FORM
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10-K
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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission
File Number
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Exact Name of Registrant as Specified in its Charter,
Principal Executive Office Address and Telephone Number
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State of
Incorporation
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I.R.S. Employer
Identification No.
|
||||
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001-06033
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United Airlines Holdings, Inc.
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Delaware
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36-2675207
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233 South Wacker Drive,
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Chicago,
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Illinois
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60606
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(872)
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825-4000
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001-10323
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United Airlines, Inc.
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Delaware
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74-2099724
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233 South Wacker Drive,
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Chicago,
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Illinois
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60606
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(872)
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825-4000
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Title of Each Class
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Trading Symbol
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Name of Each Exchange on Which Registered
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United Airlines Holdings, Inc.
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Common Stock, $0.01 par value
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|
UAL
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The Nasdaq Stock Market LLC
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United Airlines, Inc.
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None
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None
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None
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United Airlines Holdings, Inc.
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None
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United Airlines, Inc.
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|
None
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United Airlines Holdings, Inc.
|
|
Yes
|
☒
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No
|
☐
|
|
United Airlines, Inc.
|
|
Yes
|
☒
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No
|
☐
|
United Airlines Holdings, Inc.
|
|
Yes
|
☐
|
No
|
☒
|
|
United Airlines, Inc.
|
|
Yes
|
☐
|
No
|
☒
|
United Airlines Holdings, Inc.
|
|
Yes
|
☒
|
No
|
☐
|
|
United Airlines, Inc.
|
|
Yes
|
☒
|
No
|
☐
|
United Airlines Holdings, Inc.
|
|
Yes
|
☒
|
No
|
☐
|
|
United Airlines, Inc.
|
|
Yes
|
☒
|
No
|
☐
|
United Airlines Holdings, Inc.
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
United Airlines, Inc.
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☒
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
United Airlines Holdings, Inc.
|
|
☐
|
United Airlines, Inc.
|
|
☐
|
United Airlines Holdings, Inc.
|
|
Yes
|
☐
|
No
|
☒
|
|
United Airlines, Inc.
|
|
Yes
|
☐
|
No
|
☒
|
|
United Airlines Holdings, Inc.
|
|
247,951,116
|
shares of common stock ($0.01 par value)
|
United Airlines, Inc.
|
|
1,000
|
shares of common stock ($0.01 par value) (100% owned by United Airlines Holdings, Inc.)
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|
|
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Page
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PART I
|
|||
Item 1.
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|
||
Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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|||
Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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|||
Item 15.
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|
||
Item 16.
|
|
Year
|
|
Gallons Consumed
(in millions)
|
|
Fuel Expense
(in millions)
|
|
Average Price Per Gallon
|
|
Percentage of Total Operating Expense
|
||||||
2019
|
|
4,292
|
|
|
$
|
8,953
|
|
|
$
|
2.09
|
|
|
23
|
%
|
2018
|
|
4,137
|
|
|
$
|
9,307
|
|
|
$
|
2.25
|
|
|
24
|
%
|
2017
|
|
3,978
|
|
|
$
|
6,913
|
|
|
$
|
1.74
|
|
|
20
|
%
|
Employee
Group
|
|
Number of Employees
|
|
Union
|
|
Agreement Open for Amendment
|
|
Flight Attendants
|
|
24,203
|
|
|
Association of Flight Attendants (the "AFA")
|
|
August 2021
|
Fleet Service
|
|
13,803
|
|
|
International Association of Machinists and Aerospace Workers (the "IAM")
|
|
December 2021
|
Passenger Service
|
|
12,135
|
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IAM
|
|
December 2021
|
Pilots
|
|
12,251
|
|
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ALPA
|
|
January 2019
|
Technicians
|
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9,318
|
|
|
International Brotherhood of Teamsters (the "IBT")
|
|
December 2022 (a)
|
Passenger Service - United Ground Express, Inc.
|
|
4,155
|
|
|
IAM
|
|
March 2025
|
Catering
|
|
2,577
|
|
|
UNITE HERE
|
|
N/A
|
Storekeepers
|
|
989
|
|
|
IAM
|
|
December 2021
|
Dispatchers
|
|
412
|
|
|
Professional Airline Flight Control Association
|
|
December 2021
|
Fleet Tech Instructors
|
|
130
|
|
|
IAM
|
|
December 2021
|
Load Planners
|
|
62
|
|
|
IAM
|
|
December 2021
|
Security Officers
|
|
45
|
|
|
IAM
|
|
December 2021
|
Maintenance Instructors
|
|
40
|
|
|
IAM
|
|
December 2021
|
ITEM 1A.
|
RISK FACTORS.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS.
|
ITEM 2.
|
PROPERTIES.
|
•
|
Fourteen Boeing 737 MAX 9s, which are temporarily grounded pursuant to the FAA Order;
|
•
|
Four Boeing 747-400s, which are permanently grounded;
|
•
|
Three Airbus A320s, which are temporarily grounded; and
|
•
|
One Boeing 767-200, which is being subleased to another airline.
|
Aircraft Type
|
|
Total
|
|
Owned
|
|
Owned or Leased by Regional Carrier
|
|
Regional Carrier Operator and Number of Aircraft
|
|
Seats in Standard Configuration
|
||||||
Regional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Embraer E175/E175LL
|
|
170
|
|
|
71
|
|
|
99
|
|
|
SkyWest:
Mesa:
Republic:
ExpressJet:
|
65
60
28
17
|
|
|
70-76
|
|
Embraer 170
|
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38
|
|
|
—
|
|
|
38
|
|
|
Republic:
|
38
|
|
|
70
|
|
CRJ700
|
|
47
|
|
|
—
|
|
|
47
|
|
|
Mesa:
SkyWest:
GoJet:
|
20
19
8
|
|
|
70
|
|
CRJ550
|
|
18
|
|
|
—
|
|
|
18
|
|
|
GoJet:
|
18
|
|
|
50
|
|
CRJ200
|
|
133
|
|
|
—
|
|
|
133
|
|
|
SkyWest:
Air Wisconsin:
|
70
63
|
|
|
50
|
|
Embraer ERJ 145 (XR/LR/ER)
|
|
175
|
|
|
168
|
|
|
7
|
|
|
ExpressJet:
Trans States:
CommutAir:
|
95
43
37
|
|
|
50
|
|
Total regional
|
|
581
|
|
|
239
|
|
|
342
|
|
|
|
|
|
|
•
|
Eight Embraer E175LLs, which were delivered but not yet in service; and
|
•
|
Three Embraer ERJ145s, which are temporarily grounded.
|
|
|
|
|
Scheduled Aircraft Deliveries
|
|||||
Aircraft Type
|
|
Number of Firm
Commitments (a) |
|
2020
|
|
After 2020
|
|||
Airbus A321XLR
|
|
50
|
|
|
—
|
|
|
50
|
|
Airbus A350
|
|
45
|
|
|
—
|
|
|
45
|
|
Boeing 737 MAX
|
|
171
|
|
|
44
|
|
|
127
|
|
Boeing 777-300ER
|
|
2
|
|
|
2
|
|
|
—
|
|
Boeing 787
|
|
16
|
|
|
15
|
|
|
1
|
|
Embraer E175
|
|
20
|
|
|
20
|
|
|
—
|
|
ITEM 3.
|
LEGAL PROCEEDINGS.
|
ITEM 4.
|
MINE SAFETY DISCLOSURES.
|
ITEM 5.
|
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
|
Period
|
|
Total number of shares purchased (a) (b)
|
|
Average price paid per share (b)(c)
|
|
Total number of shares purchased as part of publicly announced plans or programs (a)
|
|
Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) (a)
|
||||||
October 2019
|
|
1,071,915
|
|
|
$
|
87.65
|
|
|
1,071,915
|
|
|
$
|
3,231
|
|
November 2019
|
|
430,400
|
|
|
92.70
|
|
|
430,400
|
|
|
3,191
|
|
||
December 2019
|
|
922,600
|
|
|
88.72
|
|
|
922,600
|
|
|
3,109
|
|
||
Total
|
|
2,424,915
|
|
|
|
|
2,424,915
|
|
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA.
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2019
|
|
2018 (a)
|
|
2017 (a)
|
|
2016
|
|
2015
|
||||||||||
Income Statement Data (in millions, except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenue
|
|
$
|
43,259
|
|
|
$
|
41,303
|
|
|
$
|
37,784
|
|
|
$
|
36,558
|
|
|
$
|
37,864
|
|
Operating expense
|
|
38,958
|
|
|
38,074
|
|
|
34,166
|
|
|
32,214
|
|
|
32,698
|
|
|||||
Operating income
|
|
4,301
|
|
|
3,229
|
|
|
3,618
|
|
|
4,344
|
|
|
5,166
|
|
|||||
Net income
|
|
3,009
|
|
|
2,122
|
|
|
2,143
|
|
|
2,234
|
|
|
7,340
|
|
|||||
Basic earnings per share
|
|
11.63
|
|
|
7.70
|
|
|
7.08
|
|
|
6.77
|
|
|
19.52
|
|
|||||
Diluted earnings per share
|
|
11.58
|
|
|
7.67
|
|
|
7.06
|
|
|
6.76
|
|
|
19.47
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data at December 31 (in millions):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrestricted cash, cash equivalents and short-term investments
|
|
$
|
4,944
|
|
|
$
|
3,950
|
|
|
$
|
3,798
|
|
|
$
|
4,428
|
|
|
$
|
5,196
|
|
Total assets
|
|
52,611
|
|
|
49,024
|
|
|
47,469
|
|
|
40,208
|
|
|
40,861
|
|
|||||
Debt and finance lease obligations (b)
|
|
14,818
|
|
|
13,792
|
|
|
13,576
|
|
|
11,705
|
|
|
11,759
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Select operating statistics (a)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Passengers (thousands) (b)
|
|
162,443
|
|
|
158,330
|
|
|
148,067
|
|
|
143,177
|
|
|
140,369
|
|
|||||
Revenue passenger miles ("RPMs") (millions) (c)
|
|
239,360
|
|
|
230,155
|
|
|
216,261
|
|
|
210,309
|
|
|
208,611
|
|
|||||
Available seat miles ("ASMs") (millions) (d)
|
|
284,999
|
|
|
275,262
|
|
|
262,386
|
|
|
253,590
|
|
|
250,003
|
|
|||||
Cargo revenue ton miles (millions) (e)
|
|
3,329
|
|
|
3,425
|
|
|
3,316
|
|
|
2,805
|
|
|
2,614
|
|
|||||
Passenger load factor (f)
|
|
84.0
|
%
|
|
83.6
|
%
|
|
82.4
|
%
|
|
82.9
|
%
|
|
83.4
|
%
|
|||||
Passenger revenue per available seat mile ("PRASM") (cents)
|
|
13.90
|
|
|
13.70
|
|
|
13.13
|
|
|
13.18
|
|
|
13.11
|
|
|||||
Total revenue per available seat mile ("TRASM") (cents)
|
|
15.18
|
|
|
15.00
|
|
|
14.40
|
|
|
14.42
|
|
|
15.15
|
|
|||||
Average yield per revenue passenger mile ("Yield") (cents) (g)
|
|
16.55
|
|
|
16.38
|
|
|
15.93
|
|
|
15.90
|
|
|
15.72
|
|
|||||
Cost per available seat mile ("CASM") (cents)
|
|
13.67
|
|
|
13.83
|
|
|
13.02
|
|
|
12.70
|
|
|
13.08
|
|
|||||
Average price per gallon of fuel, including fuel taxes
|
|
$
|
2.09
|
|
|
$
|
2.25
|
|
|
$
|
1.74
|
|
|
$
|
1.49
|
|
|
$
|
1.94
|
|
Fuel gallons consumed (millions)
|
|
4,292
|
|
|
4,137
|
|
|
3,978
|
|
|
3,904
|
|
|
3,886
|
|
|||||
Average stage length (miles) (h)
|
|
1,460
|
|
|
1,446
|
|
|
1,460
|
|
|
1,473
|
|
|
1,487
|
|
|||||
Average daily utilization of each mainline aircraft (hours:minutes) (i)
|
|
10:39
|
|
|
10:45
|
|
|
10:27
|
|
|
10:06
|
|
|
10:24
|
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
•
|
2019 net income was $3.0 billion, or $11.58 diluted earnings per share, as compared to $2.1 billion, or $7.67 diluted earnings per share, in 2018.
|
•
|
Revenue for 2019 increased $1.9 billion over 2018 due to a 3.5% growth in ASMs and a PRASM increase of 1.5% in 2019 compared to 2018.
|
•
|
In 2019, UAL repurchased approximately 19.2 million of its common stock for $1.6 billion. As of December 31, 2019, the Company had approximately $3.1 billion remaining to purchase shares under its share repurchase programs.
|
•
|
UAL ended 2019 with $6.9 billion in unrestricted liquidity, which consisted of unrestricted cash, cash equivalents, short-term investments and available capacity under the revolving credit facility of its Amended and Restated Credit and Guaranty Agreement (as amended, the "Credit Agreement").
|
•
|
RPMs for 2019 increased 4.0% as compared to 2018, and ASMs increased 3.5% from the prior year, resulting in a load factor of 84.0% in 2019 versus 83.6% in 2018.
|
•
|
For 2019 and 2018, the Company recorded U.S. Department of Transportation on-time arrival rates of 77.9% and 79.8%, respectively, and mainline completion factors of 99.2%.
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|
% Change
|
|||||||
Passenger revenue
|
$
|
39,625
|
|
|
$
|
37,706
|
|
|
$
|
1,919
|
|
|
5.1
|
|
Cargo
|
1,179
|
|
|
1,237
|
|
|
(58
|
)
|
|
(4.7
|
)
|
|||
Other operating revenue
|
2,455
|
|
|
2,360
|
|
|
95
|
|
|
4.0
|
|
|||
Total operating revenue
|
$
|
43,259
|
|
|
$
|
41,303
|
|
|
$
|
1,956
|
|
|
4.7
|
|
|
|
Increase (decrease) from 2018 (a):
|
|||||||||||||
|
|
Domestic
|
|
Atlantic
|
|
Pacific
|
|
Latin
|
|
Total
|
|||||
Average fare per passenger
|
|
3.4
|
%
|
|
(1.9
|
)%
|
|
(4.0
|
)%
|
|
5.9
|
%
|
|
2.4
|
%
|
Passengers
|
|
2.1
|
%
|
|
6.5
|
%
|
|
4.0
|
%
|
|
3.9
|
%
|
|
2.6
|
%
|
RPMs (traffic)
|
|
3.5
|
%
|
|
6.9
|
%
|
|
2.4
|
%
|
|
4.0
|
%
|
|
4.0
|
%
|
ASMs (capacity)
|
|
3.8
|
%
|
|
5.8
|
%
|
|
0.5
|
%
|
|
2.9
|
%
|
|
3.5
|
%
|
Passenger load factor (points)
|
|
(0.2
|
)
|
|
0.8
|
|
|
1.5
|
|
|
0.9
|
|
|
0.4
|
|
(a) See Part II, Item 6. Selected Financial Data, of this report for the definition of these statistics.
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|
% Change
|
|||||||
Salaries and related costs
|
$
|
12,071
|
|
|
$
|
11,458
|
|
|
$
|
613
|
|
|
5.3
|
|
Aircraft fuel
|
8,953
|
|
|
9,307
|
|
|
(354
|
)
|
|
(3.8
|
)
|
|||
Regional capacity purchase
|
2,849
|
|
|
2,649
|
|
|
200
|
|
|
7.6
|
|
|||
Landing fees and other rent
|
2,543
|
|
|
2,449
|
|
|
94
|
|
|
3.8
|
|
|||
Depreciation and amortization
|
2,288
|
|
|
2,165
|
|
|
123
|
|
|
5.7
|
|
|||
Aircraft maintenance materials and outside repairs
|
1,794
|
|
|
1,767
|
|
|
27
|
|
|
1.5
|
|
|||
Distribution expenses
|
1,651
|
|
|
1,558
|
|
|
93
|
|
|
6.0
|
|
|||
Aircraft rent
|
288
|
|
|
433
|
|
|
(145
|
)
|
|
(33.5
|
)
|
|||
Special charges
|
246
|
|
|
487
|
|
|
(241
|
)
|
|
NM
|
|
|||
Other operating expenses
|
6,275
|
|
|
5,801
|
|
|
474
|
|
|
8.2
|
|
|||
Total operating expenses
|
$
|
38,958
|
|
|
$
|
38,074
|
|
|
$
|
884
|
|
|
2.3
|
|
|
|
2019
|
|
2018
|
|
%
Change
|
|||||
Fuel expense
|
|
$
|
8,953
|
|
|
$
|
9,307
|
|
|
(3.8
|
)
|
Total fuel consumption (gallons)
|
|
4,292
|
|
|
4,137
|
|
|
3.7
|
|
||
Average price per gallon
|
|
$
|
2.09
|
|
|
$
|
2.25
|
|
|
(7.1
|
)
|
|
2019
|
|
2018
|
||||
Impairment of assets
|
$
|
171
|
|
|
$
|
377
|
|
Severance and benefit costs
|
16
|
|
|
41
|
|
||
Termination of an engine maintenance service agreement
|
—
|
|
|
64
|
|
||
(Gains) losses on sale of assets and other special charges
|
59
|
|
|
5
|
|
||
Total special charges
|
$
|
246
|
|
|
$
|
487
|
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|
% Change
|
|||||||
Interest expense
|
$
|
(731
|
)
|
|
$
|
(670
|
)
|
|
$
|
61
|
|
|
9.1
|
|
Interest capitalized
|
85
|
|
|
65
|
|
|
20
|
|
|
30.8
|
|
|||
Interest income
|
133
|
|
|
101
|
|
|
32
|
|
|
31.7
|
|
|||
Unrealized gains (losses) on investments, net
|
153
|
|
|
(5
|
)
|
|
158
|
|
|
NM
|
|
|||
Miscellaneous, net
|
(27
|
)
|
|
(72
|
)
|
|
(45
|
)
|
|
(62.5
|
)
|
|||
Total nonoperating expense, net
|
$
|
(387
|
)
|
|
$
|
(581
|
)
|
|
$
|
(194
|
)
|
|
(33.4
|
)
|
Pension and other postretirement plans
|
Note 7
|
Long-term debt and debt covenants
|
Note 10
|
Leases and capacity purchase agreements
|
Note 11
|
Commitments and contingencies
|
Note 13
|
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
After 2024
|
|
Total
|
||||||||||||||
Long-term debt (a)
|
|
$
|
1.4
|
|
|
$
|
1.4
|
|
|
$
|
1.8
|
|
|
$
|
0.8
|
|
|
$
|
3.1
|
|
|
$
|
6.2
|
|
|
$
|
14.7
|
|
Finance lease obligations—principal portion
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.3
|
|
|||||||
Total debt and finance lease obligations
|
|
1.5
|
|
|
1.5
|
|
|
1.8
|
|
|
0.8
|
|
|
3.1
|
|
|
6.3
|
|
|
15.0
|
|
|||||||
Interest on debt and finance lease obligations (b)
|
|
0.6
|
|
|
0.5
|
|
|
0.4
|
|
|
0.4
|
|
|
0.3
|
|
|
0.7
|
|
|
2.9
|
|
|||||||
Operating lease obligations
|
|
0.9
|
|
|
0.8
|
|
|
0.6
|
|
|
0.6
|
|
|
0.6
|
|
|
4.2
|
|
|
7.7
|
|
|||||||
Regional CPAs (c)
|
|
2.9
|
|
|
2.9
|
|
|
2.4
|
|
|
1.5
|
|
|
1.3
|
|
|
4.7
|
|
|
15.7
|
|
|||||||
Postretirement obligations (d)
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.3
|
|
|
0.8
|
|
|||||||
Pension obligations (e)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
0.6
|
|
|
1.0
|
|
|||||||
Capital purchase obligations (f)
|
|
6.9
|
|
|
4.3
|
|
|
2.0
|
|
|
1.0
|
|
|
1.2
|
|
|
11.3
|
|
|
26.7
|
|
|||||||
Total contractual obligations
|
|
$
|
12.9
|
|
|
$
|
10.1
|
|
|
$
|
7.3
|
|
|
$
|
4.4
|
|
|
$
|
7.0
|
|
|
$
|
28.1
|
|
|
$
|
69.8
|
|
•
|
MileagePlus miles awarded – United has a performance obligation to provide MileagePlus cardholders with miles to be used for air travel and non-travel award redemptions. The Company records Passenger revenue related to the travel awards when the transportation is provided and records Other revenue related to the non-travel awards when the goods or services are delivered. The Company records the cost associated with non-travel awards in Other operating revenue.
