Total operating revenue up 6% over same
quarter 2019; expects increase of 11% in third quarter versus the
same quarter in 2019
Record TRASM of up 24% over same quarter 2019;
expects sequential improvement in third quarter versus the same
quarter in 2019
Operating margin of 7.2% and adjusted
operating margin of 8.2% marking first quarter of profitability
since COVID-19 began
CHICAGO, July 20,
2022 /PRNewswire/ -- United Airlines (UAL) today
reported second quarter 2022 financial results. The company
achieved the highest second quarter revenue in its history,
delivering its first profitable quarter since COVID-19 began,
despite record-high fuel prices. The second quarter results
combined with continued progress the company is seeing affirms
United's confidence in achieving the long-term adjusted pre-tax
margin1 targets of approximately 9 percent in 2023 and
about 14 percent in 2026 that are part of the United Next
strategy.
For the quarter, the company saw operating revenue up 6 percent
versus the same quarter in 2019 and expects to see sequential
improvement in the third quarter. The company also had
record-setting TRASM (Total Revenue Per Available Seat Mile), up 24
percent versus the same quarter in 2019 and expects 24 to 26
percent improvement in the third quarter over third quarter 2019.
Second quarter revenue improved at a rapid pace and while the
company anticipates the economy will slow in the near to medium
term, the continuing pandemic recovery is more than offsetting
economic headwinds — leading to expected revenue and earnings
acceleration in the third quarter. As a result, the company
continues to expect to be profitable for the full year 2022.
Additionally, even as the industry faced several, well-documented
operational challenges throughout the quarter, United performed
well and with the exception of Newark had operating results largely in line
with 2019.
"I am grateful to the United team that has fought through severe
systemic challenges impacting all of global aviation to serve our
customers," said United Airlines CEO Scott
Kirby. "It's nice to return to profitability – but we must
confront three risks that could grow over the next 6-18 months.
Industry-wide operational challenges that limit the system's
capacity, record fuel prices and the increasing possibility of a
global recession are each real challenges that we are already
addressing. These fundamental challenges have already led to higher
costs, higher fuel prices but, also higher revenue, which means
we're as confident as ever we will deliver on our 9 percent
adjusted pre-tax margin target in 2023."
Second Quarter Financial Results
- Reported second quarter 2022 net income of $329 million, adjusted net income2 of
$471 million.
- Reported second quarter 2022 capacity down 15% compared to
second quarter 2019.
- Reported second quarter 2022 total operating revenue of
$12.1 billion, up 6% compared to
second quarter 2019.
- Reported second quarter 2022 TRASM of up 24% compared to second
quarter 2019.
- Reported second quarter 2022 Cost Per Available Seat Mile
(CASM) of up 32%, and CASM-ex2 of up 17%, compared to
second quarter 2019.
- Reported second quarter 2022 operating margin of 7.2%, adjusted
operating margin2 of 8.2%.
- Reported second quarter 2022 pre-tax margin of 3.8%, adjusted
pre-tax margin2 of 5.0%.
- Reported second quarter 2022 fuel price of approximately
$4.18 per gallon.
- Reported second quarter 2022 payments of long-term debt,
finance leases and other financing liabilities of $1.0 billion.
- Reported second quarter 2022 ending available
liquidity3 of $22
billion.
Operational Performance
- ConnectionSaver tool helped save more than 150,000 connections,
assisting more than 1,600 customers daily on average.
- Inflight satisfaction for on-time flights remained at the
highest historic level, achieving 80% for the quarter.
- 700,000 customers used the Agent on Demand platform since the
beginning of the year.
Key Highlights
- Launched a new, national advertising campaign – "Good Leads The
Way" – that tells the story of United's leadership in areas like
customer service, diversity and sustainability, and captures the
optimism fueling the airline's large ambitions at a time of
unprecedented demand in air travel.
- Announced expansion of its Flight Training Center in
Denver, already the largest
facility of its kind in the world, as United seeks to hire an
additional 10,000 pilots by 2030.
- Became the first airline to donate flights in support of the
White House's Operation Fly Formula and transported Kendamil
formula free of charge from Heathrow Airport in London to its Washington, Dulles hub.
Customer-Focused Enhancements
- Opened the new United ClubSM location at Newark
Liberty International Airport, a 30,000 square foot space offering
travelers a modern design, enhanced amenities and culinary
offerings.
- Debuted new custom amenity kits for United Polaris®
from Away ahead of summer travel.
- Announced limited-time collaboration with Spritz Society to
offer complimentary premium cocktails on flights from Chicago to Milan and Newark to Rome, and in select United Clubs.
- Debuted new plant-based menu items from Impossible Foods as
part of United's commitment to add more vegan and vegetarian
options to its culinary line-up amidst growing demand for
plant-based meat.
Network
- Announced year-round, nonstop service between San Francisco, California, and Brisbane, Australia, becoming the first U.S.
airline to add a new transpacific destination to its global network
since the start of COVID-19.
- Announced the company's application with the U.S. Department of
Transportation (DOT) for three weekly nonstop flights between
Washington, D.C., and Cape Town, South Africa. The application was
tentatively approved by the DOT earlier this month.
- Resumed nonstop service between San
Francisco and Melbourne,
Australia.
- Kicked off the launch of the largest transatlantic expansion in
United history with 10 new routes including new destinations
Amman, Jordan; Bergen, Norway; Nice, France; Ponta Delgada, Portugal; Palma de
Mallorca, Spain; and
Tenerife, Spain.
- Expanded the airline's codeshare agreement with Star Alliance member Singapore Airlines, making
it easier for customers to travel to more cities in the United States, Southeast Asia and other destinations in the
Asia-Pacific region.
- Launched a new alliance partnership with Virgin Australia,
providing customers new connectivity to Australian cities beyond
nonstop services.
- Resumed 24 international routes in the second quarter.
- Announced new three times weekly service between Tokyo, Japan, and Saipan in the Commonwealth
of the Northern Mariana Islands
beginning in September 2022.
Environmental, Social and Governance
(ESG)
- Announced a new collaboration with OneTen, a coalition
committed to upskill, hire and advance Black talent into
family-sustaining careers over the next 10 years.
- United Airlines Ventures announced an investment in and
commercial agreement with Dimensional Energy, another step forward
to reaching United's pledge to become 100% green by achieving
net-zero greenhouse gas emissions by 2050, without relying on the
use of traditional carbon offsets.
- Became the first U.S. airline to sign an agreement with Neste
to purchase sustainable aviation fuel overseas.
- United employees and their families participated in 11
different Pride parades in June and July in United hub markets and
beyond.
