.
|
Adjusted operating
margin (Non-GAAP)
|
(85.6)
|
%
|
|
(11.4)
|
%
|
|
(74.2)
|
|
|
pts.
|
|
|
|
|
|
|
|
|
Pre-tax loss
(GAAP)
|
$
|
(1,751)
|
|
|
$
|
(2,114)
|
|
|
$
|
(363)
|
|
|
(17.2)
|
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
Special charges
(credits)
|
(1,377)
|
|
|
63
|
|
|
(1,440)
|
|
|
NM
|
Special
termination benefits
|
46
|
|
|
—
|
|
|
46
|
|
|
NM
|
Unrealized losses on
investments, net
|
22
|
|
|
319
|
|
|
(297)
|
|
|
NM
|
Credit loss on BRW
term loan and guarantee
|
—
|
|
|
697
|
|
|
(697)
|
|
|
NM
|
Adjusted pre-tax loss
(Non-GAAP)
|
$
|
(3,060)
|
|
|
$
|
(1,035)
|
|
|
$
|
2,025
|
|
|
195.7
|
|
|
|
|
|
|
|
|
|
Pre-tax
margin
|
(54.4)
|
%
|
|
(26.5)
|
%
|
|
(27.9)
|
|
|
pts.
|
Adjusted pre-tax
margin (Non-GAAP)
|
(95.0)
|
%
|
|
(13.0)
|
%
|
|
(82.0)
|
|
|
pts.
|
|
|
|
|
|
|
|
|
Net loss
(GAAP)
|
$
|
(1,357)
|
|
|
$
|
(1,704)
|
|
|
$
|
(347)
|
|
|
(20.4)
|
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
Special charges
(credits)
|
(1,377)
|
|
|
63
|
|
|
(1,440)
|
|
|
NM
|
Special
termination benefits
|
46
|
|
|
—
|
|
|
46
|
|
|
NM
|
Unrealized losses on
investments, net
|
22
|
|
|
319
|
|
|
(297)
|
|
|
NM
|
Credit loss on BRW
term loan and guarantee
|
—
|
|
|
697
|
|
|
(697)
|
|
|
NM
|
Income tax expense
(benefit) related to adjustments above, net of valuation
allowance
|
291
|
|
|
(14)
|
|
|
305
|
|
|
NM
|
Adjusted net loss
(Non-GAAP)
|
$
|
(2,375)
|
|
|
$
|
(639)
|
|
|
$
|
1,736
|
|
|
271.7
|
|
|
|
|
|
|
|
|
|
Diluted loss
per share (GAAP)
|
$
|
(4.29)
|
|
|
$
|
(6.86)
|
|
|
$
|
(2.57)
|
|
|
(37.5)
|
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
Special charges
(credits)
|
(4.35)
|
|
|
0.25
|
|
|
(4.60)
|
|
|
NM
|
Special
termination benefits
|
0.15
|
|
|
—
|
|
|
0.15
|
|
|
NM
|
Unrealized (gains)
losses on investments, net
|
0.07
|
|
|
1.29
|
|
|
(1.22)
|
|
|
NM
|
Credit loss on BRW
term loan and guarantee
|
—
|
|
|
2.81
|
|
|
(2.81)
|
|
|
NM
|
Income tax expense
(benefit) related to adjustments, net of valuation
allowance
|
0.92
|
|
|
(0.06)
|
|
|
0.98
|
|
|
NM
|
Adjusted diluted loss
per share (Non-GAAP)
|
$
|
(7.50)
|
|
|
$
|
(2.57)
|
|
|
$
|
4.93
|
|
|
191.8
|
|
NM Not
Meaningful
|
UNITED AIRLINES
HOLDINGS, INC
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
|
(In
millions)
|
March 31,
2021
|
|
December 31,
2020
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
12,666
|
|
|
$
|
11,269
|
|
Short-term
investments
|
309
|
|
|
414
|
|
Restricted
cash
|
254
|
|
|
255
|
|
Receivables, less
allowance for credit losses (2021 — $74; 2020 — $78)
|
1,389
|
|
|
1,295
|
|
Aircraft fuel, spare
parts and supplies, less obsolescence allowance (2021 — $502; 2020
— $478)
|
918
|
|
|
932
|
|
Prepaid expenses and
other
|
483
|
|
|
635
|
|
Total current
assets
|
16,019
|
|
|
14,800
|
|
|
|
|
|
Total operating
property and equipment, net
|
31,915
|
|
|
31,466
|
|
Operating lease
right-of-use assets
|
4,516
|
|
|
4,537
|
|
|
|
|
|
Other
assets:
|
|
|
|
Goodwill
|
4,527
|
|
|
4,527
|
|
Intangibles, less
accumulated amortization (2021 — $1,507; 2020 — $1,495)
|
2,840
|
|
|
2,838
|
|
Restricted
cash
|
218
|
|
|
218
|
|
Deferred income
taxes
|
520
|
|
|
131
|
|
