United Airlines Holdings (UAL) 10-K risk factor changes: FY2021 vs FY2020

[removed: - Our reliance] [added: The Company relies heavily] on technology and automated systems to operate [removed: our] [added: its] business and [removed: the impact of] any significant failure or disruption of, or failure to effectively integrate and implement, [removed: the technology] [added: these technologies] or [removed: systems;][added: systems could materially harm its business.]

[removed: - Adverse] [added: The Company could experience adverse] publicity, harm to [removed: our] [added: its] brand, reduced travel [removed: demand and] [added: demand,] potential tort liability [added: and operational restrictions] as a result of an accident, catastrophe or incident involving [removed: us, our regional carriers, our codeshare partners,] [added: its aircraft] or [added: its operations or the aircraft or operations of] another [removed: airline;][added: airline, which may result in a material adverse effect on the Company's business, operating results or financial condition.]

[removed: - Costs, liabilities] [added: We are subject to many forms of environmental regulation] and [added: liability and] risks associated with [removed: environmental regulation and] climate [removed: change;][added: change and may incur substantial costs as a result.]

[removed: - Failure to comply with financial and other covenants] [added: Agreements] governing our [added: debt include financial and] other [removed: debt;][added: covenants.]

[removed: - Current] [added: Current] or future litigation and regulatory actions, or failure to comply with the terms of any settlement, order or [removed: arrangement] [added: agreement] relating to these [removed: actions; and][added: actions, could have a material adverse impact on the Company.]

[removed: Risks Relating to COVID-19][added: COVID-19 Pandemic Risks]

[removed: Measures such as "shelter] [added: The COVID-19 pandemic prompted governments and businesses to take unprecedented measures] in [removed: place" or quarantine requirements,] [added: response that have included] international and domestic travel restrictions or advisories, [added: restrictions on business operations,] limitations on public gatherings, social distancing recommendations, [added: temporary closures of businesses,] remote work [removed: arrangements and] [added: arrangements,] closures of tourist destinations and [removed: attractions,] [added: attractions] as well as [removed: consumer perceptions of the safety, ease and predictability of air travel, have contributed to a precipitous decline in passenger demand and bookings for both business] [added: quarantine] and [removed: leisure travel.][added: shelter-in-place orders.]

[removed: The] [added: It remains difficult to reasonably predict the] full extent of the ongoing impact of [added: the] COVID-19 [added: pandemic] on the Company's longer-term operational and financial [removed: performance] [added: performance, which] will depend on [added: a number of] future developments, [removed: including those] [added: many of which are] outside [removed: our control related to] the [added: Company's control, such as the ultimate duration of and factors impacting the recovery from the pandemic (including the] efficacy and speed of vaccination programs in curbing the spread of the [removed: virus,] [added: virus in different markets,] the [added: efficacy and availability of various treatment options, the] introduction and spread of new variants of the virus [removed: which] [added: that] may be resistant to currently approved [removed: vaccines, passenger testing requirements, mask mandates] [added: vaccines] or [removed: other restrictions on travel, all] [added: treatment options and the continuation] of [removed: which are highly uncertain] [added: existing or implementation of new government travel restrictions), the volatility of aircraft fuel prices, customer behavior changes] and [removed: cannot be predicted with certainty.][added: fluctuations in demand for air travel, among others.]

[removed: The] [added: The] COVID-19 pandemic has [removed: had a material impact on the Company,] [added: materially] and [removed: the continuation of reduced demand could have a material adverse effect on the Company's] [added: adversely impacted our] business, operating results, financial condition and liquidity.

If we do not successfully execute [removed: or adjust] our [added: United Next or other] strategic [removed: operating plans in the long-term,] [added: plans,] or if actual results [removed: continue to] vary significantly from our [removed: prior assumptions or vary significantly from our future assumptions,] [added: expectations,] our business, operating [removed: results and] [added: results,] financial condition [added: and market capitalization] could be materially and adversely impacted.

[removed: Risks Relating to Our Business] [added: Business, Operational] and [removed: Industry][added: Industry Risks]

In addition, during periods of unfavorable economic conditions, business travelers historically have reduced the volume of their travel, either due to cost-saving initiatives, the replacement of travel with alternatives such as [removed: videoconferencing,] [added: videoconferencing] or as a result of decreased business activity requiring travel.

[removed: During such periods, the Company's business and operating results may be adversely affected due to significant] [added: Significant] declines in industry passenger demand, particularly with respect to the Company's business and premium cabin [removed: travelers,] [added: travelers] and a reduction in fare [removed: levels.][added: levels, could lead to a material reduction in revenue, changes to the Company's operations and deferrals of capital expenditure and other spending.]

Political disruptions and instability in certain regions [removed: can] [added: have] negatively [removed: impact] [added: impacted] the demand and network availability for air [removed: travel.][added: travel, as well as fuel prices, and may continue to have a negative impact on these and other items.]

Consolidation in the airline industry, the rise of well-funded government sponsored international carriers, changes in international [removed: alliances] [added: alliances, swaps of landing] and [added: slots and] the creation of immunized JBAs have altered and are expected to continue to alter the competitive landscape in the industry, resulting in the formation of airlines and alliances with increased financial resources, more extensive global networks and services and competitive cost structures.

Several of the Company's domestic and international competitors have increased their international capacity by including service to some destinations that the Company currently serves, causing overlap in destinations [removed: served, and] [added: served and,] therefore, increasing competition for those destinations.

The Company's U.S. operations are subject to competition from traditional network carriers, national point-to-point [removed: carriers,] [added: carriers] and discount carriers, including low-cost carriers and ultra-low-cost [removed: carriers.][added: carriers that may have lower costs and provide service at lower fares to destinations also served by the Company.]

The significant presence of low-cost carriers and ultra-low-cost carriers, which engage in substantial price discounting, may diminish our ability to achieve sustained profitability on domestic and international [removed: routes.][added: routes and has also caused us to reduce fares for certain routes, resulting in lower yields on many domestic markets.]

[removed: Competition] [added: For instance, competition] is significant from [removed: government subsidized] [added: government-subsidized] competitors from certain Middle East countries.

We also face competition from foreign carriers operating under "fifth freedom" rights permitted under international treaties that allow certain carriers to provide service to and from stopover points between their home [removed: country] [added: countries] and ultimate [removed: destination,] [added: destinations,] including points in the United States, in competition with service provided by us.

Our MileagePlus frequent flyer program benefits from the attractiveness and competitiveness of United Airlines as a material purchaser of award [removed: miles,] [added: miles] and the majority recipient for mileage redemption.

If we are not able to maintain a competitive and attractive airline business, our ability to acquire, engage and retain customers in the loyalty program may be adversely affected, which could adversely affect the loyalty program's [added: and our] operating results and financial condition.

[removed: Further] [added: Further,] our MileagePlus frequent flyer program also faces significant and increasing direct competition from the frequent flyer programs offered by other airlines, as well as from similar loyalty programs offered by banks and other financial services companies.

If we are not able to maintain a competitive frequent flyer program, our ability to attract and retain customers to MileagePlus and United alike may be adversely affected, which could adversely affect our [removed: enterprise] operating results and financial condition.

During the year ended December 31, [removed: 2020,] [added: 2021,] the Company's fuel expense was approximately [removed: $3.2] [added: $5.8] billion.

The timely and adequate supply of fuel to meet operational demand depends on the continued availability of reliable fuel supply [removed: sources,] [added: sources] as well as related service and delivery infrastructure.

[removed: Market prices for aircraft] [added: The Company generally sources] fuel [added: at prevailing market prices, which] have historically fluctuated substantially in short periods of time and continue to be highly volatile due to a [removed: dependence on a] multitude of unpredictable factors beyond the Company's [removed: control.][added: control, including changes in global crude oil prices, the balance between aircraft fuel supply and demand, natural disasters, prevailing inventory levels and fuel production and transportation infrastructure.]

[removed: Prices of fuel are also impacted by] indirect factors, such as geopolitical events, economic growth indicators, fiscal/monetary policies, fuel tax policies, changes in regulations, environmental concerns and financial investments in energy markets.

Given the highly competitive nature of the airline industry, the Company [added: has not been able to previously, and] may not be able to [added: in the future,] increase its fares and fees sufficiently to offset the full impact of increases in fuel prices, especially if these increases are significant, rapid and sustained.

Further, any such fare or fee increase may not be sustainable, may reduce the general demand for air travel and may also eventually impact the Company's [added: operations,] strategic growth and investment plans for the future.

However, to the extent the Company decides to start a hedging [removed: program,] [added: program to hedge a portion of its future fuel requirements,] such hedging program may not be successful in mitigating higher fuel [removed: costs,] [added: costs] and any price protection provided may be limited due to the choice of hedging instruments and market conditions, including breakdown of correlation between hedging instrument and market price of aircraft fuel and failure of hedge counterparties.

To the extent that the Company decides to [removed: hedge a portion of its future fuel requirements and uses] [added: use] hedge contracts that have the potential to create an obligation to pay upon settlement if fuel prices decline significantly, such hedge contracts may limit the Company's ability to benefit fully from lower fuel prices in the future.

There can be no assurance that the Company's hedging arrangements, if any, [removed: will] [added: would] provide any particular level of protection against rises in fuel prices or that its counterparties will be able to perform under the Company's hedging arrangements.

Additionally, deterioration in the Company's financial condition could negatively affect its ability to enter into [removed: new] hedge contracts in the future.

The Company depends on [added: technology and] automated systems [removed: and technology] to operate its business, including, but not limited to, computerized airline reservation systems, electronic tickets, electronic airport kiosks, demand prediction software, flight operations systems, in-flight wireless internet, cloud-based technologies, [removed: revenue management systems, accounting systems,] technical and business operations [removed: systems, telecommunication] systems and commercial websites and applications, including www.united.com and the United Airlines [added: mobile] app.

We have [added: resiliency] initiatives [added: and disaster recovery plans] in place to prevent [removed: disruptions] and [removed: disaster recovery plans,] [added: mitigate disruptions,] and we continue to invest in improvements to these initiatives and [removed: plans; however, these measures may not be adequate to prevent or mitigate disruptions.][added: plans.]

[removed: confidential] [added: As a result, substantial] or [removed: otherwise protected information, result in increased costs, lost revenue and the loss] [added: repeated systems failures] or [removed: compromise of important data, and] [added: disruptions] may adversely affect the Company's business, operating results and financial condition.

The Company may also face challenges in [removed: integrating, implementing] [added: implementing, integrating] and modifying the automated systems and technology required to operate its [removed: business.][added: business, which may require significant expenditures, human resources, the development of effective]

If the Company is unable to timely or effectively [removed: integrate, implement] [added: implement, integrate] or modify its systems and technology, the Company's operations could be adversely affected.

[removed: The Company does not directly control these third-party service providers, although] [added: Although] generally [removed: it does enter] [added: the Company enters] into agreements that define expected service performance and compliance requirements, [removed: such as compliance with legal requirements, including anti-corruption laws; however,] there can be no assurance that our third-party service providers will adhere to these requirements.

*Any of the risks and uncertainties described below could significantly and negatively affect our business operations, financial condition, operating results (including components of our financial results), cash flows, prospects, reputation or credit ratings, which could cause the trading price of our common stock to decline significantly.

Additional risks and uncertainties that are not presently known to us, or risks that we currently consider immaterial, could also impair our business operations, financial condition, operating results, cash flows, prospects, reputation or credit ratings.*

The full extent of the impact will depend on future developments and how quickly we can return to more normal operations, among other things.

If the impacts from the COVID-19 pandemic extend beyond our assumed timelines, our actual results may vary significantly from our expectations.

As a result, we experienced a precipitous decline in passenger demand and bookings for both business and leisure travel, which has had an adverse impact that has been material to the Company's business, operating results, financial condition and liquidity and has materially disrupted our strategic operating plans.

The Company has seen increasing demand for travel both domestically and internationally; however, as the situation surrounding the COVID-19 pandemic remains fluid, the pandemic has continued to negatively impact travel demand.

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 fuel and other operating costs (including due to inflation), 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 negative impacts from the COVID-19 pandemic extend beyond our assumed timelines, our actual results may vary significantly from our expectations.

Our level of indebtedness has increased as we managed through the effects of the COVID-19 pandemic and may continue to increase.

The COVID-19 pandemic has resulted in an increase in demand from consumers for refunds on their tickets, and if increased demand for refunds continues, we are at risk of triggering liquidity covenants in these processing agreements.

If such covenants were triggered, it could force us to post cash collateral.

In addition, under the terms of certain assistance received by the Company under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") and related legislation, the Company's business is subject to certain restrictions, including requirements to maintain certain levels of scheduled service.

Moreover, the Company may plan to seek additional liquidity in the near-term and the Company's ability to obtain additional financing is subject to certain limitations, including covenants in several of the

In addition, the terms of any additional financing may subject the Company to additional covenants limiting its operational and financial flexibility.

We, as well as our partners, are facing and could continue to face potential other negative consequences stemming from the COVID-19 pandemic, including but not limited to increased cyber threats, such as phishing, social engineering and malware attacks partly due to the increase in remote work arrangements, supply chain constraints and an increasingly competitive labor market due to an industry-wide sustained labor shortage, including for skilled labor.

It is possible that COVID-19 could exacerbate any of the other risks described in this Form 10-K as well.

Strategic and Business Development Risks

We may not be successful in executing elements of our strategic operating plan, which may have a material adverse impact on our business, financial results and market capitalization.

In June 2021, the Company announced its United Next plan, including firm orders of 270 aircraft, retrofitting plans and plans to increase mainline daily departures and available seats across the Company's North American network.

In developing our United Next plan, we made certain assumptions including, but not limited to, those related to the duration and scope of the continued impacts from the COVID-19 pandemic, customer demand, delivery of aircraft, potential labor and supply chain shortages, inflation rates, voluntary or mandatory groundings of aircraft, our regional network, competition, market consolidation and other macroeconomic and geopolitical factors.

Actual conditions may be different from our assumptions and could cause the Company to adjust its strategic operating plan.