- United employees and their families participated in nearly 20
different Earth Month events across our hub communities and
beyond.
- Over 42 million miles and more than $400,000 donated to World Central Kitchen,
Airlink, American Red Cross, and Americares in support of
Ukraine relief efforts by United's
customers, with an additional 5 million miles and $100,000 matched by United.
- Hosted send-off events for more than 350 athletes and their
families flying to the 2022 USA Special Olympics Games in
Orlando, Florida, including a
fellow O'Hare International Airport Special Olympics Service
Ambassador.
- United welcomed 50 local youths and their family members to its
Los Angeles International Airport
maintenance facility for a three-week aviation program.
- Sponsored the "Girls Rock Wings" event with Sisters of the
Skies, allowing more than 60 young Black women, ages 10-18, to
envision a future in aviation.
- United, in partnership with the Warriors Community Foundation
and Good Tidings Foundation, revealed the newly refurbished
basketball court and gymnasium at the Willie Mays Boys and Girls
Club of San Francisco.
- In the second quarter, through a combination of cargo-only and
passenger flights, United transported approximately 275 million
pounds of freight, including COVID-19 vaccines and other essential
supplies, which included nearly 33 million pounds of vital
shipments, such as medical kits, personal protective equipment,
pharmaceuticals, and medical equipment.
Earnings Call
UAL will hold a conference call to discuss second quarter 2022
financial results, as well as its financial and operational outlook
for third quarter 2022 and beyond, on Thursday, July 21, at 9:30
a.m. CT/10:30 a.m. ET. A live,
listen-only webcast of the conference call will be available at
ir.united.com.
The webcast will be available for replay within 24 hours of the
conference call and then archived on the website for three
months.
Outlook
This press release should be read in conjunction with the
company's Investor Update issued in connection with this quarterly
earnings announcement, which provides additional information on the
company's business outlook (including certain financial and
operational guidance) and is furnished with this press release with
the U.S. Securities and Exchange Commission on a Current Report on
Form 8-K. The Investor Update is also available through the
company's investor relations website at https://ir.united.com.
Management will also discuss certain business outlook items during
the quarterly earnings conference call.
The company's business outlook is subject to risks and
uncertainties applicable to all forward-looking statements as
described elsewhere in this press release. Please see the section
entitled "Cautionary Statement Regarding Forward-Looking
Statements."
About United
United's shared purpose is "Connecting People. Uniting the
World." From our U.S. hubs in Chicago, Denver, Houston, Los
Angeles, New
York/Newark, San Francisco and Washington, D.C., United operates the most
comprehensive global route network among North American carriers.
United is bringing back our customers' favorite destinations and
adding new ones on its way to becoming the world's best airline.
For more about how to join the United team, please visit
www.united.com/careers and more information about the company is at
www.united.com. United Airlines Holdings, Inc., the parent company
of United Airlines, Inc., is traded on the Nasdaq under the symbol
"UAL".
Website Information
We routinely post important news and information regarding
United on our corporate website, united.com, and our investor
relations website, ir.united.com. We use our investor relations
website as a primary channel for disclosing key information to our
investors, including the timing of future investor conferences and
earnings calls, press releases and other information about
financial performance, reports filed or furnished with the U.S.
Securities and Exchange Commission, information on corporate
governance and details related to our annual meeting of
shareholders. We may use our investor relations website as a means
of disclosing material, non-public information and for complying
with our disclosure obligations under Regulation FD. We may also
use social media channels to communicate with our investors and the
public about our company and other matters, and those
communications could be deemed to be material information. The
information contained on, or that may be accessed through, our
website or social media channels are not incorporated by reference
into, and are not a part of, this document.
Cautionary Statement Regarding Forward-Looking
Statements:
This press release and the related attachments and Investor
Update (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, relating to, among
other things, the potential impacts of the COVID-19 pandemic and
other macroeconomic factors 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, capacity, fleet, 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,"
"would," "will," "may," "expects," "plans," "intends,"
"anticipates," "indicates," "remains," "believes," "estimates,"
"projects," "forecast," "guidance," "outlook," "goals", "targets",
"confident", "dedicated" and other words and terms of similar
meaning and expression are intended to identify forward-looking
statements, although not all forward-looking statements contain
such terms. All statements, other than those that relate solely to
historical facts, are forward-looking statements.
Additionally, forward-looking statements include conditional
statements and statements that identify uncertainties or trends,
discuss the possible future effects of known trends or
uncertainties, or that indicate that the future effects of known
trends or uncertainties cannot be predicted, guaranteed or assured.
All forward-looking statements in this report are based upon
information available to us on the date of this report. 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 on our business, operating
results, financial condition and liquidity; execution risks
associated with our strategic operating plan; 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; any failure to effectively
manage, and receive anticipated benefits and returns from,
acquisitions, divestitures, investments, joint ventures and other
portfolio actions; 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; the highly competitive nature of the
global airline industry and susceptibility of the industry to price
discounting and changes in capacity, including as a result of
alliances, joint business arrangements or other consolidations; our
reliance on a limited number of 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; disruptions to our regional network and United
Express flights provided by third-party regional carriers;
unfavorable economic and political conditions in the United States and globally (including
inflationary pressures); reliance on third-party service providers
and the impact of any significant failure of these parties to
perform as expected, or interruptions in our relationships with
these providers or their provision of services; extended
interruptions or disruptions in service at major airports where we
operate and space, facility and infrastructure constrains at our
hubs or other airports; geopolitical conflict, terrorist attacks or
security events; any damage to our reputation or brand image; 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; increasing privacy and data security
obligations or a significant data breach; increased use of social
media platforms by us, our employees and others; the impacts of
union disputes, employee strikes or slowdowns, and other
labor-related disruptions on our operations; any failure to
attract, train or retain skilled personnel, including our senior
management team or other key employees; the monetary and
operational costs of compliance with extensive government
regulation of the airline industry; current or future litigation
and regulatory actions, or failure to comply with the terms of any
settlement, order or arrangement relating to these actions; costs,
liabilities and risks associated with environmental regulation and
climate change, including our climate goals; high and/or volatile
fuel prices or significant disruptions in the supply of aircraft
fuel (including as a result of the Russia-Ukraine military conflict); 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 financial and other covenants governing our
debt, including our MileagePlus® financing agreements; the impacts
of the proposed phaseout of the London interbank offer rate; limitations on
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; our failure to realize the full value
of our intangible assets or our long-lived assets, causing us to
record impairments; fluctuations in the price of our common stock;
the impacts of seasonality, weather events, infrastructure and
other factors associated with the airline industry; increases in
insurance costs or inadequate insurance coverage and other risks
and uncertainties set forth in Part I, Item 1A. Risk Factors, of
our Annual Report on Form 10-K for the fiscal year ended
December 31, 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"). The COVID-19 pandemic and the measures taken in response
may continue to impact many aspects of our business, operating
results, financial condition and liquidity in a number of ways,
including labor shortages (including reductions in available
staffing and related impacts to the company's flight schedules and
reputation), facility closures and related costs and disruptions to
the company's and its business partners' operations, reduced travel
demand and consumer spending, increased operating costs, supply
chain disruptions, logistics constraints, volatility in the price
of our securities, our ability to access capital markets and
volatility in the global economy and financial markets generally.