|
•
|
Marketing – United has a performance obligation to provide Chase access to United's customer list and the use of United's brand. Marketing revenue is recorded to Other operating revenue as miles are delivered to Chase.
|
•
|
Advertising – United has a performance obligation to provide advertising in support of the MileagePlus card in various customer contact points such as United's website, email promotions, direct mail campaigns, airport advertising and in-flight advertising. Advertising revenue is recorded to Other operating revenue as miles are delivered to Chase.
|
•
|
Other travel-related benefits – United's performance obligations are comprised of various items such as waived bag fees, seat upgrades and lounge passes. Lounge passes are recorded to Other operating revenue as customers use the lounge passes. Bag fees and seat upgrades are recorded to Passenger revenue at the time of the associated travel.
|
Frequent flyer deferred revenue at December 31, 2019 (in millions)
|
|
$
|
5,276
|
|
Percentage of miles earned not expected to be redeemed
|
|
14
|
%
|
|
Impact of 1% change in outstanding miles expected to be redeemed or weighted average ticket value on deferred revenue (in millions)
|
|
$
|
53
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
|
2019
|
|
2018
|
||||
Variable rate debt
|
|
|
|
||||
Carrying value of variable rate debt at December 31
|
$
|
3,408
|
|
|
$
|
3,500
|
|
Impact of 100 basis point increase on projected interest expense for the following year
|
33
|
|
|
35
|
|
||
Fixed rate debt
|
|
|
|
||||
Carrying value of fixed rate debt at December 31
|
11,144
|
|
|
9,945
|
|
||
Fair value of fixed rate debt at December 31
|
11,736
|
|
|
9,901
|
|
||
Impact of 100 basis point increase in market rates on fair value
|
(458
|
)
|
|
(378
|
)
|
|
|
Frequent Flyer Deferred Revenue Estimate of Miles not Expected to be Redeemed
|
|
|
|
Description of the Matter
|
|
At December 31, 2019, the Company's frequent flyer deferred revenue liability was $5.3 billion. As described in Note 1 of the consolidated financial statements, members of the Company's MileagePlus program earn miles through the Company's flights, purchases with other airlines or non-airline partners or through co-branded credit card partnerships. Consideration is attributed to the miles earned or sold and deferred until the miles are redeemed and air travel is completed, or non-air awards are shipped. Miles can be redeemed for air travel and non-travel awards.
|
|
||
Auditing management's breakage estimate (the estimate of miles earned that will not be redeemed) was complex and highly judgmental due to the significant assumptions used in the estimate. Breakage is estimated annually using prior years' data and a regression analysis to estimate future breakage, which can be impacted by changes in customer behavior driven by program changes or redemption opportunities that would not be reflected in historical redemption data.
|
||
|
|
|
How We Addressed the Matter in Our Audit
|
|
We tested the Company's design and operating effectiveness of internal controls that address the risk of material misstatement relating to the breakage estimate. This included testing controls over management's review of the significant assumptions and other inputs used in the estimate, including redemption patterns of various customer groups.
|
|
||
Our audit procedures included, among others, testing the methodology and assumptions used to develop the breakage estimate, including testing the completeness and accuracy of the underlying data used to develop these assumptions. In addition, we assessed the trending of the breakage rate over time to ensure changes were in line with expectations. We involved a valuation specialist to test management's statistical analysis supporting the breakage assumption.
|
||
|
|
|
|
|
BRW Term Loan Impairment Analysis
|
|
|
|
Description of the Matter
|
|
At December 31, 2019, the Company had a term loan agreement with, among others, BRW Aviation Holdings LLC and BRW Aviation LLC, dated as of November 29, 2018 (the "BRW Term Loan"), which had a carrying value of $499 million. The BRW Term Loan is collateralized by common shares of Avianca Holdings S.A. ("AVH") and the equity of BRW (such shares and equity, collectively, the "BRW Loan Collateral"). As discussed in Note 8 of the consolidated financial statements, the fair market value of the BRW Loan Collateral is estimated using an income approach and a market approach, with equal weight applied to each approach. Under the income approach, the value was estimated by discounting expected future cash flows to a single present value amount. Under the market approach, the value was estimated by reference to multiples of enterprise value to earnings before interest, taxes, depreciation, amortization and rent ("EBITDAR") for a group of publicly-traded market comparable companies, along with AVH's own EBITDAR levels.
|
|
||
Auditing management's valuation of the BRW Loan Collateral was highly judgmental due to the significant estimation required in determining the fair value. The fair value estimate was sensitive to significant assumptions such as multiples of enterprise value to EBITDAR, revenue and cost growth rates and the discount rate, each of which is affected by expectations about future market or economic conditions. As a result of the subjectivity of the assumptions, adverse changes to management's estimates could reduce the underlying cash flows used to estimate fair value and trigger impairment of the loan.
|
||
|
|
|
How We Addressed the Matter in Our Audit
|
|
We tested the Company's design and operating effectiveness of internal controls that address the risk of material misstatement relating to the fair market value of the BRW Loan Collateral. This included testing controls over management's review of the significant assumptions used in the income approach and market approach such as multiples of enterprise value to EBITDAR, revenue growth rates, costs per available seat kilometer and the discount rate, which is affected by expectations about future market or economic conditions.
|
|
||
To test the estimated fair value of the BRW Loan Collateral, we performed audit procedures that included, among others, assessing the fair value methodology used by management and evaluating the significant assumptions used in the valuation model. We compared significant assumptions to current industry, market and economic trends, and to AVH's historical results and/or other guideline companies within the same industry. We performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the BRW Loan Collateral that would result from changes in assumptions. We also involved a valuation specialist to assist in our evaluation of the Company's valuation methodology and discount rate.
|
|
|
|
|
|
Indefinite-lived Intangible Assets (Route Authorities) Impairment Analysis
|
|
|
|
Description of the Matter
|
|
At December 31, 2019, the Company's route authorities indefinite-lived intangible assets were $1.15 billion. As discussed in Note 1 of the consolidated financial statements, indefinite-lived assets are reviewed for impairment on an annual basis as of October 1, or on an interim basis whenever a triggering event occurs.
|
|
||
Auditing management's annual route authorities indefinite-lived intangibles impairment test was complex and highly judgmental due to the significant estimation required in determining the fair value. The fair value estimate was sensitive to significant assumptions such as revenue growth rate, cost per available seat mile and the discount rate, each of which is affected by expectations about future market or economic conditions. As a result of the subjectivity of the assumptions, adverse changes to management's estimates could reduce the underlying cash flows used to estimate fair value and trigger impairment charges.
|
||
|
|
|
How We Addressed the Matter in Our Audit
|
|
We tested the Company's design and operating effectiveness of internal controls that address the risk of material misstatement relating to the estimate of fair value of route authorities used in the annual impairment test. This included testing controls over management's review of the significant assumptions used in the discounted cash flow methodology, including revenue growth rate, cost per available seat mile and the discount rate.
|
|
||
To test the estimated fair value of the Company's route authorities indefinite-lived intangibles, we performed audit procedures that included, among others, assessing the fair value methodology used by management and evaluating the significant assumptions used in the valuation model. We compared significant assumptions to current industry, market and economic trends, and to the Company's historical results. We assessed the historical accuracy of management's estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the intangible assets that would result from changes in assumptions. We also involved a valuation specialist to assist in our evaluation of the Company's valuation methodology and discount rate.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018 (a)
|
|
2017 (a)
|
||||||
Operating revenue:
|
|
|
|
|
|
||||||
Passenger revenue
|
$
|
39,625
|
|
|
$
|
37,706
|
|
|
$
|
34,460
|
|
Cargo
|
1,179
|
|
|
1,237
|
|
|
1,114
|
|
|||
Other operating revenue
|
2,455
|
|
|
2,360
|
|
|
2,210
|
|
|||
Total operating revenue
|
43,259
|
|
|
41,303
|
|
|
37,784
|
|
|||
Operating expense:
|
|
|
|
|
|
||||||
Salaries and related costs
|
12,071
|
|
|
11,458
|
|
|
10,941
|
|
|||
Aircraft fuel
|
8,953
|
|
|
9,307
|
|
|
6,913
|
|
|||
Regional capacity purchase
|
2,849
|
|
|
2,649
|
|
|
2,268
|
|
|||
Landing fees and other rent
|
2,543
|
|
|
2,449
|
|
|
2,310
|
|
|||
Depreciation and amortization
|
2,288
|
|
|
2,165
|
|
|
2,096
|
|
|||
Aircraft maintenance materials and outside repairs
|
1,794
|
|
|
1,767
|
|
|
1,856
|
|
|||
Distribution expenses
|
1,651
|
|
|
1,558
|
|
|
1,435
|
|
|||
Aircraft rent
|
288
|
|
|
433
|
|
|
621
|
|
|||
Special charges
|
246
|
|
|
487
|
|
|
176
|
|
|||
Other operating expenses
|
6,275
|
|
|
5,801
|
|
|
5,550
|
|
|||
Total operating expense
|
38,958
|
|
|
38,074
|
|
|
34,166
|
|
|||
Operating income
|
4,301
|
|
|
3,229
|
|
|
3,618
|
|
|||
|
|
|
|
|
|
||||||
Nonoperating income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(731
|
)
|
|
(670
|
)
|
|
(626
|
)
|
|||
Interest capitalized
|
85
|
|
|
65
|
|
|
74
|
|
|||
Interest income
|
133
|
|
|
101
|
|
|
57
|
|
|||
Unrealized gains (losses) on investments, net
|
153
|
|
|
(5
|
)
|
|
—
|
|
|||
Miscellaneous, net
|
(27
|
)
|
|
(72
|
)
|
|
(100
|
)
|
|||
Total nonoperating expense, net
|
(387
|
)
|
|
(581
|
)
|
|
(595
|
)
|
|||
Income before income taxes
|
3,914
|
|
|
2,648
|
|
|
3,023
|
|
|||
Income tax expense
|
905
|
|
|
526
|
|
|
880
|
|
|||
Net income
|
$
|
3,009
|
|
|
$
|
2,122
|
|
|
$
|
2,143
|
|
Earnings per share, basic
|
$
|
11.63
|
|
|
$
|
7.70
|
|
|
$
|
7.08
|
|
Earnings per share, diluted
|
$
|
11.58
|
|
|
$
|
7.67
|
|
|
$
|
7.06
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018 (a)
|
|
2017 (a)
|
||||||
|
|
|
|
|
|
||||||
Net income
|
$
|
3,009
|
|
|
$
|
2,122
|
|
|
$
|
2,143
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Employee benefit plans
|
80
|
|
|
342
|
|
|
(195
|
)
|
|||
Investments and other
|
5
|
|
|
(4
|
)
|
|
(5
|
)
|
|||
Total other comprehensive income (loss), net of tax
|
85
|
|
|
338
|
|
|
(200
|
)
|
|||
Total comprehensive income, net
|
$
|
3,094
|
|
|
$
|
2,460
|
|
|
$
|
1,943
|
|
|
At December 31,
|
||||||
ASSETS
|
2019
|
|
2018 (a)
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,762
|
|
|
$
|
1,694
|
|
Short-term investments
|
2,182
|
|
|
2,256
|
|
||
Receivables, less allowance for doubtful accounts (2019—$9; 2018—$8)
|
1,364
|
|
|
1,426
|
|
||
Aircraft fuel, spare parts and supplies, less obsolescence allowance (2019—$425; 2018—$412)
|
1,072
|
|
|
985
|
|
||
Prepaid expenses and other
|
814
|
|
|
733
|
|
||
Total current assets
|
8,194
|
|
|
7,094
|
|
||
Operating property and equipment:
|
|
|
|
||||
Flight equipment
|
35,421
|
|
|
32,599
|
|
||
Other property and equipment
|
7,926
|
|
|
6,889
|
|
||
Purchase deposits for flight equipment
|
1,360
|
|
|
1,177
|
|
||
Total operating property and equipment
|
44,707
|
|
|
40,665
|
|
||
Less—Accumulated depreciation and amortization
|
(14,537
|
)
|
|
(13,266
|
)
|
||
Total operating property and equipment, net
|
30,170
|
|
|
27,399
|
|
||
|
|
|
|
||||
Operating lease right-of-use assets
|
4,758
|
|
|
5,262
|
|
||
|
|
|
|
||||
Other assets:
|
|
|
|
||||
Goodwill
|
4,523
|
|
|
4,523
|
|
||
Intangibles, less accumulated amortization (2019—$1,440; 2018—$1,380)
|
3,009
|
|
|
3,159
|
|
||
Restricted cash
|
106
|
|
|
105
|
|
||
Notes receivable, net
|
671
|
|
|
516
|
|
||
Investments in affiliates and other, net
|
1,180
|
|
|
966
|
|
||
Total other assets
|
9,489
|
|
|
9,269
|
|
||
Total assets
|
$
|
52,611
|
|
|
$
|
49,024
|
|
|
At December 31,
|
||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
2019
|
|
2018 (a)
|
||||
Current liabilities:
|
|
|
|
||||
Advance ticket sales
|
$
|
4,819
|
|
|
$
|
4,381
|
|
Accounts payable
|
2,703
|
|
|
2,363
|
|
||
Frequent flyer deferred revenue
|
2,440
|
|
|
2,286
|
|
||
Accrued salaries and benefits
|
2,271
|
|
|
2,184
|
|
||
Current maturities of long-term debt
|
1,407
|
|
|
1,230
|
|
||
Current maturities of finance leases
|
46
|
|
|
123
|
|
||
Current maturities of operating leases
|
686
|
|
|
719
|
|
||
Other
|
566
|
|
|
553
|
|
||
Total current liabilities
|
14,938
|
|
|
13,839
|
|
||
|
|
|
|
||||
Long-term debt
|
13,145
|
|
|
12,215
|
|
||
Long-term obligations under finance leases
|
220
|
|
|
224
|
|
||
Long-term obligations under operating leases
|
4,946
|
|
|
5,276
|
|
||
|
|
|
|
||||
Other liabilities and deferred credits:
|
|
|
|
||||
Frequent flyer deferred revenue
|
2,836
|
|
|
2,719
|
|
||
Postretirement benefit liability
|
789
|
|
|
1,295
|
|
||
Pension liability
|
1,446
|
|
|
1,576
|
|
||
Deferred income taxes
|
1,736
|
|
|
828
|
|
||
Other
|
1,024
|
|
|
1,010
|
|
||
Total other liabilities and deferred credits
|
7,831
|
|
|
7,428
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Preferred stock
|
—
|
|
|
—
|
|
||
Common stock at par, $0.01 par value; authorized 1,000,000,000 shares; outstanding 251,216,381 and 269,914,769 shares at December 31, 2019 and 2018, respectively
|
3
|
|
|
3
|
|
||
Additional capital invested
|
6,129
|
|
|
6,120
|
|
||
Stock held in treasury, at cost
|
(3,599
|
)
|
|
(1,993
|
)
|
||
Retained earnings
|
9,716
|
|
|
6,715
|
|
||
Accumulated other comprehensive loss
|
(718
|
)
|
|
(803
|
)
|
||
Total stockholders' equity
|
11,531
|
|
|
10,042
|
|
||
Total liabilities and stockholders' equity
|
$
|
52,611
|
|
|
$
|
49,024
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018 (a)
|
|
2017 (a)
|
||||||
Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
3,009
|
|
|
$
|
2,122
|
|
|
$
|
2,143
|
|
Adjustments to reconcile net income to net cash provided by operating activities -
|
|
|
|
|
|
||||||
Deferred income taxes
|
882
|
|
|
512
|
|
|
957
|
|
|||
Depreciation and amortization
|
2,288
|
|
|
2,165
|
|
|
2,096
|
|
|||
Special charges, non-cash portion
|
175
|
|
|
416
|
|
|
35
|
|
|||
Unrealized (gains) losses on investments
|
(153
|
)
|
|
5
|
|
|
—
|
|
|||
Other operating activities
|
185
|
|
|
161
|
|
|
142
|
|
|||
Changes in operating assets and liabilities -
|
|
|
|
|
|
||||||
(Increase) decrease in receivables
|
44
|
|
|
17
|
|
|
(73
|
)
|
|||
(Increase) decrease in other assets
|
(252
|
)
|
|
265
|
|
|
(432
|
)
|
|||
Increase in advance ticket sales
|
438
|
|
|
441
|
|
|
145
|
|
|||
Increase (decrease) in frequent flyer deferred revenue
|
271
|
|
|
222
|
|
|
(107
|
)
|
|||
Increase in accounts payable
|
324
|
|
|
130
|
|
|
66
|
|
|||
Decrease in advanced purchase of miles
|
—
|
|
|
—
|
|
|
(942
|
)
|
|||
Decrease in other liabilities
|
(302
|
)
|
|
(292
|
)
|
|
(556
|
)
|
|||
Net cash provided by operating activities
|
6,909
|
|
|
6,164
|
|
|
3,474
|
|
|||
Investing Activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(4,528
|
)
|
|
(4,070
|
)
|
|
(3,870
|
)
|
|||
Purchases of short-term and other investments
|
(2,897
|
)
|
|
(2,552
|
)
|
|
(3,241
|
)
|
|||
Proceeds from sale of short-term and other investments
|
2,996
|
|
|
2,616
|
|
|
3,177
|
|
|||
Loans made to others
|
(174
|