In addition, we cannot provide any assurance that we will be able to successfully execute our strategic plan, our strategic plan will not result in additional unanticipated costs, the growth that we anticipate will occur through execution of our strategic plan will not exacerbate any other risk described in this Form 10-K (especially relating to our supply chain or our ability to attract, train and retain talent), our partners will timely provide adequate products or support for our products (including delivery of aircraft) or our strategic plan will result in improvements in future financial performance.

As a result of our network strategy changing or our demand expectations not being realized, our preference for the aircraft that we previously ordered may decrease; however, the Company may be responsible for material liabilities to its counterparties if it were to attempt to modify or terminate any of its existing aircraft order commitments and our financial condition could be adversely impacted.

These risks are heightened as a result of the Company's United Next order in the second quarter of 2021, which was the largest order in the Company's history.

Failure to effectively manage acquisitions, divestitures, investments, joint ventures and other portfolio actions could adversely impact our operating results.

In addition, any businesses or assets that we acquire in the future may underperform.

The Company plans to continue to make additional investments through its corporate venture capital arm, UAV.

However, increased competition in forming and maintaining relationships with other airlines (since there are a limited number of potential arrangements and other airlines and industry participants seek to enter into similar relationships) may make it difficult for the Company to complete strategic investments on commercially reasonable terms or at all.

Future revenues, profits and cash flows of these and future investments and repayment of invested or loaned funds may not materialize due to safety concerns, regulatory issues, supply chain problems or other factors beyond our control.

Where we acquire debt or equity securities as all or part of the consideration for business development activities, such as in connection with a joint venture, the value of those securities will fluctuate and may depreciate in value.

We may not control the companies in which we make investments, and as a result, we will have limited ability to determine its management, operational decisions, internal controls and compliance and other policies, which can result in additional financial and reputational risks.

From time to time we also divest assets.

We may not be successful in separating any such assets, and losses on the divestiture of, or lost operating income from, such assets may adversely affect our earnings.

Any divestitures also may result in continued financial exposure to the divested businesses following the transaction, such as through guarantees or other financial arrangements or potential litigation.

In addition, we may incur asset impairment charges related to acquisitions or divestitures that reduce our earnings.

For example, in 2020, United recorded a full credit loss allowance against the $515 million carrying value of the BRW Term Loan (as defined in Note 8 to the financial statements included in Part II, Item 8 of this report) and related receivable.

Moreover, new or revised accounting standards, rules and interpretations could result in changes to the recognition of income and expense that may materially and adversely affect our financial results.

If the execution or implementation of acquisitions, divestitures, investments, joint ventures and other portfolio actions is not successful, it could adversely impact our financial condition, cash flows and results of operations.

In addition, due to the Company's substantial amount of debt, there can be no assurance of when we will be able to expand our business development capacity.

Pursuing these opportunities may require us to obtain additional equity or debt financing and could result in increased leverage and/or a downgrade of our credit ratings.

*The following risk factors should be read carefully when evaluating the Company's business and the forward-looking statements contained in this report and other statements the Company or its representatives make from time to time.

Any of the following risks could materially and adversely affect the Company's business, operating results, financial condition and the actual outcome of matters as to which forward-looking statements are made in this report.* *Risks not currently known to the Company or that the Company currently deems to be immaterial may also materially and adversely affect the Company's business, operating results, financial condition and the actual outcome of matters as to which forward-looking statements are made in this report.*

Risk Factor Summary

The following is a summary of the principal risks that could adversely affect, or have adversely affected, the Company's business, operating results and financial condition:

- 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 third-party service providers and the impact of any failure of these parties to perform as expected, or interruptions in our relationships with these providers or their provision of services;

- 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, including AVH and its affiliates, and the commercial relationships that we have with those carriers, to produce the returns or results we expect;

- Further changes to the airline industry with respect to alliances and JBAs or due to consolidations;

- Changes in our network strategy or other factors outside our control resulting in less economic aircraft orders, costs related to modification or termination of aircraft orders or entry into less favorable aircraft orders;

- Our reliance on single suppliers to source a majority of our aircraft and certain parts, and the impact of any failure to obtain timely deliveries, additional equipment or support from any of these suppliers;

- The impacts of union disputes, employee strikes or slowdowns, and other labor-related disruptions on our operations;

- Extended interruptions or disruptions in service at major airports where we operate;

- The impacts of the United Kingdom's withdrawal from the EU on our operations in the United Kingdom and elsewhere;

- The impacts of seasonality and other factors associated with the airline industry;

- Our failure to realize the full value of our intangible assets or our long-lived assets, causing us to record impairments;

- Any damage to our reputation or brand image;

- The limitation of our ability to use our net operating loss carryforwards and certain other tax attributes to offset future taxable income for U.S. federal income tax purposes;

- The costs of compliance with extensive government regulation of the airline industry;

- Continued restrictions on the use of our Boeing 737 MAX aircraft and our inability to accept or integrate new aircraft into our fleet as planned;

- The impacts of our significant amount of financial leverage from fixed obligations, the possibility we may seek material amounts of additional financial liquidity in the short-term and 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;

- Changes in, or failure to retain, our senior management team or other key employees;

- Increases in insurance costs or inadequate insurance coverage.

For a more complete discussion of the material risks facing the Company's business, see below.

The global pandemic resulting from a novel strain of coronavirus has had an adverse impact that has been material to the Company's business, operating results, financial condition and liquidity, and the duration and spread of the pandemic could result in additional adverse impacts.

The outbreak of another disease or similar public health threat in the future could also have an adverse effect on the Company's business, operating results, financial condition and liquidity.

The novel coronavirus (COVID-19) pandemic, together with the measures implemented or recommended by governmental authorities and private organizations in response to the pandemic, has had an adverse impact that has been material to the Company's business, operating results, financial condition and liquidity.

The Company began experiencing a significant decline in international and domestic demand related to COVID-19 during the first quarter of 2020.

The decline in demand caused a material deterioration in our revenues in 2020, resulting in a net loss of $7.1 billion.

In response to decreased demand, the Company cut, relative to 2019 capacity, approximately 57% of its scheduled capacity for 2020.

In the first quarter of 2021, the Company expects scheduled capacity to be down at least 51% versus the first quarter of 2019.

The Company plans to continue to proactively evaluate and cancel flights on a rolling 60-day basis until it sees signs of a recovery in demand and expects demand to remain suppressed, relative to 2019 levels, until vaccines for COVID-19 are widely distributed and are effective in curbing the spread of the virus.

In addition, the Company does not currently expect the recovery from COVID-19 to follow a linear path.

As such, the Company's actual flown capacity may differ materially from its currently scheduled capacity.

The [removed: novel coronavirus (COVID-19)] [added: COVID-19] pandemic, together with the measures implemented or recommended by governmental authorities and private organizations in response to the pandemic, has had an adverse impact that has been material to the Company's business, operating results, financial condition and liquidity.

[removed: The] [added: It remains difficult to reasonably assess or predict the] full extent of the ongoing impact of [added: the] COVID-19 [added: pandemic] on the Company's longer-term operational and financial [removed: performance] [added: performance, which] will depend on [added: a number of] future developments, [removed: including those] [added: many of which are] outside [removed: our control related to] the [added: Company's control, such as the ultimate duration of and factors impacting the recovery from the pandemic (including the] efficacy and speed of vaccination programs in curbing the spread of the [removed: virus,] [added: virus in different markets,] the [added: efficacy and availability of various treatment options, the] introduction and spread of new variants of the virus [removed: which] [added: that] may be resistant to currently approved [removed: vaccines, passenger testing requirements, mask mandates] [added: vaccines] or [removed: other restrictions on travel, all] [added: treatment options, and the continuation] of [removed: which are highly uncertain] [added: existing or implementation of new government travel restrictions), customer behavior changes] and [removed: cannot be predicted with certainty.][added: fluctuations in demand for air travel, among others.]

[removed: In the first quarter of 2021, the] [added: *Capacity.* The] Company expects [added: its] scheduled capacity [added: for full year 2022] to be down [removed: at least 51%] versus [removed: the first quarter of] 2019.

As such, [removed: the Company's] [added: our] actual flown capacity may differ materially from [removed: its] currently [removed: scheduled capacity.][added: published flight schedules or current estimations.]

[removed: -] [added: During 2020, the Company] raised approximately $2.1 billion in cash proceeds from the issuance and sale of UAL common stock [added: through "at the market offerings" under an equity distribution agreement entered into] in [removed: 2020;][added: June 2020.]

[removed: On April 20, 2020,] [added: In 2021,] United entered into [removed: a] [added: two] Payroll Support Program [removed: Agreement (the "PSP Agreement")] [added: Extension Agreements (collectively, the "PSP2 and PSP3 Agreements")] with [added: the U.S.] Treasury [added: Department ("Treasury")] providing the Company with total funding of approximately [removed: $5.1 billion] [added: $5.8 billion,] pursuant to the Payroll Support [removed: Program established under the CARES Act.][added: Program.]

These funds were used to pay for the wages, salaries and benefits of United [removed: employees.][added: employees, including the payment of lost wages, salaries and benefits to returning employees who were previously impacted by involuntary furloughs.]

Approximately [removed: $3.6 billion of the $5.1] [added: $4.1] billion was provided as a direct [removed: grant,] [added: grant] and [removed: approximately $1.5] [added: $1.7] billion [removed: consists of] [added: as] indebtedness evidenced by [removed: a] [added: two] 10-year senior unsecured promissory [removed: note issued by UAL to Treasury (the "PSP Note").][added: notes (collectively, the "PSP2 and PSP3 Notes").]

See Note 2 to the financial statements included in Part II, Item 8 of this report for additional information [removed: related to] [added: on the] warrants issued in connection with the [removed: PSP Note] [added: PSP2] and [added: PSP3 Notes and] Note 10 to [removed: the] [added: such] financial statements [removed: included in Part II, Item 8 of this report] for a discussion of the [removed: PSP Note.][added: PSP2 and PSP3 Notes.]

See Note [removed: 2] [added: 11] to the financial statements included in Part II, Item 8 of this report for [removed: a discussion] [added: information] on [removed: warrants issued in connection with the CARES Act Term Loans] [added: variable rate] and [removed: Note 10 to the financial statements included in Part II, Item 8 of this report for a discussion of the CARES Act Term Loans.][added: short-term operating leases.]

See Note [removed: 2] [added: 11] to the financial statements included in Part II, Item 8 of this report for [removed: additional] information on [removed: warrants issued in connection with the PSP2 Note and Note 10 to the financial statements included in Part II, Item 8 of this report for a discussion of the PSP2 Note.][added: these leases.]

Management's Discussion and Analysis of Financial Condition and Results of Operations in the [removed: Company's 2019 Annual Report on Form 10-K, filed with the SEC on February 25,] 2020 [removed: (the "2019] Annual [removed: Report"), for analysis of the 2019 results as compared to 2018.][added: Report.]

| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | Increase (Decrease) | | | | | | % Change | | |

| Other operating revenue | | | [removed: 1,902] [added: 2,088] | | | | | | [removed: 2,455] [added: 1,902] | | | | | | [removed: (553)] [added: 186] | | | | | | [removed: (22.5)] [added: 9.8] | | |

| [removed: Total operating] [added: Operating] revenue | | | $ | [removed: 15,355] [added: 24,634] | | | | | $ | [removed: 43,259] [added: 15,355] | | | | | $ | [removed: (27,904) | | | | | (64.5) |] [added: 43,259] | |

| | | | | | | Increase (decrease) from [removed: 2019:] [added: 2020:] | | | | | | | | | | | | | | | | | | | | | | | | | | |

[removed: | Note:] See [added: Notes 1 and 14 to the financial statements included in] Part II, Item [removed: 6. Selected Financial Data,] [added: 8] of this report for [removed: the definition of these statistics. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |][added: additional information.]

Other operating revenue [removed: decreased $553] [added: increased $186] million, or [removed: 22.5%,] [added: 9.8%,] in [removed: 2020] [added: 2021] as compared to [removed: 2019,] [added: 2020,] primarily due to [removed: a decline] [added: an increase] in mileage revenue from non-airline partners, including the [added: Company's] co-branded credit card partner, [removed: Chase, and lower revenue from airport lounges due to United Club closures and fewer overall customers utilizing these lounges.][added: JPMorgan Chase Bank, N.A.]

| Salaries and related costs | | | $ | [removed: 9,522] [added: 9,566] | | | | | $ | [removed: 12,071] [added: 9,522] | | | | | $ | [removed: (2,549)] [added: 44] | | | | | [removed: (21.1)] [added: 0.5] | | |

| Depreciation and amortization | | | [removed: 2,488] [added: 2,485] | | | | | | [removed: 2,288] [added: 2,488] | | | | | | [removed: 200] [added: (3)] | | | | | | [removed: 8.7] [added: (0.1)] | | |

| Landing fees and other rent | | | [removed: 2,127] [added: 2,416] | | | | | | [removed: 2,543] [added: 2,127] | | | | | | [removed: (416)] [added: 289] | | | | | | [removed: (16.4)] [added: 13.6] | | |

| Regional capacity purchase | | | [removed: 2,039] [added: 2,147] | | | | | | [removed: 2,849] [added: 2,039] | | | | | | [removed: (810)] [added: 108] | | | | | | [removed: (28.4)] [added: 5.3] | | |

| Aircraft maintenance materials and outside repairs | | | [removed: 858] [added: 1,316] | | | | | | [removed: 1,794] [added: 858] | | | | | | [removed: (936)] [added: 458] | | | | | | [removed: (52.2)] [added: 53.4] | | |

| Aircraft rent | | | [removed: 198] [added: 228] | | | | | | [removed: 288] [added: 198] | | | | | | [removed: (90)] [added: 30] | | | | | | [removed: (31.3)] [added: 15.2] | | |

| Other operating expenses | | | [removed: 3,486] [added: 4,433] | | | | | | [removed: 6,275] [added: 3,486] | | | | | | [removed: (2,789)] [added: 947] | | | | | | [removed: (44.4)] [added: 27.2] | | |

| Total operating expenses | | | $ | [removed: 21,714] [added: 25,656] | | | | | $ | [removed: 38,958] [added: 21,714] | | | | | $ | [removed: (17,244)] [added: 3,942] | | | | | [removed: (44.3)] [added: 18.2] | | |

| | | | [removed: | | | 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: % Change] [added: 2019] | | |

| Fuel expense | | | | | | $ | [removed: 3,153] [added: 5,755] | | | | | $ | [removed: 8,953] [added: 3,153] | | | | | [removed: (64.8)] [added: 82.5] | | |

| Total fuel consumption (gallons) | | | | | | [removed: 2,004] [added: 2,729] | | | | | | [removed: 4,292] [added: 2,004] | | | | | | [removed: (53.3)] [added: 36.2] | | |

| Average price per gallon | | | | | | $ | [removed: 1.57] [added: 2.11] | | | | | $ | [removed: 2.09] [added: 1.57] | | | | | [removed: (24.9)] [added: 34.4] | | |

Landing fees and other rent [removed: decreased $416] [added: increased $289] million, or [removed: 16.4%,] [added: 13.6%,] in [removed: 2020] [added: 2021] as compared to [removed: 2019,] [added: 2020,] primarily due to [removed: reduced flying.][added: an increase in the number of flights and passengers.]