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 regularly 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.
Non-GAAP Financial Information:
In discussing financial results and guidance, the company refers
to financial measures that are not in accordance with U.S.
Generally Accepted Accounting Principles (GAAP). 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.
Please refer to the tables accompanying this release for a
description of the non-GAAP adjustments and reconciliations of the
historical 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
June 30,
|
|
%
Increase/
(Decrease)
2022 vs. 2019
|
|
|
Six Months
Ended
June 30,
|
|
%
Increase/
(Decrease)
2022 vs. 2019
|
|
(In millions, except
per share data)
|
|
2022
|
|
2021
|
|
2019
|
|
|
|
2022
|
|
2021
|
|
2019
|
|
|
Operating
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenue
|
|
$
10,829
|
|
$
4,366
|
|
$
10,486
|
|
3.3
|
|
|
$ 17,177
|
|
$
6,682
|
|
$ 19,211
|
|
(10.6)
|
|
Cargo
|
|
574
|
|
606
|
|
295
|
|
94.6
|
|
|
1,201
|
|
1,103
|
|
581
|
|
106.7
|
|
Other operating
revenue
|
|
709
|
|
499
|
|
621
|
|
14.2
|
|
|
1,300
|
|
907
|
|
1,199
|
|
8.4
|
|
Total operating
revenue
|
|
12,112
|
|
5,471
|
|
11,402
|
|
6.2
|
|
|
19,678
|
|
8,692
|
|
20,991
|
|
(6.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and related
costs
|
|
2,836
|
|
2,276
|
|
3,057
|
|
(7.2)
|
|
|
5,623
|
|
4,500
|
|
5,930
|
|
(5.2)
|
|
Aircraft
fuel
|
|
3,811
|
|
1,232
|
|
2,385
|
|
59.8
|
|
|
6,041
|
|
2,083
|
|
4,408
|
|
37.0
|
|
Landing fees and other
rent
|
|
668
|
|
564
|
|
660
|
|
1.2
|
|
|
1,280
|
|
1,083
|
|
1,248
|
|
2.6
|
|
Depreciation and
amortization
|
|
611
|
|
620
|
|
560
|
|
9.1
|
|
|
1,222
|
|
1,243
|
|
1,107
|
|
10.4
|
|
Regional capacity
purchase
|
|
567
|
|
547
|
|
715
|
|
(20.7)
|
|
|
1,132
|
|
1,026
|
|
1,403
|
|
(19.3)
|
|
Aircraft maintenance
materials and outside repairs
|
|
527
|
|
302
|
|
421
|
|
25.2
|
|
|
934
|
|
571
|
|
829
|
|
12.7
|
|
Distribution
expenses
|
|
393
|
|
139
|
|
442
|
|
(11.1)
|
|
|
619
|
|
224
|
|
802
|
|
(22.8)
|
|
Aircraft
rent
|
|
67
|
|
52
|
|
73
|
|
(8.2)
|
|
|
128
|
|
107
|
|
154
|
|
(16.9)
|
|
Special charges
(credits)
|
|
112
|
|
(948)
|
|
71
|
|
NM
|
|
|
104
|
|
(2,325)
|
|
89
|
|
NM
|
|
Other operating
expenses
|
|
1,642
|
|
957
|
|
1,546
|
|
6.2
|
|
|
3,093
|
|
1,831
|
|
3,054
|
|
1.3
|
|
Total operating
expense
|
|
11,234
|
|
5,741
|
|
9,930
|
|
13.1
|
|
|
20,176
|
|
10,343
|
|
19,024
|
|
6.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
878
|
|
(270)
|
|
1,472
|
|
(40.4)
|
|
|
(498)
|
|
(1,651)
|
|
1,967
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(420)
|
|
(426)
|
|
(191)
|
|
119.9
|
|
|
(844)
|
|
(779)
|
|
(379)
|
|
122.7
|
|
Interest
capitalized
|
|
22
|
|
22
|
|
21
|
|
4.8
|
|
|
46
|
|
39
|
|
43
|
|
7.0
|
|
Interest
income
|
|
33
|
|
12
|
|
38
|
|
(13.2)
|
|
|
38
|
|
19
|
|
67
|
|
(43.3)
|
|
Unrealized gains
(losses) on investments, net
|
|
(40)
|
|
147
|
|
34
|
|
NM
|
|
|
(40)
|
|
125
|
|
51
|
|
NM
|
|
Miscellaneous,
net
|
|
(14)
|
|
(49)
|
|
(20)
|
|
(30.0)
|
|
|
5
|
|
(68)
|
|
(28)
|
|
NM
|
|
Total nonoperating
expense, net
|
|
(419)
|
|
(294)
|
|
(118)
|
|
255.1
|
|
|
(795)
|
|
(664)
|
|
(246)
|
|
223.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
|
459
|
|
(564)
|
|
1,354
|
|
(66.1)
|
|
|
(1,293)
|
|
(2,315)
|
|
1,721
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
130
|
|
(130)
|
|
302
|
|
(57.0)
|
|
|
(245)
|
|
(524)
|
|
377
|
|
NM
|
|
Net income
(loss)
|
|
$ 329
|
|
$ (434)
|
|
$
1,052
|
|
(68.7)
|
|
|
$
(1,048)
|
|
$
(1,791)
|
|
$
1,344
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss)
per share
|
|
$ 1.00
|
|
$
(1.34)
|
|
$
4.02
|
|
(75.1)
|
|
|
$
(3.22)
|
|
$
(5.60)
|
|
$ 5.07
|
|
NM
|
|
Diluted weighted
average shares
|
|
330.3
|
|
323.6
|
|
261.6
|
|
26.3
|
|
|
325.9
|
|
320.1
|
|
264.9
|
|
23.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM Not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNITED AIRLINES
HOLDINGS, INC. PASSENGER REVENUE INFORMATION AND
STATISTICS
|
|
Information is as
follows (in millions, except for percentage
changes):
|
|
|
2Q 2022
Passenger
Revenue
|
|
Passenger
Revenue
vs.
