CHICAGO, Oct. 19, 2021 /PRNewswire/ -- United
Airlines (UAL) today announced third-quarter 2021 financial
results. Despite the impact of the COVID-19 Delta variant in the
third quarter, the company remains confidently on track to achieve
the range of longer term financial targets laid out as part of its
United Next plan earlier this summer, and to reduce
CASM-ex1 below 2019 levels next year.
Citing the rebound in premium leisure travel, re-opening of
European borders next month, continued recovery of business travel
and early indications of loosening travel restrictions in key
Pacific markets, United also announced plans to increase
international capacity by 10% in 2022 - while keeping domestic
capacity flat to 2019. The plan will capitalize on already
improving international margins and United's ideally situated
coastal hubs that have powered the airline's recent success in
launching new routes to Africa and
India. Expected flying at record
levels to Europe, Latin America, India, Africa
and the Middle East in summer
2022, will be enabled by the anticipated return of United's Pratt
& Whitney-powered Boeing 777s to the fleet in 2022, which -
when combined with already announced approximately $2.2 billion in structural cost reduction and
planned gauge growth - will allow United to keep
CASM-ex1 in check as it continues on the path to
recovery.
"The recovery was delayed by the Delta variant, but the United
team remains focused on our long-term vision – and not getting
sidetracked by near-term volatility – meaning we're solidly on
track to achieve the targets we set for 2022," said United Airlines
CEO Scott Kirby. "From the return of
business travel and the planned re-opening of Europe and early indications for opening in
the Pacific, the headwinds we've faced are turning to tailwinds,
and we believe that United is better positioned to lead the
recovery than any airline in the world. Our recovery will be
supported by investments in technology and other efficiencies that
will give our employees the tools they need to take great care of
our customers - and keep costs under control. I am grateful to our
United team members for their continued commitment to our
customers, because it has been essential to our ability to weather
the pandemic, and it will fuel our success in the years ahead."
Third Quarter Financial Results
- Reported third quarter 2021 capacity down 28% compared to third
quarter 2019.
- Reported third quarter 2021 net income of $0.5 billion, adjusted net loss[2] of
$0.3 billion.
- Reported third quarter 2021 total operating revenue of
$7.8 billion, down 31.9% compared to
third quarter 2019.
- Reported third quarter 2021 Total Revenue Per Available Seat
Mile (TRASM) of down 5.1% compared to third quarter 2019.
- Reported third quarter 2021 operating expenses down 32.2%, down
20.9% excluding special charges (credits)2, compared to
third quarter 2019.
- Reported third quarter 2021 Cost Per Available Seat Mile (CASM)
of down 5.6%, CASM, excluding fuel, profit sharing, third-party
business expenses and special charges (CASM-ex)1 of up
14.9% compared to third quarter 2019.
- Reported third quarter 2021 pre-tax margin of 7.8%, negative
6.1% on an adjusted2 basis.
- Reported third quarter 2021 adjusted Earnings Before Interest,
Taxes, Depreciation and Amortization (EBITDA) margin2 of
7.4%.
- Reported third quarter 2021 ending available
liquidity3 of approximately $21 billion.
Outlook4
- Expects fourth quarter 2021 capacity to be down approximately
23% versus fourth quarter 2019.5
- Expects fourth quarter 2021 total revenue to be down 25% to 30%
versus the fourth quarter 2019.
- Expects fourth quarter 2021 CASM-ex1 to be up 12% to
14% compared to fourth quarter 2019.
- Estimates fourth quarter 2021 fuel price of approximately
$2.39 per
gallon.6
- Continues to expect 2022 CASM-ex1 to be lower than
2019.
- Expects 2022 capacity to be up approximately 5% versus 2019
driven by international growth.
- Expects adjusted capital expenditures2 to be around
$3 billion in full year 2021.
- Expects adjusted diluted earnings per share2 in 2026
of around $20 assuming the same
number of diluted shares outstanding as of September 30, 2021. United Next assumes 2026
TRASM remains down around 1% versus 2019.
- Remains on track to achieve long term financial targets from
United Next plan.7
Key Highlights
- First commercial airline to require U.S.-based employees to
receive the COVID-19 vaccine. 99.7% of all United Airlines
employees chose to comply with the requirement, excluding those who
sought a religious or medical accommodation.
- Assisted in the evacuation of 15,000 passengers on 94 flights
as part of Afghan relief efforts.
- Committed to purchase 1.5 billion gallons of sustainable
aviation fuel (SAF) over 20 years, which is one and a half times
the size of the rest of the world's airlines' publicly announced
SAF commitments combined.
- Announced a commercial agreement with Airlink to provide
customers with easy travel to more than 40 destinations in
Southern Africa and the ability to
earn or redeem miles on Airlink flights.
Taking Care of Our Customers
- Achieved highest ever Net Promoter Score year-to-date, a 12%
improvement year-to-date; with the new Boeing 737 MAX 8
aircraft with the United signature interior receiving the highest
scores in the fleet.
- On time departure performance is at 71.8% and is on pace for
the best yearly performance in company history.
- This year, more than 500,000 customers have benefited from
ConnectionSaver and the number of customers that have misconnected
in 2021 is the lowest since 2011.
- Most improved mishandled bag performance among mainline
competitors year-to-date and a 38% improvement over 2019.
United Next
- Awarded free flights for a year to the grand prize winners of
the "Your Shot to Fly" sweepstakes to promote COVID-19
vaccinations.
- Gave customers access to even more COVID-19 testing locations,
including more than 3,000 new Walmart and Albertsons Companies
locations across the U.S., through the United website and mobile
app in the Travel Ready Center.
- Re-opened 18 United ClubSM lounge locations across
the domestic network.
- First U.S. airline to offer economy customers the option to
pre-order snacks and beverages.
- Offered customers the most transparent and user-friendly
options in the industry to encourage and simplify using travel
credits.
- Announced five new domestic routes and three new international
routes and launched three domestic routes and three international
routes – with six more international routes planned to launch in
the fourth quarter 2021.
- Received approval to start selling tickets for the first-ever
nonstop flight between Washington,
D.C., and Lagos, Nigeria,
allowing United to offer more flights between Washington, D.C. and Africa than any other carrier (flights
operations remain subject to government approval).
- Resumed nonstop service on 23 domestic routes and 13
international routes compared to the second quarter of 2021.
Environmental, Social and Governance
(ESG)
- In July, United Airlines Ventures (UAV) announced, along with
Breakthrough Energy Ventures (BEV) and Mesa Airlines, an investment
in electric aircraft startup Heart Aerospace.
- Announced a new goal to reduce its carbon emissions intensity
by 50% compared to 2019 by 2035.
- More than 43 million miles donated by MileagePlus® members to
charities in need of travel through United's mile crowd-sourcing
platform "Miles on a Mission".
- Over 30 million miles were raised to help support Afghan
refugee resettlement efforts.
- Over 4,300 volunteer hours were served by more than 1,000
United employee volunteers in the third-quarter.
- September of Service, a month-long series of employee-driven
volunteer events honoring the 20th anniversary of 9/11, included
over 2,200 hours served by nearly 800 United volunteers, with
nearly 185,000 meals packed, as well as 5,000 pounds of trash
collected, and volunteer events held at 17 different cities across
the country, including all United hubs.
- Through a combination of cargo-only flights and passenger
flights, United has transported nearly 255 million pounds of
freight, which includes nearly 22 million pounds of vital
shipments, such as medical kits, personal protective equipment,
pharmaceuticals, and medical equipment, and more than 800,000
pounds of military packages in the third-quarter.
- Transported more than 160 million COVID-19 vaccines all over
the world in the third-quarter.
Earnings Call
UAL will hold a conference call to discuss third quarter 2021
financial results as well as its financial and operational outlook
for fourth quarter 2021 and beyond, on Wednesday, October 20, at 9:30 a.m.
CT/10:30 a.m. ET. A live, listen-only
webcast of the conference call will be available at
ir.united.com.
The webcast will be available for replay within 24 hours of the
conference call and then archived on the website for three
months.