The table below presents special charges [removed: (credit)] [added: (credits)] recorded by the Company during the years ended December 31 (in millions):

| | | | [added: | | | 2021 | | | | | |] 2020 | | | | | | 2019 | | |

| CARES Act grant | | | $ | [removed: (3,536)] [added: (4,021)] | | | | | $ | [removed: —] [added: (3,536)] | |

| Severance and benefit costs | | | [removed: 575] [added: 438] | | | | | | [removed: 16] [added: 575] | | |

| Impairment of assets | | | [removed: 318] [added: 97] | | | | | | [removed: 171] [added: 318] | | |

| (Gains) losses on sale of assets and other special charges | | | [removed: 27] [added: 119] | | | | | | [removed: 59] [added: 27] | | |

| Total special charges [added: (credits)] | | | $ | [removed: (2,616)] [added: (3,367)] | | | | | $ | [removed: 246] [added: (2,616)] | |

| Interest capitalized | | | [removed: 71] [added: 80] | | | | | | [removed: 85] [added: 71] | | | | | | [removed: (14)] [added: 9] | | | | | | [removed: (16.5)] [added: 12.7] | | |

| Interest income | | | [removed: 50] [added: 36] | | | | | | [removed: 133] [added: 50] | | | | | | [removed: (83)] [added: (14)] | | | | | | [removed: (62.4)] [added: (28.0)] | | |

Management's discussion and analysis of financial condition and results of operations is provided as a supplement to and should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Form 10-K and the description of our business and reportable segments in Item 1 above to enhance the understanding of our results of operations, financial condition and cash flows.

This section generally discusses 2021 and 2020 items and year-to-year comparisons between 2021 and 2020.

Discussions of 2019 items and year-to-year comparisons between 2020 and 2019 are not included in this Form 10-K and can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the U.S. Securities and Exchange Commission (the "SEC") on March 1, 2021 (the "2020 Annual Report").

Executive Summary

The Company's shared purpose is "Connecting People.

Uniting the World." The Company 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.

Our business and operating results for 2021 continued to be significantly impacted by the COVID-19 pandemic.

Given the more significant impact of the pandemic on our business and operating results in 2020, we believe that a comparison of our 2021 results to 2019 for certain key metrics in this financial overview discussion is more reflective of the impact of the COVID-19 pandemic.

Our current expectations described below are forward-looking statements and our actual results and timing may vary materially based on various factors that include, but are not limited to, those discussed below under "Cautionary Statement Regarding Forward-Looking Statements" and in Part I, Item 1A.

Risk Factors, of this Form 10-K.

The Company is unable to reconcile forward-looking projections to accounting principles generally accepted in the United States of America ("GAAP"); refer to "Supplemental Information" below for further details.

*Impact of the COVID-19 Pandemic*

The Company has seen increasing demand for travel both domestically and in countries where entry is permitted; however, as the situation surrounding the COVID-19 pandemic remains fluid, the pandemic has continued to negatively impact travel demand.

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 skilled labor and related impacts to the Company's flight schedules and reputation), facility closures and related costs, disruptions to the Company's and its business partners' operations, reduced travel demand and consumer spending, increased fuel and other operating costs, supply chain disruptions, logistics constraints, inflation, volatility in the price of our securities, our ability to access capital markets and volatility in the global economy and financial markets generally.

We have reduced our capacity as we managed through the effects of the COVID-19 pandemic, which in 2021 remained significantly lower than capacity prior to the pandemic and resulted in a significant reduction to our revenue through the date of this report.

We operated at approximately 63% of our full year 2019 capacity during the full year of 2021.

We have delayed a portion of our previously planned capacity increases for full year 2022 and may need to implement further modifications.

The Company is taking steps to be prepared for recovery as demand for travel continues to generally increase, which include investing in innovative technology, focusing on process improvements and implementing the United Next transformative strategy.

We have taken steps to strengthen our financial position during this period of market uncertainty, which has resulted in an increase of our overall debt levels.

As of December 31, 2021, unrestricted cash, cash equivalents and short-term investments totaled $18.4 billion, an increase of approximately $13.5 billion from December 31, 2019.

We had approximately $41.1 billion of debt, finance lease, operating lease and sale-leaseback obligations as of December 31, 2021 (including $4.5 billion that will become due in the next 12 months), up from approximately $20.5 billion as of December 31, 2019.

The Company's recovery from the COVID-19 pandemic has not followed a linear path, and due to the significant uncertainty that remains, its future operating performance, particularly in the short-term, may be subject to volatility.

Risks and uncertainties related to the COVID-19 pandemic are further described in Part I, Item 1A.

Risk Factors— *"The COVID-19 pandemic has materially and adversely impacted our business, operating results, financial condition and liquidity.

The full extent of the impact will depend on future developments and how quickly we can return to more normal operations, among other things.

If the impacts from the COVID-19 pandemic extend beyond our assumed timelines, our actual results may vary significantly from our expectations"* of this report.

Outlook for Full Year 2022

*Adjusted cost per available seat mile ("CASM-ex").* The Company expects full year 2022 CASM-ex (a non-GAAP financial measure defined as CASM excluding fuel, profit sharing, third-party business expense and special charges; see "Supplemental Information" below) to be higher than 2019.

Strategic Objectives

In the second quarter of 2021, United announced its United Next plan, which we believe will have a transformational effect on the customer experience and earnings power of the business.

It is expected to increase United's average gauge in North America, the total number of available seats per departure, by almost 30% by 2026 versus 2019, as well as significantly lower carbon emissions per seat.

New aircraft will come with a new signature interior that includes seat-back entertainment in every seat, larger overhead bins for every passenger's carry-on bag and the industry's fastest available in-flight WiFi, as well as a bright look-and-feel with LED lighting.

New aircraft are expected to increase North America premium seat counts by 75% per short-haul departure by 2026 versus 2019.

The Company plans to replace older, smaller mainline jets and at least 200 single-class regional jets with larger aircraft, which we expect will lead to significant sustainability benefits compared to older planes: an expected 11% overall improvement in fuel efficiency and an expected 17-20% lower carbon emission per seat compared to older planes.

We believe United Next will allow us to differentiate our network and segment our products with a greater premium offering, while also maintaining fare competitiveness with low-cost carriers.

Select financial data and operating statistics are provided in the tables below:

| (in millions) | | | 2021 | | | | | | 2020 | | | | | | 2019 | | |

| Operating expense | | | 25,656 | | | | | | 21,714 | | | | | | 38,958 | | |

| Operating income (loss) | | | (1,022) | | | | | | (6,359) | | | | | | 4,301 | | |

| Income tax expense (benefit) | | | (593) | | | | | | (1,753) | | | | | | 905 | | |

Impact of COVID-19 and Outlook

The Company began experiencing a significant decline in international and domestic demand related to COVID-19 during the first quarter of 2020.

The decline in demand caused a material deterioration in our revenues in 2020, resulting in a net loss of $7.1 billion.

In response to decreased demand, the Company cut, relative to 2019 capacity, approximately 57% of its scheduled capacity for 2020.

The Company plans to continue to proactively evaluate and cancel flights on a rolling 60-day basis until it sees signs of a recovery in demand and expects demand to remain suppressed, relative to 2019 levels, until vaccines for COVID-19 are widely distributed and are effective in curbing the spread of the virus.

In addition, the Company does not currently expect the recovery from COVID-19 to follow a linear path.

The Company has taken a number of actions in response to the decreased demand for air travel.

In addition to the schedule reductions discussed above, the Company has:

- reduced its planned capital expenditures and reduced operating expenditures in 2020 (including by postponing projects deemed non-critical to the Company's operations);

- terminated its share repurchase program;

- issued or entered into approximately $13.4 billion in new secured notes, secured term loan facilities and new aircraft financings in 2020, including short term borrowings that were paid in 2020;

- borrowed $1.0 billion under the $2.0 billion revolving credit facility established under the Amended and Restated Credit and Guaranty Agreement (the "Credit Agreement");

- availed itself of financial assistance and/or financing made available by the U.S. Treasury Department ("Treasury"), as further described below;

- entered into agreements to finance certain aircraft currently subject to purchase agreements through sale and leaseback transactions;

- elected to defer the payment of $199 million in payroll taxes incurred through December 31, 2020, as provided by the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), until December 2021, at which time 50% is due, with the remaining amount due December 2022; and

- taken a number of actions to reduce employee-related costs, including, among other items, the Company's Chief Executive Officer and President waived 100% of their respective base salaries through the end of 2020, other officers temporarily waived a portion of their base salaries, the Company's non-employee directors waived 100% of their cash

compensation for the second and third quarters of 2020, the Company suspended merit salary increases for 2020 and implemented a temporary four-day work week for management and administrative employees and the Company offered voluntary unpaid leaves of absence.

The Company also entered into an agreement with its pilots to distribute fewer flight hours to a larger number of pilots, while also reaching agreements to provide a path to early retirement and reduce expense through voluntary leave of absence programs.

In addition, and as announced in July 2020, the Company started the involuntary furlough process by issuing Worker Adjustment and Retraining Notification ("WARN") Act notices to 36,000 of its employees.

Since then, the Company worked to reduce the total number of furloughs to approximately 13,000 employees by working closely with its union partners, introducing new voluntary options selected by approximately 9,000 employees and proposing creative solutions that would save jobs.

As a result of the Company's entry into the PSP2 Agreement, as described below, the Company issued recall notices to these furloughed employees and others impacted by furlough mitigation programs.

See the discussion below for more detail about the PSP2 Agreement and the recall process.

The Company continues to focus on reducing expenses and managing its liquidity.

We expect to continue to modify our cost management structure and capacity as the timing of demand recovery becomes more certain.

On March 27, 2020, the President of the United States signed the CARES Act into law.

The CARES Act is intended to respond to the COVID-19 pandemic and its impact on the economy, public health, state and local governments, individuals, and businesses.

The CARES Act also provides supplemental appropriations for federal agencies to respond to the COVID-19 pandemic.

During 2020, UAL and United entered into a loan and guarantee agreement with Treasury.

The agreement provides for a term loan facility of up to approximately $7.5 billion (the "CARES Act Term Loan Facility") pursuant to the loan program established under Section 4003(b)(1) of the CARES Act (the "Loan Program").

The loans (the "CARES Act Term Loans") may be disbursed in up to three disbursements on or before May 28, 2021.

On September 28, 2020, United borrowed, and recorded as Long-term debt on the Company's consolidated balance sheet, $520 million under the CARES Act Term Loan Facility, the proceeds of which were used to pay certain transaction fees and expenses and for working capital and other general corporate purposes of the Company.

Under the PSP Agreement and the Loan Program, the Company and its business are subject to certain restrictions, including, but not limited to, restrictions on the payment of dividends and the ability to repurchase UAL's equity securities, requirements to maintain certain levels of scheduled service and certain limitations on executive compensation.

On January 15, 2021, United entered into a Payroll Support Agreement (the "PSP2 Agreement") with Treasury providing the Company with total funding of approximately $2.6 billion, pursuant to the Payroll Support Program established under Subtitle A of Title IV of Division N of the Consolidated Appropriations Act, 2021 (the "PSP Extension Law").

These funds were used to pay for the wages, salaries and benefits of United employees, including the payment of lost wages, salaries and benefits to returning employees.

Approximately $1.9 billion was provided as a direct grant and approximately $753 million consists of indebtedness evidenced by a 10-year senior unsecured promissory note issued by UAL to Treasury (the "PSP2 Note").

As of February 25, 2021, we have received a total of $1.3 billion.

Pursuant to the PSP2 Agreement, the Company is required to comply with certain provisions of the PSP Extension Law, including, among others, the requirement that all funds provided under the Payroll Support Program will be used by United exclusively for the continuation of payment of its U.S. employee wages, salaries and benefits, including the payment of lost wages, salaries and benefits to returning U.S. employees; requirements to maintain U.S. employment levels from the date of the PSP2 Agreement through March 31, 2021; requirements to recall (as such term is defined in the PSP2 Agreement), any U.S. employees subject to involuntary termination or furlough between October 1, 2020 and the date of the PSP2 Agreement,

compensate such returning employees for certain lost salary, wages and benefits between December 1, 2020 and the date of the PSP2 Agreement and restore certain rights and protections for such returning employees; provisions prohibiting certain reductions in U.S. employee wages, salaries and benefits; provisions prohibiting the payment of dividends and the repurchase of certain equity until March 31, 2022; and provisions restricting the payment of certain executive compensation until October 1, 2022.

As a result of the PSP2 Agreement, the Company offered employment, through March 2021, to employees who were impacted by involuntary furloughs.

Because the Company cannot predict with certainty whether it will receive further payroll support from the federal government or when demand for air travel will increase in the short term, the Company is preparing for the possibility that these recalled employees might again be furloughed as soon as the end of the first quarter of 2021.