2Q 2019
|
|
PRASM vs.
2Q 2019
|
|
Yield vs.
2Q 2019
|
|
Available
Seat Miles
vs.
2Q 2019
|
|
2Q 2022
Available
Seat Miles
|
|
2Q 2022
Revenue
Passenger
Miles
|
Domestic
|
$
7,154
|
|
9.3 %
|
|
24.8 %
|
|
21.5 %
|
|
(12.4 %)
|
|
36,324
|
|
32,654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
1,843
|
|
7.4 %
|
|
5.2 %
|
|
6.1 %
|
|
2.1 %
|
|
12,729
|
|
10,582
|
Latin
America
|
1,075
|
|
22.6 %
|
|
13.5 %
|
|
12.8 %
|
|
8.0 %
|
|
7,441
|
|
6,416
|
Pacific
|
428
|
|
(62.3 %)
|
|
15.2 %
|
|
42.3 %
|
|
(67.3 %)
|
|
3,519
|
|
2,354
|
Middle
East/India/Africa
|
329
|
|
55.9 %
|
|
(1.2 %)
|
|
(1.7 %)
|
|
57.8 %
|
|
2,592
|
|
2,296
|
International
|
3,675
|
|
(6.7 %)
|
|
12.7 %
|
|
15.0 %
|
|
(17.2 %)
|
|
26,281
|
|
21,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
$
10,829
|
|
3.3 %
|
|
20.8 %
|
|
19.8 %
|
|
(14.5 %)
|
|
62,605
|
|
54,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select operating
statistics are as follows:
|
|
|
|
Three Months Ended
June 30,
|
|
%
Increase/
(Decrease)
2022 vs. 2019
|
|
|
Six Months
Ended
June 30,
|
|
%
Increase/
(Decrease)
2022 vs. 2019
|
|
|
|
2022
|
|
2021
|
|
2019
|
|
|
|
2022
|
|
2021
|
|
2019
|
|
|
Passengers (thousands)
(a)
|
|
37,923
|
|
23,909
|
|
42,592
|
|
(11.0)
|
|
|
67,256
|
|
38,583
|
|
79,046
|
|
(14.9)
|
|
Revenue passenger
miles ("RPMs") (millions) (b)
|
|
54,302
|
|
28,514
|
|
63,001
|
|
(13.8)
|
|
|
92,946
|
|
45,762
|
|
116,098
|
|
(19.9)
|
|
Available seat miles
("ASMs") (millions) (c)
|
|
62,605
|
|
39,613
|
|
73,240
|
|
(14.5)
|
|
|
115,869
|
|
69,983
|
|
138,885
|
|
(16.6)
|
|
Passenger load factor:
(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
86.7 %
|
|
72.0 %
|
|
86.0 %
|
|
0.7
|
pts.
|
|
80.2 %
|
|
65.4 %
|
|
83.6 %
|
|
(3.4)
|
pts.
|
Domestic
|
|
89.9 %
|
|
83.3 %
|
|
87.5 %
|
|
2.4
|
pts.
|
|
84.0 %
|
|
75.4 %
|
|
85.2 %
|
|
(1.2)
|
pts.
|
International
|
|
82.4 %
|
|
53.2 %
|
|
84.0 %
|
|
(1.6)
|
pts.
|
|
74.6 %
|
|
48.8 %
|
|
81.5 %
|
|
(6.9)
|
pts.
|
Passenger revenue per
available seat mile (cents)
|
|
17.30
|
|
11.02
|
|
14.32
|
|
20.8
|
|
|
14.82
|
|
9.55
|
|
13.83
|
|
7.2
|
|
Total revenue per
available seat mile ("TRASM") (cents)
|
|
19.35
|
|
13.81
|
|
15.57
|
|
24.3
|
|
|
16.98
|
|
12.42
|
|
15.11
|
|
12.4
|
|
Average yield per
revenue passenger mile (cents) (e)
|
|
19.94
|
|
15.31
|
|
16.64
|
|
19.8
|
|
|
18.48
|
|
14.60
|
|
16.55
|
|
11.7
|
|
Cargo revenue ton
miles (millions) (f)
|
|
752
|
|
892
|
|
831
|
|
(9.5)
|
|
|
1,543
|
|
1,657
|
|
1,636
|
|
(5.7)
|
|
Aircraft in fleet at
end of period
|
|
1,323
|
|
1,315
|
|
1,344
|
|
(1.6)
|
|
|
1,323
|
|
1,315
|
|
1,344
|
|
(1.6)
|
|
Average stage length
(miles) (g)
|
|
1,432
|
|
1,309
|
|
1,469
|
|
(2.5)
|
|
|
1,403
|
|
1,297
|
|
1,459
|
|
(3.8)
|
|
Employee headcount, as
of June 30 (in thousands) (h)
|
|
91.2
|
|
84.4
|
|
94.6
|
|
(3.6)
|
|
|
91.2
|
|
84.4
|
|
94.6
|
|
(3.6)
|
|
Average aircraft fuel
price per gallon
|
|
$ 4.18
|
|
$ 1.97
|
|
$ 2.16
|
|
93.5
|
|
|
$ 3.58
|
|
$ 1.87
|
|
$ 2.11
|
|
69.7
|
|
Fuel gallons consumed
(millions)
|
|
912
|
|
625
|
|
1,102
|
|
(17.2)
|
|
|
1,687
|
|
1,115
|
|
2,087
|
|
(19.2)
|
|
(a)
|
The number of revenue
passengers measured by each flight segment flown.
|
(b)
|
The number of scheduled
miles flown by revenue passengers.
|
(c)
|
The number of seats
available for passengers multiplied by the number of scheduled
miles those seats are flown.
|
(d)
|
RPMs divided by
ASMs.
|
(e)
|
The average passenger
revenue received for each revenue passenger mile flown.
|
(f)
|
The number of cargo
revenue tons transported multiplied by the number of miles
flown.
|
(g)
|
Average stage length
equals the average distance a flight travels weighted for size of
aircraft.
|
(h)
|
This total includes
employees who elected to voluntarily separate from the company but
who are still on pre-separation leave of absence with pay and
benefit
|
UNITED AIRLINES HOLDINGS, INC.
NON-GAAP
FINANCIAL INFORMATION
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 EBITDA margin, adjusted operating income (loss), adjusted
operating expenses, 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), operating expenses excluding special charges, adjusted
capital expenditures, free cash flow, and free cash flow, net of
financings, 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 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
non-GAAP financial 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 INFORMATION (Continued)
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 expense 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, flight academy, 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 expense 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.