About United
United's shared purpose is "Connecting People. Uniting the
World." In 2019, United and United Express® carriers operated more
than 1.7 million flights carrying more than 162 million customers.
United has the most comprehensive route network among North
American carriers, including U.S. mainland hubs in Chicago, Denver, Houston, Los
Angeles, New
York/Newark, San Francisco and Washington, D.C. For more about how to
join the United team please visit united.com/careers and more
information about the company is available at ir.united.com. United
Airlines Holdings, Inc. common stock is traded on Nasdaq under the
symbol "UAL."
Cautionary Statement Regarding Forward-Looking
Statements:
This earnings release and the related
attachments (as well as the oral statements made with respect to
information contained in this release and the attachments) contain
certain "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, including under
"Outlook" and elsewhere in this release, relating to, among other
things, the potential impacts of the COVID-19 pandemic and steps
the company plans to take in response thereto and goals, plans and
projections regarding the company's financial position, results of
operations, market position, product development, ESG targets and
business strategy. Such forward-looking statements are based on
historical performance and current expectations, estimates,
forecasts and projections about the company's future financial
results, goals, plans and objectives and involve inherent risks,
assumptions and uncertainties, known or unknown, including internal
or external factors that could delay, divert or change any of them,
that are difficult to predict, may be beyond the company's control
and could cause the company's future financial results, goals,
plans and objectives to differ materially from those expressed in,
or implied by, the statements. Words such as "should," "could,"
"expects," "will," "plans," "intends," "anticipates," "indicates,"
"remains," "believes," "estimates," "may," "projects," "forecast,"
"guidance," "outlook," "goals," "targets" and other words and terms
of similar meaning and expression are intended to identify
forward-looking statements, although not all forward-looking
statements contain such terms. Additionally, forward-looking
statements include statements that do not relate solely to
historical facts, such as conditional statements, statements which
identify uncertainties or trends, discuss the possible future
effects of current known trends or uncertainties, or which indicate
that the future effects of known trends or uncertainties cannot be
predicted, guaranteed or assured. All forward-looking statements in
this release are based upon information available to us on the date
of this release. We undertake no obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events, changed circumstances or otherwise,
except as required by applicable law or regulation. Our actual
results could differ materially from these forward-looking
statements due to numerous factors including, without limitation,
the following: the adverse impacts of the ongoing COVID-19 global
pandemic, and possible outbreaks of another disease or similar
public health threat in the future, on our business, operating
results, financial condition, liquidity and near-term and long-term
strategic operating plan, including possible additional adverse
impacts resulting from the duration and spread of the pandemic;
unfavorable economic and political conditions in the United States and globally; the highly
competitive nature of the global airline industry and
susceptibility of the industry to price discounting and changes in
capacity; high and/or volatile fuel prices or significant
disruptions in the supply of aircraft fuel; our reliance on
technology and automated systems to operate our business and the
impact of any significant failure or disruption of, or failure to
effectively integrate and implement, the technology or systems; our
reliance on third-party service providers and the impact of any
significant failure of these parties to perform as expected, or
interruptions in our relationships with these providers or their
provision of services; adverse publicity, harm to our brand;
reduced travel demand, potential tort liability and voluntary or
mandatory operational restrictions as a result of an accident,
catastrophe or incident involving us, our regional carriers, our
codeshare partners, or another airline; terrorist attacks,
international hostilities or other security events, or the fear of
terrorist attacks or hostilities, even if not made directly on the
airline industry; increasing privacy and data security obligations
or a significant data breach; disruptions to our regional network
and United Express flights provided by third-party regional
carriers; the failure of our significant investments in other
airlines, equipment manufacturers and other aviation industry
participants to produce the returns or results we expect; further
changes to the airline industry with respect to alliances and joint
business arrangements or due to consolidations; changes in our
network strategy or other factors outside our control resulting in
less economic aircraft orders, costs related to modification or
termination of aircraft orders or entry into less favorable
aircraft orders, as well as any inability to accept or integrate
new aircraft into our fleet as planned; our reliance on single
suppliers to source a majority of our aircraft and certain parts,
and the impact of any failure to obtain timely deliveries,
additional equipment or support from any of these suppliers; the
impacts of union disputes, employee strikes or slowdowns, and other
labor-related disruptions on our operations; extended interruptions
or disruptions in service at major airports where we operate; the
impacts of seasonality and other factors associated with the
airline industry; our failure to realize the full value of our
intangible assets or our long-lived assets, causing us to record
impairments; any damage to our reputation or brand image; the
limitation of our ability to use our net operating loss
carryforwards and certain other tax attributes to offset future
taxable income for U.S. federal income tax purposes; the costs of
compliance with extensive government regulation of the airline
industry; costs, liabilities and risks associated with
environmental regulation and climate change; the impacts of our
significant amount of financial leverage from fixed obligations,
the possibility we may seek material amounts of additional
financial liquidity in the short-term and the impacts of
insufficient liquidity on our financial condition and business;
failure to comply with the covenants in the MileagePlus financing
agreements, resulting in the possible acceleration of the
MileagePlus indebtedness, foreclosure upon the collateral securing
the MileagePlus indebtedness or the exercise of other remedies;
failure to comply with financial and other covenants governing our
other debt; changes in, or failure to retain, our senior management
team or other key employees; current or future litigation and
regulatory actions, or failure to comply with the terms of any
settlement, order or arrangement relating to these actions;
increases in insurance costs or inadequate insurance coverage; and
other risks and uncertainties set forth under Part II, Item 1A.,
"Risk Factors," of our Quarterly Report on Form 10-Q for the
quarter ended June 30, 2021, as well
as other risks and uncertainties set forth from time to time in the
reports we file with the U.S. Securities and Exchange
Commission.
The foregoing list sets forth many, but not all, of the factors
that could impact our ability to achieve results described in any
forward-looking statements. Investors should understand that it is
not possible to predict or identify all such factors and should not
consider this list to be a complete statement of all potential
risks and uncertainties. In addition, certain forward-looking
outlook provided in this release relies on assumptions about the
duration and severity of the COVID-19 pandemic, the timing of the
return to a more stable business environment, the volatility of
aircraft fuel prices, customer behavior changes and return in
demand for air travel, among other things (together, the "Recovery
Process"). If the actual Recovery Process differs materially from
our assumptions, the impact of the COVID-19 pandemic on our
business could be worse than expected and our actual results may be
negatively impacted and may vary materially from our expectations
and projections. It is routine for our internal projections and
expectations to change as the year or each quarter in the year
progresses, and therefore it should be clearly understood that the
internal projections, beliefs and assumptions upon which we base
our expectations may change . For instance, we will monitor future
demand and booking trends and adjust capacity, as needed. As such,
our actual flown capacity may differ materially from currently
published flight schedules or current estimations.
Please refer to the tables accompanying this release for
reconciliations of the non-GAAP financial measures used to the most
comparable GAAP financial measure and related disclosures.
-tables attached-
UNITED
AIRLINES HOLDINGS, INC
|
STATEMENTS OF
CONSOLIDATED OPERATIONS (UNAUDITED)
|
|
|
|
Three Months Ended
September
30,
|
|
%
Increase/
(Decrease)
2021 vs.
2019
|
|
|
Nine Months
Ended
September
30,
|
|
%
Increase/
(Decrease)
2021 vs.
