CHICAGO, July 20, 2021 /PRNewswire/ -- United Airlines
(UAL) today announced second-quarter 2021 financial results. The
company now expects positive adjusted pre-tax income¹ in the third
and fourth quarters of 2021 as travel demand rebounds.
The company's second quarter performance largely exceeded
original expectations as international long haul and business
travel accelerated even faster than anticipated, together with
continued yield improvement. Looking ahead, the company expects
continued gains as more businesses return by end of summer and into
2022, with a full recovery in demand anticipated by 2023.
"Thanks to the professionalism and perseverance of the United
employees who have worked so hard to take care of our customers
through the pandemic, our airline has reached a meaningful turning
point: we're expecting to be back to making a profit once again,"
said United Airlines CEO Scott
Kirby. "As we emerge from the most disruptive crisis our
company has faced, we're now focused squarely on our United Next
strategy that will transform our customers' onboard experience and
help fulfill United's incredible potential."
*For purposes of this
release, profitability refers to positive adjusted pre-tax income,
which is a non-GAAP financial measure calculated as pre-tax income
excluding special charges (credits), unrealized gains and losses on
investments, net. We are not providing a target for or a
reconciliation to pre-tax income, the most directly comparable GAAP
measure, because we are unable to predict certain items contained
in the GAAP measure without unreasonable efforts.
|
Second Quarter Financial Results
- Reported second quarter 2021 capacity down 46% compared to
second quarter 2019.
- Reported second quarter 2021 net loss of $0.4 billion, adjusted net loss3 of
$1.3 billion.
- Reported second quarter 2021 total operating revenue of
$5.5 billion, down 52% compared to
second quarter 2019.
- Reported second quarter 2021 Total Revenue per Available Seat
Mile (TRASM) of down 11.3% compared to second quarter 2019.
- Reported second quarter 2021 operating expenses down 42%, down
32% excluding special charges (credits)4, compared to
second quarter 2019.
- Reported second quarter 2021 pre-tax margin of negative 10.3%,
negative 29.2% on an adjusted5 basis.
- Reported second quarter 2021 adjusted Earnings Before Interest,
Taxes, Depreciation and Amortization (EBITDA) margin6 of
negative 10.7%.
- Raised secured financing collateralized by substantially all of
United's network of slots, routes, and gates — made up of
$4 billion in a private offering of
bonds, a $5 billion term loan, and a
$1.75 billion revolving credit
facility. This is a first of its kind financing and the largest
non-merger financing transaction in airline history.
- Reported second quarter 2021 ending available
liquidity7 of approximately $23
billion.
Outlook
- Expects third quarter 2021 capacity to be down around 26%
compared to third quarter 2019, up 39% quarter over quarter.
- Based on current trends, the company expects third quarter 2021
TRASM growth to be positive compared to the third quarter 2019, the
first quarter of positive TRASM growth since the second quarter of
2020.
- Expects third quarter 2021 cost per available seat mile,
excluding fuel, profit sharing, third-party business expenses, and
special charges (CASM-ex)2 to be up approximately 17%
compared to third quarter 2019 (includes a 6-point headwind largely
driven by lower stage length and lower gauge of our network,
including the temporary grounding of 52 Boeing Pratt & Whitney
powered 777 widebody aircraft).
- Third quarter 2021 estimated fuel price of approximately
$2.17 per gallon.
- Expects third quarter 2021 adjusted pre-tax income1
to be positive, the first quarter of positive adjusted pre-tax
income since fourth quarter 2019. Additionally, expects fourth
quarter 2021 adjusted pre-tax income1 to be
positive.
- Expects 2022 cost per available seat mile, excluding fuel,
profit sharing, third-party business expenses, and special charges
(CASM-ex)2 to be lower than 2019.
Key Highlights
- Announced the purchase of 270 new Boeing and Airbus aircraft –
the largest combined order in the airline's history and the biggest
by an individual carrier in the last decade.
- As part of "United Next" announced plans to retrofit 100% of
the mainline, narrow-body fleet to transform the customer
experience and create a new signature interior with a roughly 75%
increase in premium seats per departure, larger overhead bins,
seatback entertainment in every seat and the industry's fastest
available WiFi.
- Established a new diversity goal by striving to have 50% of
students at the new United Aviate Academy be women and people of
color.
- Launched the first-of-its-kind Eco-Skies Alliance℠ program
through which corporate customers contributed to the purchase of
approximately 3.4 million gallons of sustainable aviation fuel
(SAF) in 2021.
- Entered into a commercial agreement with Denver-based aerospace company Boom Supersonic
to add aircraft to United's global fleet as well as a cooperative
sustainability initiative — a move that facilitates a leap forward
in returning supersonic speeds to aviation.
- Provided customers the ability to schedule COVID-19 tests and
have results reviewed in advance through United's industry-leading
Travel-Ready Center.
- Teamed up with more than a dozen new environmental, nonprofit
partners to strengthen the company's sustainability commitment to
become 100% green by reducing its greenhouse gas emissions 100% by
2050.
- Launched a new, corporate venture fund – United Airlines
Ventures – which will allow the airline to continue investing in
emerging companies that have the potential to influence the future
of travel.
- Offered loyalty program members the chance to win free flights
for a year's worth of travel through "Your Shot to Fly" sweepstakes
to encourage COVID-19 vaccinations in support of the Biden
administration's national effort to encourage people to get
vaccinated.
- Announced a first-of-its-kind collaboration to use Abbott's
BinaxNOW™ COVID-19 Home Test and Abbott's NAVICA app to help make
the international travel experience more seamless.
Taking Care of Our Customers
- Introduced three new promotions that let eligible MileagePlus®
Premier® members "Pick Your Path" depending on their upcoming
travel plan giving members the chance to fast track their Premier
status or earn bonus miles.
- Expanded beer, wine, and snacks to nearly all flights over two
hours including new options like White Claw® Hard Seltzer,
Breckenridge Brewery Juice Drop Hazy IPA, and Kona Brewing Co. Big
Wave Golden Ale.
Reimagining the Route Network
- Announced seven new domestic routes and three new international
routes and launched 39 domestic routes and five international
routes, with 10 more international routes planned to launch in
2021.
- New route announcements included Dubrovnik, Croatia to Newark/New York; Athens, Greece to Washington, D.C.; and Reykjavik, Iceland to Chicago.