UAL also reports EBITDA excluding special charges (credits),
nonoperating unrealized (gains) losses on investments, net,
nonoperating debt extinguishment and modification fees and
nonoperating special termination benefits. UAL believes that
adjusting for these items is useful to investors because they are
not indicative of UAL's ongoing performance.
|
|
Three Months Ended
June 30,
|
|
|
Six Months
Ended
June 30,
|
|
|
|
2022
|
|
2021
|
|
2019
|
|
|
2022
|
|
2021
|
|
2019
|
|
CASM
(cents)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost per available seat
mile (CASM) (GAAP)
|
|
17.94
|
|
14.49
|
|
13.56
|
|
|
17.41
|
|
14.78
|
|
13.70
|
|
Special charges
(credits)
|
|
0.17
|
|
(2.40)
|
|
0.10
|
|
|
0.09
|
|
(3.32)
|
|
0.07
|
|
Third-party business
expenses
|
|
0.06
|
|
0.08
|
|
0.05
|
|
|
0.06
|
|
0.08
|
|
0.05
|
|
Fuel
expense
|
|
6.09
|
|
3.11
|
|
3.26
|
|
|
5.21
|
|
2.97
|
|
3.17
|
|
Profit
sharing
|
|
—
|
|
—
|
|
0.22
|
|
|
—
|
|
—
|
|
0.14
|
|
CASM-ex
(Non-GAAP)
|
|
11.62
|
|
13.70
|
|
9.93
|
|
|
12.05
|
|
15.05
|
|
10.27
|
|
|
Adjusted
EBITDA
|
|
Three Months Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2022
|
|
2021
|
|
2019
|
|
2022
|
|
2021
|
|
2019
|
Net income
(loss)
|
|
$ 329
|
|
$ (434)
|
|
$
1,052
|
|
$
(1,048)
|
|
$
(1,791)
|
|
$
1,344
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
611
|
|
620
|
|
560
|
|
1,222
|
|
1,243
|
|
1,107
|
Interest expense, net
of capitalized interest and interest income
|
|
365
|
|
392
|
|
132
|
|
760
|
|
721
|
|
269
|
Income tax expense
(benefit)
|
|
130
|
|
(130)
|
|
302
|
|
(245)
|
|
(524)
|
|
377
|
Special charges
(credits)
|
|
112
|
|
(948)
|
|
71
|
|
104
|
|
(2,325)
|
|
89
|
Nonoperating
unrealized (gains) losses on investments, net
|
|
40
|
|
(147)
|
|
(34)
|
|
40
|
|
(125)
|
|
(51)
|
Nonoperating debt
extinguishment and modification fees
|
|
—
|
|
62
|
|
—
|
|
7
|
|
62
|
|
—
|
Nonoperating special
termination benefits
|
|
—
|
|
—
|
|
—
|
|
—
|
|
46
|
|
—
|
Adjusted
EBITDA
|
|
$
1,587
|
|
$ (585)
|
|
$
2,083
|
|
$ 840
|
|
$
(2,693)
|
|
$
3,135
|
Adjusted EBITDA
margin
|
|
13.1 %
|
|
(10.7) %
|
|
18.3 %
|
|
4.3 %
|
|
(31.0) %
|
|
14.9 %
|
UNITED AIRLINES HOLDINGS, INC.
NON-GAAP
FINANCIAL INFORMATION (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
(used in) operating activities for capital expenditures, net of
flight equipment purchase deposit returns, adjusted capital
expenditures, and aircraft operating lease additions is useful to
allow investors to evaluate the company's ability to generate cash
that is available for debt service or general corporate
initiatives.
|
Three Months Ended
June 30,
|
|
Six Months
Ended
June 30,
|
Capital
Expenditures (in millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Capital expenditures,
net of flight equipment purchase deposit returns (GAAP)
|
$
550
|
|
$
861
|
|
$
952
|
|
$
1,305
|
Property and equipment
acquired through the issuance of debt, finance leases, and other
financial liabilities
|
—
|
|
252
|
|
—
|
|
761
|
Adjustment to property
and equipment acquired through other financial liabilities
(a)
|
—
|
|
26
|
|
—
|
|
(14)
|
Adjusted capital
expenditures (Non-GAAP)
|
$
550
|
|
$
1,139
|
|
$
952
|
|
$
2,052
|
|
|
|
|
|
|
|
|
Free Cash Flow
(in millions)
|
|
|
|
|
|
|
|
Net cash provided by
operating activities (GAAP)
|
$
2,691
|
|
$
2,675
|
|
$
4,167
|
|
$
3,122
|
Less capital
expenditures, net of flight equipment purchase deposit
returns
|
550
|
|
861
|
|
952
|
|
1,305
|
Free cash flow, net of
financings (Non-GAAP)
|
$
2,141
|
|
$
1,814
|
|
$
3,215
|
|
$
1,817
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities (GAAP)
|
$
2,691
|
|
$
2,675
|
|
$
4,167
|
|
$
3,122
|
Less adjusted capital
expenditures (Non-GAAP)
|
550
|
|
1,139
|
|
952
|
|
2,052
|
Less aircraft
operating lease additions
|
—
|
|
33
|
|
4
|
|
175
|
Free cash flow
(Non-GAAP)
|
$
2,141
|
|
$
1,503
|
|
$
3,211
|
|
$
895
|
|
|
|
|
|
|
|
|
(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. Upon delivery of each aircraft, the company accounted for
the aircraft, which has a repurchase option at a price other than
fair value, as part of Total operating property and equipment, net
on the company's balance sheet and the related obligation as
Current maturities of other financial liabilities and Other
financial liabilities (noncurrent) since they did 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 INFORMATION
(Continued)
|
|
|
Three Months Ended
June 30,
|
|
%
Increase/
(Decrease)
2022 vs. 2019
|
|
Six Months
Ended
June 30,
|
|
%
Increase/
(Decrease)
2022 vs. 2019
|
(in
millions)
|
2022
|
|
2021
|
|
2019
|
|
2022
|
|
2021
|
|
2019
|
Operating expenses
(GAAP)
|
$
11,234
|
|
$
5,741
|
|
$
9,930
|
|
13.1
|
|
$
20,176
|
|
$
10,343
|
|
$
19,024
|
|
6.1
|
Special charges
(credits)
|
112
|
|
(948)
|
|
71
|
|
NM
|
|
104
|
|
(2,325)
|
|
89
|
|
NM
|
Operating expenses,
excluding special charges (credits)
|
11,122
|
|
6,689
|
|
9,859
|
|
12.8
|
|
20,072
|
|
12,668
|
|
18,935
|
|
6.0
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-party business
expenses
|
36
|
|
30
|
|
41
|
|
(12.2)
|
|
70
|
|
56
|
|
71
|
|
(1.4)
|
Fuel
expense
|
3,811
|
|
1,232
|
|
2,385
|
|
59.8
|
|
6,041
|
|
2,083
|
|
4,408
|
|
37.0
|
Profit
sharing
|
—
|
|
—
|
|
161
|
|
(100.0)
|
|
—
|
|
—
|
|
194
|
|
(100.0)
|
Adjusted operating
expenses (Non-GAAP)
|
$ 7,275
|
|
$
5,427
|
|
$
7,272
|
|
—
|
|
$
13,961
|
|
$
10,529
|
|
$
14,262
|
|
(2.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
(GAAP)
|
$
878
|
|
$
(270)
|
|
$
1,472
|
|
(40.4)
|
|
$
(498)
|
|
$
(1,651)
|
|
$
1,967
|
|
NM
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special charges
(credits)
|
112
|
|
(948)
|
|
71
|
|
NM
|
|
104
|
|
(2,325)
|
|
89
|
|
NM
|
Adjusted operating
income (loss) (Non-GAAP)
|
$
990
|
|
$ (1,218)
|
|
$
1,543
|
|
(35.8)
|
|
$
(394)
|
|
$
(3,976)
|
|
$
2,056
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
7.2 %
|
|
(4.9) %
|
|
12.9 %
|
|
(5.7)
pts.