The following table summarizes information related to the Company's interest rate market risk at December [removed: 31] [added: 31, 2021] (in millions):

| Carrying value of variable rate debt at December 31 | | | $ | [removed: 9,533] [added: 13,003] | | | | | [removed: $] | [removed: 3,408] | |

| Impact of 100 basis point increase on projected interest expense for the following year | | | [removed: 81] [added: 98] | | | | | | [removed: 33] | | |

| Carrying value of fixed rate debt at December 31 | | | [removed: 17,214] [added: 20,360] | | | | | | [removed: 11,144] | | |

| Fair value of fixed rate debt at December 31 | | | [removed: 19,273] [added: 21,514] | | | | | | [removed: 11,736] | | |

| Impact of 100 basis point increase in market rates on fair value | | | [removed: (709)] [added: (657)] | | | | | | [removed: (458)] | | |

[removed: As most recently announced on November 30, 2020,] LIBOR is [removed: expected to be] [added: being] phased out starting on January 1, 2022 for the one-week and two-month USD LIBOR settings and starting on July 1, 2023 for the remaining USD LIBOR settings.

Assuming our cash, cash equivalents and short-term investments remain at their average [removed: 2020] [added: 2021] levels, a 100 basis point increase in interest rates would result in a corresponding increase in the Company's interest income of approximately [removed: $95] [added: $178] million during [removed: 2021.][added: 2022.]

The Company's current strategy is to not enter into transactions to hedge its foreign currency [removed: sales,] [added: exposure,] although the Company regularly reviews its policy based on market conditions and other factors.

The result of a uniform 1% strengthening in the value of the U.S. dollar from December 31, [removed: 2020] [added: 2021] levels relative to each of the currencies in which the Company has foreign currency exposure would result in a decrease in pre-tax income of approximately [removed: $10] [added: $14] million for the year ending December 31, [removed: 2021.][added: 2022.]

This sensitivity analysis was prepared based upon projected [removed: 2021] [added: 2022] foreign currency-denominated revenues and expenses as of December 31, [removed: 2020.][added: 2021.]

We are exposed to market risk resulting from changes in currency exchange rates and interest rates.

These risks, along with other business risks, impact our cost of capital.

It is our policy to manage our debt structure and foreign exchange exposure in order to manage capital costs, control financial risks and maintain financial flexibility over the long term.

In managing market risks, we may employ derivatives according to documented policies and procedures, including interest rate swaps, interest rate locks, foreign currency exchange contracts and combined interest rate foreign currency contracts (cross-currency swaps).

We do not use derivatives for trading or speculative purposes.

We do not foresee significant changes in the strategies we use to manage market risk in the near future.

All of our financial instruments, including derivatives, are subject to counterparty credit risk considered as part of the overall fair value measurement.

| | | | | | | | | | | | |

Risks and uncertainties related to the LIBOR phase out are further described in Part I, Item 1A.

Risk Factors— "*The proposed phase out of the London interbank offer rate could have a material adverse effect on us."*

A one-dollar change in the price of a barrel of aircraft fuel would change the Company's annual fuel expense by approximately $102 million, assuming flying levels similar to 2019.

| | | | 2020 | | | | | | 2019 | | |

As of December 31, 2020, the Company had $9.5 billion in variable rate indebtedness.

The Company's 2021 forecasted fuel consumption is presently approximately 2.1 billion gallons, and based on this forecast, a one-dollar change in the price of a barrel of crude oil would change the Company's annual fuel expense by approximately $49 million.

The information contained on or connected to the Company's websites is not incorporated by reference into this [removed: Annual Report on] Form 10-K and should not be considered part of this or any other report filed with the U.S. Securities and Exchange Commission ("SEC").

The Company's filings with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports, as well as UAL's proxy statement for its annual meeting of stockholders, are accessible without charge on the Company's investor relations website, as soon as reasonably practicable, after [added: we electronically file] such material [removed: is electronically filed] with, or [removed: furnished] [added: furnish such material] to, the [removed: SEC.][added: SEC pursuant to Section 13(a) or 15(d) of the Exchange Act.]

UAL, through United and its regional carriers, operates across six continents, with hubs at Newark Liberty International Airport [removed: ("Newark"),] [added: ("EWR"),] Chicago O'Hare International Airport [removed: ("Chicago O'Hare"),] [added: ("ORD"),] Denver International Airport [removed: ("Denver"),] [added: ("DEN"),] George Bush Intercontinental Airport [removed: ("Houston Bush"),] [added: ("IAH"),] Los Angeles International Airport ("LAX"), A.B. Won Pat International Airport [removed: ("Guam"),] [added: ("GUM"),] San Francisco International Airport ("SFO") and Washington Dulles International Airport [removed: ("Washington Dulles").][added: ("IAD").]

As discussed under [removed: *Alliances*] [added: Alliances] below, United is a member of Star Alliance, the world's largest alliance network.

[removed: The] [added: It remains difficult to reasonably assess or predict the] full extent of the ongoing impact of [added: the] COVID-19 [added: pandemic] on the Company's longer-term operational and financial [removed: performance] [added: performance, which] will depend on [added: a number of] future developments, [removed: including those] [added: many of which are] outside [removed: our control related to] the [added: Company's control, such as the ultimate duration of and factors impacting the recovery from the pandemic (including the] efficacy and speed of vaccination programs in curbing the spread of the [removed: virus,] [added: virus in different markets,] the [added: efficacy and availability of various treatment options, the] introduction and spread of new variants of the virus [removed: which] [added: that] may be resistant to currently approved [removed: vaccines, passenger testing requirements, mask mandates] [added: vaccines] or [removed: other restrictions on travel, all] [added: treatment options, and the continuation] of [removed: which are highly uncertain] [added: existing or implementation of new government travel restrictions), customer behavior changes] and [removed: cannot be predicted with certainty.][added: fluctuations in demand for air travel, among others.]

[removed: Regional.] The Company has contractual relationships with various regional carriers to provide regional aircraft service branded as United Express.

Champlain Enterprises, LLC d/b/a CommutAir ("CommutAir"), Republic [removed: Airline] [added: Airways] Inc. ("Republic"), GoJet Airlines LLC ("GoJet"), Mesa Airlines, Inc. ("Mesa"), SkyWest Airlines, Inc. ("SkyWest"), and Air Wisconsin Airlines LLC ("Air Wisconsin") are all regional carriers that operate with capacity contracted to United under capacity purchase agreements ("CPAs").

Despite the global challenges posed by the COVID-19 pandemic, Star Alliance carriers continued to serve [removed: nearly] [added: more than] 1,000 airports in [removed: 154] [added: 186] countries with close to [removed: 10,000] [added: 15,000] daily departures as of January 1, [removed: 2021.][added: 2022.]

Star Alliance members, in addition to United, are Aegean Airlines, Air Canada, Air China, Air India, Air New Zealand, All Nippon Airways ("ANA"), Asiana Airlines, Austrian Airlines, Aerovías del Continente Americano [removed: S.A. ("Avianca"),] [added: S.A.,] Brussels Airlines, Copa [removed: Airlines ("Copa"),] [added: Airlines,] Croatia Airlines, EGYPTAIR, Ethiopian Airlines, EVA Air, LOT Polish Airlines, Lufthansa, SAS Scandinavian Airlines, Shenzhen Airlines, Singapore Airlines, South African Airways, SWISS, TAP Air Portugal, THAI Airways International and Turkish Airlines.

In addition to the alliance agreements with Star Alliance members, United currently maintains independent marketing alliance agreements with other air carriers, including Aeromar, Aer Lingus, Air Dolomiti, [added: Airlink Proprietary Limited,] Azul Linhas Aéreas Brasileiras S.A. ("Azul"), Boutique Air, Cape Air, Edelweiss, Eurowings, [added: Eurowings Discover,] Hawaiian Airlines, Olympic Air, Silver Airways and Vistara.

United also participates in [removed: four] [added: three] passenger joint business arrangements ("JBAs"): one with Air Canada and the Lufthansa Group (which includes Lufthansa and its affiliates [added: Air Dolomiti,] Austrian Airlines, Brussels Airlines, [added: Edelweiss, Eurowings,] Eurowings [added: Discover] and SWISS) covering transatlantic routes, one with ANA covering certain transpacific routes, [added: and] one with Air New Zealand covering certain routes between the United States and New [removed: Zealand and one with Avianca and Copa, which, upon regulatory approval, will cover routes between the United States and Central and South America, excluding Brazil.][added: Zealand.]

Members can also earn miles by purchasing goods and services from our [added: network of non-airline partners, such as domestic and international credit card issuers, retail merchants, hotels and car rental companies.]

In [removed: 2020,] [added: 2021,] approximately [removed: 1.9] [added: 3.6] million MileagePlus flight awards were used on United and United Express.

These awards represented [removed: 6.2%] [added: approximately 7%] of United's total revenue passenger miles.

Total miles redeemed for flights on United and United Express, including class-of-service upgrades, represented approximately [removed: 80%] [added: 90%] of the total miles redeemed.

In addition, excluding miles redeemed for flights on United and United Express, MileagePlus members redeemed miles for approximately [removed: 0.8] [added: 1.0] million other awards.

In response to the impact of COVID-19, the Company made changes to its MileagePlus® Premier® program that [removed: will make] [added: made] it easier to earn status in 2021 for the 2022 program year.

Early in 2021, United deposited 25% of the [removed: PQP-only] [added: Premier Qualifying Points ("PQP")-only] requirements in Premier members' accounts based on their 2021 Premier status level.

Premier members [removed: will earn] [added: earned] double the PQP on each of the first three PQP-eligible trips completed January 1 through March 31, 2021 (up to 1,500 PQP per trip), helping their flights go further toward reaching status.

The price of aircraft fuel [added: used by our operations] has fluctuated substantially in the past several years.

The Company's current strategy is to not enter into [added: financial] transactions to hedge [added: the market price exposure of] its [added: expected] fuel consumption, although the Company regularly reviews its strategy based on market conditions and other factors.

Third-Party Business. United generates third-party business revenue that includes maintenance services, [removed: catering,] frequent flyer award non-travel [removed: redemptions] [added: redemptions, flight academy] and ground handling.

The majority of cargo services are provided to commercial businesses, freight forwarder [added: and logistic] firms and the United States Postal Service.

We generate cargo revenues in domestic and international markets through the use of cargo space on regularly scheduled passenger aircraft, and starting in 2020, [added: the use of our passenger aircraft for] cargo-only flights.

Distribution Channels. The Company's airline seat inventory and fares are distributed through the Company's direct channels, traditional travel agencies and [removed: on-line] [added: online] travel [removed: agencies.][added: agencies ("OTA").]

[removed: COVID-19.] [added: COVID-19 Impact.] The [removed: COVID-19] [added: novel coronavirus (COVID-19)] pandemic, together with the measures implemented or recommended by governmental authorities and private organizations in response to the pandemic, has had an adverse impact that has been material to the [removed: airline industry.][added: Company's business, operating results, financial condition and liquidity.]

International competition has increased and may continue to increase in the future as a result of airline mergers and acquisitions, JBAs, alliances, restructurings, liberalization of aviation bilateral agreements and new or increased service by [removed: competitors, including government-subsidized competitors from certain Middle East countries.][added: competitors.]

[removed: Factors—"The] [added: Risk Factors—"*The] airline industry is subject to extensive government regulation, which imposes significant costs and may adversely impact our business, operating results and financial [removed: condition"] [added: condition*"] for additional information on the material effects of compliance with government regulations.

[removed: The U.S. Department of Homeland Security ("DHS")] has jurisdiction over virtually every aspect of civil aviation security.

Labor relations in the airline industry are generally governed by the [removed: Railway Labor Act ("RLA"),] [added: RLA,] a federal statute.

The Company is also subject to investigation inquiries by the DOT, FAA, DOJ, DHS, the U.S. Food and Drug Administration ("FDA"), the U.S. Department of Agriculture ("USDA"), Centers for Disease Control and Prevention ("CDC"), [removed: U.S. Occupational Safety and Health Administration ("OSHA"),] [added: OSHA,] and other U.S. and international regulatory bodies.

Federally-mandated domestic slot restrictions that limit operations and regulate capacity currently apply at three airports: Reagan National Airport in Washington, [removed: D.C. ("Reagan National"),] [added: D.C.,] and John F.

Kennedy International Airport and LaGuardia Airport [removed: ("LaGuardia")] in the New York City metropolitan region.

Implementation of some items continues [removed: into the new Administration] and, depending on how they are implemented, could impact our operations and costs.

With the [removed: change in control of the] [added: current] U.S. Congress and [removed: a new] presidential administration, any future funding or other pandemic relief could include additional requirements that could impact our operations and costs.

In connection with the Company's international services, the Company is regulated by both the U.S. government and the governments of the foreign countries [added: or regions] the Company serves.

In cases where this activity exceeds U.S. requirements, additional burden and liability may be placed on the [added: Company.]

Certain countries have regulations requiring passenger compensation [removed: and/or enforcement penalties] from the Company [added: and/or enforcement penalties] in addition to changes in operating procedures due to [added: overbooked,] canceled [removed: and] [added: or] delayed flights.

*Airport Access.* Historically, access to foreign [removed: markets] [added: routes] has been tightly controlled through bilateral agreements between the U.S. and each foreign [removed: country] [added: jurisdiction] involved.

These agreements regulate the [removed: markets] [added: routes] served, the number of carriers allowed to serve each [removed: market] [added: route] and the frequency of carriers' flights.

United's shared purpose is "Connecting People.

Uniting the World." 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.

The Company has seen increasing demand for travel both domestically and in countries where entry is permitted compared to demand at the start of the COVID-19 pandemic; however, as the situation surrounding the COVID-19 pandemic remains fluid, the pandemic has

continued to negatively impact travel demand.

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, 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.

The Company's recovery from the COVID-19 pandemic has not followed a linear path, and due to the significant uncertainty that remains, its future operating performance, particularly in the short-term, may be subject to volatility.

The Company is taking steps to be prepared for recovery as demand for travel continues to generally increase, which include investing in innovative technology, focusing on process improvements and implementing the United Next transformative strategy.

During 2021, the Company operated approximately 63% of its 2019 capacity.

United Next. In the second quarter of 2021, United announced its United Next plan, which we believe will have a transformational effect on the customer experience and earnings power of the business.