2019
|
|
(In millions, except
per share data)
|
|
2021
|
|
2020
|
|
2019
|
|
|
|
2021
|
|
2020
|
|
2019
|
|
|
Operating
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenue
|
|
$
|
6,637
|
|
|
$
|
1,649
|
|
|
$
10,481
|
|
|
(36.7)
|
|
|
$
|
13,319
|
|
|
$
|
9,395
|
|
|
$
|
29,692
|
|
|
(55.1)
|
|
Cargo
|
|
519
|
|
|
422
|
|
|
282
|
|
|
84.0
|
|
|
1,622
|
|
|
1,088
|
|
|
863
|
|
|
87.9
|
|
Other operating
revenue
|
|
594
|
|
|
418
|
|
|
617
|
|
|
(3.7)
|
|
|
1,501
|
|
|
1,460
|
|
|
1,816
|
|
|
(17.3)
|
|
Total operating
revenue
|
|
7,750
|
|
|
2,489
|
|
|
11,380
|
|
|
(31.9)
|
|
|
16,442
|
|
|
11,943
|
|
|
32,371
|
|
|
(49.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and related
costs
|
|
2,487
|
|
|
2,229
|
|
|
3,063
|
|
|
(18.8)
|
|
|
6,987
|
|
|
7,354
|
|
|
8,993
|
|
|
(22.3)
|
|
Aircraft
fuel
|
|
1,710
|
|
|
508
|
|
|
2,296
|
|
|
(25.5)
|
|
|
3,793
|
|
|
2,474
|
|
|
6,704
|
|
|
(43.4)
|
|
Depreciation and
amortization
|
|
623
|
|
|
626
|
|
|
575
|
|
|
8.3
|
|
|
1,866
|
|
|
1,859
|
|
|
1,682
|
|
|
10.9
|
|
Landing fees and other
rent
|
|
652
|
|
|
500
|
|
|
645
|
|
|
1.1
|
|
|
1,735
|
|
|
1,552
|
|
|
1,893
|
|
|
(8.3)
|
|
Regional capacity
purchase
|
|
520
|
|
|
425
|
|
|
721
|
|
|
(27.9)
|
|
|
1,546
|
|
|
1,550
|
|
|
2,124
|
|
|
(27.2)
|
|
Aircraft maintenance
materials and
outside repairs
|
|
346
|
|
|
115
|
|
|
490
|
|
|
(29.4)
|
|
|
917
|
|
|
659
|
|
|
1,319
|
|
|
(30.5)
|
|
Distribution
expenses
|
|
218
|
|
|
53
|
|
|
432
|
|
|
(49.5)
|
|
|
442
|
|
|
379
|
|
|
1,234
|
|
|
(64.2)
|
|
Aircraft
rent
|
|
58
|
|
|
50
|
|
|
67
|
|
|
(13.4)
|
|
|
165
|
|
|
147
|
|
|
221
|
|
|
(25.3)
|
|
Special charges
(credits)
|
|
(1,098)
|
|
|
(1,081)
|
|
|
27
|
|
|
NM
|
|
|
(3,423)
|
|
|
(2,467)
|
|
|
116
|
|
|
NM
|
|
Other operating
expenses
|
|
1,197
|
|
|
679
|
|
|
1,591
|
|
|
(24.8)
|
|
|
3,028
|
|
|
2,660
|
|
|
4,645
|
|
|
(34.8)
|
|
Total operating
expense
|
|
6,713
|
|
|
4,104
|
|
|
9,907
|
|
|
(32.2)
|
|
|
17,056
|
|
|
16,167
|
|
|
28,931
|
|
|
(41.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
1,037
|
|
|
(1,615)
|
|
|
1,473
|
|
|
(29.6)
|
|
|
(614)
|
|
|
(4,224)
|
|
|
3,440
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(449)
|
|
|
(345)
|
|
|
(191)
|
|
|
135.1
|
|
|
(1,228)
|
|
|
(712)
|
|
|
(570)
|
|
|
115.4
|
|
Interest
capitalized
|
|
18
|
|
|
16
|
|
|
22
|
|
|
(18.2)
|
|
|
57
|
|
|
54
|
|
|
65
|
|
|
(12.3)
|
|
Interest
income
|
|
11
|
|
|
8
|
|
|
36
|
|
|
(69.4)
|
|
|
30
|
|
|
45
|
|
|
103
|
|
|
(70.9)
|
|
Unrealized gains
(losses) on
investments, net
|
|
(34)
|
|
|
15
|
|
|
21
|
|
|
NM
|
|
|
91
|
|
|
(295)
|
|
|
72
|
|
|
26.4
|
|
Miscellaneous,
net
|
|
20
|
|
|
(411)
|
|
|
(12)
|
|
|
NM
|
|
|
(48)
|
|
|
(1,317)
|
|
|
(40)
|
|
|
20.0
|
|
Total nonoperating
expense, net
|
|
(434)
|
|
|
(717)
|
|
|
(124)
|
|
|
250.0
|
|
|
(1,098)
|
|
|
(2,225)
|
|
|
(370)
|
|
|
196.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
|
603
|
|
|
(2,332)
|
|
|
1,349
|
|
|
(55.3)
|
|
|
(1,712)
|
|
|
(6,449)
|
|
|
3,070
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
130
|
|
|
(491)
|
|
|
325
|
|
|
(60.0)
|
|
|
(394)
|
|
|
(1,277)
|
|
|
702
|
|
|
NM
|
|
Net income
(loss)
|
|
$
|
473
|
|
|
$
|
(1,841)
|
|
|
$
|
1,024
|
|
|
(53.8)
|
|
|
$
|
(1,318)
|
|
|
$
|
(5,172)
|
|
|
$
|
2,368
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
|
$
|
1.44
|
|
|
$
|
(6.33)
|
|
|
$
|
3.99
|
|
|
(63.9)
|
|
|
$
|
(4.10)
|
|
|
$
|
(18.91)
|
|
|
$
|
9.04
|
|
|
NM
|
|
Diluted weighted
average shares
|
|
329.0
|
|
|
291.0
|
|
|
256.4
|
|
|
28.3
|
|
|
321.3
|
|
|
273.5
|
|
|
262.0
|
|
|
22.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM Not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNITED AIRLINES
HOLDINGS, INC.
|
PASSENGER REVENUE
INFORMATION AND STATISTICS
|
|
Passenger revenue
information is as follows (in millions, except for percentage
changes):
|
|
|
3Q 2021
Passenger
Revenue
|
|
Passenger
Revenue
vs.
3Q 2020
|
|
PRASM vs.
3Q 2020
|
|
PRASM vs.
3Q 2019
|
|
Yield vs.
3Q 2020
|
|
Available
Seat Miles
vs.
3Q 2020
|
|
Available
Seat Miles
vs.
3Q 2019
|
|
3Q 2021
Available
Seat Miles
|
|
3Q 2021
Revenue
Passenger
Miles
|
Domestic
|
$
|
4,845
|
|
|
288.8%
|
|
67.6%
|
|
(8.1%)
|
|
10.6%
|
|
132.0%
|
|
(19.5%)
|
|
34,337
|
|
28,287
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Atlantic
|
840
|
|
|
361.5%
|
|
91.9%
|
|
(34.3%)
|
|
(8.7%)
|
|
140.5%
|
|
(34.9%)
|
|
9,902
|
|
6,601
|
Pacific
|
209
|
|
|
115.5%
|
|
33.6%
|
|
(24.8%)
|
|
(3.7)%
|
|
61.4%
|
|
(75.2%)
|
|
2,694
|
|
920
|
Latin
America
|
743
|
|
|
499.2%
|
|
40.3%
|
|
(19.7%)
|
|
(2.0%)
|
|
327.1%
|
|
9.9%
|
|
6,953
|
|
5,223
|
International
|
1,792
|
|
|
344.7%
|
|
68.6%
|
|
(24.3%)
|
|
(10.3%)
|
|
163.7%
|
|
(39.7%)
|
|
19,549
|
|
12,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
$
|
6,637
|
|
|
302.5%
|
|
66.0%
|
|
(11.7%)
|
|
4.1%
|
|
142.6%
|
|
(28.2%)
|
|
53,886
|
|
41,031
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select operating
statistics are as follows:
|
|
|
|
Three Months Ended
September
30,
|
|
%
Increase/
(Decrease)
2021 vs.
2019
|
|
|
Nine Months
Ended
September
30,
|
|
%
Increase/
(Decrease)
2021 vs.