- New route launches included two new long-haul international
routes from Accra, Ghana to
Washington, DC, and Johannesburg, South Africa to Newark/New York, and three new routes to
Hawaii including Maui/Kahului
to Newark/New York, Honolulu to Orange
County, and Kona to Chicago.
- Resumed nonstop service on 33 domestic routes and 14
international routes compared to the first quarter of 2021.
- Compared to March 2021, United
had nonstop service in 55 more domestic and 24 more international
routes in June 2021.
- Announced plans to fly roughly 80% of its full schedule in
July 2021 compared to July 2019.
Assisting the Communities We Serve
- Announced a program with the Golden State Warriors to launch
the Franchise Fund, a program designed to support minority-owned
Bay Area small businesses.
- More than 5 million miles donated from United's customers to
charities in need of travel through United's Miles on a Mission
program.
- Over 18,200 pounds of food and beverages ($66,400 value) donated to local food banks.
- Over $326,000 raised for Airlink,
World Central Kitchen, Americares, and Global Giving via
CrowdRising to support COVID-19 relief efforts in India, including a $40,000 donation by United Airlines.
Additional Noteworthy Accomplishments
- Celebrated the 40th anniversary of the MileagePlus program by
giving away 4 million miles to essential healthcare workers.
- Recently redesigned United mobile app was voted the Best Travel
App in the 25th annual Webby Awards.
- Joined forces with Chase and Visa to offer eligible United
MileagePlus Visa cardmembers the ability to earn five total miles
for every dollar donated to select charities supporting the LGBTQ+
community.
- Became the first corporation in at least five years to be
presented with the "Volunteer Group of the Year" award from Food
Bank of the Rockies. Also, helped Food Bank of the Rockies raise
the equivalent of 30,400 meals via a fundraiser.
- In the second quarter of 2021, through a combination of
cargo-only flights and passenger flights, United has transported
nearly 298 million pounds of freight, which includes nearly 48
million pounds of vital shipments, such as medical kits, PPE,
pharmaceuticals, and medical equipment, and more than 765,000
pounds of military mail and packages.
- In the second quarter of 2021, there was an uptick in COVID-19
vaccine shipments, where United shipped 225,000 pounds of
vaccines.
_________________________________________________________________________
|
1. Adjusted pre-tax
income is a non-GAAP financial measure calculated as pre-tax income
excluding special charges (credits), unrealized (gains) losses on
investments, net. We are not providing a target for or a
reconciliation to pre-tax income, the most directly comparable GAAP
measure, because we are unable to predict certain items contained
in the GAAP measure without unreasonable efforts.
|
2. CASM-ex (adjusted
operating expense per available seat mile) is a non-GAAP measure
that excludes fuel, profit sharing, third-party business expense
and special charges. We are not providing a target or
reconciliation to CASM, the most directly comparable GAAP measure,
because we are unable to predict certain items contained in the
GAAP measure without unreasonable efforts.
|
3. Excludes special
charges (credits), unrealized (gains) losses on investments, net,
debt extinguishment and modification fees and special termination
benefits. Reconciliations of non-GAAP financial measures to the
most directly comparable GAAP measures are included in the tables
accompanying this release.
|
4. Excludes operating
special charges (credits). Reconciliations of non-GAAP financial
measures to the most directly comparable GAAP measures are included
in the tables accompanying this release. Second quarter 2019
operating expenses were $9.859 billion, excluding $71 million of
special charges.
|
5. Adjusted to
exclude special charges (credits), unrealized (gains) losses on
investments, net, debt extinguishment and modification fees and
special termination benefits. Reconciliations of non-GAAP financial
measures to the most directly comparable GAAP measures are included
in the tables accompanying this release.
|
6. 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. Reconciliations of
non-GAAP financial measures to the most directly comparable GAAP
measures are included in the tables accompanying this
release.
|
7. Includes cash,
cash equivalents, short-term investments and undrawn credit
facilities.
|
Earnings Call
UAL will hold a conference call to discuss second-quarter 2021
financial results as well as its financial and operational outlook
for the third-quarter 2021 and beyond, on Wednesday, July 21, 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 remainder of
2021, 2022 and 2023, 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 conditional statements, 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 significant 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,
potential tort liability and voluntary or mandatory operational
restrictions as a result of an accident, catastrophe or incident
involving us, our regional carriers, our codeshare partners, or
another airline; 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; the failure of
our significant investments in other airlines, equipment
manufacturers and other aviation industry participants to produce
the returns or results we expect; 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, as well as any