)
|
|
(466
|
)
|
|
(30
|
)
|
|||
Investment in affiliates
|
(36
|
)
|
|
(139
|
)
|
|
(2
|
)
|
|||
Other, net
|
79
|
|
|
156
|
|
|
163
|
|
|||
Net cash used in investing activities
|
(4,560
|
)
|
|
(4,455
|
)
|
|
(3,803
|
)
|
|||
Financing Activities:
|
|
|
|
|
|
||||||
Repurchases of common stock
|
(1,645
|
)
|
|
(1,235
|
)
|
|
(1,844
|
)
|
|||
Proceeds from issuance of long-term debt
|
1,847
|
|
|
1,594
|
|
|
2,537
|
|
|||
Payments of long-term debt
|
(1,240
|
)
|
|
(1,727
|
)
|
|
(901
|
)
|
|||
Principal payments under finance leases
|
(151
|
)
|
|
(79
|
)
|
|
(84
|
)
|
|||
Capitalized financing costs
|
(61
|
)
|
|
(37
|
)
|
|
(80
|
)
|
|||
Other, net
|
(30
|
)
|
|
(17
|
)
|
|
(11
|
)
|
|||
Net cash used in financing activities
|
(1,280
|
)
|
|
(1,501
|
)
|
|
(383
|
)
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
1,069
|
|
|
208
|
|
|
(712
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
1,799
|
|
|
1,591
|
|
|
2,303
|
|
|||
Cash, cash equivalents and restricted cash at end of year
|
$
|
2,868
|
|
|
$
|
1,799
|
|
|
$
|
1,591
|
|
|
|
|
|
|
|
||||||
Investing and Financing Activities Not Affecting Cash:
|
|
|
|
|
|
||||||
Property and equipment acquired through the issuance of debt
|
$
|
493
|
|
|
$
|
143
|
|
|
$
|
897
|
|
Right-of-use assets acquired through operating leases
|
498
|
|
|
663
|
|
|
319
|
|
|||
Property and equipment acquired through finance lease
|
22
|
|
|
17
|
|
|
16
|
|
|||
Lease modifications and lease conversions
|
(2
|
)
|
|
52
|
|
|
—
|
|
|||
Debt associated with termination of a maintenance service agreement
|
—
|
|
|
163
|
|
|
—
|
|
|||
Investment in Republic Airways Holdings Inc. received from bankruptcy claims
|
—
|
|
|
—
|
|
|
92
|
|
|||
|
|
|
|
|
|
||||||
Cash Paid During the Period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
648
|
|
|
$
|
651
|
|
|
$
|
571
|
|
Income taxes
|
29
|
|
|
19
|
|
|
20
|
|
|
Common
Stock
|
|
Additional
Capital Invested
|
|
Treasury Stock
|
|
Retained Earnings (Accumulated Deficit)
|
|
Accumulated
Other Comprehensive Income (Loss)
|
|
Total
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
Balance at December 31, 2016
|
314.6
|
|
|
$
|
3
|
|
|
$
|
6,569
|
|
|
$
|
(511
|
)
|
|
$
|
3,342
|
|
|
$
|
(829
|
)
|
|
$
|
8,574
|
|
Net income (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,143
|
|
|
—
|
|
|
2,143
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(200
|
)
|
|
(200
|
)
|
||||||
Stock-settled share-based compensation
|
—
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56
|
|
||||||
Proceeds from exercise of stock options
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Repurchases of common stock
|
(27.8
|
)
|
|
—
|
|
|
—
|
|
|
(1,844
|
)
|
|
—
|
|
|
—
|
|
|
(1,844
|
)
|
||||||
Treasury stock retired
|
—
|
|
|
—
|
|
|
(508
|
)
|
|
1,576
|
|
|
(1,068
|
)
|
|
—
|
|
|
—
|
|
||||||
Net treasury stock issued for share-based awards
|
0.2
|
|
|
—
|
|
|
(21
|
)
|
|
10
|
|
|
(1
|
)
|
|
—
|
|
|
(12
|
)
|
||||||
Excess tax benefits from share-based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
||||||
Reclassification of stranded tax effects
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
118
|
|
|
(118
|
)
|
|
—
|
|
||||||
Other (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55
|
|
|
—
|
|
|
55
|
|
||||||
Balance at December 31, 2017
|
287.0
|
|
|
3
|
|
|
6,098
|
|
|
(769
|
)
|
|
4,603
|
|
|
(1,147
|
)
|
|
8,788
|
|
||||||
Net income (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,122
|
|
|
—
|
|
|
2,122
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
338
|
|
|
338
|
|
||||||
Stock-settled share-based compensation
|
—
|
|
|
—
|
|
|
60
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60
|
|
||||||
Repurchases of common stock
|
(17.5
|
)
|
|
—
|
|
|
—
|
|
|
(1,250
|
)
|
|
—
|
|
|
—
|
|
|
(1,250
|
)
|
||||||
Net treasury stock issued for share-based awards
|
0.4
|
|
|
—
|
|
|
(38
|
)
|
|
26
|
|
|
(4
|
)
|
|
—
|
|
|
(16
|
)
|
||||||
Adoption of accounting standard related to equity investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
6
|
|
|
—
|
|
||||||
Balance at December 31, 2018
|
269.9
|
|
|
3
|
|
|
6,120
|
|
|
(1,993
|
)
|
|
6,715
|
|
|
(803
|
)
|
|
10,042
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,009
|
|
|
—
|
|
|
3,009
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85
|
|
|
85
|
|
||||||
Stock-settled share-based compensation
|
—
|
|
|
—
|
|
|
66
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66
|
|
||||||
Repurchases of common stock
|
(19.2
|
)
|
|
—
|
|
|
—
|
|
|
(1,641
|
)
|
|
—
|
|
|
—
|
|
|
(1,641
|
)
|
||||||
Net treasury stock issued for share-based awards
|
0.5
|
|
|
—
|
|
|
(57
|
)
|
|
35
|
|
|
(8
|
)
|
|
—
|
|
|
(30
|
)
|
||||||
Balance at December 31, 2019
|
251.2
|
|
|
$
|
3
|
|
|
$
|
6,129
|
|
|
$
|
(3,599
|
)
|
|
$
|
9,716
|
|
|
$
|
(718
|
)
|
|
$
|
11,531
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018 (a)
|
|
2017 (a)
|
||||||
Operating revenue:
|
|
|
|
|
|
||||||
Passenger revenue
|
$
|
39,625
|
|
|
$
|
37,706
|
|
|
$
|
34,460
|
|
Cargo
|
1,179
|
|
|
1,237
|
|
|
1,114
|
|
|||
Other operating revenue
|
2,455
|
|
|
2,360
|
|
|
2,210
|
|
|||
Total operating revenue
|
43,259
|
|
|
41,303
|
|
|
37,784
|
|
|||
Operating expense:
|
|
|
|
|
|
||||||
Salaries and related costs
|
12,071
|
|
|
11,458
|
|
|
10,941
|
|
|||
Aircraft fuel
|
8,953
|
|
|
9,307
|
|
|
6,913
|
|
|||
Regional capacity purchase
|
2,849
|
|
|
2,649
|
|
|
2,268
|
|
|||
Landing fees and other rent
|
2,543
|
|
|
2,449
|
|
|
2,310
|
|
|||
Depreciation and amortization
|
2,288
|
|
|
2,165
|
|
|
2,096
|
|
|||
Aircraft maintenance materials and outside repairs
|
1,794
|
|
|
1,767
|
|
|
1,856
|
|
|||
Distribution expenses
|
1,651
|
|
|
1,558
|
|
|
1,435
|
|
|||
Aircraft rent
|
288
|
|
|
433
|
|
|
621
|
|
|||
Special charges
|
246
|
|
|
487
|
|
|
176
|
|
|||
Other operating expenses
|
6,273
|
|
|
5,799
|
|
|
5,548
|
|
|||
Total operating expense
|
38,956
|
|
|
38,072
|
|
|
34,164
|
|
|||
Operating income
|
4,303
|
|
|
3,231
|
|
|
3,620
|
|
|||
|
|
|
|
|
|
||||||
Nonoperating income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(731
|
)
|
|
(670
|
)
|
|
(626
|
)
|
|||
Interest capitalized
|
85
|
|
|
65
|
|
|
74
|
|
|||
Interest income
|
133
|
|
|
101
|
|
|
57
|
|
|||
Unrealized gains (losses) on investments, net
|
153
|
|
|
(5
|
)
|
|
—
|
|
|||
Miscellaneous, net
|
(27
|
)
|
|
(72
|
)
|
|
(100
|
)
|
|||
Total nonoperating expense, net
|
(387
|
)
|
|
(581
|
)
|
|
(595
|
)
|
|||
Income before income taxes
|
3,916
|
|
|
2,650
|
|
|
3,025
|
|
|||
Income tax expense
|
905
|
|
|
527
|
|
|
864
|
|
|||
Net income
|
$
|
3,011
|
|
|
$
|
2,123
|
|
|
$
|
2,161
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018 (a)
|
|
2017 (a)
|
||||||
|
|
|
|
|
|
||||||
Net income
|
$
|
3,011
|
|
|
$
|
2,123
|
|
|
$
|
2,161
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Employee benefit plans
|
80
|
|
|
342
|
|
|
(195
|
)
|
|||
Investments and other
|
5
|
|
|
(4
|
)
|
|
(5
|
)
|
|||
Total other comprehensive income (loss), net of tax
|
85
|
|
|
338
|
|
|
(200
|
)
|
|||
Total comprehensive income, net
|
$
|
3,096
|
|
|
$
|
2,461
|
|
|
$
|
1,961
|
|
|
At December 31,
|
||||||
ASSETS
|
2019
|
|
2018 (a)
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,756
|
|
|
$
|
1,688
|
|
Short-term investments
|
2,182
|
|
|
2,256
|
|
||
Receivables, less allowance for doubtful accounts (2019—$9; 2018—$8)
|
1,364
|
|
|
1,426
|
|
||
Aircraft fuel, spare parts and supplies, less obsolescence allowance (2019—$425; 2018—$412)
|
1,072
|
|
|
985
|
|
||
Prepaid expenses and other
|
814
|
|
|
733
|
|
||
Total current assets
|
8,188
|
|
|
7,088
|
|
||
Operating property and equipment:
|
|
|
|
||||
Flight equipment
|
35,421
|
|
|
32,599
|
|
||
Other property and equipment
|
7,926
|
|
|
6,889
|
|
||
Purchase deposits for flight equipment
|
1,360
|
|
|
1,177
|
|
||
Total operating property and equipment
|
44,707
|
|
|
40,665
|
|
||
Less—Accumulated depreciation and amortization
|
(14,537
|
)
|
|
(13,266
|
)
|
||
Total operating property and equipment, net
|
30,170
|
|
|
27,399
|
|
||
|
|
|
|
||||
Operating lease right-of-use assets
|
4,758
|
|
|
5,262
|
|
||
|
|
|
|
||||
Other assets:
|
|
|
|
||||
Goodwill
|
4,523
|
|
|
4,523
|
|
||
Intangibles, less accumulated amortization (2019—$1,440; 2018—$1,380)
|
3,009
|
|
|
3,159
|
|
||
Restricted cash
|
106
|
|
|
105
|
|
||
Notes receivable, net
|
671
|
|
|
516
|
|
||
Investments in affiliates and other, net
|
1,180
|
|
|
966
|
|
||
Total other assets
|
9,489
|
|
|
9,269
|
|
||
Total assets
|
$
|
52,605
|
|
|
$
|
49,018
|
|
|
At December 31,
|
||||||
LIABILITIES AND STOCKHOLDER'S EQUITY
|
2019
|
|
2018 (a)
|
||||
Current liabilities:
|
|
|
|
||||
Advance ticket sales
|
$
|
4,819
|
|
|
$
|
4,381
|
|
Accounts payable
|
2,703
|
|
|
2,363
|
|
||
Frequent flyer deferred revenue
|
2,440
|
|
|
2,286
|
|
||
Accrued salaries and benefits
|
2,271
|
|
|
2,184
|
|
||
Current maturities of long-term debt
|
1,407
|
|
|
1,230
|
|
||
Current maturities of finance leases
|
46
|
|
|
123
|
|
||
Current maturities of operating leases
|
686
|
|
|
719
|
|
||
Other
|
571
|
|
|
558
|
|
||
Total current liabilities
|
14,943
|
|
|
13,844
|
|
||
|
|
|
|
||||
Long-term debt
|
13,145
|
|
|
12,215
|
|
||
Long-term obligations under finance leases
|
220
|
|
|
224
|
|
||
Long-term obligations under operating leases
|
4,946
|
|
|
5,276
|
|
||
|
|
|
|
||||
Other liabilities and deferred credits:
|
|
|
|
||||
Frequent flyer deferred revenue
|
2,836
|
|
|
2,719
|
|
||
Postretirement benefit liability
|
789
|
|
|
1,295
|
|
||
Pension liability
|
1,446
|
|
|
1,576
|
|
||
Deferred income taxes
|
1,763
|
|
|
855
|
|
||
Other
|
1,025
|
|
|
1,010
|
|
||
Total other liabilities and deferred credits
|
7,859
|
|
|
7,455
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholder's equity:
|
|
|
|
||||
Common stock at par, $0.01 par value; authorized 1,000 shares; issued and outstanding 1,000 shares at December 31, 2019 and 2018
|
—
|
|
|
—
|
|
||
Additional capital invested
|
—
|
|
|
598
|
|
||
Retained earnings
|
12,353
|
|
|
10,319
|
|
||
Accumulated other comprehensive loss
|
(718
|
)
|
|
(803
|
)
|
||
Receivable from related parties
|
(143
|
)
|
|
(110
|
)
|
||
Total stockholder's equity
|
11,492
|
|
|
10,004
|
|
||
Total liabilities and stockholder's equity
|
$
|
52,605
|
|
|
$
|
49,018
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018 (a)
|
|
2017 (a)
|
||||||
Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
3,011
|
|
|
$
|
2,123
|
|
|
$
|
2,161
|
|
Adjustments to reconcile net income to net cash provided by operating activities -
|
|
|
|
|
|
||||||
Deferred income taxes
|
882
|
|
|
513
|
|
|
941
|
|
|||
Depreciation and amortization
|
2,288
|
|
|
2,165
|
|
|
2,096
|
|
|||
Special charges, non-cash portion
|
175
|
|
|
416
|
|
|
35
|
|
|||
Unrealized (gains) losses on investments
|
(153
|
)
|
|
5
|
|
|
—
|
|
|||
Other operating activities
|
186
|
|
|
162
|
|
|
141
|
|
|||
Changes in operating assets and liabilities -
|
|
|
|
|
|
||||||
(Increase) decrease in receivables
|
44
|
|
|
17
|
|
|
(73
|
)
|
|||
Increase in intercompany receivables
|
(33
|
)
|
|
(20
|
)
|
|
(15
|
)
|
|||
(Increase) decrease in other assets
|
(252
|
)
|
|
265
|
|
|
(432
|
)
|
|||
Increase in advance ticket sales
|
438
|
|
|
441
|
|
|
145
|
|
|||
Increase (decrease) in frequent flyer deferred revenue
|
271
|
|
|
222
|
|
|
(107
|
)
|
|||
Increase in accounts payable
|
324
|
|
|
130
|
|
|
66
|
|
|||
Decrease in advanced purchase of miles
|
—
|
|
|
—
|
|
|
(942
|
)
|
|||
Decrease in other liabilities
|
(302
|
)
|
|
(293
|
)
|
|
(556
|
)
|
|||
Net cash provided by operating activities
|
6,879
|
|
|
6,146
|
|
|
3,460
|
|
|||
Investing Activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(4,528
|
)
|
|
(4,070
|
)
|
|
(3,870
|
)
|
|||
Purchases of short-term and other investments
|
(2,897
|
)
|
|
(2,552
|
)
|
|
(3,241
|
)
|
|||
Proceeds from sale of short-term and other investments
|
2,996
|
|
|
2,616
|
|
|
3,177
|
|
|||
Loans made to others
|
(174
|
)
|
|
(466
|
)
|
|
(30
|
)
|
|||
Investment in affiliates
|
(36
|
)
|
|
(139
|
)
|
|
(2
|
)
|
|||
Other, net
|
79
|
|
|
156
|
|
|
163
|
|
|||
Net cash used in investing activities
|
(4,560
|
)
|
|
(4,455
|
)
|
|
(3,803
|
)
|
|||
Financing Activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of long-term debt
|
1,847
|
|
|
1,594
|
|
|
2,537
|
|
|||
Payments of long-term debt
|
(1,240
|
)
|
|
(1,727
|
)
|
|
(901
|
)
|
|||
Dividend to UAL
|
(1,645
|
)
|
|
(1,235
|
)
|
|
(1,844
|
)
|
|||
Principal payments under finance leases
|
(151
|
)
|
|
(79
|
)
|
|
(84
|
)
|
|||
Capitalized financing costs
|
(61
|
)
|
|
(37
|
)
|
|
(80
|
)
|
|||
Other, net
|
—
|
|
|
1
|
|
|
3
|
|
|||
Net cash used in financing activities
|
(1,250
|
)
|
|
(1,483
|
)
|
|
(369
|
)
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
1,069
|
|
|
208
|
|
|
(712
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
1,793
|
|
|
1,585
|
|
|
2,297
|
|
|||
Cash, cash equivalents and restricted cash at end of year
|
$
|
2,862
|
|
|
$
|
1,793
|
|
|
$
|
1,585
|
|
|
|
|
|
|
|
||||||
Investing and Financing Activities Not Affecting Cash:
|
|
|
|
|
|
||||||
Property and equipment acquired through the issuance of debt
|
$
|
493
|
|
|
$
|
143
|
|
|
$
|
897
|
|
Right-of-use assets acquired through operating leases
|
498
|
|
|
663
|
|
|
319
|
|
|||
Property and equipment acquired through finance lease
|
22
|
|
|
17
|
|
|
16
|
|
|||
Lease modifications and lease conversions
|
(2
|
)
|
|
52
|
|
|
—
|
|
|||
Debt associated with termination of a maintenance service agreement
|
—
|
|
|
163
|
|
|
—
|
|
|||
Investment in Republic Airways Holdings Inc. received from bankruptcy claims
|
—
|
|
|
—
|
|
|
92
|
|
|||
|
|
|
|
|
|
||||||
Cash Paid During the Period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
648
|
|
|
$
|
651
|
|
|
$
|
571
|
|
Income taxes
|
29
|
|
|
19
|
|
|
20
|
|
|
Additional
Capital
Invested
|
|
Retained Earnings (Accumulated
Deficit)
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Receivable from Related Parties, Net
|
|
Total
|
||||||||||
Balance at December 31, 2016
|
$
|
3,573
|
|
|
$
|
5,851
|
|
|
$
|
(829
|
)
|
|
$
|
(75
|
)
|
|
$
|
8,520
|
|
Net income (a)
|
—
|
|
|
2,161
|
|
|
—
|
|
|
—
|
|
|
2,161
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(200
|
)
|
|
—
|
|
|
(200
|
)
|
|||||
Dividend to UAL
|
(1,844
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,844
|
)
|
|||||
Stock-settled share-based compensation
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|||||
UAL contribution related to stock plans
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Excess tax benefits from share-based awards
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|||||
Reclassification of stranded tax effects
|
—
|
|
|
118
|
|
|
(118
|
)
|
|
—
|
|
|
—
|
|
|||||
Other (a)
|
—
|
|
|
57
|
|
|
—
|
|
|
(15
|
)
|
|
42
|
|
|||||
Balance at December 31, 2017
|
1,787
|
|
|
8,201
|
|
|
(1,147
|
)
|
|
(90
|
)
|
|
8,751
|
|
|||||
Net income (a)
|
—
|
|
|
2,123
|
|
|
—
|
|
|
—
|
|
|
2,123
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
338
|
|
|
—
|
|
|
338
|
|
|||||
Dividend to UAL
|
(1,249
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,249
|
)
|
|||||
Stock-settled share-based compensation
|
60
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|||||
Other
|
—
|
|
|
(5
|
)
|
|
6
|
|
|
(20
|
)
|
|
(19
|
)
|
|||||
Balance at December 31, 2018
|
598
|
|
|
10,319
|
|
|
(803
|
)
|
|
(110
|
)
|
|
10,004
|
|
|||||
Net income
|
—
|
|
|
3,011
|
|
|
—
|
|
|
—
|
|
|
3,011
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
85
|
|
|
—
|
|
|
85
|
|
|||||
Dividend to UAL
|
(664
|
)
|
|
(977
|
)
|
|
—
|
|
|
—
|
|
|
(1,641
|
)
|
|||||
Stock-settled share-based compensation
|
66
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(33
|
)
|
|
(33
|
)
|
|||||
Balance at December 31, 2019
|
$
|
—
|
|
|
$
|
12,353
|
|
|
$
|
(718
|
)
|
|
$
|
(143
|
)
|
|
$
|
11,492
|
|
(a)
|
Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates.
|
(b)
|
Revenue Recognition—The Company presents Passenger revenue, Cargo revenue and Other operating revenue on its income statement. Passenger revenue is recognized when transportation is provided and Cargo revenue is recognized when shipments arrive at their destination. Other operating revenue is recognized as the related performance obligations are satisfied.
|
|
Revenue by Geography. The Company further disaggregates revenue by geographic regions.