|
|
(2.5) %
|
|
(19.0) %
|
|
9.4 %
|
|
(11.9)
pts.
|
Adjusted operating
margin (Non-GAAP)
|
8.2 %
|
|
(22.3) %
|
|
13.5 %
|
|
(5.3)
pts.
|
|
(2.0) %
|
|
(45.7) %
|
|
9.8 %
|
|
(11.8)
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income (loss)
(GAAP)
|
$
459
|
|
$
(564)
|
|
$
1,354
|
|
(66.1)
|
|
$
(1,293)
|
|
$
(2,315)
|
|
$
1,721
|
|
NM
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special charges
(credits)
|
112
|
|
(948)
|
|
71
|
|
NM
|
|
104
|
|
(2,325)
|
|
89
|
|
NM
|
Unrealized (gains)
losses on investments, net
|
40
|
|
(147)
|
|
(34)
|
|
NM
|
|
40
|
|
(125)
|
|
(51)
|
|
NM
|
Debt extinguishment
and modification fees
|
—
|
|
62
|
|
—
|
|
NM
|
|
7
|
|
62
|
|
—
|
|
NM
|
Special termination
benefits
|
—
|
|
—
|
|
—
|
|
NM
|
|
—
|
|
46
|
|
—
|
|
NM
|
Interest expense
on ERJ 145 finance leases
|
—
|
|
—
|
|
25
|
|
NM
|
|
—
|
|
—
|
|
46
|
|
NM
|
Adjusted pre-tax income
(loss) (Non-GAAP)
|
$
611
|
|
$ (1,597)
|
|
$
1,416
|
|
(56.9)
|
|
$ (1,142)
|
|
$
(4,657)
|
|
$
1,805
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
margin
|
3.8 %
|
|
(10.3) %
|
|
11.9 %
|
|
(8.1)
pts.
|
|
(6.6) %
|
|
(26.6) %
|
|
8.2 %
|
|
(14.8)
pts.
|
Adjusted pre-tax
margin (Non-GAAP)
|
5.0 %
|
|
(29.2) %
|
|
12.4 %
|
|
(7.4)
pts.
|
|
(5.8) %
|
|
(53.6) %
|
|
8.6 %
|
|
(14.4)
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
(GAAP)
|
$
329
|
|
$
(434)
|
|
$
1,052
|
|
(68.7)
|
|
$ (1,048)
|
|
$
(1,791)
|
|
$
1,344
|
|
NM
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special charges
(credits)
|
112
|
|
(948)
|
|
71
|
|
NM
|
|
104
|
|
(2,325)
|
|
89
|
|
NM
|
Unrealized (gains)
losses on investments, net
|
40
|
|
(147)
|
|
(34)
|
|
NM
|
|
40
|
|
(125)
|
|
(51)
|
|
NM
|
Debt extinguishment
and modification fees
|
—
|
|
62
|
|
—
|
|
NM
|
|
7
|
|
62
|
|
—
|
|
NM
|
Special termination
benefits
|
—
|
|
—
|
|
—
|
|
NM
|
|
—
|
|
46
|
|
—
|
|
NM
|
Interest expense on
ERJ 145 finance leases
|
—
|
|
—
|
|
25
|
|
NM
|
|
—
|
|
—
|
|
46
|
|
NM
|
Income tax expense
(benefit) on adjustments, net
|
(10)
|
|
203
|
|
(14)
|
|
NM
|
|
(10)
|
|
494
|
|
(19)
|
|
NM
|
Adjusted net income
(loss) (Non-GAAP)
|
$
471
|
|
$ (1,264)
|
|
$
1,100
|
|
(57.2)
|
|
$
(907)
|
|
$
(3,639)
|
|
$
1,409
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share (GAAP)
|
$
1.00
|
|
$
(1.34)
|
|
$
4.02
|
|
(75.1)
|
|
$
(3.22)
|
|
$
(5.60)
|
|
$
5.07
|
|
NM
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special charges
(credits)
|
0.34
|
|
(2.93)
|
|
0.27
|
|
NM
|
|
0.32
|
|
(7.26)
|
|
0.34
|
|
NM
|
Unrealized (gains)
losses on investments, net
|
0.12
|
|
(0.46)
|
|
(0.13)
|
|
NM
|
|
0.12
|
|
(0.39)
|
|
(0.19)
|
|
NM
|
Debt extinguishment
and modification fees
|
—
|
|
0.19
|
|
—
|
|
NM
|
|
0.03
|
|
0.19
|
|
—
|
|
NM
|
Special termination
benefits
|
—
|
|
—
|
|
—
|
|
NM
|
|
—
|
|
0.15
|
|
—
|
|
NM
|
Interest expense on
ERJ 145 finance leases
|
—
|
|
—
|
|
0.10
|
|
NM
|
|
—
|
|
—
|
|
0.17
|
|
NM
|
Income tax expense
(benefit) on adjustments, net
|
(0.03)
|
|
0.63
|
|
(0.05)
|
|
NM
|
|
(0.03)
|
|
1.54
|
|
(0.07)
|
|
NM
|
Adjusted diluted income
(loss) per share (Non-GAAP)
|
$
1.43
|
|
$
(3.91)
|
|
$
4.21
|
|
(66.0)
|
|
$
(2.78)
|
|
$ (11.37)
|
|
$
5.32
|
|
NM
|
UNITED AIRLINES
HOLDINGS, INC CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
|
|
(In
millions)
|
June 30,
2022
|
|
December 31,
2021
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
16,885
|
|
$
18,283
|
Short-term
investments
|
3,190
|
|
123
|
Restricted
cash
|
43
|
|
37
|
Receivables, less
allowance for credit losses (2022 — $31; 2021 — $28)
|
2,217
|
|
1,663
|
Aircraft fuel, spare
parts and supplies, less obsolescence allowance (2022 — $578; 2021
— $546)
|
1,153
|
|
983
|
Prepaid expenses and
other
|
883
|
|
745
|
Total current
assets
|
24,371
|
|
21,834
|
|
|
|
|
Total operating
property and equipment, net
|
31,853
|
|
32,074
|
Operating lease
right-of-use assets
|
4,440
|
|
4,645
|
Other
assets:
|
|
|
|
Goodwill
|
4,527
|
|
4,527
|
Intangibles, less
accumulated amortization (2022 — $1,451; 2021 — $1,544)
|
2,782
|
|
2,803
|
Restricted
cash
|
204
|
|
213
|
Deferred income
taxes
|
907
|
|
659
|
Investments in
affiliates and other, less allowance for credit losses (2022
— $623; 2021 — $622)
|
1,297
|
|
1,420
|
Total other
assets
|
9,717
|
|
9,622
|
Total assets
|
$
70,381
|
|
$
68,175
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
3,755
|
|
$
2,562
|
Accrued salaries and
benefits
|
1,943
|
|
2,121
|
Advance ticket
sales
|
9,931
|
|
6,354
|
Frequent flyer
deferred revenue
|
2,590
|
|
2,239
|
Current maturities of
long-term debt
|
3,012
|
|
3,002
|
Current maturities of
other financial liabilities
|
914
|
|
834
|
Current maturities of
operating leases
|
543
|
|
556
|