2019
|
|
|
|
2021
|
|
2020
|
|
2019
|
|
|
|
2021
|
|
2020
|
|
2019
|
|
|
Passengers
(thousands)
|
|
32,145
|
|
|
9,739
|
|
|
43,091
|
|
|
(25.4)
|
|
|
|
70,728
|
|
|
42,911
|
|
|
122,137
|
|
|
(42.1)
|
|
|
Revenue passenger
miles (millions)
|
|
41,031
|
|
|
10,613
|
|
|
64,629
|
|
|
(36.5)
|
|
|
|
86,793
|
|
|
56,812
|
|
|
180,727
|
|
|
(52.0)
|
|
|
Available seat miles
(millions)
|
|
53,886
|
|
|
22,212
|
|
|
75,076
|
|
|
(28.2)
|
|
|
|
123,869
|
|
|
92,113
|
|
|
213,961
|
|
|
(42.1)
|
|
|
Passenger load
factor:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
76.1
|
%
|
|
47.8
|
%
|
|
86.1
|
%
|
|
(10.0)
|
|
pts.
|
|
70.1
|
%
|
|
61.7
|
%
|
|
84.5
|
%
|
|
(14.4)
|
|
pts.
|
Domestic
|
|
82.4
|
%
|
|
54.4
|
%
|
|
86.6
|
%
|
|
(4.2)
|
|
pts.
|
|
78.5
|
%
|
|
62.7
|
%
|
|
85.7
|
%
|
|
(7.2)
|
|
pts.
|
International
|
|
65.2
|
%
|
|
34.7
|
%
|
|
85.4
|
%
|
|
(20.2)
|
|
pts.
|
|
55.8
|
%
|
|
60.0
|
%
|
|
82.9
|
%
|
|
(27.1)
|
|
pts.
|
Passenger revenue per
available
seat mile (cents)
|
|
12.32
|
|
|
7.42
|
|
|
13.96
|
|
|
(11.7)
|
|
|
|
10.75
|
|
|
10.20
|
|
|
13.88
|
|
|
(22.6)
|
|
|
Total revenue per
available seat
mile (cents)
|
|
14.38
|
|
|
11.21
|
|
|
15.16
|
|
|
(5.1)
|
|
|
|
13.27
|
|
|
12.97
|
|
|
15.13
|
|
|
(12.3)
|
|
|
Average yield per
revenue
passenger mile (cents)
|
|
16.18
|
|
|
15.54
|
|
|
16.22
|
|
|
(0.2)
|
|
|
|
15.35
|
|
|
16.54
|
|
|
16.43
|
|
|
(6.6)
|
|
|
Cargo revenue ton
miles
(millions)
|
|
758
|
|
|
685
|
|
|
804
|
|
|
(5.7)
|
|
|
|
2,415
|
|
|
1,876
|
|
|
2,440
|
|
|
(1.0)
|
|
|
Aircraft in fleet at
end of period
|
|
1,338
|
|
|
1,319
|
|
|
1,348
|
|
|
(0.7)
|
|
|
|
1,338
|
|
|
1,319
|
|
|
1,348
|
|
|
(0.7)
|
|
|
Average stage length
(miles)
|
|
1,334
|
|
|
1,212
|
|
|
1,473
|
|
|
(9.4)
|
|
|
|
1,313
|
|
|
1,312
|
|
|
1,464
|
|
|
(10.3)
|
|
|
Employee headcount, as
of
September 30 (in thousands) (a)
|
|
85.3
|
|
|
87.9
|
|
|
95.0
|
|
|
(10.2)
|
|
|
|
85.3
|
|
|
87.9
|
|
|
95.0
|
|
|
(10.2)
|
|
|
Average aircraft fuel
price per
gallon
|
|
$
|
2.14
|
|
|
$
|
1.31
|
|
|
$
|
2.02
|
|
|
5.9
|
|
|
|
$
|
1.98
|
|
|
$
|
1.65
|
|
|
$
|
2.08
|
|
|
(4.8)
|
|
|
Fuel gallons consumed
(millions)
|
|
800
|
|
|
387
|
|
|
1,134
|
|
|
(29.5)
|
|
|
|
1,915
|
|
|
1,501
|
|
|
3,221
|
|
|
(40.5)
|
|
|
(a) The 2021 employee
headcount includes employees who participated in the company's
voluntary leave programs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: See
Part II, Item 6, Selected Financial Data, of UAL's Annual Report on
Form 10-K for the fiscal year ended December 31, 2020, for
definitions of these
statistics.
|
UNITED AIRLINES HOLDINGS, INC.
NON-GAAP
FINANCIAL RECONCILIATION
UAL evaluates its financial performance utilizing various
accounting principles generally accepted in the United States of America (GAAP) and
non-GAAP financial measures, including adjusted earnings before
interest, taxes, depreciation and amortization (adjusted EBITDA),
adjusted operating income (loss), adjusted operating margin,
adjusted pre-tax income (loss), adjusted pre-tax margin, adjusted
net income (loss), adjusted diluted earnings (loss) per share,
CASM, excluding special charges, third-party business expenses,
fuel, and profit sharing (CASM-ex), and operating expenses
excluding special charges, among others. The non-GAAP financial
measures are provided as supplemental information to the financial
measures presented in this press release that are calculated and
presented in accordance with GAAP and are presented because
management believes that they supplement or enhance management's,
analysts' and investors' overall understanding of the company's
underlying financial performance and trends and facilitate
comparisons among current, past and future periods.
Because the non-GAAP financial measures are not calculated in
accordance with GAAP, they should not be considered superior to and
are not intended to be considered in isolation or as a substitute
for the related GAAP financial measures presented in the press
release and may not be the same as or comparable to similarly
titled measures presented by other companies due to possible
differences in method and in the items being adjusted. We encourage
investors to review our financial statements and publicly-filed
reports in their entirety and not to rely on any single financial
measure.
The company does not provide a reconciliation of forward-looking
measures on a forward-looking basis where the company believes such
a reconciliation would imply a degree of precision and certainty
that could be confusing to investors and is unable to reasonably
predict certain items contained in the GAAP measures without
unreasonable efforts. This is due to the inherent difficulty of
forecasting the timing or amount of various items that have not yet
occurred and are out of the company's control or cannot be
reasonably predicted. For the same reasons, the company is unable
to address the probable significance of the unavailable
information. Forward-looking measures provided without the most
directly comparable GAAP financial measures may vary materially
from the corresponding GAAP financial measures. See "Cautionary
Statement Regarding Forward-Looking Statements" above.
The information below provides an explanation of certain
adjustments reflected in the non-GAAP financial measures and shows
a reconciliation of non-GAAP financial measures reported in this
press release to the most directly comparable GAAP financial
measures. Within the financial tables presented, certain columns
and rows may not add due to the use of rounded numbers. Percentages
and earnings per share amounts presented are calculated from the
underlying amounts.
UNITED AIRLINES HOLDINGS, INC.
NON-GAAP
FINANCIAL RECONCILIATION (Continued)
UAL believes that adjusting for special charges (credits),
nonoperating debt extinguishment and modification fees,
nonoperating special termination benefits and settlement losses and
nonoperating credit losses is useful to investors because these
items are not indicative of UAL's ongoing performance. UAL believes
that adjusting for unrealized (gains) losses on investments, net is
useful to investors because those unrealized gains or losses may
not ultimately be realized on a cash basis. UAL believes that
adjusting for interest expense related to finance leases of Embraer
ERJ 145 aircraft is useful to investors because of the accelerated
recognition of interest expense.