It is expected to increase United's average gauge in North America, the total number of available seats per departure, by almost 30% by 2026 versus 2019, as well as significantly lower carbon emissions per seat.

New aircraft will come with a new signature interior that includes seat-back entertainment in every seat, larger overhead bins for every passenger's carry-on bag and the industry's fastest available in-flight WiFi, as well as a bright look-and-feel with LED lighting.

New aircraft are expected to increase North America premium seat counts by 75% per short-haul departure by 2026 versus 2019.

The Company plans to replace older, smaller mainline jets and at least 200 single-class regional jets with larger aircraft, which we expect will lead to significant sustainability benefits compared to older planes: an expected 11% overall improvement in fuel efficiency and an expected 17-20% lower carbon emission per seat compared to older planes.

We believe United Next will allow us to differentiate our network and segment our products with a greater premium offering, while also maintaining fare competitiveness with low-cost carriers.

Regional. The Company's business and operations are dependent on its regional flight network, with regional capacity accounting for approximately 13% of the Company's total capacity for the year ended December 31, 2021.

Redemptions in 2021 were adversely impacted by the COVID-19 pandemic and decreased 37% as compared to 2019 redemptions.

We expect to reduce and ultimately cease cargo-only flights as long haul passenger demand increases.

| 2021 | | | | | | 2,729 | | | | | | $ | 5,755 | | | | | $ | 2.11 | | | | | 22 | | % | | | | | | |

The Company routinely enters into purchase contracts based on expected fuel requirements for UAL aircraft (including regional partners operating under CPAs) that are generally indexed to various market price benchmarks for aircraft fuel.

These contracts customarily do not provide material protection against changes in market prices or guarantee the uninterrupted availability of adequate quantities of aircraft fuel.

Due to the partial recovery in operations experienced in 2021, our aircraft fuel consumption has increased from 2020 levels.

Environmental, Social and Governance Approach and Highlights

Climate Strategy

The Company's commitment to operating an environmentally sustainable and responsible airline is woven into its long-term strategy and its values.

The Company believes that it is critical, now more than ever, to continue to enhance its services connecting people and uniting the world, and is committed to finding solutions, both individually as a company, and together with partners in both the private and public sectors, to do so sustainably and responsibly while also achieving its financial goals.

The Company is continuously looking for new ways to reduce its environmental impact in the air, on the ground and at its facilities, which benefits its employees, customers and stockholders.

At the end of 2020, the Company pledged to become 100% green by eliminating its greenhouse gas ("GHG") emissions by 2050 without relying on the use of traditional carbon offsets, the only airline globally to make this commitment.

Given the airline industry's designation as a 'hard-to-abate sector', the Company believes that not relying on carbon offsets is important and the right priority because the airline industry should focus on real decarbonization within its own activities as the industry cannot afford to divert resources and attention toward offset programs that do not effectuate real progress within aviation operations.

Since making the announcement of the Company's pledge to become 100% green by eliminating GHG emissions by 2050, management has identified multiple pathways to accomplish this goal wholly independent of any current regulatory requirement to do so.

The Company's earnest intention on meeting the net zero GHG emission goal led the Company to commit to a mid-term objective of reducing, compared to 2019, its carbon intensity by 50% by 2035.

This carbon intensity target aligns with the temperature limits of the Paris Agreement and will allow the Company to show progress towards its 2050 net zero GHG emissions goal in the nearer term.

Even with the challenges presented by the COVID-19 pandemic, the Company is committed to redefining the future of air travel with environmental sustainability in the forefront because it believes that it is the Company's responsibility to take tangible steps to mitigate climate change.

Its strategy to achieve its climate goals is centered around four key pathways, each of which is described in further detail below: (i) reducing the Company's environmental footprint, (ii) innovating for potentially transformative carbon reduction technology, (iii) removing the Company's atmospheric carbon impacts and (iv) collaborating with employees, customers, airports, suppliers, cross-industry partners and policymakers to facilitate faster action and the commercialization of technology solutions concerning climate change.

The Company's Board of Directors (the "Board"), including through its Public Responsibility Committee, provides oversight of its climate goals and strategy to ensure integration with its core business strategy and management periodically updates the Board on the implementation of the Company's climate strategy.

- *Reducing Environmental Footprint*: As part of this plan, the Company is keyed on maximizing fuel efficiency and reducing fuel usage in its operations.

The main focus in realizing this objective is reducing its fossil jet fuel consumption, which is both the largest contributor to its environmental footprint and a sizable expense for the Company.

The Company's primary effort in reducing its fossil jet fuel consumption is directed on working with strategic partners to employ and commercialize the use of sustainable aviation fuel ("SAF").

SAF is the only technology solution realized today that can abate emissions from the Company's flight operations.

SAF can reduce lifecycle GHG emissions by up to 85% compared with conventional jet fuel and has the added benefits of having a limited impact on performance or safety and providing energy diversification.

However, SAF supply in the jet fuel market is constrained today, with it contributing to far less than 1% of global commercial aviation fuel usage.

The Company began experiencing a significant decline in passenger demand related to the novel coronavirus (COVID-19) during the first quarter of 2020.

In response to decreased demand, the Company cut, relative to 2019 capacity, approximately 57% of its scheduled capacity for 2020.

In the first quarter of 2021, the Company expects scheduled capacity to be down at least 51% versus the first quarter of 2019.

The Company plans to continue to proactively evaluate and cancel flights on a rolling 60-day basis until it sees signs of a recovery in demand and expects demand to remain suppressed, relative to 2019 levels, until vaccines for COVID-19 are widely distributed and are effective in curbing

the spread of the virus.

In addition, the Company does not currently expect the recovery from COVID-19 to follow a linear path.

As such, the Company's actual flown capacity may differ materially from its currently scheduled capacity.

The significant decline in demand for air travel services resulting from the COVID-19 pandemic has also materially impacted demand for regional carrier services and, as a result, the Company's utilization of its regional network is significantly reduced and is expected to remain so for the foreseeable future.

As a result, we may face claims that we failed to perform certain obligations under our agreements with our regional carriers and may incur damages.

Additionally, in July 2020, the Company announced its plans to consolidate its Embraer 145 ("E145") operations into a single regional partner, CommutAir.

As a result, the Company terminated its CPA with ExpressJet Airlines, LLC, a domestic regional airline ("ExpressJet").

ExpressJet flew its last commercial flight, on behalf of United, on September 30, 2020.

Additionally, United transferred all of its E145 operations over to CommutAir as United's sole regional partner for this aircraft type.

We expect the disruption to services resulting from the COVID-19 pandemic to continue to adversely affect our regional carriers, some of which may declare bankruptcy or otherwise cease to operate.

network of non-airline partners, such as domestic and international credit card issuers, retail merchants, hotels and car rental companies.

Redemptions in 2020 were adversely impacted by the COVID-19 pandemic.

United will again have reduced Premier Qualifying Points ("PQP") and Premier Qualifying Flights ("PQF") thresholds in 2021 and will have innovative promotions that help members earn status more quickly.

| 2018 | | | | | | 4,137 | | | | | | $ | 9,307 | | | | | $ | 2.25 | | | | | 24 | | % | | | | | | |

To provide adequate supplies of fuel, the Company routinely enters into purchase contracts that are customarily indexed to market prices for aircraft fuel, and the Company generally has some ability to cover short-term fuel supply and infrastructure disruptions at certain major demand locations.

Measures such as "shelter in place" or quarantine requirements, international and domestic travel restrictions or advisories, limitations on public gatherings, social distancing recommendations, remote work arrangements and closures of tourist destinations and attractions, as well as consumer perceptions of the safety, ease and predictability of air travel, have contributed to a precipitous decline in passenger demand and bookings for both business and leisure travel.

Effective August 30, 2020, United permanently eliminated change fees on all standard Economy and Premium cabin tickets for travel within the 50 U.S. states, Washington, D.C., Puerto Rico and the U.S. Virgin Islands.

Also, in December 2020, the Company eliminated change fees on flights from the U.S. to all international destinations and fees on Basic Economy and all other international travel tickets issued by March 31, 2021.

In addition, effective January 1, 2021, United began allowing passengers to standby for free on a flight departing the day of their travel regardless of the type of ticket or class of service, while MileagePlus Premier members can confirm a seat on a different flight on the same day with the same departure and arrival cities as their original ticket if a seat in the same ticket fare class is available.

Risk

*Catering Operations*.

The Company owns and operates catering kitchens at airports in Denver, Cleveland, Newark, Houston, and Honolulu, which prepare ready-to-eat food for United flights.

Some of the Company's kitchens also prepare ready-to-eat food for other domestic and international airlines.

The Company's onboard food service operations are subject to FDA regulation through its interstate conveyance sanitation regulations, and the Company's catering operations are subject to regulation by the FDA and the USDA, as well as other federal, state, and local regulatory agencies.

In particular, the FDA enforces the Federal Food Safety Modernization Act which requires all food manufacturers, including ready-to-eat catering operations, to implement stringent risk-based preventive controls.

As a result, the Company's catering and food service operations are periodically subject to inspections and enforcement by regulatory agencies.

Company.

London Heathrow International Airport, Frankfurt Rhein-Main Airport, Shanghai Pudong International Airport, Beijing Capital International Airport, Sao Paulo Guarulhos International Airport and Tokyo Haneda International Airport are among the most restrictive foreign airports due to slot and capacity limitations.

There is an increasing global regulatory focus on greenhouse gas ("GHG") emissions and their potential impacts relating to climate change.

The European Parliament is expected to assess CORSIA implementation and re-assess the applicability of EU ETS to international aviation in 2024, at which point the EU could require all extra- and intra-EU flights to participate in EU ETS.

However, CORSIA is expected to increase operating costs for the Company, depending on a number of factors, including the number of its flights that are subject to CORSIA, the fuel efficiency of the Company's fleet, the Company's purchase and use of CORSIA-eligible sustainable fuels, aviation sector growth, the price of CORSIA-eligible offsets and the applicable baseline year(s) applied to future phases of the program.

In 2017, ICAO also adopted a carbon dioxide ("CO2") emission standard for aircraft.

We have made a series of tangible commitments and actions to help reduce our carbon emission footprint, including the following:

- In 2015, we invested $30 million in Fulcrum BioEnergy, a sustainable aviation fuel ("SAF") producer that converts trash to low-carbon jet fuel.

- In 2016, we became the first airline globally to use SAF in regular operations on a continuous basis and, as of December 31, 2020, based on publicly announced commitments, have purchased more SAF than any other U.S. commercial airline.

- In 2018, we became the first U.S. airline to establish a climate goal of reducing our emissions 50% by 2050 versus our 2005 baseline.

[removed: Other Legal Proceedings.] The Company is involved in [removed: various] [added: legal proceedings, including litigation, arbitration and] other [removed: claims] [added: claims,] and [removed: legal actions] [added: investigations, inspections, subpoenas, audits, inquiries and similar action,] involving [added: its] passengers, customers, [removed: suppliers, employees] [added: suppliers] and [added: employees as well as] government agencies arising in the ordinary course of [removed: business.][added: business and that have not been fully resolved.]

[removed: Additionally, from time to time, the] Company becomes aware of potential non-compliance with applicable environmental regulations, which have either been identified by the Company (through internal compliance programs such as its environmental compliance audits) or through notice from a governmental entity.

[removed: After] [added: Management believes, after] considering a number of factors, including (but not limited to) the [added: information currently available, the] views of legal counsel, the nature of contingencies to which the Company is subject and prior experience, [removed: management believes] that [added: its defenses and assertions in pending legal proceedings have merit and] the ultimate disposition of [removed: these other claims and legal actions] [added: any pending matter] will not materially affect [removed: its consolidated] [added: the Company's] financial [removed: position or] [added: position,] results of [removed: operations.][added: operations or cash flows.]

Legal proceedings, in general, and securities, class action and multi-district litigation, in particular, can be expensive and disruptive.

Some of these suits may purport or may be determined to be class actions and/or involve parties seeking large and/or indeterminate amounts, including punitive or exemplary damages, and may remain unresolved for several years.

Additionally, from time to time, the

However, the ultimate resolutions of the Company's legal proceedings and other contingencies are inherently unpredictable and subject to significant uncertainties.

There can be no assurance that there will not be an increase in the scope of one or more of these pending matters or any other or future lawsuits, claims, government investigations or other legal proceedings will not be material to the Company's financial position, results of operations or cash flows for a particular period.

Antitrust Litigation

On October 13, 2015, United received a CID from the Civil Division of the DOJ.

The CID requested documents and oral testimony from United in connection with an industry-wide DOJ investigation related to delivery scan and other data purportedly required for payment for the carriage of mail under United's International Commercial Air Contracts with the U.S. Postal Service.

The Company has been responding to the DOJ's request and cooperating in the investigation since that time.

On November 8, 2016, the DOJ Criminal Division met with representatives from the Company and advised they are conducting an industry-wide investigation into the same matter.

In February 2021, United entered into a settlement with the Civil and Criminal Divisions of the DOJ, pursuant to which the Company agreed to pay $49.5 million.

In conjunction with these settlements, United entered into a non-prosecution agreement with the Criminal Division of the DOJ.

However, the ultimate resolutions of these matters are inherently unpredictable.

For the fiscal year ended December 31, [removed: 2020][added: 2021]

[removed: ][added: ]

| | | | | | | Preferred Stock Purchase Rights | | | | | | [added: None] | | | | | | The Nasdaq Stock Market LLC | | |

The aggregate market value of common stock held by non-affiliates of United Airlines Holdings, Inc. was [removed: $10.0] [added: $16.9] billion as of June 30, [removed: 2020] [added: 2021] based on the closing sale price of [removed: $34.61] [added: $52.29] on that date.

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of February [removed: 24, 2021.][added: 10, 2022.]

| United Airlines Holdings, Inc. | | | | | | [removed: 318,476,280] [added: 324,626,332] | | | shares of common stock ($0.01 par value) | | |

Certain information required by Items 10, 11, 12 and 13 of Part III of this Form 10-K is incorporated by reference for United Airlines Holdings, Inc. from its definitive proxy statement for its [removed: 2021] [added: 2022] Annual Meeting of Stockholders.