inability to accept or integrate new aircraft into our fleet as
planned; 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 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; 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 II, Item 1A.,
"Risk Factors," of our Quarterly Report on Form 10-Q for the
quarter ended June 30, 2021, 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
June 30,
|
|
%
Increase/
(Decrease)
|
|
|
Six Months
Ended
June 30,
|
|
%
Increase/
(Decrease)
|
|
(In millions, except
per share data)
|
|
2021
|
|
2020
|
|
|
|
2021
|
|
2020
|
|
|
Operating
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenue
|
|
$
|
4,366
|
|
|
$
|
681
|
|
|
541.1
|
|
|
|
$
|
6,682
|
|
|
$
|
7,746
|
|
|
(13.7)
|
|
|
Cargo
|
|
606
|
|
|
402
|
|
|
50.7
|
|
|
|
1,103
|
|
|
666
|
|
|
65.6
|
|
|
Other operating
revenue
|
|
499
|
|
|
392
|
|
|
27.3
|
|
|
|
907
|
|
|
1,042
|
|
|
(13.0)
|
|
|
Total operating
revenue
|
|
5,471
|
|
|
1,475
|
|
|
270.9
|
|
|
|
8,692
|
|
|
9,454
|
|
|
(8.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and related
costs
|
|
2,276
|
|
|
2,170
|
|
|
4.9
|
|
|
|
4,500
|
|
|
5,125
|
|
|
(12.2)
|
|
|
Aircraft
fuel
|
|
1,232
|
|
|
240
|
|
|
413.3
|
|
|
|
2,083
|
|
|
1,966
|
|
|
6.0
|
|
|
Depreciation and
amortization
|
|
620
|
|
|
618
|
|
|
0.3
|
|
|
|
1,243
|
|
|
1,233
|
|
|
0.8
|
|
|
Landing fees and other
rent
|
|
564
|
|
|
429
|
|
|
31.5
|
|
|
|
1,083
|
|
|
1,052
|
|
|
2.9
|
|
|
Regional capacity
purchase
|
|
547
|
|
|
388
|
|
|
41.0
|
|
|
|
1,026
|
|
|
1,125
|
|
|
(8.8)
|
|
|
Aircraft maintenance
materials and outside repairs
|
|
302
|
|
|
110
|
|
|
174.5
|
|
|
|
571
|
|
|
544
|
|
|
5.0
|
|
|
Distribution
expenses
|
|
139
|
|
|
31
|
|
|
348.4
|
|
|
|
224
|
|
|
326
|
|
|
(31.3)
|
|
|
Aircraft
rent
|
|
52
|
|
|
47
|
|
|
10.6
|
|
|
|
107
|
|
|
97
|
|
|
10.3
|
|
|
Special charges
(credits)
|
|
(948)
|
|
|
(1,449)
|
|
|
NM
|
|
|
|
(2,325)
|
|
|
(1,386)
|
|
|
NM
|
|
|
Other operating
expenses
|
|
957
|
|
|
528
|
|
|
81.3
|
|
|
|
1,831
|
|
|
1,981
|
|
|
(7.6)
|
|
|
Total operating
expense
|
|
5,741
|
|
|
3,112
|
|
|
84.5
|
|
|
|
10,343
|
|
|
12,063
|
|
|
(14.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
(270)
|
|
|
(1,637)
|
|
|
(83.5)
|
|
|
|
(1,651)
|
|
|
(2,609)
|
|
|
(36.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(426)
|
|
|
(196)
|
|
|
117.3
|
|
|
|
(779)
|
|
|
(367)
|
|
|
112.3
|
|
|
Interest
capitalized
|
|
22
|
|
|
17
|
|
|
29.4
|
|
|
|
39
|
|
|
38
|
|
|
2.6
|
|
|
Interest
income
|
|
12
|
|
|
11
|
|
|
9.1
|
|
|
|
19
|
|
|
37
|
|
|
(48.6)
|
|
|
Unrealized gains
(losses) on investments, net
|
|
147
|
|
|
9
|
|
|
NM
|
|
|
|
125
|
|
|
(310)
|
|
|
NM
|
|
|
Miscellaneous,
net
|
|
(49)
|
|
|
(207)
|
|
|
(76.3)
|
|
|
|
(68)
|
|
|
(906)
|
|
|
(92.5)
|
|
|
Total nonoperating
expense, net
|
|
(294)
|
|
|
(366)
|
|
|
(19.7)
|
|
|
|
(664)
|
|
|
(1,508)
|
|
|
(56.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
tax benefit
|
|
(564)
|
|
|
(2,003)
|
|
|
(71.8)
|
|
|
|
(2,315)
|
|
|
(4,117)
|
|
|
(43.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
(130)
|
|
|
(376)
|
|
|
(65.4)
|
|
|
|
(524)
|
|
|
(786)
|
|
|
(33.3)
|
|
|
Net loss
|
|
$
|
(434)
|
|
|
$
|
(1,627)
|
|
|
(73.3)
|
|
|
|
$
|
(1,791)
|
|
|
$
|
(3,331)
|
|
|
(46.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share
|
|
$
|
(1.34)
|
|
|
$
|
(5.79)
|
|
|
(76.9)
|
|
|
|
$
|
(5.60)
|
|
|
$
|
(12.59)
|
|
|
(55.5)
|
|
|
Diluted weighted
average shares
|
|
323.6
|
|
|
280.7
|
|
|
15.3
|
|
|
|
320.1
|
|
|
264.6
|
|
|
21.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM Not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNITED AIRLINES
HOLDINGS, INC.
PASSENGER REVENUE
INFORMATION AND STATISTICS
|
|
Passenger revenue
information is as follows (in millions, except for percentage
changes):
|
|
|
2Q 2021
Passenger
Revenue
|
|
Passenger
Revenue
vs.
2Q 2020
|
|
PRASM vs.
2Q 2020
|
|
PRASM vs.
2Q 2019
|
|
Yield vs.
2Q 2020
|
|
Available
Seat Miles
vs.
2Q 2020
|
|
Available
Seat Miles
vs.
2Q 2019
|
|
2Q 2021
Available
Seat Miles
|
|
2Q 2021
Revenue
Passenger
Miles
|
Domestic
|
$
|
3,288
|
|
|
506.6%
|
|
57.0%
|
|
(15.7%)
|
|
(32.7%)
|
|
286.1%
|
|
(40.4%)
|
|
24,717
|
|
20,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Atlantic
|
323
|
|
|
466.7%
|
|
14.4%
|
|
(61.0%)
|
|
(35.2%)
|
|
396.3%
|
|
(57.0%)
|
|
6,065
|
|
2,827
|
Pacific
|
132
|
|
|
288.2%
|
|
42.7%
|
|
(48.8%)
|
|
13.8%
|
|
172.1%
|
|
(77.3%)
|
|
2,438
|
|
587
|
Latin
America
|
623
|
|
|
1,197.9%
|
|
(10.1%)
|
|
(23.4%)
|
|
(44.8%)
|
|
1,343.1%
|
|
(7.2%)
|
|
6,393
|
|
4,513
|
International
|
1,078
|
|
|
675.5%
|
|
33.3%
|
|
(41.6%)
|
|
(32.8%)
|
|
481.6%
|
|
(53.1%)
|
|
14,896
|
|
7,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
$
|
4,366
|
|
|
541.1%
|
|
45.0%
|
|
(23.0%)
|
|
(33.2%)
|
|
342.0%
|
|
(45.9%)
|
|
39,613
|
|
28,514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select operating
statistics are as follows:
|
|
|
|
Three Months Ended
June 30,
|
|
%
Increase/
(Decrease)
|
|
|
Six Months
Ended
June 30,
|
|
%
Increase/
(Decrease)
|
|
|
|
2021
|
|
2020
|
|
|
|
2021
|
|
2020
|
|
|
Passengers
(thousands)
|
|
23,909
|
|
|
2,813
|
|
|
749.9
|
|
|
|
38,583
|
|
|
33,172
|
|
|
16.3
|
|
|
Revenue passenger
miles (millions)
|
|
28,514
|
|
|
2,970
|
|
|
860.1
|
|
|
|
45,762
|
|
|
46,199
|
|
|
(0.9)
|
|
|
Available seat miles
(millions)
|
|
39,613
|
|
|
8,963
|
|
|
342.0
|
|
|
|
69,983
|
|
|
69,901
|
|
|
0.1
|
|
|
Passenger load
factor:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
72.0
|
%
|
|
33.1
|
%
|
|
38.9
|
|
pts.