Current maturities of
finance leases
|
78
|
|
76
|
Other
|
678
|
|
560
|
Total current
liabilities
|
23,444
|
|
18,304
|
Long-term liabilities
and deferred credits:
|
|
|
|
Long-term
debt
|
29,175
|
|
30,361
|
Long-term obligations
under operating leases
|
4,997
|
|
5,152
|
Long-term obligations
under finance leases
|
205
|
|
219
|
Frequent flyer
deferred revenue
|
3,905
|
|
4,043
|
Pension
liability
|
1,934
|
|
1,920
|
Postretirement benefit
liability
|
964
|
|
1,000
|
Other financial
liabilities
|
496
|
|
863
|
Other
|
1,297
|
|
1,284
|
Total long-term
liabilities and deferred credits
|
42,973
|
|
44,842
|
Total stockholders'
equity
|
3,964
|
|
5,029
|
Total liabilities and
stockholders' equity
|
$
70,381
|
|
$
68,175
|
UNITED AIRLINES
HOLDINGS, INC. CONDENSED STATEMENTS OF CONSOLIDATED CASH
FLOWS (UNAUDITED)
|
|
(In
millions)
|
Six Months
Ended
June 30,
|
|
2022
|
|
2021
|
Cash Flows from
Operating Activities:
|
|
|
|
Net cash provided by
operating activities
|
$
4,167
|
|
$
3,122
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital expenditures,
net of flight equipment purchase deposit returns
|
(952)
|
|
(1,305)
|
Purchases of short-term
and other investments
|
(3,302)
|
|
—
|
Proceeds from sale of
short-term and other investments
|
215
|
|
184
|
Proceeds from sale of
property and equipment
|
138
|
|
13
|
Other, net
|
(13)
|
|
(2)
|
Net cash used in
investing activities
|
(3,914)
|
|
(1,110)
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Proceeds from issuance
of debt, net of discounts and fees
|
212
|
|
11,116
|
Proceeds from equity
issuance
|
—
|
|
532
|
Payments of long-term
debt, finance leases and other financing liabilities
|
(1,795)
|
|
(4,072)
|
Other, net
|
(71)
|
|
(22)
|
Net cash provided by
(used in) financing activities
|
(1,654)
|
|
7,554
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
(1,401)
|
|
9,566
|
Cash, cash equivalents
and restricted cash at beginning of the period
|
18,533
|
|
11,742
|
Cash, cash equivalents
and restricted cash at end of the period
|
$
17,132
|
|
$
21,308
|
|
|
|
|
Investing and Financing
Activities Not Affecting Cash:
|
|
|
|
Property and equipment
acquired through the issuance of debt, finance leases and
other
|
$
—
|
|
$
761
|
Lease modifications and
lease conversions
|
82
|
|
59
|
Right-of-use assets
acquired through operating leases
|
84
|
|
214
|
Equity investment
interest received in exchange for aircraft
|
42
|
|
—
|
Notes receivable and
warrants received for entering into agreements
|
2
|
|
139
|
UNITED AIRLINES
HOLDINGS, INC. NOTES (UNAUDITED)
|
|
Special charges
(credits) and unrealized (gains) and losses on investments, net
include the following:
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months
Ended
June 30,
|
(In
millions)
|
|
2022
|
|
2021
|
|
2019
|
|
2022
|
|
2021
|
|
2019
|
Operating:
|
|
|
|
|
|
|
|
|
|
|
|
|
CARES Act
grant
|
|
$
—
|
|
$ (1,079)
|
|
$
—
|
|
$
—
|
|
$
(2,889)
|
|
$
—
|
Impairment of
assets
|
|
—
|
|
59
|
|
61
|
|
—
|
|
59
|
|
69
|
Severance and benefit
costs
|
|
—
|
|
11
|
|
6
|
|
—
|
|
428
|
|
12
|
(Gains) losses on sale
of assets and other special charges
|
|
112
|
|
61
|
|
4
|
|
104
|
|
77
|
|
8
|
Total operating special
charges (credits)
|
|
112
|
|
(948)
|
|
71
|
|
104
|
|
(2,325)
|
|
89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating:
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating debt
extinguishment and modification fees
|
|
—
|
|
62
|
|
—
|
|
7
|
|
62
|
|
—
|
Nonoperating special
termination benefits
|
|
—
|
|
—
|
|
—
|
|
—
|
|
46
|
|
—
|
Nonoperating unrealized
(gains) losses on investments, net
|
|
40
|
|
(147)
|
|
(34)
|
|
40
|
|
(125)
|
|
(51)
|
Total nonoperating special
charges and unrealized (gains) losses on investments,
net
|
|
40
|
|
(85)
|
|
(34)
|
|
47
|
|
(17)
|
|
(51)
|
Total operating and
nonoperating special charges (credits) and unrealized (gains)
losses on investments, net
|
|
152
|
|
(1,033)
|
|
37
|
|
151
|
|
(2,342)
|
|
38
|
Income tax expense
(benefit), net of valuation allowance
|
|
(10)
|
|
203
|
|
(8)
|
|
(10)
|
|
494
|
|
(8)
|
Total operating and non-operating special charges (credits) and
unrealized (gains) losses on investments, net of income
taxes
|
|
$
142
|
|
$
(830)
|
|
$
29
|
|
$ 141
|
|
$
(1,848)
|
|
$
30
|
CARES Act grant: During the six months ended June 30, 2021, the company received approximately
$5.8 billion in funding pursuant to
certain Payroll Support Programs ("PSP2" and "PSP3") under the
Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"),
which included an approximately $1.7
billion unsecured loan. The company recorded $1.1 billion and $2.9
billion as grant income during the three and six months
ended June 30, 2021, respectively.