CASM is a common metric used in the airline industry to measure
an airline's cost structure and efficiency. UAL reports CASM
excluding special charges (credits), third-party business expenses,
fuel and profit sharing. UAL believes that adjusting for special
charges (credits) is useful to investors because special charges
(credits) are not indicative of UAL's ongoing performance. UAL also
believes that excluding third-party business expenses, such as
maintenance, ground handling and catering services for third
parties, provides more meaningful disclosure because these expenses
are not directly related to UAL's core business. UAL also believes
that excluding fuel costs from certain measures is useful to
investors because it provides an additional measure of management's
performance excluding the effects of a significant cost item over
which management has limited influence. UAL excludes profit sharing
because it believes that this exclusion allows investors to better
understand and analyze UAL's operating cost performance and
provides a more meaningful comparison of our core operating costs
to the airline
industry.
|
|
Three Months Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
Year Ended
December 31,
|
|
|
2021
|
|
2020
|
|
2019
|
|
2021
|
|
2020
|
|
2019
|
|
2019
|
CASM
(cents)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost per available
seat mile (CASM) (GAAP)
|
|
12.46
|
|
|
18.48
|
|
|
13.20
|
|
|
13.77
|
|
|
17.55
|
|
|
13.52
|
|
|
13.67
|
Special charges
(credits)
|
|
(2.04)
|
|
|
(4.86)
|
|
|
0.04
|
|
|
(2.76)
|
|
|
(2.68)
|
|
|
0.05
|
|
|
0.09
|
Third-party business
expenses
|
|
0.07
|
|
|
0.06
|
|
|
0.07
|
|
|
0.07
|
|
|
0.13
|
|
|
0.06
|
|
|
0.06
|
Fuel
expense
|
|
3.17
|
|
|
2.28
|
|
|
3.05
|
|
|
3.06
|
|
|
2.68
|
|
|
3.13
|
|
|
3.14
|
Profit
sharing
|
|
—
|
|
|
—
|
|
|
0.24
|
|
|
—
|
|
|
—
|
|
|
0.17
|
|
|
0.17
|
CASM-ex
(Non-GAAP)
|
|
11.26
|
|
|
21.00
|
|
|
9.80
|
|
|
13.40
|
|
|
17.42
|
|
|
10.11
|
|
|
10.21
|
|
Adjusted
EBITDA
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
|
2019
|
|
2021
|
|
2020
|
|
2019
|
Net income
(loss)
|
|
$
|
473
|
|
|
$
|
(1,841)
|
|
|
$
|
1,024
|
|
|
$
|
(1,318)
|
|
|
$
|
(5,172)
|
|
|
$
2,368
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
623
|
|
|
626
|
|
|
575
|
|
|
1,866
|
|
|
1,859
|
|
|
1,682
|
|
Interest expense, net
of capitalized interest and interest income
|
|
420
|
|
|
321
|
|
|
133
|
|
|
1,141
|
|
|
613
|
|
|
402
|
|
Income tax expense
(benefit)
|
|
130
|
|
|
(491)
|
|
|
325
|
|
|
(394)
|
|
|
(1,277)
|
|
|
702
|
|
Special charges
(credits)
|
|
(1,098)
|
|
|
(1,081)
|
|
|
27
|
|
|
(3,423)
|
|
|
(2,467)
|
|
|
116
|
|
Nonoperating
unrealized (gains) losses on investments, net
|
|
34
|
|
|
(15)
|
|
|
(21)
|
|
|
(91)
|
|
|
295
|
|
|
(72)
|
|
Nonoperating debt
extinguishment and modification fees
|
|
(12)
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
—
|
|
Nonoperating special
termination benefits and settlement losses
|
|
—
|
|
|
415
|
|
|
—
|
|
|
46
|
|
|
646
|
|
|
—
|
|
Nonoperating credit
loss on BRW term loan and guarantee
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
697
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
570
|
|
|
$
|
(2,066)
|
|
|
$
|
2,063
|
|
|
$
|
(2,123)
|
|
|
$
|
(4,806)
|
|
|
$
|
5,198
|
|
Adjusted EBITDA
margin
|
|
7.4
|
%
|
|
(83.0)
|
%
|
|
18.1
|
%
|
|
(12.9)
|
%
|
|
(40.2)
|
%
|
|
16.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNITED AIRLINES HOLDINGS, INC.
NON-GAAP
FINANCIAL RECONCILIATION (Continued)
UAL believes that adjusting capital expenditures for assets
acquired through the issuance of debt, finance leases and other
financial liabilities is useful to investors in order to
appropriately reflect the total amounts spent on capital
expenditures. UAL also believes that adjusting net cash provided by
operating activities for capital expenditures, adjusted capital
expenditures, and aircraft operating lease additions is useful to
allow investors to evaluate the company's ability to generate cash
that is available for debt service or general corporate
initiatives.
|
Three Months Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
Capital
Expenditures (in millions)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Capital expenditures,
net of flight equipment purchase deposit returns (GAAP)
|
$
|
266
|
|
|
$
|
(368)
|
|
|
$
|
1,571
|
|
|
$
|
1,630
|
|
Property and equipment
acquired through the issuance of debt, finance leases,
and other financial liabilities
|
40
|
|
|
887
|
|
|
801
|
|
|
1,513
|
|
Adjustment to property
and equipment acquired through other financial
liabilities (a)
|
—
|
|
|
(132)
|
|
|
(14)
|
|
|
(185)
|
|
Adjusted capital
expenditures (Non-GAAP)
|
$
|
306
|
|
|
$
|
387
|
|
|
$
|
2,358
|
|
|
$
|
2,958
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow (in millions)
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities (GAAP)
|
$
|
(786)
|
|
|
$
|
(1,889)
|
|
|
$
|
2,336
|
|
|
$
|
(1,956)
|
|
Less capital
expenditures, net of flight equipment purchase deposit
returns
|
266
|
|
|
(368)
|
|
|
1,571
|
|
|
1,630
|
|
Free cash flow, net
of financings (Non-GAAP)
|
$
|
(1,052)
|
|
|
$
|
(1,521)
|
|
|
$
|
765
|
|
|
$
|
(3,586)
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities (GAAP)
|
$
|
(786)
|
|
|
$
|
(1,889)
|
|
|
$
|
2,336
|
|
|
$
|
(1,956)
|
|
Less adjusted capital
expenditures (Non-GAAP)
|
306
|
|
|
387
|
|
|
2,358
|
|
|
2,958
|
|
Less aircraft
operating lease additions
|
366
|
|
|
7
|
|
|
541
|
|
|
40
|
|
Free cash flow
(Non-GAAP)
|
$
|
(1,458)
|
|
|
$
|
(2,283)
|
|
|
$
|
(563)
|
|
|
$
|
(4,954)
|
|
|
|
|
|
|
|
|
|
(a) United entered
into agreements with third parties to finance through sale and
leaseback transactions new Boeing model 787 aircraft and Boeing
model 737
MAX aircraft subject to purchase agreements between United and
Boeing. In connection with the delivery of each aircraft from
Boeing, United assigned its
right to purchase such aircraft to the buyer, and simultaneous with
the buyer's purchase from Boeing, United entered into a long-term
lease for such aircraft
with the buyer as lessor. Twenty Boeing model aircraft were
delivered in 2021 under these transactions (and each is presently
subject to a long-term lease to
United). Upon delivery, the company accounted for the aircraft,
which have a repurchase option at a price other than fair value, as
part of Flight equipment on
the company's balance sheet and the related obligation as Other
current liabilities and Other financial liabilities from
sale-leasebacks (noncurrent) since they
do not qualify for sale recognition. If the repurchase option is
not exercised, these aircraft will be accounted for as leased
assets at the time of the option
expiration and the related assets and liabilities will be adjusted
to the present value of the remaining lease payments at that time.
This adjustment reflects the
difference between the recorded amounts and the present value of
future lease payments at inception.
|
UNITED AIRLINES
HOLDINGS, INC.
|
NON-GAAP FINANCIAL
RECONCILIATION (Continued)
|
|
|
Three Months Ended
September
30,
|
|
%
Increase/
(Decrease)
2021 vs.
2019
|
|
Nine Months
Ended
September
30,
|
|
%
Increase/
(Decrease)
2021 vs.