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Domestic (U.S. and Canada)
|
|
$
|
26,960
|
|
|
$
|
25,552
|
|
|
$
|
23,114
|
|
Atlantic
|
|
7,387
|
|
|
7,103
|
|
|
6,340
|
|
|||
Pacific
|
|
5,132
|
|
|
5,188
|
|
|
4,914
|
|
|||
Latin America
|
|
3,780
|
|
|
3,460
|
|
|
3,416
|
|
|||
Total
|
|
$
|
43,259
|
|
|
$
|
41,303
|
|
|
$
|
37,784
|
|
(c)
|
Ticket Taxes—Certain governmental taxes are imposed on the Company's ticket sales through a fee included in ticket prices. The Company collects these fees and remits them to the appropriate government agency. These fees are recorded on a net basis and, as a result, are excluded from revenue.
|
(d)
|
Frequent Flyer Accounting—United's MileagePlus loyalty program builds customer loyalty by offering awards, benefits and services to program participants. Members in this program earn miles for travel on United, United Express, Star Alliance members and certain other airlines that participate in the program. Members can also earn miles by purchasing goods and services from our network of non-airline partners. We have contracts to sell miles to these partners with the terms extending from one to nine years. These partners include domestic and international credit card issuers, retail merchants, hotels, car rental companies and our participating airline partners. Miles can be redeemed for free (other than taxes and government-imposed fees), discounted or upgraded air travel and non-travel awards.
|
•
|
MileagePlus miles awarded – United has a performance obligation to provide MileagePlus cardholders with miles to be used for air travel and non-travel award redemptions. The Company records Passenger revenue related to the travel awards when the transportation is provided and records Other revenue related to the non-travel awards when the goods or services are delivered. The Company records the cost associated with non-travel awards in Other operating revenue.
|
•
|
Marketing – United has a performance obligation to provide Chase access to United's customer list and the use of United's brand. Marketing revenue is recorded to Other operating revenue as miles are delivered to Chase.
|
•
|
Advertising – United has a performance obligation to provide advertising in support of the MileagePlus card in various customer contact points such as United's website, email promotions, direct mail campaigns, airport advertising and in-flight advertising. Advertising revenue is recorded to Other operating revenue as miles are delivered to Chase.
|
•
|
Other travel-related benefits – United's performance obligations are comprised of various items such as waived bag fees, seat upgrades and lounge passes. Lounge passes are recorded to Other operating revenue as customers use the lounge passes. Bag fees and seat upgrades are recorded to Passenger revenue at the time of the associated travel.
|
|
Twelve Months Ended
December 31, |
||||||
|
2019
|
|
2018
|
||||
Total Frequent flyer deferred revenue - beginning balance
|
$
|
5,005
|
|
|
$
|
4,783
|
|
Total miles awarded
|
2,621
|
|
|
2,451
|
|
||
Travel miles redeemed (Passenger revenue)
|
(2,213
|
)
|
|
(2,068
|
)
|
||
Non-travel miles redeemed (Other operating revenue)
|
(137
|
)
|
|
(161
|
)
|
||
Total Frequent flyer deferred revenue - ending balance
|
$
|
5,276
|
|
|
$
|
5,005
|
|
(e)
|
Cash and Cash Equivalents and Restricted Cash—Highly liquid investments with a maturity of three months or less on their acquisition date are classified as cash and cash equivalents.
|
|
UAL
|
|
United
|
||||||||||||||||||||||
|
At December 31,
|
|
At December 31,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and cash equivalents
|
$
|
2,762
|
|
|
$
|
1,694
|
|
|
$
|
1,482
|
|
|
$
|
2,756
|
|
|
$
|
1,688
|
|
|
$
|
1,476
|
|
||
Restricted cash included in Prepaid expenses and other
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
||||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Restricted cash
|
106
|
|
|
105
|
|
|
91
|
|
|
106
|
|
|
105
|
|
|
91
|
|
||||||||
Total cash, cash equivalents and restricted cash shown in the statement of consolidated cash flows
|
$
|
2,868
|
|
|
$
|
1,799
|
|
|
$
|
1,591
|
|
|
$
|
2,862
|
|
|
$
|
1,793
|
|
|
$
|
1,585
|
|
(f)
|
Investments—Debt investments are classified as available-for-sale and are stated at fair value. Realized gains and losses on sales of these investments are reflected in Miscellaneous, net in the consolidated statements of operations. Unrealized gains and losses on available-for-sale securities are reflected as a component of accumulated other comprehensive income (loss). Equity investments with readily determinable fair values are measured at fair value. Equity investments without readily determinable fair values are measured using the equity method, or measured at cost with adjustments for observable changes in price or impairments (referred to as the measurement alternative). Changes in fair value are recorded in Unrealized gains (losses) on investments, net in the consolidated statements of operations.
|
(g)
|
Accounts Receivable—Accounts receivable primarily consist of amounts due from credit card companies, non-airline partners, and cargo transportation customers. We provide an allowance for uncollectible accounts equal to the estimated losses expected to be incurred based on historical write-offs and other specific analyses. Bad debt expense and write-offs were not material for the year ended December 31, 2019 and 2018.
|
(h)
|
Aircraft Fuel, Spare Parts and Supplies—The Company accounts for aircraft fuel, spare parts and supplies at average cost and provides an obsolescence allowance for aircraft spare parts with an assumed residual value of 10% of original cost.
|
(i)
|
Property and Equipment—The Company records additions to owned operating property and equipment at cost when acquired. Property under finance leases and the related obligation for future lease payments are recorded at an amount equal to the initial present value of those lease payments. Modifications that enhance the operating performance or extend the useful lives of airframes or engines are capitalized as property and equipment. It is the Company's policy to record contractual damages received related to delays in delivery of aircraft as a reduction of the cost of the related aircraft.
|
|
|
Estimated Useful Life (in years)
|
Aircraft, spare engines and related rotable parts
|
|
25 to 30
|
Aircraft seats
|
|
10 to 15
|
Buildings
|
|
25 to 45
|
Other property and equipment
|
|
3 to 15
|
Computer software
|
|
5 to 15
|
Building improvements
|
|
1 to 40
|
(j)
|
Long-Lived Asset Impairments—The Company evaluates the carrying value of long-lived assets subject to amortization whenever events or changes in circumstances indicate that an impairment may exist. For purposes of this testing, the Company has generally identified the aircraft fleet type as the lowest level of identifiable cash flows. An impairment charge is recognized when the asset's carrying value exceeds its net undiscounted future cash flows and its fair market value. The amount of the charge is the difference between the asset's carrying value and fair market value. See Note 14 of this report for additional information related to impairments.
|
(k)
|
Intangibles—The Company has finite-lived and indefinite-lived intangible assets, including goodwill. Finite-lived intangible assets are amortized over their estimated useful lives. Goodwill and indefinite-lived intangible assets are not amortized but are reviewed for impairment on an annual basis as of October 1, or more frequently if events or circumstances indicate that the asset may be impaired. See Note 14 of this report for additional information related to impairments.
|
|
|
2019
|
|
2018
|
||||||||||||
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Goodwill
|
|
$
|
4,523
|
|
|
|
|
$
|
4,523
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Indefinite-lived intangible assets
|
|
|
|
|
|
|
|
|
||||||||
Route authorities
|
|
$
|
1,150
|
|
|
|
|
$
|
1,240
|
|
|
|
||||
Airport slots
|
|
546
|
|
|
|
|
546
|
|
|
|
||||||
Tradenames and logos
|
|
593
|
|
|
|
|
593
|
|
|
|
||||||
Alliances
|
|
404
|
|
|
|
|
404
|
|
|
|
||||||
Total
|
|
$
|
2,693
|
|
|
|
|
$
|
2,783
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Finite-lived intangible assets
|
|
|
|
|
|
|
|
|
||||||||
Frequent flyer database
|
|
$
|
1,177
|
|
|
$
|
931
|
|
|
$
|
1,177
|
|
|
$
|
884
|
|
Hubs
|
|
145
|
|
|
104
|
|
|
145
|
|
|
97
|
|
||||
Contracts
|
|
120
|
|
|
111
|
|
|
120
|
|
|
106
|
|
||||
Other
|
|
314
|
|
|
294
|
|
|
314
|
|
|
293
|
|
||||
Total
|
|
$
|
1,756
|
|
|
$
|
1,440
|
|
|
$
|
1,756
|
|
|
$
|
1,380
|
|
(l)
|
Labor Costs—The Company records expenses associated with new or amendable labor agreements when the amounts are probable and estimable. These include costs associated with lump sum cash payments that would be made in conjunction with the ratification of labor agreements. To the extent these upfront costs are in lieu of future pay increases, they would be capitalized and amortized over the term of the labor agreements. If not, these amounts would be expensed.
|
(m)
|
Share-Based Compensation—The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. The resulting cost is recognized over the period during which an employee is required to provide service in exchange for the award, usually the vesting period. Obligations for cash-settled restricted stock units ("RSUs") are remeasured at fair value throughout the requisite service period at the close of the reporting period based upon UAL's stock price. In addition to the service requirement, certain RSUs have performance metrics that must be achieved prior to vesting. These awards are accrued based on the expected level of achievement at each reporting period. An adjustment is recorded each reporting period to adjust compensation expense based on the then current level of expected performance achievement for the performance-based awards. See Note 4 of this report for additional information on UAL's share-based compensation plans.
|
(n)
|
Maintenance and Repairs—The cost of maintenance and repairs, including the cost of minor replacements, is charged to expense as incurred, except for costs incurred under our power-by-the-hour ("PBTH") engine maintenance agreements. PBTH contracts transfer certain risk to third-party service providers and fix the amount we pay per flight hour or per cycle to the service provider in exchange for maintenance and repairs under a predefined maintenance program. Under PBTH agreements, the Company recognizes expense at a level rate per engine hour, unless the level of service effort and the related payments during the period are substantially consistent, in which case the Company recognizes expense based on the amounts paid.
|
(o)
|
Advertising—Advertising costs, which are included in Other operating expenses, are expensed as incurred. Advertising expenses were $212 million, $211 million and $217 million for the years ended December 31, 2019, 2018 and 2017, respectively.
|
(p)
|
Third-Party Business—The Company has third-party business revenue that includes fuel sales, catering, ground handling, maintenance services and frequent flyer award non-travel redemptions. Third-party business revenue is recorded in Other operating revenue. The Company also incurs third-party business expenses, such as maintenance, ground handling and catering services for third parties, fuel sales and non-travel mileage redemptions. The third-party business expenses are recorded in Other operating expenses, except for non-travel mileage redemption. Non-travel mileage redemption expenses are recorded to Other operating revenue.
|
(q)
|
Uncertain Income Tax Positions—The Company has recorded reserves for income taxes and associated interest that may become payable in future years. Although management believes that its positions taken on income tax matters are reasonable, the Company nevertheless has established tax and interest reserves in recognition that various taxing authorities may challenge certain of the positions taken by the Company, potentially resulting in additional liabilities for taxes and interest. The Company's uncertain tax position reserves are reviewed periodically and are adjusted as events occur that affect its estimates, such as the availability of new information, the lapsing of applicable statutes of limitation, the conclusion of tax audits, the measurement of additional estimated liability, the identification of new tax matters, the release of administrative tax guidance affecting its estimates of tax liabilities, or the rendering of relevant court decisions. The Company records penalties and interest relating to uncertain tax positions as part of income tax expense in its consolidated statements of operations. See Note 6 of this report for additional information on UAL's uncertain tax positions.
|
(r)
|
Recently Issued Accounting Standards—The Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 842, Leases (the "New Lease Standard"), effective January 1, 2019. The Company used the modified retrospective approach for all leases existing at or commencing after January 1, 2017 and elected the package of transition practical expedients for expired or existing contracts, which does not require reassessment of: (1) whether any of our contracts are or contain leases, (2) lease classification and (3) initial direct costs. The New Lease Standard prescribes that an entity should recognize a right-of-use asset and a lease liability for all leases at the commencement date of each lease and recognize expenses on their income statements similar to the prior FASB Accounting Standards Codification Topic 840, Leases ("Topic 840").
|
|
As Reported
|
|
New Lease Standard Adjustments
|
|
As Adjusted
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
Regional capacity purchase
|
$
|
2,601
|
|
|
$
|
2,232
|
|
|
$
|
48
|
|
|
$
|
36
|
|
|
$
|
2,649
|
|
|
$
|
2,268
|
|
Landing fees and other rent
|
2,359
|
|
|
2,240
|
|
|
90
|
|
|
70
|
|
|
2,449
|
|
|
2,310
|
|
||||||
Depreciation and amortization
|
2,240
|
|
|
2,149
|
|
|
(75
|
)
|
|
(53
|
)
|
|
2,165
|
|
|
2,096
|
|
||||||
Interest expense
|
(729
|
)
|
|
(671
|
)
|
|
59
|
|
|
45
|
|
|
(670
|
)
|
|
(626
|
)
|
||||||
Interest capitalized
|
70
|
|
|
84
|
|
|
(5
|
)
|
|
(10
|
)
|
|
65
|
|
|
74
|
|
||||||
Income tax expense
|
529
|
|
|
896
|
|
|
(3
|
)
|
|
(16
|
)
|
|
526
|
|
|
880
|
|
||||||
Net income
|
2,129
|
|
|
2,144
|
|
|
(7
|
)
|
|
(1
|
)
|
|
2,122
|
|
|
2,143
|
|
||||||
Earnings per share, basic
|
7.73
|
|
|
7.08
|
|
|
(0.03
|
)
|
|
—
|
|
|
7.70
|
|
|
7.08
|
|
||||||
Earnings per share, diluted
|
7.70
|
|
|
7.06
|
|
|
(0.03
|
)
|
|
—
|
|
|
7.67
|
|
|
7.06
|
|
|
|
December 31, 2018
|
||||||||||
|
|
As Reported
|
|
New Lease Standard Adjustments
|
|
As Adjusted
|
||||||
Receivables, less allowance for doubtful accounts
|
|
$
|
1,346
|
|
|
$
|
80
|
|
|
$
|
1,426
|
|
Prepaid expenses and other
|
|
913
|
|
|
(180
|
)
|
|
733
|
|
|||
Flight equipment, owned and finance leases (a)
|
|
32,636
|
|
|
(37
|
)
|
|
32,599
|
|
|||
Other property and equipment, owned and finance leases (a)
|
|
7,930
|
|
|
(1,041
|
)
|
|
6,889
|
|
|||
Accumulated depreciation and amortization, owned and finance leases (a)
|
|
(13,414
|
)
|
|
148
|
|
|
(13,266
|
)
|
|||
Operating lease right-of-use assets
|
|
—
|
|
|
5,262
|
|
|
5,262
|
|
|||
Current maturities of finance leases (a)
|
|
149
|
|
|
(26
|
)
|
|
123
|
|
|||
Current maturities of operating leases
|
|
—
|
|
|
719
|
|