|
|
65.4
|
%
|
|
66.1
|
%
|
|
(0.7)
|
|
pts.
|
Domestic
|
|
83.3
|
%
|
|
35.7
|
%
|
|
47.6
|
|
pts.
|
|
75.4
|
%
|
|
65.6
|
%
|
|
9.8
|
|
pts.
|
International
|
|
53.2
|
%
|
|
26.8
|
%
|
|
26.4
|
|
pts.
|
|
48.8
|
%
|
|
66.8
|
%
|
|
(18.0)
|
|
pts.
|
Passenger revenue per
available seat mile (cents)
|
|
11.02
|
|
|
7.60
|
|
|
45.0
|
|
|
|
9.55
|
|
|
11.08
|
|
|
(13.8)
|
|
|
Total revenue per
available seat mile (cents)
|
|
13.81
|
|
|
16.46
|
|
|
(16.1)
|
|
|
|
12.42
|
|
|
13.52
|
|
|
(8.1)
|
|
|
Average yield per
revenue passenger mile (cents)
|
|
15.31
|
|
|
22.93
|
|
|
(33.2)
|
|
|
|
14.60
|
|
|
16.77
|
|
|
(12.9)
|
|
|
Cargo revenue ton
miles (millions)
|
|
892
|
|
|
496
|
|
|
79.8
|
|
|
|
1,657
|
|
|
1,191
|
|
|
39.1
|
|
|
Aircraft in fleet at
end of period
|
|
1,315
|
|
|
1,307
|
|
|
0.6
|
|
|
|
1,315
|
|
|
1,307
|
|
|
0.6
|
|
|
Average stage length
(miles)
|
|
1,309
|
|
|
1,075
|
|
|
21.8
|
|
|
|
1,297
|
|
|
1,347
|
|
|
(3.7)
|
|
|
Employee headcount, as
of June 30 (in thousands) (a)
|
|
84.4
|
|
|
91.8
|
|
|
(8.1)
|
|
|
|
84.4
|
|
|
91.8
|
|
|
(8.1)
|
|
|
Average aircraft fuel
price per gallon
|
|
$
|
1.97
|
|
|
$
|
1.18
|
|
|
66.9
|
|
|
|
$
|
1.87
|
|
|
$
|
1.76
|
|
|
6.3
|
|
|
Fuel gallons consumed
(millions)
|
|
625
|
|
|
204
|
|
|
206.4
|
|
|
|
1,115
|
|
|
1,114
|
|
|
0.1
|
|
|
(a) The 2021 employee
headcount includes approximately 4,500 employees who participated
in the Company's voluntary leave programs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
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,
CASM, excluding special charges, third-party business expenses,
fuel, and profit sharing (CASM-ex), and operating expenses
excluding special charges, among others. UAL believes that
adjusting for special charges (credits), nonoperating debt
extinguishment and modification fees, nonoperating special
termination benefits and settlement losses and nonoperating credit
losses 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
June 30,
|
|
Six Months
Ended
June 30,
|
|
Year Ended
December 31,
|
|
|
2021
|
|
2020
|
|
2019
|
|
2021
|
|
2020
|
|
2019
|
|
2019
|
CASM
(cents)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost per available
seat mile (CASM) (GAAP)
|
|
14.49
|
|
|
34.72
|
|
|
13.56
|
|
|
14.78
|
|
|
17.26
|
|
|
13.70
|
|
|
13.67
|
Special charges
(credits)
|
|
(2.40)
|
|
|
(16.17)
|
|
|
0.10
|
|
|
(3.32)
|
|
|
(1.98)
|
|
|
0.07
|
|
|
0.09
|
Third-party business
expenses
|
|
0.08
|
|
|
0.65
|
|
|
0.05
|
|
|
0.08
|
|
|
0.15
|
|
|
0.05
|
|
|
0.06
|
Fuel
expense
|
|
3.11
|
|
|
2.68
|
|
|
3.26
|
|
|
2.97
|
|
|
2.81
|
|
|
3.17
|
|
|
3.14
|
Profit
sharing
|
|
—
|
|
|
—
|
|
|
0.22
|
|
|
—
|
|
|
—
|
|
|
0.14
|
|
|
0.17
|
CASM, excluding
special charges (credits), third-party business
expenses, fuel, and profit sharing
(Non-GAAP)
|
|
13.70
|
|
|
47.56
|
|
|
9.93
|
|
|
15.05
|
|
|
16.28
|
|
|
10.27
|
|
|
10.21
|
|
Adjusted
EBITDA
|
June
|
|
Three Months Ended
June 30,
|
|
Six Months
Ended June 30,
|
|
2021
|
|
2021
|
|
2020
|
|
2019
|
|
2021
|
|
2020
|
|
2019
|
Net income
(loss)
|
$
|
183
|
|
|
$
|
(434)
|
|
|
$
|
(1,627)
|
|
|
$
|
1,052
|
|
|
$
|
(1,791)
|
|
|
$
|
(3,331)
|
|
|
1,344
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
207
|
|
|
620
|
|
|
618
|
|
|
560
|
|
|
1,243
|
|
|
1,233
|
|
|
1,107
|
|
Interest expense, net
of capitalized interest and interest income
|
133
|
|
|
392
|
|
|
168
|
|
|
132
|
|
|
721
|
|
|
292
|
|
|
269
|
|
Income tax expense
(benefit)
|
41
|
|
|
(130)
|
|
|
(376)
|
|
|
302
|
|
|
(524)
|
|
|
(786)
|
|
|
377
|
|
Special charges
(credits)
|
(245)
|
|
|
(948)
|
|
|
(1,449)
|
|
|
71
|
|
|
(2,325)
|
|
|
(1,386)
|
|
|
89
|
|
Nonoperating
unrealized (gains) losses on investments, net
|
(107)
|
|
|
(147)
|
|
|
(9)
|
|
|
(34)
|
|
|
(125)
|
|
|
310
|
|
|
(51)
|
|
Nonoperating debt
extinguishment and modification fees
|
—
|
|
|
62
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|
—
|
|
|
—
|
|
Nonoperating special
termination benefits and settlement losses
|
—
|
|
|
—
|
|
|
231
|
|
|
—
|
|
|
46
|
|
|
231
|
|
|
—
|
|
Nonoperating credit
loss on BRW term loan and guarantee