For the Year Ended December 31, [removed: 2020][added: 2021]

| Item 1. | | | | | | [removed: [Business](#i15888b2859a04b5a865aff8a6bcfb463_13)] [added: [Business](#i1a3c37c27981496fa61e1f5ea5856175_13)] | | | [removed: [3](#i15888b2859a04b5a865aff8a6bcfb463_13)] [added: [3](#i1a3c37c27981496fa61e1f5ea5856175_13)] | | |

| Item 1A. | | | | | | [Risk [removed: Factors](#i15888b2859a04b5a865aff8a6bcfb463_16)] [added: Factors](#i1a3c37c27981496fa61e1f5ea5856175_16)] | | | [removed: [13](#i15888b2859a04b5a865aff8a6bcfb463_16)] [added: [18](#i1a3c37c27981496fa61e1f5ea5856175_16)] | | |

| Item 1B. | | | | | | [Unresolved Staff [removed: Comments](#i15888b2859a04b5a865aff8a6bcfb463_19)] [added: Comments](#i1a3c37c27981496fa61e1f5ea5856175_19)] | | | [removed: [32](#i15888b2859a04b5a865aff8a6bcfb463_19)] [added: [32](#i1a3c37c27981496fa61e1f5ea5856175_19)] | | |

| Item 2. | | | | | | [removed: [Properties](#i15888b2859a04b5a865aff8a6bcfb463_22)] [added: [Properties](#i1a3c37c27981496fa61e1f5ea5856175_22)] | | | [removed: [32](#i15888b2859a04b5a865aff8a6bcfb463_22)] [added: [32](#i1a3c37c27981496fa61e1f5ea5856175_22)] | | |

| Item 3. | | | | | | [Legal [removed: Proceedings](#i15888b2859a04b5a865aff8a6bcfb463_25)] [added: Proceedings](#i1a3c37c27981496fa61e1f5ea5856175_25)] | | | [removed: [34](#i15888b2859a04b5a865aff8a6bcfb463_25)] [added: [33](#i1a3c37c27981496fa61e1f5ea5856175_25)] | | |

| Item 4. | | | | | | [Mine Safety [removed: Disclosures](#i15888b2859a04b5a865aff8a6bcfb463_28)] [added: Disclosures](#i1a3c37c27981496fa61e1f5ea5856175_28)] | | | [removed: [34](#i15888b2859a04b5a865aff8a6bcfb463_28)] [added: [34](#i1a3c37c27981496fa61e1f5ea5856175_28)] | | |

| Item 5. | | | | | | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i15888b2859a04b5a865aff8a6bcfb463_34)] [added: Securities](#i1a3c37c27981496fa61e1f5ea5856175_34)] | | | [removed: [34](#i15888b2859a04b5a865aff8a6bcfb463_34)] [added: [34](#i1a3c37c27981496fa61e1f5ea5856175_34)] | | |

| Item 7. | | | | | | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i15888b2859a04b5a865aff8a6bcfb463_40)] [added: Operations](#i1a3c37c27981496fa61e1f5ea5856175_40)] | | | [removed: [37](#i15888b2859a04b5a865aff8a6bcfb463_40)] [added: [35](#i1a3c37c27981496fa61e1f5ea5856175_40)] | | |

| Item 7A. | | | | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i15888b2859a04b5a865aff8a6bcfb463_58)] [added: Risk](#i1a3c37c27981496fa61e1f5ea5856175_58)] | | | [removed: [50](#i15888b2859a04b5a865aff8a6bcfb463_58)] [added: [49](#i1a3c37c27981496fa61e1f5ea5856175_58)] | | |

| Item 8. | | | | | | [Financial Statements and Supplementary [removed: Data](#i15888b2859a04b5a865aff8a6bcfb463_61)] [added: Data](#i1a3c37c27981496fa61e1f5ea5856175_61)] | | | [removed: [51](#i15888b2859a04b5a865aff8a6bcfb463_61)] [added: [50](#i1a3c37c27981496fa61e1f5ea5856175_61)] | | |

| | | | | | | [Combined Notes to Consolidated Financial [removed: Statements](#i15888b2859a04b5a865aff8a6bcfb463_109)] [added: Statements](#i1a3c37c27981496fa61e1f5ea5856175_103)] | | | [removed: [69](#i15888b2859a04b5a865aff8a6bcfb463_109)] [added: [66](#i1a3c37c27981496fa61e1f5ea5856175_103)] | | |

| Item 9. | | | | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i15888b2859a04b5a865aff8a6bcfb463_178)] [added: Disclosure](#i1a3c37c27981496fa61e1f5ea5856175_166)] | | | [removed: [108](#i15888b2859a04b5a865aff8a6bcfb463_178)] [added: [98](#i1a3c37c27981496fa61e1f5ea5856175_166)] | | |

| Item 9A. | | | | | | [Controls and [removed: Procedures](#i15888b2859a04b5a865aff8a6bcfb463_181)] [added: Procedures](#i1a3c37c27981496fa61e1f5ea5856175_169)] | | | [removed: [108](#i15888b2859a04b5a865aff8a6bcfb463_181)] [added: [98](#i1a3c37c27981496fa61e1f5ea5856175_169)] | | |

| Item 9B. | | | | | | [Other [removed: Information](#i15888b2859a04b5a865aff8a6bcfb463_184)] [added: Information](#i1a3c37c27981496fa61e1f5ea5856175_172)] | | | [removed: [111](#i15888b2859a04b5a865aff8a6bcfb463_184)] [added: [101](#i1a3c37c27981496fa61e1f5ea5856175_172)] | | |

| Item 10. | | | | | | [Directors, Executive Officers and Corporate [removed: Governance](#i15888b2859a04b5a865aff8a6bcfb463_190)] [added: Governance](#i1a3c37c27981496fa61e1f5ea5856175_178)] | | | [removed: [112](#i15888b2859a04b5a865aff8a6bcfb463_190)] [added: [101](#i1a3c37c27981496fa61e1f5ea5856175_178)] | | |

| Item 11. | | | | | | [Executive [removed: Compensation](#i15888b2859a04b5a865aff8a6bcfb463_193)] [added: Compensation](#i1a3c37c27981496fa61e1f5ea5856175_181)] | | | [removed: [113](#i15888b2859a04b5a865aff8a6bcfb463_193)] [added: [101](#i1a3c37c27981496fa61e1f5ea5856175_181)] | | |

| Item 12. | | | | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i15888b2859a04b5a865aff8a6bcfb463_196)] [added: Matters](#i1a3c37c27981496fa61e1f5ea5856175_184)] | | | [removed: [113](#i15888b2859a04b5a865aff8a6bcfb463_196)] [added: [101](#i1a3c37c27981496fa61e1f5ea5856175_184)] | | |

| Item 13. | | | | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i15888b2859a04b5a865aff8a6bcfb463_199)] [added: Independence](#i1a3c37c27981496fa61e1f5ea5856175_187)] | | | [removed: [113](#i15888b2859a04b5a865aff8a6bcfb463_199)] [added: [101](#i1a3c37c27981496fa61e1f5ea5856175_187)] | | |

| Item 14. | | | | | | [Principal Accountant Fees and [removed: Services](#i15888b2859a04b5a865aff8a6bcfb463_202)] [added: Services](#i1a3c37c27981496fa61e1f5ea5856175_190)] | | | [removed: [114](#i15888b2859a04b5a865aff8a6bcfb463_202)] [added: [102](#i1a3c37c27981496fa61e1f5ea5856175_190)] | | |

| Item 15. | | | | | | [Exhibits and Financial Statement [removed: Schedules](#i15888b2859a04b5a865aff8a6bcfb463_208)] [added: Schedules](#i1a3c37c27981496fa61e1f5ea5856175_196)] | | | [removed: [115](#i15888b2859a04b5a865aff8a6bcfb463_208)] [added: [103](#i1a3c37c27981496fa61e1f5ea5856175_196)] | | |

| Item 16. | | | | | | [Form 10-K [removed: Summary](#i15888b2859a04b5a865aff8a6bcfb463_211)] [added: Summary](#i1a3c37c27981496fa61e1f5ea5856175_199)] | | | [removed: [115](#i15888b2859a04b5a865aff8a6bcfb463_211)] [added: [103](#i1a3c37c27981496fa61e1f5ea5856175_199)] | | |

| | | | | | | [Information about Our Executive Officers](#i1a3c37c27981496fa61e1f5ea5856175_1727) | | | [16](#i1a3c37c27981496fa61e1f5ea5856175_1727) | | |

| Item 6. | | | | | | [\[Reserved\]](#i1a3c37c27981496fa61e1f5ea5856175_37) | | | [35](#i1a3c37c27981496fa61e1f5ea5856175_37) | | |

| Item 9C. | | | | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i1a3c37c27981496fa61e1f5ea5856175_1712) | | | [101](#i1a3c37c27981496fa61e1f5ea5856175_1712) | | |

| Item 6. | | | | | | [Selected Financial Data](#i15888b2859a04b5a865aff8a6bcfb463_37) | | | [35](#i15888b2859a04b5a865aff8a6bcfb463_37) | | |

Fleet. As of December 31, [removed: 2020,] [added: 2021,] United's mainline and regional fleets consisted of the following:

| Aircraft Type | | | | | | Total | | | | | | Owned | | | | | | Leased | | | | | | Seats in Standard Configuration | | | | | | [removed: | | |] Average Age (In Years) | | |

| Mainline: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | |]

| 777-300ER | | | | | | 22 | | | | | | 22 | | | | | | — | | | | | | 350 | | | | | | [removed: | | | 3.0] [added: 4.0] | | |

| 777-200ER | | | | | | 55 | | | | | | 52 | | | | | | 3 | | | | | | [removed: 267-276 | | |] [added: 276-362] | | | | | | [removed: 20.8] [added: 21.8] | | |

| 777-200 | | | | | | 19 | | | | | | 19 | | | | | | — | | | | | | 364 | | | | | | [removed: | | | 23.5] [added: 24.5] | | |

| 787-10 | | | | | | 13 | | | | | | 13 | | | | | | — | | | | | | 318 | | | | | | [removed: | | | 1.6] [added: 2.6] | | |

| 787-9 | | | | | | [removed: 35] [added: 38] | | | | | | 28 | | | | | | [removed: 7 | | |] [added: 10] | | | [removed: 252] | | | [added: 252-257] | | | | | | [removed: 3.6] [added: 4.3] | | |

| 767-400ER | | | | | | 16 | | | | | | [removed: 14] [added: 16] | | | | | | [removed: 2] [added: —] | | | | | | 240 | | | | | | [removed: | | | 19.3] [added: 20.3] | | |

| 767-300ER | | | | | | 38 | | | | | | [removed: 30] [added: 31] | | | | | | [removed: 8] [added: 7] | | | | | | 167-214 | | | | | | [removed: | | | 24.9] [added: 25.9] | | |

| 757-300 | | | | | | 21 | | | | | | 9 | | | | | | 12 | | | | | | 234 | | | | | | [removed: | | | 18.3] [added: 19.3] | | |

| 757-200 | | | | | | 40 | | | | | | 35 | | | | | | 5 | | | | | | [removed: 142-176 | | |] [added: 169-176] | | | | | | [removed: 23.9] [added: 24.9] | | |

| 737 MAX 9 | | | | | | [removed: 22] [added: 30] | | | | | | 14 | | | | | | [removed: 8] [added: 16] | | | | | | 179 | | | | | | [removed: | | | 1.5] [added: 2.1] | | |

| 737-900ER | | | | | | 136 | | | | | | 136 | | | | | | — | | | | | | 179 | | | | | | [removed: | | | 8.0] [added: 9.0] | | |

| 737-900 | | | | | | 12 | | | | | | 8 | | | | | | 4 | | | | | | 179 | | | | | | [removed: | | | 19.3] [added: 20.3] | | |

| 737-800 | | | | | | 141 | | | | | | [removed: 97] [added: 108] | | | | | | [removed: 44] [added: 33] | | | | | | 166 | | | | | | [removed: | | | 16.8] [added: 17.8] | | |

| 737-700 | | | | | | [removed: 49] [added: 40] | | | | | | [removed: 37] [added: 32] | | | | | | [removed: 12] [added: 8] | | | | | | 126 | | | | | | [removed: | | | 20.7] [added: 22.8] | | |

| A320-200 | | | | | | 96 | | | | | | 78 | | | | | | 18 | | | | | | 150 | | | | | | [removed: | | | 22.3] [added: 23.4] | | |

| A319-100 | | | | | | [removed: 85] [added: 81] | | | | | | [removed: 56] [added: 52] | | | | | | 29 | | | | | | [removed: 126-128 | | |] [added: 126] | | | | | | [removed: 18.9] [added: 20.1] | | |

In addition to the aircraft presented in the table above, United owned or leased, as of December 31, [removed: 2020, eleven] [added: 2021, seven] Boeing 757-200s, [removed: three] [added: 13 Boeing 737-700s, 17] Airbus A319s, three Airbus A320s and one Boeing 767-200 that are not used in its operations.

| Embraer E175/E175LL | | | | | | [removed: 190] [added: 198] | | | | | | [removed: 91] [added: 99] | | | | | | | | | | | | 99 | | | | | | SkyWest: Mesa: Republic: | | | 90 [removed: 72] [added: 80] 28 | | | | | | [removed: 70] [added: 70/76] | | | [removed: (a)] | | |

| CRJ700 | | | | | | [removed: 27] [added: 19] | | | | | | — | | | | | | | | | | | | [removed: 27] [added: 19] | | | | | | [removed: Mesa:] SkyWest: | | | [removed: 8] 19 | | | | | | 70 | | | | | |

| CRJ550 | | | | | | [removed: 38] [added: 55] | | | | | | [removed: —] [added: 6] | | | | | | | | | | | | [removed: 38] [added: 49] | | | | | | GoJet: | | | [removed: 38] [added: 55] | | | | | | 50 | | | | | |

| Embraer ERJ 145 (XR/LR) | | | | | | [removed: 49] [added: 75] | | | | | | [removed: 49] [added: 75] | | | | | | | | | | | | — | | | | | | CommutAir: | | | [removed: 49] [added: 75] | | | | | | 50 | | | | | |

In addition to the aircraft presented in the table above, United owned or leased the following regional aircraft as of December 31, [removed: 2020:][added: 2021:]

Firm Order and Option Aircraft. As of December 31, [removed: 2020 (adjusted to include the effects of the February 26, 2021 agreement with Boeing discussed below),] [added: 2021,] United had firm commitments and options to purchase [removed: new] aircraft from [removed: Boeing, Airbus] [added: Boeing] and [removed: Embraer as] [added: Airbus] presented in the table below:

| Aircraft Type | | | | | | Number of Firm Commitments (a) | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2022] [added: 2023] | | | | | | After [removed: 2022] [added: 2023] | | |

| Boeing 787 | | | | | | [removed: 11] [added: 8] | | | | | | [removed: 11] [added: 8] | | | | | | — | | | | | | — | | |

[added: |] (a) United also has options and purchase rights for additional aircraft. [added: | | | | | | | | | | | | | | | | | | | | | | | | | | |]

To the extent the Company and the aircraft manufacturers with [removed: which] [added: whom] the Company has existing orders for new aircraft agree to modify the contracts governing those orders, [added: or to] the [added: extent rights are exercised pursuant to the relevant agreements to modify the timing of deliveries, the] amount and timing of the Company's future capital commitments could change.