|
719
|
|
|||
Other current liabilities
|
|
619
|
|
|
(66
|
)
|
|
553
|
|
|||
Long-term obligations under finance leases (a)
|
|
1,134
|
|
|
(910
|
)
|
|
224
|
|
|||
Long-term obligations under operating leases
|
|
—
|
|
|
5,276
|
|
|
5,276
|
|
|||
Deferred income taxes
|
|
814
|
|
|
14
|
|
|
828
|
|
|||
Other long-term liabilities
|
|
1,832
|
|
|
(822
|
)
|
|
1,010
|
|
|||
Retained earnings
|
|
6,668
|
|
|
47
|
|
|
6,715
|
|
|
As Reported
|
|
New Lease Standard Adjustments
|
|
As Adjusted
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by operating activities
|
$
|
6,181
|
|
|
$
|
3,413
|
|
|
$
|
(17
|
)
|
|
$
|
61
|
|
|
$
|
6,164
|
|
|
$
|
3,474
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
(4,177
|
)
|
|
(3,998
|
)
|
|
107
|
|
|
128
|
|
|
(4,070
|
)
|
|
(3,870
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from issuance of long-term debt
|
1,740
|
|
|
2,765
|
|
|
(146
|
)
|
|
(228
|
)
|
|
1,594
|
|
|
2,537
|
|
||||||
Principal payments under finance leases
|
(134
|
)
|
|
(124
|
)
|
|
55
|
|
|
40
|
|
|
(79
|
)
|
|
(84
|
)
|
|
|
2019
|
|
2018 (a)
|
|
2017 (a)
|
||||||
Earnings available to common stockholders
|
|
$
|
3,009
|
|
|
$
|
2,122
|
|
|
$
|
2,143
|
|
|
|
|
|
|
|
|
||||||
Basic weighted-average shares outstanding
|
|
258.8
|
|
|
275.5
|
|
|
302.7
|
|
|||
Effect of employee stock awards
|
|
1.1
|
|
|
1.2
|
|
|
0.9
|
|
|||
Diluted weighted-average shares outstanding
|
|
259.9
|
|
|
276.7
|
|
|
303.6
|
|
|||
|
|
|
|
|
|
|
||||||
Earnings per share, basic
|
|
$
|
11.63
|
|
|
$
|
7.70
|
|
|
$
|
7.08
|
|
Earnings per share, diluted
|
|
$
|
11.58
|
|
|
$
|
7.67
|
|
|
$
|
7.06
|
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Compensation cost:
|
|
|
|
|
|
|
||||||
RSUs
|
|
$
|
98
|
|
|
$
|
98
|
|
|
$
|
63
|
|
Restricted stock
|
|
1
|
|
|
2
|
|
|
8
|
|
|||
Stock options
|
|
1
|
|
|
1
|
|
|
2
|
|
|||
Total
|
|
$
|
100
|
|
|
$
|
101
|
|
|
$
|
73
|
|
|
|
Unearned Compensation
|
|
Weighted-Average
Remaining Period
(in years)
|
||
RSUs
|
|
$
|
66
|
|
|
2.0
|
Stock options
|
|
11
|
|
|
5.3
|
|
Total
|
|
$
|
77
|
|
|
|
|
|
Liability Awards
|
|
Equity Awards
|
|||||||||||||
|
|
RSUs
|
|
RSUs
|
|
Weighted-
Average
Grant Price
|
|
Restricted
Stock
|
|
Weighted-
Average
Grant Price
|
|||||||
Outstanding at December 31, 2016
|
|
2.1
|
|
|
0.8
|
|
|
$
|
51.67
|
|
|
0.5
|
|
|
$
|
52.00
|
|
Granted
|
|
0.6
|
|
|
1.0
|
|
|
71.68
|
|
|
—
|
|
|
—
|
|
||
Vested
|
|
(0.7
|
)
|
|
(0.3
|
)
|
|
51.81
|
|
|
(0.2
|
)
|
|
51.60
|
|
||
Forfeited
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
57.49
|
|
|
—
|
|
|
—
|
|
||
Outstanding at December 31, 2017
|
|
1.8
|
|
|
1.4
|
|
|
63.99
|
|
|
0.3
|
|
|
52.30
|
|
||
Granted
|
|
0.7
|
|
|
1.1
|
|
|
67.74
|
|
|
—
|
|
|
—
|
|
||
Vested
|
|
(0.5
|
)
|
|
(0.5
|
)
|
|
63.02
|
|
|
(0.2
|
)
|
|
53.24
|
|
||
Forfeited
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
67.34
|
|
|
—
|
|
|
—
|
|
||
Outstanding at December 31, 2018
|
|
1.9
|
|
|
1.8
|
|
|
66.29
|
|
|
0.1
|
|
|
51.17
|
|
||
Granted
|
|
0.1
|
|
|
1.1
|
|
|
86.72
|
|
|
—
|
|
|
—
|
|
||
Vested
|
|
(0.5
|
)
|
|
(0.8
|
)
|
|
64.85
|
|
|
(0.1
|
)
|
|
51.17
|
|
||
Forfeited
|
|
(0.9
|
)
|
|
(0.1
|
)
|
|
76.48
|
|
|
—
|
|
|
—
|
|
||
Outstanding at December 31, 2019
|
|
0.6
|
|
|
2.0
|
|
|
78.03
|
|
|
—
|
|
|
—
|
|
|
|
Pension and
Other
Postretirement
Liabilities
|
|
Investments and Other
|
|
Deferred Taxes
|
|
Total
|
||||||||
Balance at December 31, 2016
|
|
$
|
(854
|
)
|
|
$
|
(1
|
)
|
|
$
|
26
|
|
|
$
|
(829
|
)
|
Change in value
|
|
(306
|
)
|
(a)
|
(7
|
)
|
|
74
|
|
|
(239
|
)
|
||||
Amounts reclassified to earnings
|
|
58
|
|
|
2
|
|
|
(21
|
)
|
|
39
|
|
||||
Reclassification of stranded tax effects
|
|
—
|
|
|
—
|
|
|
(118
|
)
|
(b)
|
(118
|
)
|
||||
Balance at December 31, 2017
|
|
(1,102
|
)
|
|
(6
|
)
|
|
(39
|
)
|
|
(1,147
|
)
|
||||
Change in value
|
|
377
|
|
(a)
|
(5
|
)
|
|
(83
|
)
|
|
289
|
|
||||
Amounts reclassified to earnings
|
|
62
|
|
|
—
|
|
|
(13
|
)
|
|
49
|
|
||||
Amounts reclassified to retained earnings ("RE")
|
|
—
|
|
|
7
|
|
(c)
|
(1
|
)
|
(c)
|
6
|
|
||||
Balance at December 31, 2018
|
|
(663
|
)
|
|
(4
|
)
|
|
(136
|
)
|
|
(803
|
)
|
||||
Change in value
|
|
105
|
|
(a)
|
7
|
|
|
(24
|
)
|
|
88
|
|
||||
Amounts reclassified to earnings
|
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
||||
Balance at December 31, 2019
|
|
$
|
(560
|
)
|
|
$
|
2
|
|
|
$
|
(160
|
)
|
|
$
|
(718
|
)
|
UAL
|
|
2019
|
|
2018 (a)
|
|
2017 (a)
|
||||||
Income tax provision at statutory rate
|
|
$
|
822
|
|
|
$
|
556
|
|
|
$
|
1,058
|
|
State income taxes, net of federal income tax benefit
|
|
50
|
|
|
29
|
|
|
30
|
|
|||
Foreign tax rate differential
|
|
(90
|
)
|
|
(84
|
)
|
|
(43
|
)
|
|||
Global intangible low-taxed income
|
|
90
|
|
|
4
|
|
|
—
|
|
|||
Foreign income taxes
|
|
1
|
|
|
2
|
|
|
3
|
|
|||
Nondeductible employee meals
|
|
12
|
|
|
12
|
|
|
17
|
|
|||
Impact of Tax Act
|
|
—
|
|
|
(5
|
)
|
|
(189
|
)
|
|||
State rate change
|
|
—
|
|
|
3
|
|
|
12
|
|
|||
Valuation allowance
|
|
(4
|
)
|
|
(3
|
)
|
|
(16
|
)
|
|||
Other, net
|
|
24
|
|
|
12
|
|
|
8
|
|
|||
|
|
$
|
905
|
|
|
$
|
526
|
|
|
$
|
880
|
|
|
|
|
|
|
|
|
||||||
Current
|
|
$
|
23
|
|
|
$
|
14
|
|
|
$
|
(77
|
)
|
Deferred
|
|
882
|
|
|
512
|
|
|
957
|
|
|||
|
|
$
|
905
|
|
|
$
|
526
|
|
|
$
|
880
|
|
|
|
|
|
|
|
|
||||||
United
|
|
2019
|
|
2018 (a)
|
|
2017 (a)
|
||||||
Income tax provision at statutory rate
|
|
$
|
822
|
|
|
$
|
557
|
|
|
$
|
1,059
|
|
State income taxes, net of federal income tax
|
|
50
|
|
|
29
|
|
|
30
|
|
|||
Foreign tax rate differential
|
|
(90
|
)
|
|
(84
|
)
|
|
(43
|
)
|
|||
Global intangible low-taxed income
|
|
90
|
|
|
4
|
|
|
—
|
|
|||
Foreign income taxes
|
|
1
|
|
|
2
|
|
|
3
|
|
|||
Nondeductible employee meals
|
|
12
|
|
|
12
|
|
|
17
|
|
|||
Impact of Tax Act
|
|
—
|
|
|
(5
|
)
|
|
(206
|
)
|
|||
State rate change
|
|
—
|
|
|
3
|
|
|
12
|
|
|||
Valuation allowance
|
|
(4
|
)
|
|
(3
|
)
|
|
(16
|
)
|
|||
Other, net
|
|
24
|
|
|
12
|
|
|
8
|
|
|||
|
|
$
|
905
|
|
|
$
|
527
|
|
|
$
|
864
|
|
|
|
|
|
|
|
|
||||||
Current
|
|
$
|
23
|
|
|
$
|
14
|
|
|
$
|
(77
|
)
|
Deferred
|
|
882
|
|
|
513
|
|
|
941
|
|
|||
|
|
$
|
905
|
|
|
$
|
527
|
|
|
$
|
864
|
|
|
|
UAL
|
|
United
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Deferred income tax asset (liability):
|
|
|
|
|
|
|
|
|
||||||||
Federal and state net operating loss ("NOL") carryforwards
|
|
$
|
695
|
|
|
$
|
398
|
|
|
$
|
668
|
|
|
$
|
371
|
|
Deferred revenue
|
|
1,287
|
|
|
1,232
|
|
|
1,287
|
|
|
1,232
|
|
||||
Employee benefits, including pension, postretirement and medical
|
|
715
|
|
|
885
|
|
|
715
|
|
|
885
|
|
||||
Operating lease liabilities
|
|
1,256
|
|
|
1,338
|
|
|
1,256
|
|
|
1,338
|
|
||||
Other
|
|
165
|
|
|
229
|
|
|
165
|
|
|
229
|
|
||||
Less: Valuation allowance
|
|
(58
|
)
|
|
(59
|
)
|
|
(58
|
)
|
|
(59
|
)
|
||||
Total deferred tax assets
|
|
$
|
4,060
|
|
|
$
|
4,023
|
|
|
$
|
4,033
|
|
|
$
|
3,996
|
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation
|
|
$
|
(4,011
|
)
|
|
$
|
(2,929
|
)
|
|
$
|
(4,011
|
)
|
|
$
|
(2,929
|
)
|
Operating lease right-of-use asset
|
|
(1,061
|
)
|
|
(1,173
|
)
|
|
(1,061
|
)
|
|
(1,173
|
)
|
||||
Intangibles
|
|
(724
|
)
|
|
(749
|
)
|
|
(724
|
)
|
|
(749
|
)
|
||||
Total deferred tax liabilities
|
|
$
|
(5,796
|
)
|
|
$
|
(4,851
|
)
|
|
$
|
(5,796
|
)
|
|
$
|
(4,851
|
)
|
Net deferred tax liability
|
|
$
|
(1,736
|
)
|
|
$
|
(828
|
)
|
|
$
|
(1,763
|
)
|
|
$
|
(855
|
)
|
|
Pension Benefits
|
||||||
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
||||
Accumulated benefit obligation:
|
$
|
5,333
|
|
|
$
|
4,448
|
|
|
|
|
|
||||
Change in projected benefit obligation:
|
|
|
|
||||
Projected benefit obligation at beginning of year
|
$
|
5,396
|
|
|
$
|
5,852
|
|
Service cost
|
184
|
|
|
228
|
|
||
Interest cost
|
226
|
|
|
217
|
|
||
Actuarial (gain) loss
|
784
|
|
|
(601
|
)
|
||
Gross benefits paid and settlements
|
(200
|
)
|
|
(292
|
)
|
||
Other
|
8
|
|
|
(8
|
)
|
||
Projected benefit obligation at end of year
|
$
|
6,398
|
|
|
$
|
5,396
|
|
|
|
|
|
||||
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
3,827
|
|
|
$
|
3,932
|
|
Actual (loss) return on plan assets
|
684
|
|
|
(215
|
)
|
||
Employer contributions
|
649
|
|
|
413
|
|
||
Gross benefits paid and settlements
|
(200
|
)
|
|
(292
|
)
|
||
Other
|
4
|
|
|
(11
|
)
|
||
Fair value of plan assets at end of year
|
$
|
4,964
|
|
|
$
|
3,827
|
|
Funded status—Net amount recognized
|
$
|
(1,434
|
)
|
|
$
|
(1,569
|
)
|
|
Pension Benefits
|
||||||
|
December 31, 2019
|
|
December 31, 2018
|
||||
Amounts recognized in the consolidated balance sheets consist of:
|
|
|
|
||||
Noncurrent asset
|
$
|
14
|
|
|
$
|
13
|
|
Current liability
|
(2
|
)
|
|
(6
|
)
|
||
Noncurrent liability
|
(1,446
|
)
|
|
(1,576
|
)
|
||
Total liability
|
$
|
(1,434
|
)
|
|
$
|
(1,569
|
)
|
|
|
|
|
||||
Amounts recognized in accumulated other comprehensive loss consist of:
|
|
|
|
||||
Net actuarial loss
|
$
|
(1,652
|
)
|
|
$
|
(1,382
|
)
|
Prior service cost
|
(4
|
)
|
|
(5
|
)
|
||
Total accumulated other comprehensive loss
|
$
|
(1,656
|
)
|
|
$
|
(1,387
|
)
|
|
|
|
|
||||
|
Other Postretirement Benefits
|
||||||
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
||||
Change in benefit obligation:
|
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
1,391
|
|
|
$
|
1,710
|
|
Service cost
|
10
|
|
|
12
|
|
||
Interest cost
|
47
|
|
|
61
|
|
||
Plan participants' contributions
|
67
|
|
|
68
|
|
||
Benefits paid
|
(180
|
)
|
|
(181
|
)
|
||
Actuarial loss (gain)
|
99
|
|
|
(285
|
)
|
||
Plan amendments
|
(597
|
)
|
|
—
|
|
||
Other
|
5
|
|
|
6
|
|
||
Benefit obligation at end of year
|
$
|
842
|
|
|
$
|
1,391
|
|
|
|
|
|
||||
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
53
|
|
|
$
|
54
|
|
Actual return on plan assets
|
1
|
|
|
1
|
|
||
Employer contributions
|
111
|
|
|
111
|
|
||
Plan participants' contributions
|
67
|
|
|
68
|
|
||
Benefits paid
|
(180
|
)
|
|
(181
|
)
|
||
Fair value of plan assets at end of year
|
52
|
|
|
53
|
|
||
Funded status—Net amount recognized
|
$
|
(790
|
)
|
|
$
|
(1,338
|
)
|
|
Other Postretirement Benefits
|
||||||
|
December 31, 2019
|
|
December 31, 2018
|
||||
Amounts recognized in the consolidated balance sheets consist of:
|
|
|
|
||||
Current liability
|
$
|
(1
|
)
|
|
$
|
(43
|
)
|
Noncurrent liability
|
(789
|
)
|
|
(1,295
|
)
|
||
Total liability
|
$
|
(790
|
)
|
|
$
|
(1,338
|
)
|
Amounts recognized in accumulated other comprehensive income consist of:
|
|
|
|
||||
Net actuarial gain
|
$
|
403
|
|
|
$
|
554
|
|
Prior service credit
|
693
|
|
|
170
|
|
||
Total accumulated other comprehensive income
|
$
|
1,096
|
|
|
$
|
724
|
|
|
2019
|
|
2018
|
||||
Projected benefit obligation
|
$
|
6,161
|
|
|
$
|
5,196
|
|
Accumulated benefit obligation
|
5,137
|
|
|
4,286
|
|
||
Fair value of plan assets
|
4,714
|
|
|
3,614
|
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
|
Pension Benefits
|
|
Other Postretirement Benefits
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
Service cost
|
$
|
184
|
|
|
$
|
10
|
|
|
$
|
228
|
|
|
$
|
12
|
|
|
$
|
195
|
|
|
$
|
13
|
|
Interest cost
|
226
|
|
|
47
|
|
|
217
|
|
|
61
|
|
|
220
|
|
|
66
|
|
||||||
Expected return on plan assets
|
(291
|
)
|
|
(1
|
)
|
|
(292
|
)
|
|
(2
|
)
|
|
(243
|
)
|
|
(2
|
)
|
||||||
Amortization of unrecognized actuarial (gain) loss
|
118
|
|
|
(52
|
)
|
|
130
|
|
|
(32
|
)
|
|
128
|
|
|
(33
|
)
|
||||||
Amortization of prior service credits
|
—
|
|
|
(73
|
)
|
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
(37
|
)
|
||||||
Other
|
5
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||||
Net periodic benefit cost (credit)
|
$
|
242
|
|
|
$
|
(69
|
)
|
|
$
|
284
|
|
|
$
|
2
|
|
|
$
|
305
|
|
|
$
|
7
|
|
|
|
Pension Benefits
|
||||
Assumptions used to determine benefit obligations
|
|
2019
|
|
2018
|
||
Discount rate
|
|
3.52
|
%
|
|
4.20
|
%
|
Rate of compensation increase
|
|
3.89
|
%
|
|
3.89
|
%
|
|
|
|
|
|
||
Assumptions used to determine net expense
|
|
|
||||
Discount rate
|
|
4.21
|
%
|
|
3.65
|
%
|
Expected return on plan assets
|
|
7.40
|
%
|
|
7.31
|
%
|
Rate of compensation increase
|
|
3.89
|
%
|
|
3.89
|
%
|
|
|
Other Postretirement Benefits
|
||||
Assumptions used to determine benefit obligations
|
|
2019
|
|
2018
|
||
Discount rate
|
|
3.35
|
%
|
|
4.30
|
%
|
|
|
|
|
|
||
Assumptions used to determine net expense
|
|
|
|
|
||
Discount rate
|
|
4.30
|
%
|
|
3.63
|
%
|
Expected return on plan assets
|
|
3.00
|
%
|
|
3.00
|
%
|
Health care cost trend rate assumed for next year
|
|
6.00
|
%
|
|
6.00
|
%
|
Rate to which the cost trend rate is assumed to decline (ultimate trend rate in 2033)
|
|
5.00
|
%
|
|
5.00
|
%
|
|
Percent of Total
|
|
Expected Long-Term
Rate of Return
|
||
Equity securities
|
30-45
|
%
|
|
10
|
%
|
Fixed-income securities
|
35-50
|
|
|
5
|
|
Alternatives
|
15-25
|
|
|
7
|
|
Level 1
|
Unadjusted quoted prices in active markets for assets or liabilities identical to those to be reported at fair value
|
||||||
Level 2
|
Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputs
|
||||||
Level 3
|
Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants would price the assets or liabilities
|
|
|
2019
|
|
|
2018
|
||||||||||||||||||||||||||||||||||||
Pension Plan Assets:
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets Measured at NAV(a)
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets Measured at NAV(a)
|
||||||||||||||||||||
Equity securities funds
|
|
$
|
1,957
|
|
|
$
|
47
|
|
|
$
|
117
|
|
|
$
|
71
|
|
|
$
|
1,722
|
|
|
|
$
|
1,457
|
|
|
$
|
254
|
|
|
$
|
106
|
|
|
$
|
63
|
|
|
$
|
1,034
|
|
Fixed-income securities
|
|
1,732
|
|
|
—
|
|
|
687
|
|
|
69
|
|
|
976
|
|
|
|
1,520
|
|
|
—
|
|
|
628
|
|
|
87
|
|
|
805
|
|
||||||||||
Alternatives
|
|
776
|
|
|
—
|
|
|
—
|
|
|
205
|
|
|
571
|
|
|
|
596
|
|
|
—
|
|
|
—
|
|
|
134
|
|
|
462
|
|
||||||||||
Other investments
|
|
499
|
|
|
466
|
|
|
21
|
|
|
12
|
|
|
—
|
|
|
|
254
|
|
|
224
|
|
|
17
|
|
|
13
|
|
|
—
|
|
||||||||||
Total
|
|
$
|
4,964
|
|
|
$
|
513
|
|
|
$
|
825
|
|
|
$
|
357
|
|
|
$
|
3,269
|
|
|
|
$
|
3,827
|
|
|
$
|
478
|
|
|
$
|
751
|
|
|
$
|
297
|
|
|
$
|
2,301
|
|
Other Postretirement Benefit Plan Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Deposit administration fund
|
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
52
|
|
|
$
|
—
|
|
|
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
53
|
|
|
$
|
—
|
|
|
2019
|
|
2018
|
||||
Balance at beginning of year
|
$
|
350
|
|
|
$
|
383
|
|
Actual return (loss) on plan assets:
|
|
|
|
||||
Sold during the year
|
12
|
|
|
10
|
|
||
Held at year end
|
(1
|
)
|
|
(21
|
)
|
||
Purchases, sales, issuances and settlements (net)
|
48
|
|
|
(22
|
)
|
||
Balance at end of year
|
$
|
409
|
|
|
$
|
350
|
|
|
Pension
|
|
Other Postretirement
|
||||
2020
|
$
|
361
|
|
|
$
|
53
|
|
2021
|
386
|
|
|
56
|
|
||
2022
|
399
|
|
|
59
|
|
||
2023
|
410
|
|
|
62
|
|
||
2024
|
399
|
|
|
64
|
|
||
Years 2025 – 2029
|
2,219
|
|
|
328
|
|
Pension Fund
|
IAM National Pension Fund
|
EIN/ Pension Plan Number
|
51-6031295 - 002
|
Pension Protection Act Zone Status (2019 and 2018)
|
Red Zone (2019) and Green Zone (2018). Plans in the Green Zone are at least 80 percent funded. Plans in the Red Zone are less than 65% funded. The IAM National Pension Fund Board of Trustees voluntarily elected to place the fund in the Red Zone for 2019, although the fund was over 80% funded at the time, to protect the fund's participants' core retirement benefits and strengthen the fund's financial health over the long term.