The company also recorded $52 million
and $99 million for the related
warrants issued to the U.S. Treasury Department as part of the
agreements related to PSP2 and PSP3, within stockholders' equity,
as an offset to the grant income in the three and six months ended
June 30, 2021, respectively.
Impairment of assets: During the three and six months ended
June 30, 2021, the company recorded
$59 million of impairments primarily
related to 64 Embraer EMB 145LR aircraft and related engines that
United retired from its regional aircraft fleet.
During the three months ended June 30,
2019, the company recorded a $47
million impairment for aircraft engines removed from
operations, a $6 million charge for
the early termination of several regional aircraft finance leases
and $8 million in other miscellaneous
impairments. During the six months ended June 30, 2019, in addition to the charges
described above, the company recorded an $8
million fair value adjustment for aircraft purchased off
lease.
Severance and benefit costs: During the three and six months
ended June 30, 2021, the company
recorded charges of $11 million and
$428 million, respectively, related
to pay continuation and benefits-related costs provided to
employees who chose to voluntarily separate from the company. The
company offered, based on employee group, age and completed years
of service, pay continuation, health care coverage, and travel
benefits. Approximately 4,500 employees elected to voluntarily
separate from the company.
During the three and six months ended June 30, 2019, the company recorded $6 million and $10
million, respectively, of management severance. During the
six months ended June 30, 2019, the
company recorded $2 million of
severance and benefit costs primarily related to a voluntary
early-out program for its technicians and related employees
represented by the International Brotherhood of Teamsters.
(Gains) losses on sale of assets and other special charges:
During the three and six months ended June
30, 2022, the company recorded $112 million and
$104 million, respectively, of net charges primarily comprised
of $94 million for various legal matters.
During the three and six months ended June 30, 2021, the company recorded charges of
$61 million and $77 million, respectively, primarily related to
incentives for certain of its front-line employees to receive a
COVID-19 vaccination and the termination of the lease associated
with three floors of its headquarters at the Willis Tower in
Chicago in the first quarter of
2021.
During the three and six months ended June 30, 2019, the company recorded $4 million and $8
million, respectively, of net charges, primarily related to
the sale of aircraft engines.
Nonoperating debt extinguishment and modification fees: During
the six months ended June 30, 2022,
the company recorded $7 million of
charges mainly related to the early redemption of $400 million
of its unsecured debt.
During the three and six months ended June 30, 2021, the company recorded $62 million of charges for fees and discounts
related to the issuance of a new term loan and revolving credit
facility and the prepayment of a CARES Act loan and a 2017 term
loan and revolving credit facility.
Nonoperating special termination benefits: During the six
months ended June 30, 2021, as part
of first quarter voluntary separation leave programs, the company
recorded $46 million of special
termination benefits in the form of additional subsidies for
retiree medical costs for certain U.S.-based front-line employees.
The subsidies 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.
Nonoperating unrealized gains and losses on investments,
net: All amounts represent changes to market value of equity
investments.
Interest expense related to finance leases of Embraer ERJ 145
aircraft:
During the third quarter of 2018, United entered into an
agreement with the lessor of 54 Embraer ERJ 145 aircraft to
purchase those aircraft in 2019. The provisions of the new lease
agreement resulted in a change in accounting classification of
these new leases from operating leases to finance leases up until
the purchase date. The company recognized $25 million and $46
million of additional interest expense in the three and six
months ended June 30, 2019,
respectively, as a result of this change. UAL believes that
adjusting for interest expense related to finance leases of Embraer
ERJ 145 aircraft in certain non-GAAP measures is useful to
investors because of the accelerated recognition of interest
expense.
Effective tax rate:
The company's effective tax rates for the three and six months
ended June 30, 2022, 2021 and 2019
were as follows:
|
Three Months Ended June
30,
|
|
Six Months Ended June
30,
|
|
2022
|
|
2021
|
|
2019
|
|
2022
|
|
2021
|
|
2019
|
Effective tax
rate
|
28.3 %
|
|
23.0 %
|
|
22.3 %
|
|
18.9 %
|
|
22.6 %
|
|
21.9 %
|
The provisions for income taxes for the three and six months
ended June 30, 2021 and 2019 are
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. We have historically calculated the
provision for income taxes during interim reporting periods by
applying an estimate of the annual effective tax rate for the full
fiscal year to income or loss for the reporting period. We have
used a discrete effective tax rate method to calculate taxes for
the three and six months ended June 30,
2022. We believe that, at this time, the use of the discrete
method for the three and six months ended June 30, 2022 is more appropriate than the
estimated annual effective tax rate method as the estimated annual
effective tax rate method is not reliable due to a high degree of
uncertainty in estimating annual pretax earnings.
1
|
The company is not
providing a target for or a reconciliation to the most directly
comparable GAAP measure because the company is unable to predict
certain items contained in the GAAP measure without unreasonable
efforts. For additional information about the reconciling items and
their significance, see "Non-GAAP Financial Information"
below.
|
2
|
For additional
information about the non-GAAP measures used in this press release,
see "Non-GAAP Financial Information" below.
|
3
|
Includes cash, cash
equivalents, short-term investments and undrawn credit
facilities.
|
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SOURCE United Airlines