Investments in
affiliates and other, less allowance for credit losses (2021 —
$526; 2020 — $522)
|
1,107
|
|
|
1,031
|
|
Total other
assets
|
9,212
|
|
|
8,745
|
|
Total
assets
|
$
|
61,662
|
|
|
$
|
59,548
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
1,838
|
|
|
$
|
1,595
|
|
Accrued salaries and
benefits
|
2,267
|
|
|
1,960
|
|
Advance ticket
sales
|
5,502
|
|
|
4,833
|
|
Frequent flyer
deferred revenue
|
1,251
|
|
|
908
|
|
Current maturities of
long-term debt
|
1,783
|
|
|
1,911
|
|
Current maturities of
operating leases
|
623
|
|
|
612
|
|
Current maturities of
finance leases
|
179
|
|
|
182
|
|
Other
|
724
|
|
|
724
|
|
Total current
liabilities
|
14,167
|
|
|
12,725
|
|
|
|
|
|
Long-term liabilities
and deferred credits:
|
|
|
|
Long-term
debt
|
25,849
|
|
|
24,836
|
|
Long-term obligations
under operating leases
|
4,985
|
|
|
4,986
|
|
Long-term obligations
under finance leases
|
240
|
|
|
224
|
|
Frequent flyer
deferred revenue
|
4,858
|
|
|
5,067
|
|
Pension
liability
|
2,478
|
|
|
2,460
|
|
Postretirement benefit
liability
|
1,013
|
|
|
994
|
|
Other financial
liabilities from sale-leasebacks
|
1,568
|
|
|
1,140
|
|
Other
|
1,298
|
|
|
1,156
|
|
Total long-term
liabilities and deferred credits
|
42,289
|
|
|
40,863
|
|
Total stockholders'
equity
|
5,206
|
|
|
5,960
|
|
Total liabilities and
stockholders' equity
|
$
|
61,662
|
|
|
$
|
59,548
|
|
UNITED AIRLINES
HOLDINGS, INC.
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(UNAUDITED)
|
|
(In
millions)
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
Cash Flows from
Operating Activities:
|
|
|
|
Net cash provided by
operating activities
|
$
|
447
|
|
|
$
|
63
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital
expenditures
|
(444)
|
|
|
(1,959)
|
|
Purchases of short-term
and other investments
|
—
|
|
|
(541)
|
|
Proceeds from sale of
short-term and other investments
|
105
|
|
|
927
|
|
Other, net
|
10
|
|
|
1
|
|
Net cash used in
investing activities
|
(329)
|
|
|
(1,572)
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Proceeds from issuance
of debt, net of discounts and fees
|
1,336
|
|
|
2,813
|
|
Proceeds from equity
issuance
|
532
|
|
|
—
|
|
Payments of long-term
debt, finance leases and other financing liabilities
|
(569)
|
|
|
(253)
|
|
Repurchases of common
stock
|
—
|
|
|
(353)
|
|
Other, net
|
(21)
|
|
|
(18)
|
|
Net cash provided by
financing activities
|
1,278
|
|
|
2,189
|
|
Net increase in cash,
cash equivalents and restricted cash
|
1,396
|
|
|
680
|
|
Cash, cash
equivalents and restricted cash at beginning of the
period
|
11,742
|
|
|
2,868
|
|
Cash, cash
equivalents and restricted cash at end of the period (a)
|
$
|
13,138
|
|
|
$
|
3,548
|
|
|
|
|
|
Investing and
Financing Activities Not Affecting Cash:
|
|
|
|
Property and equipment
acquired through the issuance of debt, finance leases and
other
|
$
|
509
|
|
|
$
|
128
|
|
Lease modifications and
lease conversions
|
22
|
|
|
439
|
|
Right-of-use assets
acquired through operating leases
|
180
|
|
|
30
|
|
Warrants received for
entering into agreements with Archer Aviation Inc
("Archer")
|
81
|
|
|
—
|
|
UNITED AIRLINES
HOLDINGS, INC.