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
697
|
|
|
—
|
|
Adjusted EBITDA,
excluding operating and
nonoperating special charges (credits) and
unrealized (gains) losses on investments
|
$
|
212
|
|
|
$
|
(585)
|
|
|
$
|
(2,444)
|
|
|
$
|
2,083
|
|
|
$
|
(2,693)
|
|
|
$
|
(2,740)
|
|
|
$
|
3,135
|
|
Adjusted EBITDA
margin
|
9.2
|
%
|
|
(10.7)
|
%
|
|
(165.7)
|
%
|
|
18.3
|
%
|
|
(31.0)
|
%
|
|
(29.0)
|
%
|
|
14.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
June 30,
|
|
Six Months
Ended
June 30,
|
Capital
Expenditures (in millions)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Capital expenditures,
net of flight equipment purchase deposit returns (GAAP)
|
$
|
861
|
|
|
$
|
39
|
|
|
$
|
1,305
|
|
|
$
|
1,998
|
|
Property and equipment
acquired through the issuance of debt, finance leases,
and other financial liabilities
|
252
|
|
|
498
|
|
|
761
|
|
|
626
|
|
Adjustment to property
and equipment acquired through other financial
liabilities (a)
|
26
|
|
|
(53)
|
|
|
(14)
|
|
|
(53)
|
|
Adjusted capital
expenditures (Non-GAAP)
|
$
|
1,139
|
|
|
$
|
484
|
|
|
$
|
2,052
|
|
|
$
|
2,571
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow (in millions)
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities (GAAP)
|
$
|
2,675
|
|
|
$
|
(130)
|
|
|
$
|
3,122
|
|
|
$
|
(67)
|
|
Less capital
expenditures, net of flight equipment purchase deposit
returns
|
861
|
|
|
39
|
|
|
1,305
|
|
|
1,998
|
|
Free cash flow, net
of financings (Non-GAAP)
|
$
|
1,814
|
|
|
$
|
(169)
|
|
|
$
|
1,817
|
|
|
$
|
(2,065)
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities (GAAP)
|
$
|
2,675
|
|
|
$
|
(130)
|
|
|
$
|
3,122
|
|
|
$
|
(67)
|
|
Less adjusted capital
expenditures (Non-GAAP)
|
1,139
|
|
|
484
|
|
|
2,052
|
|
|
2,571
|
|
Less aircraft
operating lease additions
|
33
|
|
|
12
|
|
|
175
|
|
|
33
|
|
Free cash flow
(Non-GAAP)
|
$
|
1,503
|
|
|
$
|
(626)
|
|
|
$
|
895
|
|
|
$
|
(2,671)
|
|
|
|
|
|
|
|
|
|
(a) United entered
into agreements with third parties to finance through sale and
leaseback transactions new Boeing model 787 aircraft and Boeing
model 737 MAX aircraft subject to purchase agreements between
United and Boeing. 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. Eleven 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
June 30,
|
|
Increase/
(Decrease)
|
|
%
Increase/
(Decrease)
|
|
Six Months
Ended
June 30,
|
|
Increase/
(Decrease)
|
|
%
Increase/
(Decrease)
|
(in
millions)
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
Operating expenses
(GAAP)
|
$
|
5,741
|
|
|
$
|
3,112
|
|
|
$
|
2,629
|
|
|
84.5
|
|
|
$
|
10,343
|
|
|
$
|
12,063
|
|
|
$
|
(1,720)
|
|
|
(14.3)
|
|
Special charges
(credits)
|
(948)
|
|
|
(1,449)
|
|
|
(501)
|
|
|
NM
|
|
|
(2,325)
|
|
|
(1,386)
|
|
|
939
|
|
|
NM
|
|
Operating expenses,
excluding special charges
(credits)
|
6,689
|
|
|
4,561
|
|
|
2,128
|
|
|
46.7
|
|
|
12,668
|
|
|
13,449
|
|
|
(781)
|
|
|
(5.8)
|
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-party business
expenses
|
30
|
|
|
58
|
|
|
(28)
|
|
|
(48.3)
|
|
|
56
|
|
|
102
|
|
|
(46)
|
|
|
(45.1)
|
|
Fuel
expense
|
1,232
|
|
|
240
|
|
|
992
|
|
|
413.3
|
|
|
2,083
|
|
|
1,966
|
|
|
117
|
|
|
6.0
|
|
Adjusted operating
expenses (Non-GAAP)
|
$
|
5,427
|
|
|
$
|
4,263
|
|
|
$
|
1,164
|
|
|
27.3
|
|
|
$
|
10,529
|
|
|
$
|
11,381
|
|
|
$
|
(852)
|
|
|
(7.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
(GAAP)
|
$
|
(270)
|
|
|
$
|
(1,637)
|
|
|
$
|
(1,367)
|
|
|
(83.5)
|
|
|
$
|
(1,651)
|
|
|
$
|
(2,609)
|
|
|
(958)
|
|
|
(36.7)
|
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special charges
(credits)
|
(948)
|
|
|
(1,449)
|
|
|
$
|
(501)
|
|
|
NM
|
|
|
(2,325)
|
|
|
(1,386)
|
|
|
939
|
|
|
NM
|
|
Adjusted operating
loss (Non-GAAP)
|
$
|
(1,218)
|
|
|
$
|
(3,086)
|
|
|
$
|
(1,868)
|
|
|
(60.5)
|
|
|
$
|
(3,976)
|
|
|
$
|
(3,995)
|
|
|
$
|
(19)
|
|
|
(0.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
(4.9)
|
%
|
|
(111.0)
|
%
|
|
106.1
|
|
|
pts.
|
|
|
(19.0)
|
%
|
|
(27.6)
|
%
|
|
8.6
|
|
|
pts.
|
|
Adjusted operating
margin (Non-GAAP)
|
(22.3)
|
%
|
|
(209.2)
|
%
|
|
186.9
|
|
|
pts.