United has major terminal facility leases at SFO, [removed: Washington Dulles, Chicago O'Hare,] [added: IAD, ORD,] LAX, [removed: Denver, Newark, Houston Bush] [added: DEN, EWR, IAH] and [removed: Guam] [added: GUM] with expiration dates ranging from [removed: 2021] [added: 2022] through 2053.

Substantially all of these facilities are leased on a net-rental basis, resulting in the [removed: Company's] [added: Company having financial] responsibility for maintenance, insurance and other facility-related expenses and services.

In addition, United has multiple leases, which expire from [removed: 2030] [added: 2029] through 2033, for its principal executive office and operations center in downtown Chicago and administrative offices in downtown Houston.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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| 787-8 | | | | | | 12 | | | | | | 12 | | | | | | — | | | | | | 243 | | | | | | 8.5 | | |

| 737 MAX 8 | | | | | | 16 | | | | | | — | | | | | | 16 | | | | | | 166 | | | | | | 0.3 | | |

| Total mainline | | | | | | 826 | | | | | | 665 | | | | | | 161 | | | | | | | | | | | | 16.5 | | |

| Total regional | | | | | | 518 | | | | | | 180 | | | | | | | | | | | | 338 | | | | | | | | | | | | | | | | | | | | |

- 11 CRJ700s awaiting conversion to CRJ550s; and

- 85 Embraer ERJ 145s, which are temporarily grounded, 56 of which are currently held for sale.

| Airbus A321neo | | | | | | 70 | | | | | | — | | | | | | 12 | | | | | | 58 | | |

| Boeing 737 MAX | | | | | | 367 | | | | | | 53 | | | | | | 109 | | | | | | 205 | | |

In November 2021, United purchased off-lease its backup network operations center in Arlington Heights, Illinois, which, effective April 1, 2022, will become the Company's primary network operations center.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 787-8 | | | | | | 12 | | | | | | 12 | | | | | | — | | | | | | 219 | | | | | | | | | 7.5 | | |

| Total mainline | | | | | | 812 | | | | | | 660 | | | | | | 152 | | | | | | | | | | | | | | | 16.0 | | |

| Total regional | | | | | | 475 | | | | | | 140 | | | | | | | | | | | | 335 | | | | | | | | | | | | | | | | | | | | |

| (a) In 2020, the Company temporarily modified all 76-seat aircraft to have a 70-seat configuration as agreed upon in the Pandemic Recovery Agreement between the Company and its pilots. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

- Four Embraer E175LLs, which were delivered but not yet in service;

- 119 Embraer ERJ 145s currently in storage with several aircraft scheduled to be inducted into CommutAir's fleet throughout 2021 and 2022; and

- 12 CRJ700s that are being transitioned between CPAs and for which United continues to make monthly payments.

| Boeing 737 MAX | | | | | | 188 | | | | | | 21 | | | | | | 40 | | | | | | 127 | | |

| Embraer E175 | | | | | | 4 | | | | | | 4 | | | | | | — | | | | | | — | | |

On February 26, 2021, the Company entered into an agreement with The Boeing Company ("Boeing") for a firm order of 25 Boeing 737 MAX aircraft for delivery in 2023, and to reschedule the delivery of 40 previously ordered Boeing 737 MAX aircraft to 2022 and 5 Boeing 737 MAX aircraft into 2023.

United also has an agreement to purchase 11 used Boeing 737-700 aircraft with expected delivery dates in 2021.

In addition, United has an agreement to purchase 17 used Airbus A319 aircraft, which it intends to sell, with expected delivery dates in 2021 and 2022.

UAL's common stock is listed on the Nasdaq Global Select Market ("Nasdaq") under the symbol "UAL." [removed: As of February 24, 2021, there were 5,989 holders of record of UAL common stock.]

The following graph [removed: shows] [added: compares] the cumulative total stockholder return [removed: for UAL's common stock] during the period from December 31, [removed: 2015] [added: 2016] to December 31, [removed: 2020.][added: 2021 of UAL's common stock to the Standard and Poor's 500 Index ("SPX") and the NYSE Arca Airline Index ("XAL").]

The comparison assumes $100 was invested on December 31, [removed: 2015] [added: 2016] in [added: our common stock and in] each of [removed: UAL common stock,] the [removed: SPX] [added: foregoing indices] and [removed: the XAL.][added: assumes that all dividends were reinvested.]

[removed: ][added: ]

Holders of Common Stock

As of February 10, 2022, there were 5,920 holders of record of UAL common stock.

The number of record holders is based upon the actual number of holders registered on our books at such date based on information provided by Computershare Investor Services, our transfer agent, and does not include holders of shares in "street name" or other holders identified in security position listings maintained by depository trust companies.

Performance Graph

The graph also shows the cumulative returns of the Standard and Poor's 500 Index ("SPX") and the NYSE Arca Airline Index ("XAL") of 15 investor-owned airlines over the same five-year period.

The following table presents repurchases of UAL common stock made in the fourth quarter of fiscal year 2020:

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Period | | | | | | Total number of shares purchased | | | | | | Average price paid per share | | | | | | Total number of shares purchased as part of publicly announced plans or programs (a) | | | | | | Maximum number of shares (or approximate dollar value) of shares that may yet be purchased under the plans or programs | | |

| October 2020 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | — | |

| November 2020 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

| December 2020 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

| Total | | | | | | — | | | | | | | | | | | | — | | | | | | | | |

(a) On April 24, 2020, UAL's Board of Directors terminated its share repurchase program.

Under the Payroll Support Program agreements and Loan Program, the Company and its business are subject to certain restrictions, including, but not limited to, restrictions on the ability to repurchase UAL's equity securities through September 26, 2026 (or such earlier date that is one year after repayment in full of the Term Loan Facility).

UAL's consolidated financial statements and statistical data are provided in the tables below:

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| | | | | | | Year Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | 2020 | | | | | | 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | |

| Income Statement Data (in millions, except per share amounts): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Operating revenue | | | | | | $ | 15,355 | | | | | $ | 43,259 | | | | | $ | 41,303 | | | | | $ | 37,784 | | | | | $ | 36,558 | |

| Operating expense | | | | | | 21,714 | | | | | | 38,958 | | | | | | 38,074 | | | | | | 34,166 | | | | | | 32,214 | | |

| Operating income (loss) | | | | | | (6,359) | | | | | | 4,301 | | | | | | 3,229 | | | | | | 3,618 | | | | | | 4,344 | | |

| Net income (loss) | | | | | | (7,069) | | | | | | 3,009 | | | | | | 2,122 | | | | | | 2,143 | | | | | | 2,234 | | |

| Basic earnings (loss) per share | | | | | | (25.30) | | | | | | 11.63 | | | | | | 7.70 | | | | | | 7.08 | | | | | | 6.77 | | |

| Diluted earnings (loss) per share | | | | | | (25.30) | | | | | | 11.58 | | | | | | 7.67 | | | | | | 7.06 | | | | | | 6.76 | | |

| Balance Sheet Data at December 31 (in millions): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Unrestricted cash, cash equivalents and short-term investments | | | | | | $ | 11,683 | | | | | $ | 4,944 | | | | | $ | 3,950 | | | | | $ | 3,798 | | | | | $ | 4,428 | |

| Total assets | | | | | | 59,548 | | | | | | 52,611 | | | | | | 49,024 | | | | | | 47,469 | | | | | | 40,208 | | |

| Debt and finance lease obligations | | | | | | 27,153 | | | | | | 14,818 | | | | | | 13,792 | | | | | | 13,576 | | | | | | 11,705 | | |

| Select operating statistics (a) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Passengers (thousands) (b) | | | | | | 57,761 | | | | | | 162,443 | | | | | | 158,330 | | | | | | 148,067 | | | | | | 143,177 | | |

| Revenue passenger miles ("RPMs") (millions) (c) | | | | | | 73,883 | | | | | | 239,360 | | | | | | 230,155 | | | | | | 216,261 | | | | | | 210,309 | | |

| Available seat miles ("ASMs") (millions) (d) | | | | | | 122,804 | | | | | | 284,999 | | | | | | 275,262 | | | | | | 262,386 | | | | | | 253,590 | | |

| Cargo revenue ton miles (millions) (e) | | | | | | 2,711 | | | | | | 3,329 | | | | | | 3,425 | | | | | | 3,316 | | | | | | 2,805 | | |

| Passenger load factor (f) | | | | | | 60.2% | | | | | | 84.0% | | | | | | 83.6% | | | | | | 82.4% | | | | | | 82.9% | | |

| Passenger revenue per available seat mile ("PRASM") (cents) | | | | | | 9.61 | | | | | | 13.90 | | | | | | 13.70 | | | | | | 13.13 | | | | | | 13.18 | | |

| Total revenue per available seat mile ("TRASM") (cents) | | | | | | 12.50 | | | | | | 15.18 | | | | | | 15.00 | | | | | | 14.40 | | | | | | 14.42 | | |

| Average yield per revenue passenger mile ("Yield") (cents) (g) | | | | | | 15.98 | | | | | | 16.55 | | | | | | 16.38 | | | | | | 15.93 | | | | | | 15.90 | | |

| Cost per available seat mile ("CASM") (cents) | | | | | | 17.68 | | | | | | 13.67 | | | | | | 13.83 | | | | | | 13.02 | | | | | | 12.70 | | |

| Average price per gallon of fuel, including fuel taxes | | | | | | $ | 1.57 | | | | | $ | 2.09 | | | | | $ | 2.25 | | | | | $ | 1.74 | | | | | $ | 1.49 | |

| Fuel gallons consumed (millions) | | | | | | 2,004 | | | | | | 4,292 | | | | | | 4,137 | | | | | | 3,978 | | | | | | 3,904 | | |

| Average stage length (miles) (h) | | | | | | 1,307 | | | | | | 1,460 | | | | | | 1,446 | | | | | | 1,460 | | | | | | 1,473 | | |

| Employee headcount, as of December 31 (thousands) | | | | | | 74.4 | | | | | | 95.9 | | | | | | 91.7 | | | | | | 89.8 | | | | | | 87.8 | | |

(a) Includes data from our regional carriers operating under CPAs unless otherwise noted.

(b) The number of revenue passengers measured by each flight segment flown.

(c) The number of scheduled miles flown by revenue passengers.

(d) The number of seats available for passengers multiplied by the number of scheduled miles those seats are flown.

(e) The number of cargo revenue tons transported multiplied by the number of miles flown.

(f) RPM divided by ASM.

(g) The average passenger revenue received for each revenue passenger mile flown.

(h) Average stage length equals the average distance a flight travels weighted for size of aircraft.

We have audited the accompanying consolidated balance sheets of United Airlines Holdings, Inc. (the "Company") as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of operations, comprehensive income (loss), cash flows, and stockholders' equity for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company's internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated [removed: March 1, 2021,] [added: February 18, 2022,] expressed an unqualified opinion thereon.

| *Description of the matter* | | | | | | At December 31, [removed: 2020,] [added: 2021,] the [added: carrying value of the] Company's China route authorities indefinite-lived intangible [removed: asset had a carrying value of approximately $1.0] [added: assets (the China intangible assets) was $1.02] billion. As discussed in Note 1 of the consolidated financial statements, indefinite-lived assets are reviewed for impairment on an annual basis as of October 1, or on an interim basis whenever a triggering event occurs. [removed: As discussed in Note 14 of the consolidated financial statements, the Company recorded a $130 million interim impairment charge related to this intangible asset.] | | |

| Auditing management's annual China [removed: route authorities indefinite-lived intangibles] [added: intangible assets] impairment test was complex and [added: highly] judgmental due to the significant estimation required in determining the fair [removed: value.] [added: value of the assets.] The fair value estimate was sensitive to significant assumptions such as revenue growth rate, operating margin and the discount rate, each of which is affected by expectations about future market or economic conditions. As a result of the subjectivity of the assumptions, adverse changes to management's estimates could reduce the underlying cash flows used to estimate fair value and trigger impairment charges. | | | | | | | | |

| *How we addressed the matter in our audit* | | | | | | We tested the Company's design and operating effectiveness of internal controls that address the risk of material misstatement relating to the estimate of fair value of [removed: route authorities] [added: the China intangible assets] used in the annual [removed: and interim] impairment [removed: tests.] [added: test.] This included testing controls over management's review of the significant assumptions used in the discounted cash flow methodology, including revenue growth rate, operating margin and the discount rate. | | |

| To test the estimated fair value of the Company's China [removed: route authorities indefinite-lived intangible,] [added: intangible assets,] we performed audit procedures that included, among others, assessing the fair value methodology used by management and evaluating the significant assumptions used in the valuation [removed: models.] [added: model.] We compared significant assumptions to current industry, market and economic trends, and to the Company's historical results. We assessed the historical accuracy of management's estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the [added: China] intangible [removed: asset] [added: assets] that would result from changes in assumptions. We also involved a valuation specialist to assist in our evaluation of the Company's valuation methodology and discount [removed: rates.] [added: rate.] | | | | | | | | |

| *Description of the matter* | | | | | | As more fully described in Note 6 to the consolidated financial statements, at December 31, [removed: 2020,] [added: 2021,] the Company had deferred tax assets of [removed: $6.6] [added: $7.5] billion. In addition, the Company had deferred tax liabilities [added: available to offset deferred tax assets] of [removed: $6.5] [added: $6.2] billion. Deferred tax assets are reduced by a valuation allowance if, based on the weight of all available evidence, in [removed: management’s] [added: management's] judgment it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. | | |

| | | | Auditing management's assessment of the realizability of its deferred tax assets involved complex auditor judgment because management's [removed: estimate is highly judgmental and based on] [added: judgement involves] significant assumptions [added: about the ability to generate future taxable income] that may be affected by future market or economic conditions. | | | | | |