|
FIP/RP Status Pending/Implemented
|
A 10-year Rehabilitation Plan effective, January 1, 2022, was adopted on April 17, 2019 that requires the Company to make an additional contribution of 2.5% of the hourly contribution rate, compounded annually for the length of the Rehabilitation Plan, effective June 1, 2019.
|
United's Contributions
|
$59 million, $52 million and $50 million in the years ended December 31, 2019, 2018 and 2017, respectively
|
Surcharge Imposed
|
No
|
Expiration Date of Collective Bargaining Agreement
|
N/A
|
|
2019
|
|
2018
|
||||||||||||||||||||||||||||
|
Total
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
||||||||||
Cash and cash equivalents
|
$
|
2,762
|
|
|
$
|
2,762
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,694
|
|
|
$
|
1,694
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
1,045
|
|
|
—
|
|
|
1,045
|
|
|
—
|
|
|
1,023
|
|
|
—
|
|
|
1,023
|
|
|
—
|
|
||||||||
Asset-backed securities
|
690
|
|
|
—
|
|
|
690
|
|
|
—
|
|
|
746
|
|
|
—
|
|
|
746
|
|
|
—
|
|
||||||||
U.S. government and agency notes
|
124
|
|
|
—
|
|
|
124
|
|
|
—
|
|
|
108
|
|
|
—
|
|
|
108
|
|
|
—
|
|
||||||||
Certificates of deposit placed through an account registry service ("CDARS")
|
35
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
75
|
|
|
—
|
|
|
75
|
|
|
—
|
|
||||||||
Other fixed-income securities
|
95
|
|
|
—
|
|
|
95
|
|
|
—
|
|
|
116
|
|
|
—
|
|
|
116
|
|
|
—
|
|
||||||||
Other investments measured at NAV
|
193
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
188
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Restricted cash
|
106
|
|
|
106
|
|
|
—
|
|
|
—
|
|
|
105
|
|
|
105
|
|
|
—
|
|
|
—
|
|
||||||||
Long-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Equity securities
|
385
|
|
|
385
|
|
|
—
|
|
|
—
|
|
|
249
|
|
|
249
|
|
|
—
|
|
|
—
|
|
||||||||
AVH Derivative Assets
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
Description
|
Fair Value Methodology
|
Cash and cash equivalents
|
The carrying amounts approximate fair value because of the short-term maturity of these assets.
|
Short-term investments,
Equity securities and
Restricted cash
|
Fair value is based on (a) the trading prices of the investment or similar instruments, (b) an income approach, which uses valuation techniques to convert future amounts into a single present amount based on current market expectations about those future amounts when observable trading prices are not available, or (c) broker quotes obtained by third-party valuation services.
|
Other investments measured at NAV
|
In accordance with the relevant accounting standards, certain investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the table above are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. The investments measured using NAV are shares of mutual funds that invest in fixed-income instruments including bonds, debt securities, and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities. The Company can redeem its shares at any time at NAV subject to a three-day settlement period.
|
AVH Derivative Assets
|
Fair values are calculated using a Monte Carlo simulation approach. Unobservable inputs include expected volatility, expected dividend yield and control and acquisition premiums.
|
Long-term debt
|
Fair values were based on either market prices or the discounted amount of future cash flows using our current incremental rate of borrowing for similar liabilities or assets.
|
•
|
Republic Airways Holdings Inc. ("Republic"). United holds a 19% minority interest in Republic which the Company received in 2017 in consideration for its unsecured claim in Republic's bankruptcy case. Republic is the parent company of Republic Airline Inc.
|
•
|
ManaAir, LLC ("ManaAir"). United holds a 49.9% minority ownership stake in ManaAir. ManaAir is the parent company of ExpressJet Airlines LLC.
|
•
|
Champlain Enterprises, LLC ("Champlain"). United owns a 40% minority ownership stake in Champlain. Champlain does business as CommutAir.
|
(In millions)
|
|
At December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Secured
|
|
|
|
|
||||
Notes payable, fixed interest rates of 2.7% to 9.8% (weighted average rate of 3.95% as of December 31, 2019), payable through 2032
|
|
$
|
9,615
|
|
|
$
|
8,811
|
|
Notes payable, floating interest rates of the London interbank offered rate ("LIBOR") plus 1.05% to 2.25%, payable through 2030
|
|
1,970
|
|
|
2,051
|
|
||
Term loan, LIBOR plus 1.75%, or alternative rate based on certain market rates plus 0.75%, due 2024
|
|
1,459
|
|
|
1,474
|
|
||
Unsecured
|
|
|
|
|
||||
6% Senior Notes due 2020 (a)
|
|
300
|
|
|
300
|
|
||
4.25% Senior Notes due 2022 (a)
|
|
400
|
|
|
400
|
|
||
5% Senior Notes due 2024 (a)
|
|
300
|
|
|
300
|
|
||
4.875% Senior Notes due 2025 (a)
|
|
350
|
|
|
—
|
|
||
Other
|
|
339
|
|
|
300
|
|
||
|
|
14,733
|
|
|
13,636
|
|
||
Less: unamortized debt discount, premiums and debt issuance costs
|
|
(181
|
)
|
|
(191
|
)
|
||
Less: current portion of long-term debt
|
|
(1,407
|
)
|
|
(1,230
|
)
|
||
Long-term debt, net
|
|
$
|
13,145
|
|
|
$
|
12,215
|
|
2020
|
|
$
|
1,407
|
|
2021
|
|
1,415
|
|
|
2022
|
|
1,765
|
|
|
2023
|
|
815
|
|
|
2024
|
|
3,122
|
|
|
After 2024
|
|
6,209
|
|
|
|
|
$
|
14,733
|
|
EETC Issuance Date
|
|
Class
|
|
Principal
|
|
Final expected distribution date
|
|
Stated interest rate
|
|
Total proceeds received from issuance of debt during 2019 and recorded as debt as of December 31, 2019
|
|
Amounts returned to the holders of the Pass-Through Certificates (a)
|
|
Remaining proceeds from issuance of debt to be received in future periods
|
||||||||
September 2019
|
|
AA
|
|
$
|
702
|
|
|
May 2032
|
|
2.70%
|
|
$
|
513
|
|
|
$
|
—
|
|
|
$
|
189
|
|
September 2019
|
|
A
|
|
287
|
|
|
May 2028
|
|
2.90%
|
|
210
|
|
|
—
|
|
|
77
|
|
||||
September 2019
|
|
B
|
|
232
|
|
|
May 2028
|
|
3.50%
|
|
170
|
|
|
—
|
|
|
62
|
|
||||
February 2019
|
|
AA
|
|
717
|
|
|
August 2031
|
|
4.15%
|
|
651
|
|
|
66
|
|
|
—
|
|
||||
February 2019
|
|
A
|
|
296
|
|
|
August 2031
|
|
4.55%
|
|
269
|
|
|
27
|
|
|
—
|
|
||||
|
|
|
|
$
|
2,234
|
|
|
|
|
|
|
$
|
1,813
|
|
|
$
|
93
|
|
|
$
|
328
|
|
Debt Instrument
|
Collateral, Covenants and Cross Default Provisions
|
Various equipment notes and other notes payable
|
Secured by certain aircraft. The indentures contain events of default that are customary for aircraft financing, including in certain cases cross default to other related aircraft.
|
Credit Agreement
|
Secured by certain of United's international route authorities, specified take-off and landing slots at certain airports and certain other assets.
The Credit Agreement requires the Company to maintain at least $2.0 billion of unrestricted liquidity at all times, which includes unrestricted cash, short-term investments and any undrawn amounts under any revolving credit facility, and to maintain a minimum ratio of appraised value of collateral to the outstanding obligations under the Credit Agreement of 1.6 to 1.0 at all times. The Credit Agreement contains covenants that, among other things, restrict the ability of UAL and its restricted subsidiaries (as defined in the Credit Agreement) to incur additional indebtedness and to pay dividends on or repurchase stock, although, as of December 31, 2019, the Company had ample ability under these restrictions to repurchase stock under the Company's share repurchase programs. The Credit Agreement contains events of default customary for this type of financing, including a cross default and cross acceleration provision to certain other material indebtedness of the Company. |
6% Senior Notes due 2020
4.25% Senior Notes due 2022
5% Senior Notes due 2024
4.875% Senior Notes due 2025
|
The indentures for these notes contain covenants that, among other things, restrict the ability of the Company and its restricted subsidiaries (as defined in the indentures) to incur additional indebtedness and pay dividends on or repurchase stock, although the Company currently has ample ability under these restrictions to repurchase stock under the Company's share repurchase programs.
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Operating lease cost
|
|
$
|
1,038
|
|
|
$
|
1,213
|
|
|
$
|
1,433
|
|
Variable and short-term lease cost
|
|
2,548
|
|
|
2,569
|
|
|
2,209
|
|
|||
Amortization of finance lease assets
|
|
68
|
|
|
75
|
|
|
77
|
|
|||
Interest on finance lease liabilities
|
|
85
|
|
|
44
|
|
|
24
|
|
|||
Sublease income
|
|
(32
|
)
|
|
(38
|
)
|
|
(36
|
)
|
|||
Total lease cost
|
|
$
|
3,707
|
|
|
$
|
3,863
|
|
|
$
|
3,707
|
|
|
|
Operating Leases
|
|
Finance Leases
|
||||
2020
|
|
$
|
920
|
|
|
$
|
62
|
|
2021
|
|
754
|
|
|
75
|
|
||
2022
|
|
591
|
|
|
49
|
|
||
2023
|
|
633
|
|
|
38
|
|
||
2024
|
|
626
|
|
|
35
|
|
||
After 2024
|
|
4,214
|
|
|
57
|
|
||
Minimum lease payments
|
|
7,738
|
|
|
316
|
|
||
Imputed interest
|
|
(2,106
|
)
|
|
(50
|
)
|
||
Present value of minimum lease payments
|
|
5,632
|
|
|
266
|
|
||
Less: current maturities of lease obligations
|
|
(686
|
)
|
|
(46
|
)
|
||
Long-term lease obligations
|
|
$
|
4,946
|
|
|
$
|
220
|
|
|
|
2019
|
|
2018
|
||
Weighted-average remaining lease term - operating leases
|
|
11 years
|
|
|
10 years
|
|
Weighted-average remaining lease term - finance leases
|
|
6 years
|
|
|
5 years
|
|
Weighted-average discount rate - operating leases
|
|
5.2
|
%
|
|
5.2
|
%
|
Weighted-average discount rate - finance leases
|
|
5.7
|
%
|
|
45.8
|
%
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
|
|
||||||
Operating cash flows for operating leases
|
$
|
902
|
|
|
$
|
1,078
|
|
|
$
|
1,451
|
|
Operating cash flows for finance leases
|
70
|
|
|
53
|
|
|
24
|
|
|||
Financing cash flows for finance leases
|
151
|
|
|
79
|
|
|
84
|
|
2020
|
$
|
2.9
|
|
2021
|
2.9
|
|
|
2022
|
2.4
|
|
|
2023
|
1.5
|
|
|
2024
|
1.3
|
|
|
After 2024
|
4.7
|
|
|
|
$
|
15.7
|
|
|
|
|
|
Scheduled Aircraft Deliveries
|
|||||
Aircraft Type
|
|
Number of Firm
Commitments (a) |
|
2020
|
|
After 2020
|
|||
Airbus A321XLR
|
|
50
|
|
|
—
|
|
|
50
|
|
Airbus A350
|
|
45
|
|
|
—
|
|
|
45
|
|
Boeing 737 MAX
|
|
171
|
|
|
44
|
|
|
127
|
|
Boeing 777-300ER
|
|
2
|
|
|
2
|
|
|
—
|
|
Boeing 787
|
|
16
|
|
|
15
|
|
|
1
|
|
Embraer E175
|
|
20
|
|
|
20
|
|
|
—
|
|
2020
|
|
$
|
6.9
|
|
2021
|
|
4.3
|
|
|
2022
|
|
2.0
|
|
|
2023
|
|
1.0
|
|
|
2024
|
|
1.2
|
|
|
After 2024
|
|
11.3
|
|
|
|
|
$
|
26.7
|
|
Operating:
|
|
2019
|
|
2018
|
|
2017
|
||||||
Impairment of assets
|
|
$
|
171
|
|
|
$
|
377
|
|
|
$
|
25
|
|
Severance and benefit costs
|
|
16
|
|
|
41
|
|
|
116
|
|
|||
Termination of an engine maintenance service agreement
|
|
—
|
|
|
64
|
|
|
—
|
|
|||
(Gains) losses on sale of assets and other special charges
|
|
59
|
|
|
5
|
|
|
35
|
|
|||
Total operating special charges
|
|
246
|
|
|
487
|
|
|
176
|
|
|||
Nonoperating unrealized (gains) losses on investments
|
|
(153
|
)
|
|
5
|
|
|
—
|
|
|||
Total special charges and unrealized (gains) losses on investments
|
|
93
|
|
|
492
|
|
|
176
|
|
|||
Income tax benefit
|
|
(21
|
)
|
|
(110
|
)
|
|
(63
|
)
|
|||
Income tax adjustments (Note 6)
|
|
—
|
|
|
(5
|
)
|
|
(189
|
)
|
|||
Total special charges and unrealized (gains) losses on investments, net of income taxes and income tax adjustments
|
|
$
|
72
|
|
|
$
|
377
|
|
|
$
|
(76
|
)
|
|
|
Quarter Ended
|
||||||||||||||
(In millions, except per share amounts)
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
2019
|
|
|
|
|
|
|
|
|
||||||||
Operating revenue
|
|
$
|
9,589
|
|
|
$
|
11,402
|
|
|
$
|
11,380
|
|
|
$
|
10,888
|
|
Income from operations
|
|
495
|
|
|
1,472
|
|
|
1,473
|
|
|
861
|
|
||||
Net income
|
|
292
|
|
|
1,052
|
|
|
1,024
|
|
|
641
|
|
||||
Basic earnings per share
|
|
1.09
|
|
|
4.03
|
|
|
4.01
|
|
|
2.54
|
|
||||
Diluted earnings per share
|
|
1.09
|
|
|
4.02
|
|
|
3.99
|
|
|
2.53
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
2018
|
|
|
|
|
|
|
|
|
||||||||
Operating revenue
|
|
$
|
9,032
|
|
|
$
|
10,777
|
|
|
$
|
11,003
|
|
|
$
|
10,491
|
|
Income from operations (a)
|
|
262
|
|
|
1,145
|
|
|
1,187
|
|
|
635
|
|
||||
Net income (a)
|
|
145
|
|
|
683
|
|
|
833
|
|
|
461
|
|
||||
Basic earnings per share (a)
|
|
0.51
|
|
|
2.48
|
|
|
3.06
|
|
|
1.70
|
|
||||
Diluted earnings per share (a)
|
|
0.51
|
|
|
2.48
|
|
|
3.05
|
|
|
1.69
|
|
|
|
Quarter Ended
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
2019
|
|
|
|
|
|
|
|
|
||||||||
Impairment of assets
|
|
8
|
|
|
61
|
|
|
—
|
|
|
102
|
|
||||
Severance and benefit costs
|
|
6
|
|
|
6
|
|
|
2
|
|
|
2
|
|
||||
(Gains) losses on sale of assets and other special charges
|
|
4
|
|
|
4
|
|
|
25
|
|
|
26
|
|
||||
Total operating special charges
|
|
18
|
|
|
71
|
|
|
27
|
|
|
130
|
|
||||
Nonoperating unrealized (gains) losses on investments
|
|
(17
|
)
|
|
(34
|
)
|
|
(21
|
)
|
|
(81
|
)
|
||||
Total special charges and unrealized (gains) losses on investments
|
|
1
|
|
|
37
|
|
|
6
|
|
|
49
|
|
||||
Income tax benefit related to special charges and unrealized (gains) losses on investments
|
|
—
|
|
|
(8
|
)
|
|
(2
|
)
|
|
(11
|
)
|
||||
Total special charges and unrealized (gains) losses on investments, net of income tax
|
|
1
|
|
|
29
|
|
|
4
|
|
|
38
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
2018
|
|
|
|
|
|
|
|
|
||||||||
Impairment of assets
|
|
$
|
23
|
|
|
$
|
111
|
|
|
$
|
11
|
|
|
$
|
232
|
|
Termination of an engine maintenance service agreement
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
||||
Severance and benefit costs
|
|
14
|
|
|
11
|
|
|
9
|
|
|
7
|
|
||||
(Gains) losses on sale of assets and other special charges
|
|
3
|
|
|
7
|
|
|
(3
|
)
|
|
(2
|
)
|
||||
Total operating special charges
|
|
40
|
|
|
129
|
|
|
17
|
|
|
301
|
|
||||
Nonoperating unrealized (gains) losses on investments
|
|
(45
|
)
|
|
135
|
|
|
(29
|
)
|
|
(56
|
)
|
||||
Total special charges and unrealized (gains) losses on investments
|
|
(5
|
)
|
|
264
|
|
|
(12
|
)
|
|
245
|
|
||||
Income tax benefit related to special charges and unrealized (gains) losses on investments
|
|
1
|
|
|
(59
|
)
|
|
3
|
|
|
(55
|
)
|
||||
Income tax adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||
Total special charges and unrealized (gains) losses on investments, net of income tax
|
|
$
|
(4
|
)
|
|
$
|
205
|
|
|
$
|
(9
|
)
|
|
$
|
185
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION.
|
ITEM 11.
|
EXECUTIVE COMPENSATION.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES.
|
Service
|
|
2019
|
|
2018
|
||||
Audit Fees
|
|
$
|
4,323
|
|
|
$
|
3,992
|
|
Audit Related Fees
|
|
403
|
|
|
375
|
|
||
Tax Fees
|
|
174
|
|
|
166
|
|
||
All Other Fees
|
|
—
|
|
|
2
|
|
||
Total Fees
|
|
$
|
4,900
|
|
|
$
|
4,535
|
|
Note: UAL and United amounts are the same.
|
|
|
|
|
(a)
|
|
List of documents filed as part of this report:
|
|
|
|
(1)
|
|
Financial Statements. The financial statements required by this item are listed in Part II, Item 8, Financial Statements and Supplementary Data herein.
|
|
|
|
(2)
|
|
Financial Statement Schedules. The financial statement schedule required by this item is listed below and included in this report after the signature page hereto.
|
|
|
Schedule II-Valuation and Qualifying Accounts for the years ended December 31, 2019, 2018 and 2017.
|
|
|
|
|
|
All other schedules are omitted because they are not applicable, not required or the required information is shown in the consolidated financial statements or notes thereto.
|
|
|
|
(b)
|
|
Exhibits. The exhibits required by this item are provided in the Exhibit Index.
|
Exhibit No.