|
|
|
(45.7)
|
%
|
|
(42.3)
|
%
|
|
(3.4)
|
|
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax loss
(GAAP)
|
$
|
(564)
|
|
|
$
|
(2,003)
|
|
|
$
|
(1,439)
|
|
|
(71.8)
|
|
|
$
|
(2,315)
|
|
|
$
|
(4,117)
|
|
|
$
|
(1,802)
|
|
|
(43.8)
|
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special charges
(credits)
|
(948)
|
|
|
(1,449)
|
|
|
(501)
|
|
|
NM
|
|
|
(2,325)
|
|
|
(1,386)
|
|
|
939
|
|
|
NM
|
|
Unrealized (gains)
losses on investments, net
|
(147)
|
|
|
(9)
|
|
|
138
|
|
|
NM
|
|
|
(125)
|
|
|
310
|
|
|
(435)
|
|
|
NM
|
|
Debt
extinguishment and modification fees
|
62
|
|
|
—
|
|
|
62
|
|
|
NM
|
|
|
62
|
|
|
—
|
|
|
62
|
|
|
NM
|
|
Special
termination benefits
|
—
|
|
|
231
|
|
|
(231)
|
|
|
NM
|
|
|
46
|
|
|
231
|
|
|
(185)
|
|
|
NM
|
|
Credit loss on BRW
term loan and guarantee
|
—
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
|
—
|
|
|
697
|
|
|
(697)
|
|
|
NM
|
|
Adjusted pre-tax loss
(Non-GAAP)
|
$
|
(1,597)
|
|
|
$
|
(3,230)
|
|
|
$
|
(1,633)
|
|
|
(50.6)
|
|
|
$
|
(4,657)
|
|
|
$
|
(4,265)
|
|
|
$
|
392
|
|
|
9.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
margin
|
(10.3)
|
%
|
|
(135.8)
|
%
|
|
125.5
|
|
|
pts.
|
|
|
(26.6)
|
%
|
|
(43.5)
|
%
|
|
16.9
|
|
|
pts.
|
|
Adjusted pre-tax
margin (Non-GAAP)
|
(29.2)
|
%
|
|
(219.0)
|
%
|
|
189.8
|
|
|
pts.
|
|
|
(53.6)
|
%
|
|
(45.1)
|
%
|
|
(8.5)
|
|
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
(GAAP)
|
$
|
(434)
|
|
|
$
|
(1,627)
|
|
|
$
|
(1,193)
|
|
|
(73.3)
|
|
|
$
|
(1,791)
|
|
|
$
|
(3,331)
|
|
|
$
|
(1,540)
|
|
|
(46.2)
|
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special charges
(credits)
|
(948)
|
|
|
(1,449)
|
|
|
(501)
|
|
|
NM
|
|
|
(2,325)
|
|
|
(1,386)
|
|
|
939
|
|
|
NM
|
|
Unrealized (gains)
losses on investments, net
|
(147)
|
|
|
(9)
|
|
|
138
|
|
|
NM
|
|
|
(125)
|
|
|
310
|
|
|
(435)
|
|
|
NM
|
|
Debt extinguishment
and modification fees
|
62
|
|
|
—
|
|
|
62
|
|
|
NM
|
|
|
62
|
|
|
—
|
|
|
62
|
|
|
NM
|
|
Special
termination benefits
|
—
|
|
|
231
|
|
|
(231)
|
|
|
NM
|
|
|
46
|
|
|
231
|
|
|
(185)
|
|
|
NM
|
|
Credit loss on BRW
term loan and guarantee
|
—
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
|
—
|
|
|
697
|
|
|
(697)
|
|
|
NM
|
|
Income tax expense
related to adjustments
above, net of valuation allowance
|
203
|
|
|
241
|
|
|
(38)
|
|
|
NM
|
|
|
494
|
|
|
227
|
|
|
267
|
|
|
NM
|
|
Adjusted net loss
(Non-GAAP)
|
$
|
(1,264)
|
|
|
$
|
(2,613)
|
|
|
$
|
(1,349)
|
|
|
(51.6)
|
|
|
$
|
(3,639)
|
|
|
$
|
(3,252)
|
|
|
$
|
387
|
|
|
11.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss
per share (GAAP)
|
$
|
(1.34)
|
|
|
$
|
(5.79)
|
|
|
$
|
(4.45)
|
|
|
(76.9)
|
|
|
$
|
(5.60)
|
|
|
$
|
(12.59)
|
|
|
$
|
(6.99)
|
|
|
(55.5)
|
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special charges
(credits)
|
(2.93)
|
|
|
(5.17)
|
|
|
(2.24)
|
|
|
NM
|
|
|
(7.26)
|
|
|
(5.24)
|
|
|
$
|
2.02
|
|
|
NM
|
|
Unrealized (gains)
losses on investments, net
|
(0.46)
|
|
|
(0.03)
|
|
|
0.43
|
|
|
NM
|
|
|
(0.39)
|
|
|
1.17
|
|
|
(1.56)
|
|
|
NM
|
|
Debt extinguishment
and modification fees
|
0.19
|
|
|
—
|
|
|
0.19
|
|
|
NM
|
|
|
0.19
|
|
|
—
|
|
|
0.19
|
|
|
NM
|
|
Special
termination benefits
|
—
|
|
|
0.82
|
|
|
(0.82)
|
|
|
NM
|
|
|
0.15
|
|
|
0.87
|
|
|
(0.72)
|
|
|
NM
|
|
Credit loss on BRW
term loan and guarantee
|
—
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
|
—
|
|
|
2.64
|
|
|
(2.64)
|
|
|
NM
|
|
Income tax expense
(benefit) related to
adjustments, net of valuation allowance
|
0.63
|
|
|
0.86
|
|
|
(0.23)
|
|
|
NM
|
|
|
1.54
|
|
|
0.86
|
|
|
0.68
|
|
|
NM
|
|
Adjusted diluted loss
per share (Non-GAAP)
|
$
|
(3.91)
|
|
|
$
|
(9.31)
|
|
|
$
|
(5.40)
|
|
|
(58.0)
|
|
|
$
|
(11.37)
|
|
|
$
|
(12.29)
|
|
|
$
|
(0.92)
|
|
|
(7.5)
|
|
UNITED AIRLINES
HOLDINGS, INC
CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
|
(In
millions)
|
June 30,
2021
|
|
December 31,
2020
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
20,838
|
|
|
$
|
11,269
|
|
Short-term
investments
|
230
|
|
|
414
|
|
Restricted
cash
|
254
|
|
|
255
|
|
Receivables, less
allowance for credit losses (2021 — $71; 2020 — $78)
|
1,793
|
|
|
1,295
|
|
Aircraft fuel, spare
parts and supplies, less obsolescence allowance (2021 — $518; 2020
— $478)
|
912
|
|
|
932
|
|
Prepaid expenses and
other
|
646
|
|
|
635
|
|
Total current
assets
|
24,673
|
|
|
14,800
|
|
|
|
|
|
Total operating
property and equipment, net
|
32,331
|
|
|
31,466
|
|
Operating lease
right-of-use assets
|
4,421
|
|
|
4,537
|
|
Other
assets:
|
|
|
|
Goodwill
|
4,527
|
|
|
4,527
|
|
Intangibles, less
accumulated amortization (2021 — $1,519; 2020 — $1,495)
|
2,827
|
|
|
2,838
|
|
Restricted
cash
|
216
|
|
|
218
|
|
Deferred income
taxes
|
647
|
|
|
131
|
|
Investments in
affiliates and other, less allowance for credit losses (2021 —
$606; 2020 — $522)
|
1,407
|
|
|
1,031
|
|
Total other
assets
|
9,624
|
|
|
8,745
|
|
Total
assets
|
$
|
71,049
|
|
|
$
|
59,548