2019
|
(in
millions)
|
2021
|
|
2020
|
|
2019
|
|
2021
|
|
2020
|
|
2019
|
Operating expenses
(GAAP)
|
$
|
6,713
|
|
|
$
|
4,104
|
|
|
$
|
9,907
|
|
|
(32.2)
|
|
$
|
17,056
|
|
|
$
|
16,167
|
|
|
$
|
28,931
|
|
|
(41.0)
|
Special charges
(credits)
|
(1,098)
|
|
|
(1,081)
|
|
|
27
|
|
|
NM
|
|
(3,423)
|
|
|
(2,467)
|
|
|
116
|
|
|
NM
|
Operating expenses,
excluding special charges
(credits)
|
7,811
|
|
|
5,185
|
|
|
9,880
|
|
|
(20.9)
|
|
20,479
|
|
|
18,634
|
|
|
28,815
|
|
|
(28.9)
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-party business
expenses
|
33
|
|
|
13
|
|
|
49
|
|
|
(32.7)
|
|
89
|
|
|
115
|
|
|
120
|
|
|
(25.8)
|
Fuel
expense
|
1,710
|
|
|
508
|
|
|
2,296
|
|
|
(25.5)
|
|
3,793
|
|
|
2,474
|
|
|
6,704
|
|
|
(43.4)
|
Profit
sharing
|
—
|
|
|
—
|
|
|
174
|
|
|
(100.0)
|
|
—
|
|
|
—
|
|
|
368
|
|
|
(100.0)
|
Adjusted operating
expenses (Non-GAAP)
|
$
|
6,068
|
|
|
$
|
4,664
|
|
|
$
|
7,361
|
|
|
(17.6)
|
|
$
|
16,597
|
|
|
$
|
16,045
|
|
|
$
|
21,623
|
|
|
(23.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss) (GAAP)
|
$
|
1,037
|
|
|
$
|
(1,615)
|
|
|
$
|
1,473
|
|
|
(29.6)
|
|
$
|
(614)
|
|
|
$
|
(4,224)
|
|
|
$
3,440
|
|
|
NM
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special charges
(credits)
|
(1,098)
|
|
|
(1,081)
|
|
|
27
|
|
|
NM
|
|
(3,423)
|
|
|
(2,467)
|
|
|
116
|
|
|
NM
|
Adjusted operating
loss (Non-GAAP)
|
$
|
(61)
|
|
|
$
|
(2,696)
|
|
|
$
|
1,500
|
|
|
NM
|
|
$
|
(4,037)
|
|
|
$
|
(6,691)
|
|
|
$
|
3,556
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
13.4
|
%
|
|
(64.9)
|
%
|
|
12.9
|
%
|
|
.5
pts.
|
|
(3.7)
|
%
|
|
(35.4)
|
%
|
|
10.6
|
%
|
|
(14.3)
pts.
|
Adjusted operating
margin (Non-GAAP)
|
(0.8)
|
%
|
|
(108.3)
|
%
|
|
13.2
|
%
|
|
(14.0)
pts.
|
|
(24.6)
|
%
|
|
(56.0)
|
%
|
|
11.0
|
%
|
|
(35.6)
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income (loss)
(GAAP)
|
$
|
603
|
|
|
$
|
(2,332)
|
|
|
$
|
1,349
|
|
|
(55.3)
|
|
$
|
(1,712)
|
|
|
$
|
(6,449)
|
|
|
$
|
3,070
|
|
|
NM
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special charges
(credits)
|
(1,098)
|
|
|
(1,081)
|
|
|
27
|
|
|
NM
|
|
(3,423)
|
|
|
(2,467)
|
|
|
116
|
|
|
NM
|
Unrealized (gains)
losses on investments, net
|
34
|
|
|
(15)
|
|
|
(21)
|
|
|
NM
|
|
(91)
|
|
|
295
|
|
|
(72)
|
|
|
NM
|
Debt extinguishment
and modification fees
|
(12)
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
50
|
|
|
—
|
|
|
—
|
|
|
NM
|
Special termination
benefits and settlement losses
|
—
|
|
|
415
|
|
|
—
|
|
|
NM
|
|
46
|
|
|
646
|
|
|
—
|
|
|
NM
|
Credit loss on BRW
term loan and guarantee
|
—
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
—
|
|
|
697
|
|
|
—
|
|
|
NM
|
Interest expense
on ERJ 145 finance leases
|
—
|
|
|
—
|
|
|
22
|
|
|
NM
|
|
—
|
|
|
—
|
|
|
68
|
|
|
NM
|
Adjusted pre-tax loss
(Non-GAAP)
|
$
|
(473)
|
|
|
$
|
(3,013)
|
|
|
$
|
1,377
|
|
|
NM
|
|
$
|
(5,130)
|
|
|
$
|
(7,278)
|
|
|
$
|
3,182
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
margin
|
7.8
|
%
|
|
(93.7)
|
%
|
|
11.9
|
%
|
|
(4.1)
pts.
|
|
(10.4)
|
%
|
|
(54.0)
|
%
|
|
9.5
|
%
|
|
(19.9)
pts.
|
Adjusted pre-tax
margin (Non-GAAP)
|
(6.1)
|
%
|
|
(121.1)
|
%
|
|
12.1
|
%
|
|
(18.2)
pts.
|
|
(31.2)
|
%
|
|
(60.9)
|
%
|
|
9.8
|
%
|
|
(41.0)
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) (GAAP)
|
$
|
473
|
|
|
$
|
(1,841)
|
|
|
$
|
1,024
|
|
|
(53.8)
|
|
$
|
(1,318)
|
|
|
$
|
(5,172)
|
|
|
$
|
2,368
|
|
|
NM
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special charges
(credits)
|
(1,098)
|
|
|
(1,081)
|
|
|
27
|
|
|
NM
|
|
(3,423)
|
|
|
(2,467)
|
|
|
116
|
|
|
NM
|
Unrealized (gains)
losses on investments, net
|
34
|
|
|
(15)
|
|
|
(21)
|
|
|
NM
|
|
(91)
|
|
|
295
|
|
|
(72)
|
|
|
NM
|
Debt extinguishment
and modification fees
|
(12)
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
50
|
|
|
—
|
|
|
—
|
|
|
NM
|
Special termination
benefits and settlement losses
|
—
|
|
|
415
|
|
|
—
|
|
|
NM
|
|
46
|
|
|
646
|
|
|
—
|
|
|
NM
|
Credit loss on BRW
term loan and guarantee
|
—
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
—
|
|
|
697
|
|
|
—
|
|
|
NM
|
Interest expense on
ERJ 145 finance leases
|
—
|
|
|
—
|
|
|
22
|
|
|
NM
|
|
—
|
|
|
—
|
|
|
68
|
|
|
NM
|
Income tax expense
(benefit) on adjustments, net
|
274
|
|
|
148
|
|
|
(6)
|
|
|
NM
|
|
768
|
|
|
375
|
|
|
(25)
|
|
|
NM
|
Adjusted net income
(loss) (Non-GAAP)
|
$
|
(329)
|
|
|
$
|
(2,374)
|
|
|
$
|
1,046
|
|
|
NM
|
|
$
|
(3,968)
|
|
|
$
|
(5,626)
|
|
|
$
|
2,455
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings (loss) per share (GAAP)
|
$
|
1.44
|
|
|
$
|
(6.33)
|
|
|
$
|
3.99
|
|
|
(63.9)
|
|
$
|
(4.10)
|
|
|
$
|
(18.91)
|
|
|
$
|
9.04
|
|
|
NM
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special charges
(credits)
|
(3.39)
|
|
|
(3.72)
|
|
|
0.10
|
|
|
NM
|
|
(10.65)
|
|
|
(9.02)
|
|
|
0.44
|
|
|
NM
|
Unrealized (gains)
losses on investments, net
|
0.10
|
|
|
(0.05)
|
|
|
(0.08)
|
|
|
NM
|
|
(0.28)
|
|
|
1.08
|
|
|
(0.27)
|
|
|
NM
|
Debt extinguishment
and modification fees
|
(0.04)
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
0.15
|
|