|
Registrant
|
Exhibit
|
|
|
|
|
|
Articles of Incorporation and Bylaws
|
|
|
|
3.1
|
UAL
|
|
|
|
|
3.2
|
UAL
|
|
|
|
|
3.3
|
United
|
|
|
|
|
3.4
|
United
|
|
|
|
|
|
|
Instruments Defining Rights of Security Holders, Including Indentures
|
|
|
|
4.1
|
UAL
United
|
|
|
|
|
4.2
|
UAL
United
|
|
|
|
|
4.3
|
UAL
United
|
|
|
|
|
4.4
|
UAL
United
|
|
|
|
|
4.5
|
UAL
United |
|
|
|
|
4.6
|
UAL
United |
|
|
|
|
4.7
|
UAL
United |
|
|
|
|
4.8
|
UAL
United |
|
|
|
|
4.9
|
UAL
United |
|
|
|
|
4.10
|
UAL
United |
|
|
|
|
4.11
|
UAL
United |
|
|
|
|
4.12
|
UAL
United |
|
|
|
|
4.13
|
UAL
United |
|
|
|
|
4.14
|
UAL
United |
|
|
|
|
|
|
Material Contracts
|
|
|
|
†10.1
|
UAL
|
|
|
|
|
†10.2
|
UAL
|
|
|
|
|
†10.3
|
UAL
United |
|
|
|
|
†10.4
|
UAL
United |
|
|
|
|
†10.5
|
UAL
United |
|
|
|
|
†10.6
|
UAL
United |
|
|
|
|
†10.7
|
UAL
United |
|
|
|
|
†10.8
|
UAL
United |
|
|
|
|
†10.9
|
UAL
|
|
|
|
|
†10.10
|
UAL
|
|
|
|
|
†10.11
|
UAL
|
|
|
|
|
†10.12
|
UAL
|
|
|
|
|
†10.13
|
UAL
|
|
|
|
|
†10.14
|
UAL
|
|
|
|
|
†10.15
|
UAL
|
|
|
|
|
†10.16
|
UAL
|
|
|
|
|
†10.17
|
UAL
|
|
|
|
|
†10.18
|
UAL
|
|
|
|
|
†10.19
|
UAL
|
|
|
|
|
†10.20
|
UAL
|
|
|
|
|
†10.21
|
UAL
|
|
|
|
|
†10.22
|
UAL
|
|
|
|
|
†10.23
|
UAL
|
|
|
|
|
†10.24
|
UAL
|
|
|
|
|
†10.25
|
UAL
|
|
|
|
|
†10.26
|
UAL
|
|
|
|
|
†10.27
|
UAL
|
|
|
|
|
†10.28
|
UAL
|
|
|
|
|
†10.29
|
UAL
|
|
|
|
|
†10.30
|
UAL
|
|
|
|
|
†10.31
|
UAL
|
|
|
|
|
†10.32
|
UAL
|
|
|
|
|
†10.33
|
UAL
|
|
|
|
|
†10.34
|
UAL
|
|
|
|
|
†10.35
|
UAL
|
|
|
|
|
†10.36
|
UAL
|
|
|
|
|
†10.37
|
UAL
|
|
|
|
|
†10.38
|
UAL
|
|
|
|
†10.39
|
UAL
|
|
|
|
|
^10.40
|
UAL
United |
|
|
|
|
^10.41
|
UAL
United |
|
|
|
|
^10.42
|
UAL
United |
|
|
|
|
^10.43
|
UAL
United |
|
|
|
|
^10.44
|
UAL
United |
|
|
|
|
^10.45
|
UAL
United |
|
|
|
|
^10.46
|
UAL
United |
|
|
|
|
^10.47
|
UAL
United |
|
|
|
|
^10.48
|
UAL
United |
|
|
|
|
^10.49
|
UAL
United |
|
|
|
|
^10.50
|
UAL
United |
|
|
|
|
^10.51
|
UAL
United |
|
|
|
|
^10.52
|
UAL
United |
|
|
|
|
^10.53
|
UAL
United |
|
|
|
|
^10.54
|
UAL
United |
|
|
|
|
^10.55
|
UAL
United |
|
|
|
|
^10.56
|
UAL
United |
|
|
|
|
^10.57
|
UAL
United |
|
|
|
|
^10.58
|
UAL
United |
|
|
|
|
^10.59
|
UAL
United |
|
|
|
|
^10.60
|
UAL
United |
|
|
|
|
^10.61
|
UAL
United |
|
|
|
|
^10.62
|
UAL
United |
|
|
|
|
^10.63
|
UAL
United |
|
|
|
|
^10.64
|
UAL
United |
|
|
|
|
^10.65
|
UAL
United |
|
|
|
|
^10.66
|
UAL
United |
|
|
|
|
^10.67
|
UAL
United |
|
|
|
|
^10.68
|
UAL
United |
|
|
|
|
^10.69
|
UAL
United |
|
|
|
^10.70
|
UAL
United |
|
|
|
|
^10.71
|
UAL
United |
|
|
|
|
^10.72
|
UAL
United |
|
|
|
|
10.73
|
UAL
United |
|
|
|
|
10.74
|
UAL
United |
|
|
|
|
10.75
|
UAL
United |
|
|
|
|
|
|
List of Subsidiaries
|
|
|
|
21
|
UAL
United
|
|
|
|
|
|
|
Consents of Experts and Counsel
|
|
|
|
23.1
|
UAL
|
|
|
|
|
23.2
|
United
|
|
|
|
|
|
|
Rule 13a-14(a)/15d-14(a) Certifications
|
|
|
|
31.1
|
UAL
|
|
|
|
|
31.2
|
UAL
|
|
|
|
|
31.3
|
United
|
|
|
|
|
31.4
|
United
|
|
|
|
|
|
|
Section 1350 Certifications
|
|
|
|
32.1
|
UAL
|
|
|
|
|
32.2
|
United
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interactive Data File
|
|
|
|
101
|
UAL
United
|
The following financial statements from the combined Annual Report of UAL and United on Form 10-K for the year ended December, 2019, formatted in Inline XBRL: (i) the Statements of Consolidated Operations, (ii) the Statements of Consolidated Comprehensive Income (Loss), (iii) the Consolidated Balance Sheets, (iv) the Statements of Consolidated Cash Flows, (v) the Statements of Consolidated Stockholders' Equity (Deficit) and (vi) the Combined Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
|
|
|
|
104
|
UAL
United
|
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document
|
†
|
Indicates management contract or compensatory plan or arrangement. Pursuant to Item 601(b)(10), United is permitted to omit certain compensation-related exhibits from this report and therefore only UAL is identified as the registrant for purposes of those items.
|
^
|
Portions of the referenced exhibit have been omitted pursuant to Item 601(b) of Regulation S-K.
|
|
|
|
|
|
UNITED AIRLINES HOLDINGS, INC.
UNITED AIRLINES, INC.
(Registrants)
|
|
|
|
By:
|
|
/s/ Gerald Laderman
|
|
|
Gerald Laderman
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
Date:
|
|
February 24, 2020
|
Signature
|
|
Capacity
|
|
|
|
/s/ Oscar Munoz
|
|
Chief Executive Officer, Director
|
Oscar Munoz
|
|
(Principal Executive Officer)
|
|
|
|
/s/ Gerald Laderman
|
|
Executive Vice President and Chief Financial Officer
|
Gerald Laderman
|
|
(Principal Financial Officer)
|
|
|
|
/s/ Chris Kenny
|
|
Vice President and Controller
|
Chris Kenny
|
|
(Principal Accounting Officer)
|
|
|
|
/s/ Carolyn Corvi
|
|
Director
|
Carolyn Corvi
|
|
|
|
|
|
/s/ Jane C. Garvey
|
|
Director
|
Jane C. Garvey
|
|
|
|
|
|
/s/ Barney Harford
|
|
Director
|
Barney Harford
|
|
|
|
|
|
/s/ Michele J. Hooper
|
|
Director
|
Michele J. Hooper
|
|
|
|
|
|
/s/ Todd M. Insler
|
|
Director
|
Todd M. Insler
|
|
|
/s/ Walter Isaacson
|
|
Director
|
Walter Isaacson
|
|
|
|
|
|
/s/ James A.C. Kennedy
|
|
Director
|
James A.C. Kennedy
|
|
|
|
|
|
/s/ Sito Pantoja
|
|
Director
|
Sito Pantoja
|
|
|
|
|
|
/s/ Edward M. Philip
|
|
Director
|
Edward M. Philip
|
|
|
|
|
|
/s/ Edward L. Shapiro
|
|
Director
|
Edward L. Shapiro
|
|
|
|
|
|
/s/ David J. Vitale
|
|
Director
|
David J. Vitale
|
|
|
|
|
|
/s/ James M. Whitehurst
|
|
Director
|
James M. Whitehurst
|
|
|
Date:
|
February 24, 2020
|
Signature
|
|
Capacity
|
|
|
|
/s/ Oscar Munoz
|
|
Chief Executive Officer, Director
|
Oscar Munoz
|
|
(Principal Executive Officer)
|
|
|
|
/s/ Gerald Laderman
|
|
Executive Vice President and Chief Financial Officer, Director
|
Gerald Laderman
|
|
(Principal Financial Officer)
|
|
|
|
/s/ Chris Kenny
|
|
Vice President and Controller
|
Chris Kenny
|
|
(Principal Accounting Officer)
|
|
|
|
/s/ Gregory L. Hart
|
|
Director
|
Gregory L. Hart
|
|
|
|
|
|
/s/ J. Scott Kirby
|
|
Director
|
J. Scott Kirby
|
|
|
|
|
|
Date:
|
February 24, 2020
|
(In millions)
Description
|
Balance at
Beginning of
Period
|
|
Additions
Charged to
Costs and
Expenses
|
|
Deductions
|
|
Other
|
|
Balance at
End of
Period
|
||||||||||
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
$
|
8
|
|
|
$
|
17
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
9
|
|
2018
|
7
|
|
|
17
|
|
|
16
|
|
|
—
|
|
|
8
|
|
|||||
2017
|
10
|
|
|
20
|
|
|
23
|
|
|
—
|
|
|
7
|
|
|||||
Obsolescence allowance—spare parts:
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
$
|
412
|
|
|
$
|
76
|
|
|
$
|
63
|
|
|
$
|
—
|
|
|
$
|
425
|
|
2018
|
354
|
|
|
73
|
|
|
15
|
|
|
—
|
|
|
412
|
|
|||||
2017
|
295
|
|
|
75
|
|
|
17
|
|
|
1
|
|
|
354
|
|
|||||
Valuation allowance for deferred tax assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
$
|
59
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
58
|
|
2018
|
63
|
|
|
2
|
|
|
6
|
|
|
—
|
|
|
59
|
|
|||||
2017
|
68
|
|
|
11
|
|
|
27
|
|
|
11
|
|
|
63
|
|
•
|
have continuously owned 3% or more of the outstanding shares of Common Stock throughout the three-year period preceding the date of the nomination notice, and continue to own at least 3% or more of the outstanding shares of Common Stock through the date of the annual meeting;
|
•
|
represent that such stockholder (or group) did not acquire, and is not holding, such shares of Common Stock for the purpose, or with the effect, of influencing or changing control of UAL; and
|
•
|
provide a written notice requesting the inclusion of director nominees in UAL’s proxy materials and provide other required information to UAL not earlier than the close of business on the 150th day and not later than the close of business on the 120th day prior to the anniversary of the mailing date of UAL’s proxy statement for the prior year’s annual meeting of stockholders (with adjustments if the date for the upcoming annual meeting of stockholders is more than 30 days before or after the anniversary date of the prior year’s annual meeting).
|
A.
|
Purpose. United Airlines Holdings, Inc. (the “Company”) sponsors this United Airlines Holdings, Inc. Profit Sharing Plan (the “Plan”) for the benefit of certain employees of United Airlines, Inc. and other participating Affiliates.
|
B.
|
Collective Bargaining. As it relates to Qualified Employees who are in the class or craft of employees covered by a collective bargaining agreement with the Employer pursuant to which the Employer has agreed to provide such Qualified Employees with participation in a profit sharing bonus plan, this Plan is maintained pursuant to such agreement.
|
C.
|
Cash Bonus Plan. The Plan is a cash bonus plan and is not intended to be (and will not be construed or administered as) an employee benefit plan within the meaning of ERISA. The Plan is intended to be a discretionary cash bonus plan and payments under the Plan will not constitute a part of an employee’s regular rate of pay for any purpose; provided, however, all Awards will be paid to Qualified Employees in accordance with the terms of the Plan and the applicable collective bargaining agreements. Except to the extent specifically provided under a particular pension, insurance, profit sharing, retirement, welfare or other employee benefit plan or arrangement maintained or contributed to by the Company or an Affiliate, the payments to an employee under the Plan will not be treated as “salary,” “wages,” or “cash compensation” to the employee for the purpose of computing benefits to which the employee may be entitled under any such plan or arrangement.
|
D.
|
Effective Date. The Plan commenced on January 1, 2006 as the UAL Corporation Success Sharing Program – Profit Sharing Plan, was previously amended and restated effective January 1, 2011, again effective January 1, 2014, again effective January 1, 2016, and is hereby amended and restated effective January 1, 2019, to reflect the name change of the Company from United Continental Holdings, Inc. to United Airlines Holdings, Inc., effective June 27, 2019, and certain other changes. This amendment and restatement is effective for the 2019 Plan Year and future Plan Years, except as otherwise stated herein, and does not apply to 2018 Plan Year profit sharing payments made in 2019.
|
E.
|
Term. The provisions of the Plan shall continue indefinitely subject to termination by the Company, or, as it relates to any Qualified Employees who are in the class or craft of employees covered by a collective bargaining agreement with the Employer pursuant to which the Employer has agreed to provide such Qualified Employees with participation in a profit sharing bonus plan, subject to termination pursuant to the terms of such collective bargaining agreement.
|
F.
|
Definitions. Unless otherwise specified, the capitalized terms under the Plan have the meanings given below:
|
A.
|
Eligibility. A Qualified Employee who is employed for any portion of an Award Year is eligible to receive payment of an Award for such Award Year, unless (1) prior to the end of the Award Year he or she voluntarily terminates employment or (2) prior to the payment date he or she is terminated “for cause” as determined by the Company. Termination of employment due to other reasons, such as involuntary termination (not “for cause”), voluntary termination after the end of the Award Year, death, Disability, Retirement, or Furlough do not disqualify a Qualified Employee from receiving payment of an Award for an Award Year.
|
B.
|
Employee Classifications. The classification by an Employer of an individual as an employee of an Employer within the meaning of the Plan, or as a person who is not an employee of
|
A.
|
Annual Threshold. After the end of each Award Year, if the Company’s Pre-Tax Profit for that year exceeds ten million dollars ($10,000,000), Awards will be determined in accordance with Section III.B. If this threshold is not met, no Awards will be payable under the Plan for the Award Year.
|
B.
|
Determination of Awards. Awards will be determined as follows:
|
1.
|
Determination of Base Percentage A: Base Percentage A is equal to one percent (1%) of Pre-Tax Profit up to and including a Pre-Tax Margin of 6.9%, divided by the total Wages of all Qualified Employees of the Employers for the Award Year. Notwithstanding the foregoing, for the group of Qualified Employees covered by the collective bargaining agreement between the Company and the Association of Flight Attendants – CWA, Base Percentage A is equal to one percent (1%) of Pre-Tax Profit up to and including Pre-Tax Profit for the previous Plan Year.
|
2.
|
Determination of Base Percentage B: Base Percentage B is equal to one percent (1%) of Pre-Tax Profit in excess of a Pre-Tax Margin of 6.9%, divided by the total Wages of all Qualified Employees of the Employers for the Award Year. Notwithstanding the foregoing, for the group of Qualified Employees covered by the collective bargaining agreement between the Company and the Association of Flight Attendants – CWA, Base Percentage A is equal to one percent (1%) of Pre-Tax Profit in excess of Pre-Tax Profit for the previous Plan Year.
|
3.
|
Calculation. Each Qualified Employee eligible under Section II shall be entitled to an Award equal to the following:
|
C.
|
Wages. Wages for a Plan Year will be determined as follows:
|
1.
|
Compensation Included. “Wages” will only include compensation paid (or payable) during a Plan Year to a Qualified Employee for the period he or she is a Qualified Employee and shall include the items listed in Paragraph A-1 of Appendix A. Wages will include compensation not paid as a result of an earnings reduction election made by the Qualified Employee under a Code Sec. 125 cafeteria plan or under any qualified cash or deferred arrangement under Code Sec. 401(k).
|
2.
|
Exclusions. “Wages” will not include the items of compensation or other payments listed in Paragraph A-2 of Appendix A.
|
3.
|
Reemployment. In the event a Qualified Employee terminates employment and is reemployed by an Employer, such employee’s Wages will include amounts paid during the applicable Plan Year, both prior to the termination and following such reemployment.
|
4.
|
Change of Position. In the event that a Qualified Employee transfers from one Employee Group to another Employee Group during the calendar year, the Qualified Employee’s Wages while a member of each Employee Group shall be distinguished and applied to the appropriate formula under Section III.B.
|
5.
|
Determination of Wages. Subject to the provisions of Appendix A, the Company’s Executive Vice President – Human Resources and Labor Relations will determine, in his or her discretion (subject to a contrary requirement under any applicable collective bargaining agreement or determination under any applicable collective bargaining agreement grievance procedure in the case of an employee who is in the class or craft of employees covered by a collective bargaining agreement), whether an item of compensation is included or excluded from the definition of “Wages.”
|
D.
|
Time of Payment. Award payments will be made following determination of the Company’s Pre-Tax Profit for the fiscal year, but not later than March 15 or as soon as administratively practicable thereafter. Notwithstanding the foregoing, the Committee may, in its reasonable discretion, vary the time for making the payments provided herein, provided such modification does not cause the payments to become subject to the tax under Section 409A of the Code. Nothing herein shall be construed to grant to any Qualified Employee who is entitled to payment of an Award or to any person claiming under or through such Qualified Employee the right to elect a modification of the time for receiving payments hereunder.
|
E.
|
Payment Methods. Each Qualified Employee entitled to an Award will receive payment of the Award in cash, subject to such employee’s right, if any, to elect to defer receipt of a portion of such cash payment as may be permitted under any Employer-sponsored 401(k) plan in which the Qualified Employee is eligible to participate. Payment is subject to any applicable withholding taxes and other amounts the Company reasonably determines it is obligated to withhold or deduct pursuant to federal, state or local laws. Notwithstanding the foregoing:
|
1.
|
The Committee shall have the right, in its reasonable discretion, to vary the form of payment of Awards payable to Officers by payment in shares of the Company’s common stock. In the event the Company reasonably anticipates that the Company’s deduction with respect to a payment otherwise would be limited or eliminated by application of Section 162(m) of the Code, the Committee may enter into an agreement with an Officer to provide payment of an Award on a deferred basis through a bookkeeping account, the value of which may be determined by reference to the Company’s common stock, provided such written deferred payment arrangement complies with the requirements of Section 409A of the Code, including the requirement that the payment be made either at the earliest date at which the Company reasonably anticipates the payment of the amount will not be limited or eliminated by application of Section 162(m) of the Code or the calendar year in which the officer separates from service with the Company and all affiliates.
|
2.
|
Payment of Awards for any employee group shall be made as a profit sharing contribution to the applicable Employer-sponsored 401(k) plan if required under the terms of the applicable collective bargaining agreement or, in the case of the Management and Administrative Employee Group, if so determined by the Company.
|
A.