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
2,218
|
|
|
$
|
1,595
|
|
Accrued salaries and
benefits
|
2,228
|
|
|
1,960
|
|
Advance ticket
sales
|
6,960
|
|
|
4,833
|
|
Frequent flyer
deferred revenue
|
2,099
|
|
|
908
|
|
Current maturities of
long-term debt
|
1,881
|
|
|
1,911
|
|
Current maturities of
operating leases
|
583
|
|
|
612
|
|
Current maturities of
finance leases
|
144
|
|
|
182
|
|
Payroll Support
Program deferred credit
|
1,132
|
|
|
—
|
|
Other
|
819
|
|
|
724
|
|
Total current
liabilities
|
18,064
|
|
|
12,725
|
|
|
|
|
|
Long-term liabilities
and deferred credits:
|
|
|
|
Long-term
debt
|
32,303
|
|
|
24,836
|
|
Long-term obligations
under operating leases
|
4,920
|
|
|
4,986
|
|
Long-term obligations
under finance leases
|
250
|
|
|
224
|
|
Frequent flyer
deferred revenue
|
4,086
|
|
|
5,067
|
|
Pension
liability
|
2,501
|
|
|
2,460
|
|
Postretirement benefit
liability
|
988
|
|
|
994
|
|
Other financial
liabilities from sale-leasebacks
|
1,683
|
|
|
1,140
|
|
Other
|
1,350
|
|
|
1,156
|
|
Total long-term
liabilities and deferred credits
|
48,081
|
|
|
40,863
|
|
Total stockholders'
equity
|
4,904
|
|
|
5,960
|
|
Total liabilities and
stockholders' equity
|
$
|
71,049
|
|
|
$
|
59,548
|
|
UNITED AIRLINES
HOLDINGS, INC.
CONDENSED STATEMENTS
OF CONSOLIDATED CASH FLOWS (UNAUDITED)
|
|
(In
millions)
|
Six Months
Ended
June 30,
|
|
2021
|
|
2020
|
Cash Flows from
Operating Activities:
|
|
|
|
Net cash provided by
(used in) operating activities
|
$
|
3,122
|
|
|
$
|
(67)
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital expenditures,
net of flight equipment purchase deposit returns
|
(1,305)
|
|
|
(1,998)
|
|
Purchases of short-term
investments
|
—
|
|
|
(550)
|
|
Proceeds from sale of
short-term investments
|
184
|
|
|
1,774
|
|
Other, net
|
11
|
|
|
14
|
|
Net cash used in
investing activities
|
(1,110)
|
|
|
(760)
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Proceeds from issuance
of debt, net of discounts and fees
|
11,116
|
|
|
4,371
|
|
Proceeds from equity
issuance
|
532
|
|
|
1,135
|
|
Payments of long-term
debt, finance leases and other financing liabilities
|
(4,072)
|
|
|
(564)
|
|
Repurchases of common
stock
|
—
|
|
|
(353)
|
|
Other, net
|
(22)
|
|
|
(18)
|
|
Net cash provided by
financing activities
|
7,554
|
|
|
4,571
|
|
Net increase in cash,
cash equivalents and restricted cash
|
9,566
|
|
|
3,744
|
|
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
|
$
|
21,308
|
|
|
$
|
6,612
|
|
|
|
|
|
Investing and
Financing Activities Not Affecting Cash:
|
|
|
|
Property and equipment
acquired through the issuance of debt, finance leases and
other
|
$
|
761
|
|
|
$
|
626
|
|
Lease modifications and
lease conversions
|
59
|
|
|
470
|
|
Right-of-use assets
acquired through operating leases
|
214
|
|
|
48
|
|
Notes receivable and
warrants received for entering into agreements
|
139
|
|
|
—
|
|
UNITED AIRLINES
HOLDINGS, INC.
NOTES
(UNAUDITED)
|
|
Special charges
(credits) and unrealized (gains) and losses on investments, net
include the following:
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months
Ended
June 30,
|
(In
millions)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Operating:
|
|
|
|
|
|
|
|
|
CARES Act
grant
|
|
$
|
(1,079)
|
|
|
$
|
(1,589)
|
|
|
$
|
(2,889)
|
|
|
$
|
(1,589)
|
|
Impairment of
assets
|
|
59
|
|
|
80
|
|
|
59
|
|
|
130
|
|
Severance and benefit
costs
|
|
11
|
|
|
63
|
|
|
428
|
|
|
63
|
|
(Gains) losses on
sale of assets and other special charges
|
|
61
|
|
|
(3)
|
|
|
77
|
|
|
10
|
|
Total operating special
charges (credits)
|
|
(948)
|
|
|
(1,449)
|
|
|
(2,325)
|
|
|
(1,386)
|
|
|
|
|
|
|
|
|
|
|
Nonoperating
unrealized (gains) losses on investments, net
|
|
(147)
|
|
|
(9)
|
|
|
(125)
|
|
|
310
|
|
Nonoperating debt
extinguishment and modification fees
|
|
62
|
|
|
—
|
|
|
62
|
|
|
—
|
|
Nonoperating special
termination benefits and settlement losses
|
|
—
|
|
|
231
|
|
|
46
|
|
|
231
|
|
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 (gains) losses on investments,
net
|
|
(85)
|
|
|
222
|
|
|
(17)
|
|
|
1,238
|
|
Total operating and
nonoperating special charges (credits) and unrealized (gains)
losses on investments, net
|
|
(1,033)
|
|
|
(1,227)
|
|
|
(2,342)
|
|
|
(148)
|
|
Income tax expense,
net of valuation allowance
|
|
203
|
|
|
241
|
|
|
494
|
|
|
227
|
|
Total operating and non-operating special charges (credits) and
unrealized (gains) losses on
investments, net of income taxes
|
|
$
|
(830)
|
|
|
$
|
(986)
|
|
|
$
|
(1,848)
|
|
|
$
|
79
|
|
CARES Act grant: During the six months ended June 30, 2021, the company received approximately
$5.8 billion in funding pursuant to
certain Payroll Support Programs under the CARES Act ("PSP2" and
"PSP3") which included an approximately $1.7
billion unsecured loan. The company recorded $1.1 billion and $2.9
billion as grant income during the three and six months
ended June 30, 2021, respectively.