|
—
|
|
|
—
|
|
|
NM
|
Special termination
benefits and settlement losses
|
—
|
|
|
1.43
|
|
|
—
|
|
|
NM
|
|
0.14
|
|
|
2.36
|
|
|
—
|
|
|
NM
|
Credit loss on BRW
term loan and guarantee
|
—
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
—
|
|
|
2.55
|
|
|
—
|
|
|
NM
|
Interest expense on
ERJ 145 finance leases
|
—
|
|
|
—
|
|
|
0.08
|
|
|
NM
|
|
—
|
|
|
—
|
|
|
0.26
|
|
|
NM
|
Income tax expense
(benefit) on adjustments, net
|
0.85
|
|
|
0.51
|
|
|
(0.02)
|
|
|
NM
|
|
2.39
|
|
|
1.37
|
|
|
(0.10)
|
|
|
NM
|
Dilutive share
impact
|
0.02
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
—
|
|
|
—
|
|
|
—
|
|
|
NM
|
Adjusted diluted
income (loss) per share (Non-GAAP)
|
$
|
(1.02)
|
|
|
$
|
(8.16)
|
|
|
$
|
4.07
|
|
|
NM
|
|
$
|
(12.35)
|
|
|
$
|
(20.57)
|
|
|
$
|
9.37
|
|
|
NM
|
UNITED AIRLINES
HOLDINGS, INC
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
|
(In
millions)
|
September 30,
2021
|
|
December 31,
2020
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
19,256
|
|
|
$
|
11,269
|
|
Short-term
investments
|
166
|
|
|
414
|
|
Restricted
cash
|
254
|
|
|
255
|
|
Receivables, less
allowance for credit losses (2021 — $70; 2020 — $78)
|
1,709
|
|
|
1,295
|
|
Aircraft fuel, spare
parts and supplies, less obsolescence allowance (2021 — $532; 2020
— $478)
|
955
|
|
|
932
|
|
Prepaid expenses and
other
|
717
|
|
|
635
|
|
Total current
assets
|
23,057
|
|
|
14,800
|
|
|
|
|
|
Total operating
property and equipment, net
|
32,128
|
|
|
31,466
|
|
Operating lease
right-of-use assets
|
4,697
|
|
|
4,537
|
|
Other
assets:
|
|
|
|
Goodwill
|
4,527
|
|
|
4,527
|
|
Intangibles, less
accumulated amortization (2021 — $1,532; 2020 — $1,495)
|
2,815
|
|
|
2,838
|
|
Restricted
cash
|
215
|
|
|
218
|
|
Deferred income
taxes
|
519
|
|
|
131
|
|
Investments in
affiliates and other, less allowance for credit losses (2021 —
$611; 2020 — $522)
|
1,336
|
|
|
1,031
|
|
Total other
assets
|
9,412
|
|
|
8,745
|
|
Total
assets
|
$
|
69,294
|
|
|
$
|
59,548
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
2,199
|
|
|
$
|
1,595
|
|
Accrued salaries and
benefits
|
2,207
|
|
|
1,960
|
|
Advance ticket
sales
|
6,363
|
|
|
4,833
|
|
Frequent flyer
deferred revenue
|
2,129
|
|
|
908
|
|
Current maturities of
long-term debt
|
2,269
|
|
|
1,911
|
|
Current maturities of
operating leases
|
569
|
|
|
612
|
|
Current maturities of
finance leases
|
116
|
|
|
182
|
|
Other
|
1,083
|
|
|
724
|
|
Total current
liabilities
|
16,935
|
|
|
12,725
|
|
|
|
|
|
Long-term liabilities
and deferred credits:
|
|
|
|
Long-term
debt
|
31,520
|
|
|
24,836
|
|
Long-term obligations
under operating leases
|
5,163
|
|
|
4,986
|
|
Long-term obligations
under finance leases
|
250
|
|
|
224
|
|
Frequent flyer
deferred revenue
|
4,088
|
|
|
5,067
|
|
Pension
liability
|
2,180
|
|
|
2,460
|
|
Postretirement benefit
liability
|
961
|
|
|
994
|
|
Other financial
liabilities from sale-leasebacks
|
1,406
|
|
|
1,140
|
|
Other
|
1,360
|
|
|
1,156
|
|
Total long-term
liabilities and deferred credits
|
46,928
|
|
|
40,863
|
|
Total stockholders'
equity
|
5,431
|
|
|
5,960
|
|
Total liabilities and
stockholders' equity
|
$
|
69,294
|
|
|
$
|
59,548
|
|
UNITED AIRLINES
HOLDINGS, INC.
|
CONDENSED STATEMENTS
OF CONSOLIDATED CASH FLOWS (UNAUDITED)
|
|
(In
millions)
|
Nine Months
Ended
September
30,
|
|
2021
|
|
2020
|
Cash Flows from
Operating Activities:
|
|
|
|
Net cash provided by
(used in) operating activities
|
$
|
2,336
|
|
|
$
|
(1,956)
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital expenditures,
net of flight equipment purchase deposit returns
|
(1,571)
|
|
|
(1,630)
|
|
Purchases of short-term
and other investments
|
(47)
|
|
|
(552)
|
|
Proceeds from sale of
short-term and other investments
|
271
|
|
|
2,182
|
|
Other, net
|
23
|
|
|
10
|
|
Net cash provided by
(used in) investing activities
|
(1,324)
|
|
|
10
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Proceeds from issuance
of debt, net of discounts and fees
|
11,098
|
|
|
12,730
|
|
Proceeds from equity
issuance
|
532
|
|
|
1,135
|
|
Payments of long-term
debt, finance leases and other financing liabilities
|
(4,632)
|
|
|
(1,017)
|
|
Repurchases of common
stock
|
—
|
|
|
(353)
|
|
Other, net
|
(27)
|
|
|
(19)
|
|
Net cash provided by
financing activities
|
6,971
|
|
|
12,476
|
|
Net increase in cash,
cash equivalents and restricted cash
|
7,983
|
|
|
10,530
|
|
Cash, cash
equivalents and restricted cash at beginning of the
period
|
11,742
|
|
|
2,868
|
|
Cash, cash
equivalents and restricted cash at end of the period
|
$
|
19,725
|
|
|
$
|
13,398
|
|
|
|
|
|
Investing and
Financing Activities Not Affecting Cash:
|
|
|
|
Property and equipment
acquired through the issuance of debt, finance leases and
other
|
$
|
801
|
|
|
$
|
1,513
|
|
Lease modifications and
lease conversions
|
111
|
|
|
503
|
|
Right-of-use assets
acquired through operating leases
|
627
|
|
|
64
|
|
Notes receivable and
warrants received for entering into aircraft and other ancillary
business agreements
|
129
|
|
|
—
|
|
|
|
|
|
UNITED AIRLINES
HOLDINGS, INC.