|
Plan Administration. The Company or its delegate has the authority and responsibility to manage and control the general administration of the Plan, except as to matters expressly reserved in the Plan to the Committee. Determinations, decisions and actions of the Company or, if applicable, the Committee, in connection with the construction, interpretation, administration, or application of the Plan will be final, conclusive, and binding upon any person, including any employee of any Employer, any Qualified Employee and any person claiming under or through the Qualified Employee. No employee of an Employer, any member of the Board, any delegate of the Board, or any member of the Committee will be liable for any determination, decision, or action made in good faith with respect to the Plan or any Award made under the Plan.
|
B.
|
Committee. The Committee has the sole authority and responsibility to administer Awards payable to Officers.
|
A.
|
Authority to Amend or Terminate Plan. The Plan may at any time be amended, modified, suspended or terminated, as the Company in its sole discretion determines. Such amendment, modification, or termination of the Plan will not require any notice or the consent, ratification, or approval of any party, including any Qualified Employee who is then eligible to participate in the Plan.
|
B.
|
Authority to Amend Awards. The Committee in its sole discretion may reduce or eliminate an Award payable to any member of the Management and Administrative Employee Group classified by the Company as a management employee. In addition, the Company may reduce any Award other than an Award payable to an Officer, prior to the payment of the Award, to the extent it deems necessary or appropriate to comply with laws, including applicable securities laws, local laws outside the United States and the pooling of interests requirements in connection with a merger, provided that nothing in this Section V.B affects the rights of any employee to an Award required under the terms of a collective bargaining agreement.
|
A.
|
No Contract of Employment, etc. Neither this Plan nor any award under the Plan constitutes a contract of employment and participation in the Plan will not give any employee the right to be retained in the service of the Company or any Affiliate or to continue in any position or at any level of compensation. Nothing contained in the Plan will prohibit or interfere with the Company’s or an Affiliate’s right to assign projects, tasks and responsibilities to any employee or to alter the nature of the Company’s or an Affiliate’s rights with respect to the employee’s employment relationship, including the right to terminate any employee at any time, with or without prior notice, and for any reason within the constraints of existing law.
|
B.
|
Governing Law. The validity, construction, interpretation, administration and effect of the Plan and any rules, regulations and actions relating to the Plan will be governed by and construed exclusively in accordance with the laws of the United States and the State of Illinois, notwithstanding the conflicts of law principles of any jurisdiction.
|
C.
|
Conflict. Notwithstanding anything to the contrary in the Plan, the Plan Rules or Plan administration, the Employer’s obligations to any employees covered by collective bargaining agreements shall be governed by the applicable terms of such agreements, and any conflict between the terms of the Plan, the Plan Rules or Plan administration and the applicable collective bargaining agreements with respect to such employees shall be resolved in favor of the Employer’s obligations under the applicable collective bargaining agreements.
|
•
|
base pay
|
•
|
overtime pay
|
•
|
holiday pay
|
•
|
longevity pay
|
•
|
sick pay
|
•
|
lead/purser/service director pay
|
•
|
high skill premium/longevity pay
|
•
|
language premium
|
•
|
international and night flying premium pay
|
•
|
pay for time taken as vacation
|
•
|
payment for accrued vacation not taken as vacation when paid on account of (i) a leave or (ii) a termination of employment due to a reduction in force or for a military leave
|
•
|
shift differential pay
|
•
|
back pay to the extent such pay is otherwise categorized as Wages related to the applicable Plan Year (other than judicial or administrative awards of grievance pay or back pay (including settlements thereof))
|
•
|
delayed activation pay
|
•
|
bypass pay
|
•
|
check pilot premium pay
|
•
|
double town salary expense
|
•
|
senior/junior manning pay
|
•
|
operational integrity pay
|
•
|
temporary reclass pay
|
•
|
Hawaiian override
|
•
|
deferred compensation (other than pursuant to Code Sec. 125 or 401(k))
|
•
|
moving expense and similar allowances
|
•
|
performance incentive awards, profit sharing awards or sales incentive awards
|
•
|
expense reimbursements and per diems
|
•
|
severance, termination pay and related payments
|
•
|
payment for accrued vacation time not taken as vacation when paid on account of termination of employment, other than on account of a reduction in force or for a military leave
|
•
|
disability and workers compensation payments
|
•
|
duty-free commissions
|
•
|
recognition lump sums
|
•
|
flight expense
|
•
|
retropay created by execution of a collective bargaining agreement, unless the collective bargaining agreement requires inclusion
|
•
|
reimbursable cleaning
|
•
|
Employer contributions to employee benefit plans
|
•
|
solely for purposes of making an award payment under this Plan, judicial or administrative awards for grievance pay or back pay (including settlements thereof)
|
•
|
imputed income for employee or dependent life insurance coverage
|
•
|
imputed income from pass service charges
|
•
|
taxable travel
|
•
|
imputed income from domestic partner benefits
|
•
|
cash payments made pursuant to any agreement, program, arrangement or plan designed to compensate an employee for amounts that may not be credited or allocated to the employee under a qualified retirement plan due to limitations imposed by tax laws
|
•
|
taxable fringe benefits, including taxable reimbursement of insurance premiums
|
•
|
expatriate allowances
|
•
|
hiring bonuses or other special payments relating to the initiation of employment
|
•
|
amounts realized with respect to restricted stock, non-qualified stock options or stock appreciation rights
|
•
|
lost luggage advance
|
•
|
interest payments
|
•
|
taxable distributions of the Company’s common stock or notes (including cash in lieu of such stock or notes) made in connection with UAL Corporation’s confirmed plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code
|
•
|
payments made to employees domiciled outside of the United States that are in lieu of Employer contributions to a retirement plan
|
•
|
any amount counted as wages under this Plan or any other profit sharing plan for a prior Award Year.
|
Labor Group
|
Union Representation
|
Factor for
Base Percentage A
|
Factor for
Base Percentage B
|
Represented
|
|
|
|
Central Load Planners
|
IAM
|
5
|
10
|
Customer Service Representatives
|
IAM
|
5
|
10
|
Dispatchers
|
PAFCA
|
5
|
10
|
Fleet Service Employees
|
IAM
|
5
|
10
|
Flight Attendants
|
AFA
|
10
|
20
|
Maintenance Instructors
|
IAM
|
5
|
10
|
Pilots
|
ALPA
|
10
|
20
|
Reservations Representatives
|
IAM
|
5
|
10
|
Simulator Technicians
|
IBT
|
5
|
10
|
Storekeeper Employees
|
IAM
|
5
|
10
|
Technicians
|
IBT
|
5
|
10
|
Tech Ops Maintenance Controllers
|
IBT
|
5
|
10
|
Catering Operations
|
UH
|
5
|
10
|
Non-Represented
|
|
|
|
Flight Qualified Management
|
None
|
5
|
10
|
Management & Administrative
|
None
|
5
|
10
|
|
i.
|
Entry Level means ___________________; and;
|
|
ii.
|
Target Level means _____________________; and
|
|
iii.
|
Stretch Level means ____________________. ]
|
|
|
|
Level of [Insert Performance Measure] Achieved3
|
|
Vested Percentage
|
Entry
|
|
% (Entry Level RSU Percentage)
|
|
|
|
Target
|
|
% (Target Level RSU Percentage)
|
|
|
|
Stretch (or higher)
|
|
% (Stretch Level RSU Percentage)
|
1.
|
DEFINITIONS
|
1.1
|
Capitalized terms used herein and not otherwise expressly defined in this Amendment No. 2 shall have the meanings assigned thereto in the Agreement. The terms “herein”, “hereof”, and “hereunder” and words of similar import refer to this Amendment No. 2.
|
1.2
|
The definitions of “A350-900 Standard Specification” and “A350-1000 Standard Specification” set out in Clause 0 of the Agreement are deleted in their entirety and replaced with the following quoted text:
|
1.3
|
The definition of “Family ADD” set out in Clause 0 of the Agreement is deleted in its entirety.
|
1.4
|
The following definition for “A350XWB ACG” is added to Clause 0 of the Agreement:
|
1.5
|
Clauses 18.6.1 and 18.6.2.1 of the Agreement are amended by replacing “Family ADD” with "A350XWB ACG".
|
2.
|
PRICE
|
2.1
|
Clause 3.1 of the Agreement is deleted in its entirety and replaced with the following quoted text:
|
(i)
|
the base price of the A350-900 Aircraft as defined in the A350-900 Standard Specification (excluding Buyer Furnished Equipment and Airbus Contracted Supplier equipment), which is:
|
(ii)
|
the sum of the base prices of all SCNs set forth in Part 1 of Exhibit B-2 (the “A350-900 SCN Budget”), which is:
|
(iii)
|
the base price of the ***, which is:
|
3.1.2
|
Base Price of the A350-1000 Aircraft
|
(i)
|
the base price of the A350-1000 Aircraft as defined in the A350-1000 Standard Specification (excluding Buyer Furnished Equipment and Airbus Contracted Supplier equipment), which is:
|
(ii)
|
the sum of the base prices of all SCNs set forth in Part 2 of Exhibit B-2 (the “A350-1000 SCN Budget”), which is:
|
(iii)
|
the base price of the *** which is:
|
3.1.3
|
Base Price of the A350-900 ULR Aircraft
|
(i)
|
the base price of the A350-900 Aircraft as defined in the A350-900 Standard Specification (excluding Buyer Furnished Equipment and Airbus Contracted Supplier equipment), as modified by the ULR Option Changes, which is:
|
(ii)
|
the sum of the base prices of all SCNs set forth in Part 3 of Exhibit B-2 (the “A350-900 ULR SCN Budget”), which is:
|
3.
|
DELIVERY SCHEDULE
|
3.1
|
Upon the Buyer’s request, the Seller agrees to *** the Scheduled Delivery *** of the Aircraft as set forth in Clause 3.2 below (the “***”).
|
3.2
|
The delivery schedule of the Aircraft set out in Clause 9.1 of the Agreement is amended to read the following:
|
4.
|
PREDELIVERY PAYMENTS
|
4.1
|
***.
|
5.
|
LETTER AGREEMENT No. 2 (predelivery payments)
|
5.1
|
Clause 5.2.2 of the Agreement, as amended by Letter Agreement No. 2, is amended by deleting in its entirety the text located between ***, and replacing the same with the following quoted text:
|
6.
|
LETTER AGREEMENT No. 3 (credit matters)
|
6.1
|
The following quoted text is added at the end of Paragraph 1.2 of Letter Agreement No.3:
|
6.2
|
Paragraph 1.3 of Letter Agreement No.3 is deleted in its entirety and replaced with the following quoted text:
|
7.1.1
|
The table in Paragraph 2.2 of Letter Agreement No. 4 is deleted in its entirety and replaced with the following table:
|
7.2
|
***
|
7.2.1
|
Sub-paragraph (ii) of Paragraph 3.1.3 of Letter Agreement No. 4 is deleted in its entirety and replaced with the following quoted text:
|
7.2.2
|
Sub-paragraph (iv) of Paragraph 3.1.3 of Letter Agreement No. 4 is deleted in its entirety and replaced with the following quoted text:
|
7.2.3
|
Sub-paragraph (ii) of the part of Paragraph 3.2.1 of Letter Agreement No. 4 which deals with *** is deleted in its entirety and replaced with the following quoted text:
|
7.3
|
***
|
7.3.1
|
Paragraph 4 of Letter Agreement No. 4 is deleted in its entirety and voided.
|
8.
|
LETTER AGREEMENT No. 6 (specification matters)
|
8.1
|
The last paragraph of Clause 2.1.1.1 (as amended by Letter Agreement No. 6) is deleted in its entirety.
|
8.2
|
The following quoted text is added at the end of Clause 2.1.1.2 (as amended by Letter Agreement No. 6):
|
8.3
|
Clause 2.1.1.3 (as amended by Letter Agreement No. 6) is deleted in its entirety and replaced with the following quoted text:
|
8.4
|
Clause 2.1.2 (as amended by Letter Agreement No. 6) is deleted in its entirety and replaced with the following quoted text:
|
8.5
|
The first paragraph of Clause 2.1.3 (as amended by Letter Agreement No. 6) is deleted in its entirety and replaced with the following quoted text:
|
8.6
|
The third paragraph of Clause 2.1.3 (as amended by Letter Agreement No. 6) is amended by ***.
|
8.7
|
Clauses 2.5.1 and 2.5.2 (as amended by Letter Agreement No. 6) are amended by ***.
|
9.
|
LETTER AGREEMENT No. 14 (aircraft order matters)
|
9.1
|
Paragraph 1.1 (i) of Letter Agreement No. 14 is deleted in its entirety and replaced with the following quoted text:
|
(i)
|
The *** is only granted to the Buyer for *** of the Aircraft which are included in the Buyer’s *** order of forty-five (45) Aircraft, as follows (each a “***”):
|
9.2
|
The Decision Window, as such term is defined in Paragraph 1.1 (ii) of Letter Agreement No. 14, is amended to be the period between *** and ***.
|
9.3
|
The date by which the *** Agreement shall enter in full force and effect, as set out in Paragraph 2.2 (i) of Letter Agreement No. 14, is amended to be ***.
|
9.4
|
***, as set out in Paragraph 2.2 (iii) of Letter Agreement No. 14, is amended to read ***.
|
9.5
|
***, as set out in Paragraph 2.3 (iii) of Letter Agreement No. 14, is amended to read ***.
|
9.6
|
The date up to ***, as set out in Paragraph 2.3 of Letter Agreement No. 14, is amended to read ***.
|
10.
|
EXIBIT B-2
|
10.1
|
The reference reading *** of the Agreement is amended to read ***.
|
10.2
|
The reference reading *** of the Agreement is amended to read ***.
|
10.3
|
The reference reading *** of the Agreement is amended to read ***.
|
11.
|
EFFECT OF THE AMENDMENT
|
12.
|
ASSIGNMENT
|
13.
|
CONFIDENTIALITY
|
14.
|
GOVERNING LAW
|
15.
|
COUNTERPARTS
|
By:
|
/s/ Gerald Laderman
|
Its:
|
Gerald Laderman
|
By:
|
/s/ Benoit de Saint Exupéry
|
Its:
|
Benoit de Saint Exupéry
|
11.
|
ASSIGNMENT
|
12.
|
CONFIDENTIALITY
|
13.
|
COUNTERPARTS
|
11.
|
ASSIGNMENT
|
12.
|
CONFIDENTIALITY
|
13.
|
COUNTERPARTS
|
11.
|
ASSIGNMENT
|
12.
|
CONFIDENTIALITY
|
13.
|
COUNTERPARTS
|
Entity
|
Jurisdiction of Incorporation
|
||||
|
|
|
|
|
|
United Airlines Holdings, Inc.
|
Delaware
|
||||
|
|
|
|
|
|
Wholly-owned subsidiaries*:
|
|
||||
|
|
|
|
|
|
United Airlines, Inc.
|
Delaware
|
||||
|
● Air Wis Services, Inc.
|
Wisconsin
|
|||
|
|
● Air Wisconsin, Inc.
|
Delaware
|
||
|
|
● Domicile Management Services, Inc. **
|
Delaware
|
||
|
● Air Micronesia, LLC.
|
Delaware
|
|||
|
● CAL Cargo, S.A. de C.V.**
|
Mexico
|
|||
|
● CALFINCO Inc.
|
Delaware
|
|||
|
● Century Casualty Company
|
Vermont
|
|||
|
● Continental Airlines de Mexico, S.A.**
|
Mexico
|
|||
|
● Continental Airlines Domain Name Limited
|
England
|
|||
|
● Continental Airlines Finance Trust II
|
Delaware
|
|||
|
● Continental Airlines Fuel Purchasing Group, LLC
|
Delaware
|
|||
|
● Continental Airlines, Inc. Supplemental Retirement Plan for Pilots Trust Agreement
|
Delaware
|
|||
|
● Continental Airlines Purchasing Holdings LLC
|
Delaware
|
|||
|
|
● Continental Airlines Purchasing Services LLC**
|
Delaware
|
||
|
● Continental Express, Inc.
|
Delaware
|
|||
|
● Covia LLC
|
Delaware
|
|||
|
● Mileage Plus Holdings, LLC
|
Delaware
|
|||
|
|
● MPH I, Inc.
|
Delaware
|
||
|
|
|
● Mileage Plus Marketing, Inc.
|
Delaware
|
|
|
|
● Mileage Plus, Inc.
|
Delaware
|
||
|
● Presidents Club of Guam, Inc.
|
Delaware
|
|||
|
● UABSPL Holdings, Inc.
|
Delaware
|
|||
|
● UAL Benefits Management, Inc.**
|
Delaware
|
|||
|
● United Atlantic LP**
|
Delaware
|
|||
|
|
● United Atlantic Services C.V.**
|
Netherlands
|
||
|
|
|
● United Atlantic Corporate LLC
|
Delaware
|
|
|
|
|
● United Atlantic Corporate Center C.V.**
|
Netherlands
|
|
|
● United Atlantic B.V.
|
Netherlands
|
|||
|
● United Atlantic Services LLC
|
Delaware
|
|||
|
● United Aviation Fuels Corporation
|
Delaware
|
|||
|
● United Airlines Business Services Private Limited**
|
India
|
|||
|
● United Ground Express, Inc.
|
Delaware
|
|||
|
● United Travel Services, LLC
|
Delaware
|
|||
|
● United Vacations, Inc.
|
Delaware
|
(1)
|
Registration Statement (Form S-3 No. 333-221865),
|
(2)
|
Registration Statement (Form S-4 No. 333-167801),
|
(3)
|
Registration Statement (Form S-8 No. 333-197815),
|
(4)
|
Registration Statement (Form S-8 No. 333-151778),
|
(5)
|
Registration Statement (Form S-8 No. 333-131434), and
|
(6)
|
Registration Statement (Form S-8 No. 333-218637);
|
(1)
|
I have reviewed this annual report on Form 10-K for the period ended December 31, 2019 of United Airlines Holdings, Inc. (the "Company");
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
|
(4)
|
The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
|
(5)
|
The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
|
|
/s/ Oscar Munoz
|
Oscar Munoz
Chief Executive Officer |
(1)
|
I have reviewed this annual report on Form 10-K for the period ended December 31, 2019 of United Airlines Holdings, Inc. (the "Company");
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
|
(4)
|
The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
|
(5)
|
The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
|
|
/s/ Gerald Laderman
|
Gerald Laderman
Executive Vice President and Chief Financial Officer |
(1)
|
I have reviewed this annual report on Form 10-K for the period ended December 31, 2019 of United Airlines, Inc. (the "Company");
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
|
(4)
|
The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
|
(5)
|
The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
|
|
/s/ Oscar Munoz
|
Oscar Munoz
Chief Executive Officer |
(1)
|
I have reviewed this annual report on Form 10-K for the period ended December 31, 2019 of United Airlines, Inc. (the "Company");
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
|
(4)
|
The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
|
(5)
|
The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
|
|
/s/ Gerald Laderman
|
Gerald Laderman
Executive Vice President and Chief Financial Officer |
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of United Airlines Holdings, Inc.
|
|
/s/ Oscar Munoz
|
Oscar Munoz
|
Chief Executive Officer
|
|
/s/ Gerald Laderman
|
Gerald Laderman
|
Executive Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of United Airlines, Inc.
|
|
/s/ Oscar Munoz
|
Oscar Munoz
|
Chief Executive Officer
|
|
/s/ Gerald Laderman
|
Gerald Laderman
|
Executive Vice President and Chief Financial Officer
|