NOTES (UNAUDITED)
|
|
Special charges
(credits) and unrealized losses on investments, net include the
following:
|
|
|
|
Three Months Ended
March 31,
|
(In
millions)
|
|
2021
|
|
2020
|
Operating:
|
|
|
|
|
CARES Act
grant
|
|
$
|
(1,810)
|
|
|
$
|
—
|
|
Severance and benefit
costs
|
|
417
|
|
|
—
|
|
Impairment of
assets
|
|
—
|
|
|
50
|
|
(Gains) losses on
sale of assets and other special charges
|
|
16
|
|
|
13
|
|
Total operating special charges (credits)
|
|
(1,377)
|
|
|
63
|
|
|
|
|
|
|
Nonoperating special
termination benefits
|
|
46
|
|
|
—
|
|
Nonoperating
unrealized losses on investments, net
|
|
22
|
|
|
319
|
|
Nonoperating credit
loss on BRW Aviation Holding LLC and BRW Aviation LLC ("BRW") term
loan and related guarantee
|
|
—
|
|
|
697
|
|
Total nonoperating
special charges and unrealized losses on investments,
net
|
|
68
|
|
|
1,016
|
|
Total operating and
nonoperating special charges (credits) and unrealized losses on
investments, net
|
|
(1,309)
|
|
|
1,079
|
|
Income tax expense
(benefit), net of valuation allowance
|
|
291
|
|
|
(14)
|
|
Total operating and non-operating special charges (credits) and
unrealized losses on investments, net of income taxes
|
|
$
|
(1,018)
|
|
|
$
|
1,065
|
|
CARES Act grant. During the three months ended March 31, 2021, the company received
approximately $2.6 billion in
funding pursuant to the Payroll Support Agreement (the "PSP2
Agreement") with the U.S. Treasury Department, which included
a $753 million unsecured loan. The company recorded
$1.8 billion as grant income and
$47 million for warrants issued to Treasury as part of the
PSP2 Agreement, within stockholders' equity, as an offset to the
grant income.
Severance and benefit costs: During the three months ended
March 31, 2021, the company recorded
$417 million related to pay
continuation and benefits-related costs provided to employees who
chose to voluntary separate from the company. The company offered,
based on employee group, age and completed years of service, pay
continuation, health care coverage, and travel benefits.
Approximately 4,500 employees elected to voluntary separate from
the company.
Impairment of assets: Impairment of assets. In February 2021, the company voluntarily and
temporarily removed all 52 Boeing 777-200/200ER aircraft powered by
Pratt & Whitney 4000 series engines from its schedule due to an
engine failure incident with one of its aircraft. The company
viewed this incident as an indicator of potential impairment.
Accordingly, as required under relevant accounting standards,
United performed forecasted cash flow analyses and determined that
the carrying value of the Boeing 777-200/200ER fleet is recoverable
from future cash flows expected to be generated by that fleet and,
consequently, no impairment was recorded.
During the three months ended March 31,
2020, the company recorded a $50 million impairment for
its China routes which was
primarily caused by the COVID-19 pandemic and the company's
subsequent suspension of flights to China.
Gains (loss) on sale of other assets and other special charges::
During the three months ended March 31,
2021, the company recorded $16
million of net charges, driven by charges for the
termination of the lease associated with three floors of its
headquarters at the Willis Tower in Chicago and utility charges related to the
February winter storms in Texas,
partially offset by net gains, primarily on sale-leaseback
transactions.
During the three months ended March 31,
2020, the company recorded a $10
million one-time special charge related to the wind-down of
the capacity purchase agreement with Trans States Airlines, LLC and
$3 million for costs related to the
transition of fleet types within other regional carrier
contracts.
Nonoperating credit loss on BRW term loan and related guarantee:
During the three months ended March 31,
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. BRW's equity and BRW's holdings of Avianca
Holdings S.A.'s ("AVH") equity are secured as a pledge under the
BRW Term Loan, which is currently in default.
Nonoperating special termination benefits. During the three
months ended March 31, 2021, as part
of first quarter voluntary separation leave programs, the company
recorded $46 million of special
termination benefits in the form of additional subsidies for
retiree medical costs for certain U.S. based front-line employees.
The subsidies are in the form of additional subsidies for retiree
medical costs as a one-time contribution into the employee's
Retiree Health Account of $125,000
for full-time employees and $75,000
for part-time employees.
Unrealized losses on investments, net: During the three months
ended March 31, 2021, the company
recorded losses of $22 million
primarily for the decrease in the market value of its investment in
Azul Linhas Aéreas Brasileiras S.A. ("Azul").
During the three months ended March 31,
2020, the company recorded losses of $319 million primarily for the $293 million decrease in the market value of its
investment in Azul and $24 million
for the decrease in fair value of the AVH share call options, AVH
share appreciation rights, and AVH share-based upside sharing
agreement that United obtained as part of the BRW Term Loan and
related agreements with Kingsland Holdings Limited.
Effective tax rate
The company's effective tax rate for the three months ended
March 31, 2021 and March 31, 2020 was 22.5% and 19.4%, 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. The first quarter 2020 rate was impacted by a
$66 million valuation allowance related to unrealized capital
losses.
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SOURCE United Airlines