|
NOTES
(UNAUDITED)
|
|
Special
charges (credits) and unrealized (gains) and losses on investments,
net include the following:
|
|
|
|
Three Months Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
(In
millions)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Operating:
|
|
|
|
|
|
|
|
|
CARES Act
grant
|
|
$
|
(1,132)
|
|
|
$
|
(1,494)
|
|
|
$
|
(4,021)
|
|
|
$
|
(3,083)
|
|
Impairment of
assets
|
|
46
|
|
|
38
|
|
|
105
|
|
|
168
|
|
Severance and benefit
costs
|
|
5
|
|
|
350
|
|
|
433
|
|
|
413
|
|
(Gains) losses on
sale of assets and other special charges
|
|
(17)
|
|
|
25
|
|
|
60
|
|
|
35
|
|
Total operating special
charges (credits)
|
|
(1,098)
|
|
|
(1,081)
|
|
|
(3,423)
|
|
|
(2,467)
|
|
|
|
|
|
|
|
|
|
|
Nonoperating:
|
|
|
|
|
|
|
|
|
Nonoperating
unrealized (gains) losses on investments, net
|
|
34
|
|
|
(15)
|
|
|
(91)
|
|
|
295
|
|
Nonoperating debt
extinguishment and modification fees
|
|
(12)
|
|
|
—
|
|
|
50
|
|
|
—
|
|
Nonoperating special
termination benefits and settlement losses
|
|
—
|
|
|
415
|
|
|
46
|
|
|
646
|
|
Nonoperating credit
loss on BRW Aviation Holding LLC and BRW Aviation LLC ("BRW") term
loan and related guarantee
|
|
—
|
|
|
—
|
|
|
—
|
|
|
697
|
|
Total nonoperating special
charges and unrealized (gains) losses on investments,
net
|
|
22
|
|
|
400
|
|
|
5
|
|
|
1,638
|
|
Total operating and
nonoperating special charges (credits) and unrealized (gains)
losses on investments, net
|
|
(1,076)
|
|
|
(681)
|
|
|
(3,418)
|
|
|
(829)
|
|
Income tax expense,
net of valuation allowance
|
|
274
|
|
|
148
|
|
|
768
|
|
|
375
|
|
Total operating and non-operating special charges (credits) and
unrealized (gains) losses on investments, net of income
taxes
|
|
$
|
(802)
|
|
|
$
|
(533)
|
|
|
$
|
(2,650)
|
|
|
$
|
(454)
|
|
CARES Act grant: During the nine months ended September 30, 2021, the company received
approximately $5.8 billion in funding
pursuant to Payroll Support Program agreements under the CARES Act
(the "PSP2 Agreement" and the "PSP3 Agreement"), which included an
approximately $1.7 billion unsecured
loan. The company recorded $1.1 billion and $4.0
billion as grant income in Special charges (credits) during
the three and nine months ended September
30, 2021, respectively. The company also recorded
$99 million for warrants issued to
Treasury as part of the PSP2 Agreement and PSP3 Agreement, within
stockholders' equity, as an offset to the grant income in the nine
months ended September 30, 2021.
During the nine months ended September
30, 2020, the company received approximately $5.1 billion in funding pursuant to the
first Payroll Support Program under the CARES Act, which consisted
of a $3.6 billion grant and a
$1.5 billion unsecured loan. The
company recognized $3.1 billion
of the grant as a credit to Special charges (credits) and
$66 million in warrants issued to Treasury, within
stockholders' equity, as an offset to the grant income.
Impairment of assets: During the three months ended September 30, 2021, the company recorded
$46 million of impairment charges for
nine Airbus A319 aircraft and 13 Boeing 737-700 airframes as a
result of current market conditions for used aircraft. These
aircraft are all considered held for sale and classified as part of
other assets. During the nine months ended September 30, 2021, in addition to the third
quarter impairments described above, the company recorded
impairment charges of $59 million for
64 Embraer EMB 145LR aircraft and related spare engines that United
retired from its regional fleet.
During the three and nine months ended September 30, 2020, the company recorded an
impairment charge of $38 million of the right-of-use asset
associated with the embedded aircraft lease in one of our capacity
purchase agreements. Also, during the nine months ended
September 30, 2020, the company
recorded impairment charges of $130 million for its
China routes which were primarily
caused by the COVID-19 pandemic, the company's subsequent
suspension of flights to China and
a further delay in the expected return of full capacity to the
China markets.
Severance and benefit costs: During the three and nine months
ended September 30, 2021, the company
recorded charges of $5 million and
$433 million, respectively, related
to pay continuation and benefits-related costs provided to
employees who chose to voluntarily separate from the company. The
company offered, based on employee group, age and completed years
of service, pay continuation, health care coverage, and travel
benefits. Approximately 4,500 employees elected to voluntarily
separate from the company.
In 2020, the company enacted a workforce reduction as part of
the company's strategic realignment of its business and new
organizational structure as a result of the impacts of the COVID-19
pandemic on the company's operations and cost structure. The
company recorded $350 million and
$413 million during the three and
nine months ended September 30, 2020,
respectively, related to the workforce reduction and voluntary
plans for employee severance, pay continuance from voluntary
retirements, and benefits-related costs.
(Gains) losses on sale of assets and other special charges:
During the three months ended September 30,
2021, the company recorded net gains of $17 million
primarily related to gains on aircraft sale-leaseback transactions
and aircraft component manufacturer credits. During the nine months
ended September 30, 2021, the company
recorded net charges of $60 million
primarily related to incentives for its employees to receive a
COVID-19 vaccination and the termination of the lease associated
with three floors of its headquarters at the Willis Tower in
Chicago partially offset by the
third quarter's gains.
Nonoperating unrealized gains and losses on investments,
net: During the three and nine months ended September 30, 2021, the company recorded losses
of $34 million and gains of
$91 million, respectively, primarily
for the change in the market value of its investment in equity
securities.
During the three and nine months ended September 30, 2020, the company recorded gains of
$15 million and losses of $271 million, respectively,
primarily for the change in the market value of its investment in
equity securities. Also during the nine months ended September 30, 2020, the company recorded a loss
of $24 million for the decrease in
fair value of the Avianca Holdings S.A.("AVH") share call options,
AVH share appreciation rights, and AVH share-based upside sharing
agreement that United obtained as part of the BRW Term Loan (as
defined below) and related agreements with Kingsland Holdings.
Nonoperating debt extinguishment and modification fees: During
the nine months ended September 30,
2021, the company recorded $50
million of charges for fees and discounts related to the
issuance of new debt and the prepayment of certain debt
agreements.
Nonoperating special termination benefits and settlement
losses: During the nine months ended September 30, 2021, as part of the first quarter
voluntary separation programs, the company recorded
$46 million of special termination benefits in the form of
additional subsidies for retiree medical costs for certain
U.S.-based front-line employees. The subsidies were in the form of
a one-time contribution to a notional Retiree Health Account of
$125,000 for full-time employees and
$75,000 for part-time employees.
During the three and nine months ended September 30, 2020, the company recorded
$415 million and $646 million, respectively, of
settlement losses related to the company's primary defined benefit
pension plans covering certain U.S. non-pilot employees, and
special termination benefits offered under voluntary separation
programs to certain front-line U.S. based employees participating
in the non-pilot defined benefit pension plan and postretirement
medical programs.
Nonoperating credit loss on BRW term loan and related guarantee:
During the nine months ended September 30,
2020, the company recorded a $697
million expected credit loss allowance for the company's
Term Loan Agreement (the "BRW Term Loan"), with, among others, BRW
Aviation Holding LLC and BRW Aviation LLC, and the related
guarantee. BRW's equity and BRW's holdings of AVH equity are
secured as a pledge under the BRW Term Loan, which is currently in
default.
Effective tax rate:
The company's effective tax rates for the three and nine months
ended September 30, 2021 were 21.6%
and 23.0%, respectively. The effective tax rates for the three and
nine months ended September 30, 2020
were 21.1% and 19.8%, respectively. The provision for income taxes
is based on the estimated annual effective tax rate which
represents a blend of federal, state and foreign taxes and includes
the impact of certain nondeductible items. The effective tax rate
was impacted by $52 million of additional valuation allowance
related to unrealized capital losses for the three months ended
September 30, 2021, and by
$27 million of valuation allowance release related to
unrealized capital gains and state attributes for the nine months
ended September 30, 2021. The
effective tax rates for the three and nine months ended
September 30, 2020 were impacted by
$27 million and $157 million,
respectively, of changes in valuation allowance related to
unrealized capital losses.
1 CASM-ex (adjusted cost or operating expense
per available seat mile) is a non-GAAP measure that excludes fuel,
profit sharing, third-party business expense and special charges.
Please see the tables accompanying this release for more detailed
information regarding non-GAAP financial measures used.
2 Please see the tables accompanying this release
for more detailed information regarding non-GAAP financial measures
used.
3 Includes cash, cash equivalents, short-term
investments and undrawn credit facilities.
4 The forward-looking measures listed below are
subject to risks and uncertainties applicable to all
forward-looking statements as described elsewhere in this press
release.
5 Forward capacity is matched with current observed
bookings trends and published flight schedules for the quarter.
6 Fuel guidance is based on the Jet A forward curve
as of October 6, 2021.
7 Please refer to our Current Report on Form 8-K
filed on June 29, 2021 with the U.S.
Securities and Exchange Commission, which contains the United Next
financial targets.
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SOURCE United Airlines