The company also recorded $52 million
and $99 million for the related
warrants issued to United States Treasury ("Treasury") as part of
the agreements related to PSP2 and PSP3, within stockholders'
equity, as an offset to the grant income in the three and six
months ended June 30, 2021,
respectively. The company deferred recognition of $1.1 billion of the funds received under the PSP3
program as of June 30, 2021 as the
funds can only be used for the payment of eligible salaries, wages
and benefits. The company expects the remainder of the PSP3 funds
will be recognized as income in the third quarter of 2021.
During the three and six months ended June 30, 2020, the company received approximately
$4.5 billion in funding pursuant
to a separate Payroll Support Program under the CARES Act, which
consisted of a $3.2 billion
grant and a $1.3 billion
unsecured loan. The company recognized $1.6 billion of the grant as a credit to
Special charges (credit) and $57 million in warrants issued to
Treasury, within stockholder's equity, as an offset to the grant
income.
Impairment of assets: During the three and six months ended
June 30, 2021, the company recorded
$59 million of impairments primarily
related to 64 Embraer EMB 145LR aircraft and related engines that
United retired from its regional aircraft fleet.
During the three and six months ended June 30, 2020, the company recorded impairment
charges of $80 million and $130 million, respectively,
for its China routes, which was
primarily caused by the COVID-19 pandemic and the company's
subsequent suspension of flights to China.
Severance and benefit costs: During the three and six
months ended June 30, 2021, the
company recorded charges of $11
million and $428 million,
respectively, related to pay continuation and benefits-related
costs provided to employees who chose to voluntarily 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
voluntarily separate from the company.
During the three and six months ended June 30, 2020, the company recorded $63 million related to pay continuation and
benefits provided to employees who chose to voluntarily separate
from the company.
(Gains) losses on sale of assets and other special charges:
During the three and six months ended June
30, 2021, the company recorded charges of $61 million and $77
million, respectively, primarily related to incentives for
certain of its front-line employees to receive a COVID-19
vaccination and the termination of the lease associated with three
floors of its headquarters at the Willis Tower in Chicago in the first quarter of 2021.
Nonoperating unrealized gains and losses on investments,
net: During the three and six months ended June 30, 2021, the company recorded $90 million of gains related to its equity
investments and warrants in the equity of Clear Secure, Inc.
(formerly, Alclear, Inc.). Clear Secure, Inc. undertook its initial
public stock offering in June 2021.
Also during the three and six months ended June 30, 2021, the company recorded gains of
$57 million and $35 million, respectively, primarily for the
change in the market value of its investment in Azul Linhas Aéreas
Brasileiras S.A. ("Azul").
During the three and six months ended June 30, 2020, the company recorded gains of
$9 million and losses of $310 million, respectively. The
losses in the six months ended June 30,
2020 were primarily due to a $284
million decrease in the market value of the company's
investment in Azul and a $24 million
decrease in the fair value of the Avianca Holdings S.A. ("AVH")
share call options, AVH share appreciation rights and AVH
share-based upside sharing agreement.
Nonoperating debt extinguishment and modification fees: On
April 21, 2021, United issued,
through a private offering to eligible purchasers, $4.0 billion in aggregate principal amount of two
series of notes, consisting of $2.0
billion in aggregate principal amount of 4.375% senior
secured notes due 2026 and $2.0
billion in aggregate principal amount of 4.625% senior
secured notes due 2029. United used the net proceeds from the
offering of the notes and borrowings under a new $5.0 billion term loan facility to repay in full
the $1.4 billion aggregate principal
amount outstanding under the then-existing term loan facility
included in the Amended and Restated Credit and Guaranty Agreement,
dated as of March 29, 2017 (the
"Existing Credit Agreement"), the $1.0
billion aggregate principal amount outstanding under the
revolving credit facility included in the Existing Credit Agreement
and the $520 million aggregate
principal amount outstanding under the CARES Act loan. During the
three and six months ended June 30,
2021, the company recorded $62
million of charges for fees and discounts related to the
issuance of new debt and the prepayment of these debt
agreements.
Nonoperating special termination benefits and settlement
losses: During the six months ended June 30, 2021, as part of a first quarter
voluntary separation program, 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 were in the form of 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.
During the three and six months ended June 30, 2020, the company recorded
$231 million of settlement losses related to the company's
primary defined benefit pension plans covering certain U.S.
non-pilot employees, and special termination benefits offered under
voluntary separation programs to certain U.S. based front-line
employees participating in the non-pilot defined benefit pension
plan and postretirement medical programs.
Nonoperating credit loss on BRW term loan and related guarantee:
During the six months ended June 30,
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 AVH equity are
secured as a pledge under the BRW Term Loan, which is currently in
default.
Effective tax rate:
The company's effective tax rates for the three and six months
ended June 30, 2021 were 23.0% and
22.6%, respectively. The effective tax rates for the three and six
months ended June 30, 2020 were 18.8%
and 19.1%, 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. The effective tax rates for the three and six
months ended June 30, 2021 were
impacted by $74 million and
$79 million, respectively, of
valuation allowance related to unrealized capital losses and state
attributes. The effective tax rates for the three and six months
ended June 30, 2020 were impacted by
$64 million and $130 million, respectively, of valuation
allowance related to unrealized capital losses.
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SOURCE United Airlines