We have audited the accompanying consolidated balance sheets of United Airlines, Inc. (the "Company") as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the related consolidated statements of operations, comprehensive income (loss), cash flows, and stockholder's equity, for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the "consolidated financial statements").

| | | | Auditing management's annual China [removed: route authorities indefinite-lived] intangible [added: assets] impairment test was complex and [added: highly] judgmental due to the significant estimation required in determining the fair [removed: value.] [added: value of the assets.] The fair value estimate was sensitive to significant assumptions such as revenue growth rate, operating margin and the discount rate, each of which is affected by expectations about future market or economic conditions. As a result of the subjectivity of the assumptions, adverse changes to management's estimates could reduce the underlying cash flows used to estimate fair value and trigger impairment charges. | | | | | |

| | | | To test the estimated fair value of the Company's China [removed: route authorities indefinite-lived intangible,] [added: intangible assets,] we performed audit procedures that included, among others, assessing the fair value methodology used by management and evaluating the significant assumptions used in the valuation model. We compared significant assumptions to current industry, market and economic trends, and to the Company's historical results. We assessed the historical accuracy of management's estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the [added: China] intangible [removed: asset] [added: assets] that would result from changes in assumptions. We also involved a valuation specialist to assist in our evaluation of the Company's valuation methodology and discount [removed: rates.] [added: rate.] | | | | | |

| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Passenger revenue | | | $ | [removed: 11,805] [added: 20,197] | | | | | $ | [removed: 39,625] [added: 11,805] | | | | | $ | [removed: 37,706] [added: 39,625] | |

| Cargo | | | [removed: 1,648] [added: 2,349] | | | | | | [removed: 1,179] [added: 1,648] | | | | | | [removed: 1,237] [added: 1,179] | | |

| Other operating revenue | | | [removed: 1,902] [added: 2,088] | | | | | | [removed: 2,455] [added: 1,902] | | | | | | [removed: 2,360] [added: 2,455] | | |

| Total operating revenue | | | [removed: 15,355] [added: 24,634] | | | | | | [removed: 43,259] [added: 15,355] | | | | | | [removed: 41,303] [added: 43,259] | | |

| Salaries and related costs | | | [removed: 9,522] [added: 9,566] | | | | | | [removed: 12,071] [added: 9,522] | | | | | | [removed: 11,458] [added: 12,071] | | |

| Aircraft fuel | | | [removed: 3,153] [added: 5,755] | | | | | | [removed: 8,953] [added: 3,153] | | | | | | [removed: 9,307] [added: 8,953] | | |

| Depreciation and amortization | | | [removed: 2,488] [added: 2,485] | | | | | | [removed: 2,288] [added: 2,488] | | | | | | [removed: 2,165] [added: 2,288] | | |

| Landing fees and other rent | | | [removed: 2,127] [added: 2,416] | | | | | | [removed: 2,543] [added: 2,127] | | | | | | [removed: 2,449] [added: 2,543] | | |

| Regional capacity purchase | | | [removed: 2,039] [added: 2,147] | | | | | | [removed: 2,849] [added: 2,039] | | | | | | [removed: 2,649] [added: 2,849] | | |

| Aircraft maintenance materials and outside repairs | | | [removed: 858] [added: 1,316] | | | | | | [removed: 1,794] [added: 858] | | | | | | [removed: 1,767] [added: 1,794] | | |

| Distribution expenses | | | [removed: 459] [added: 677] | | | | | | [removed: 1,651] [added: 459] | | | | | | [removed: 1,558] [added: 1,651] | | |

| Aircraft rent | | | [removed: 198] [added: 228] | | | | | | [removed: 288] [added: 198] | | | | | | [removed: 433] [added: 288] | | |

| Special charges [removed: (credit)] [added: (credits)] | | | [removed: (2,616)] [added: (3,367)] | | | | | | [removed: 246] [added: (2,616)] | | | | | | [removed: 487] [added: 246] | | |

| Other operating expenses | | | [removed: 3,486] [added: 4,433] | | | | | | [removed: 6,275] [added: 3,486] | | | | | | [removed: 5,801] [added: 6,275] | | |

| Total operating expense | | | [removed: 21,714] [added: 25,656] | | | | | | [removed: 38,958] [added: 21,714] | | | | | | [removed: 38,074] [added: 38,958] | | |

| Operating income (loss) | | | [removed: (6,359)] [added: (1,022)] | | | | | | [removed: 4,301] [added: (6,359)] | | | | | | [removed: 3,229] [added: 4,301] | | |

| Interest expense | | | [removed: (1,063)] [added: (1,657)] | | | | | | [removed: (731)] [added: (1,063)] | | | | | | [removed: (670)] [added: (731)] | | |

| Interest capitalized | | | [removed: 71] [added: 80] | | | | | | [removed: 85] [added: 71] | | | | | | [removed: 65] [added: 85] | | |

| Interest income | | | [removed: 50] [added: 36] | | | | | | [removed: 133] [added: 50] | | | | | | [removed: 101] [added: 133] | | |

| Unrealized gains (losses) on investments, net | | | [removed: (194)] [added: (34)] | | | | | | [removed: 153] [added: (194)] | | | | | | [removed: (5)] [added: 153] | | |

| Miscellaneous, net | | | [removed: (1,327)] [added: 40] | | | | | | [removed: (27)] [added: (1,327)] | | | | | | [removed: (72)] [added: (27)] | | |

| Total nonoperating expense, net | | | [removed: (2,463)] [added: (1,535)] | | | | | | [removed: (387)] [added: (2,463)] | | | | | | [removed: (581)] [added: (387)] | | |

| Income (loss) before income taxes | | | [removed: (8,822)] [added: (2,557)] | | | | | | [removed: 3,914] [added: (8,822)] | | | | | | [removed: 2,648] [added: 3,914] | | |

| Income tax expense (benefit) | | | [removed: (1,753)] [added: (593)] | | | | | | [removed: 905] [added: (1,753)] | | | | | | [removed: 526] [added: 905] | | |

| Net income (loss) | | | $ | [removed: (7,069)] [added: (1,964)] | | | | | $ | [removed: 3,009] [added: (7,069)] | | | | | $ | [removed: 2,122] [added: 3,009] | |

| Earnings (loss) per share, basic | | | $ | [removed: (25.30)] [added: (6.10)] | | | | | $ | [removed: 11.63] [added: (25.30)] | | | | | $ | [removed: 7.70] [added: 11.63] | |

| Earnings (loss) per share, diluted | | | $ | [removed: (25.30)] [added: (6.10)] | | | | | $ | [removed: 11.58] [added: (25.30)] | | | | | $ | [removed: 7.67] [added: 11.58] | |

February 18, 2022

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.

| *Description of the matter* | | | | | | At December 31, 2021, the carrying value of the Company's China route authorities indefinite-lived intangible assets (the China intangible assets) was $1.02 billion. As discussed in Note 1 of the consolidated financial statements, indefinite-lived assets are reviewed for impairment on an annual basis as of October 1, or on an interim basis whenever a triggering event occurs. | | |

| *How we addressed the matter in our audit* | | | | | | We tested the Company's design and operating effectiveness of internal controls that address the risk of material misstatement relating to the estimate of fair value of the China intangible assets used in the annual impairment test. This included testing controls over management's review of the significant assumptions used in the discounted cash flow methodology, including revenue growth rate, operating margin and the discount rate. | | |

| *Description of the matter* | | | | | | As more fully described in Note 6 to the consolidated financial statements, at December 31, 2021, the Company had deferred tax assets of $7.5 billion. In addition, the Company had deferred tax liabilities available to offset deferred tax assets of $6.2 billion. Deferred tax assets are reduced by a valuation allowance if, based on the weight of all available evidence, in management’s judgment it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. | | |

| | | | Auditing management's assessment of the realizability of its deferred tax assets involved complex auditor judgment because management's judgement involves significant assumptions about the ability to generate future taxable income that may be affected by future market or economic conditions. | | | | | |

February 18, 2022

| Net income (loss) | | | $ | (1,964) | | | | | $ | (7,069) | | | | | $ | 3,009 | |

| Current maturities of other financial liabilities | | | 834 | | | | | | 18 | | |

| Other | | | 560 | | | | | | 706 | | |

| Net income (loss) | | | $ | (1,964) | | | | | $ | (7,069) | | | | | $ | 3,009 | |

| Depreciation and amortization | | | 2,485 | | | | | | 2,488 | | | | | | 2,288 | | |

| Proceeds from sale of property and equipment | | | 107 | | | | | | 6 | | | | | | 49 | | |

| Proceeds from issuance of debt, net of discounts and fees | | | 11,096 | | | | | | 15,676 | | | | | | 1,786 | | |

| Payments of long-term debt, finance leases and other financing liabilities | | | (5,205) | | | | | | (4,449) | | | | | | (1,391) | | |

| Equity interest in Avianca Group International Limited ("AVG") received in consideration for a loan | | | 164 | | | | | | — | | | | | | — | | |

| Notes receivable and warrants received for entering into aircraft and other ancillary business agreements | | | 131 | | | | | | — | | | | | | — | | |

| Net loss | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,964) | | | | | | — | | | | | | (1,964) | | |

| Warrants issued | | | — | | | | | | — | | | | | | 99 | | | | | | — | | | | | | — | | | | | | — | | | | | | 99 | | |

| Issuance of common stock | | | 11.0 | | | | | | — | | | | | | 532 | | | | | | — | | | | | | — | | | | | | — | | | | | | 532 | | |

| Balance at December 31, 2021 | | | 323.8 | | | | | | $ | 4 | | | | | $ | 9,156 | | | | | $ | (3,814) | | | | | $ | 625 | | | | | $ | (942) | | | | | $ | 5,029 | |

| Passenger revenue | | | $ | 20,197 | | | | | $ | 11,805 | | | | | $ | 39,625 | |

| Cargo | | | 2,349 | | | | | | 1,648 | | | | | | 1,179 | | |

| Other operating revenue | | | 2,088 | | | | | | 1,902 | | | | | | 2,455 | | |

| Total operating revenue | | | 24,634 | | | | | | 15,355 | | | | | | 43,259 | | |

| Salaries and related costs | | | 9,566 | | | | | | 9,522 | | | | | | 12,071 | | |

| Aircraft fuel | | | 5,755 | | | | | | 3,153 | | | | | | 8,953 | | |

| Depreciation and amortization | | | 2,485 | | | | | | 2,488 | | | | | | 2,288 | | |

| Landing fees and other rent | | | 2,416 | | | | | | 2,127 | | | | | | 2,543 | | |

| Regional capacity purchase | | | 2,147 | | | | | | 2,039 | | | | | | 2,849 | | |

| Aircraft maintenance materials and outside repairs | | | 1,316 | | | | | | 858 | | | | | | 1,794 | | |

| Distribution expenses | | | 677 | | | | | | 459 | | | | | | 1,651 | | |

| Aircraft rent | | | 228 | | | | | | 198 | | | | | | 288 | | |

| Special charges (credits) | | | (3,367) | | | | | | (2,616) | | | | | | 246 | | |

| Interest expense | | | (1,657) | | | | | | (1,063) | | | | | | (731) | | |

| Interest capitalized | | | 80 | | | | | | 71 | | | | | | 85 | | |

| Interest income | | | 36 | | | | | | 50 | | | | | | 133 | | |

| Miscellaneous, net | | | 40 | | | | | | (1,327) | | | | | | (27) | | |

| Total nonoperating expense, net | | | (1,535) | | | | | | (2,463) | | | | | | (387) | | |

| Net income (loss) | | | $ | (1,962) | | | | | $ | (7,067) | | | | | $ | 3,011 | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | Frequent Flyer Accounting – Co-Brand Agreement | | |

| *Description of the matter* | | | | | | At December 31, 2020, the Company's frequent flyer deferred revenue liability was $6.0 billion. For the year ended December 31, 2020, the Company recognized revenue of $568 million classified as travel miles redeemed within passenger revenue, revenue of $69 million classified as non-travel miles redeemed within other operating revenue and revenue of $1.7 billion associated with various partner agreements including, but not limited to, the JPMorgan Chase Bank, N.A. ("Chase") co-brand agreement, classified as other operating revenue in the consolidated statement of operations. As disclosed in Note 1 to the consolidated financial statements, effective January 1, 2020, the Company amended its co-brand agreement with Chase. The Company allocates the consideration received from Chase based on its best estimate of the relative selling price of the products and services delivered, including the use of the Company's brand. | | |

| Auditing the Company's accounting for its co-brand agreement with Chase was complex and highly judgmental due to the significant estimation required in determining the selling price of the Company's brand deliverable primarily resulting from the absence of observable standalone selling prices. A change in the estimated selling price of the brand deliverable could have a material impact on the deferred revenue balance and the timing of revenue recognition. | | | | | | | | |

| *How we addressed the matter in our audit* | | | | | | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's accounting for its co-brand agreement with Chase, including controls specific to the estimated selling price of the Company's brand deliverable and the completeness and accuracy of the data underlying the brand deliverable estimate. | | |

| To test the estimated selling price of the brand deliverable, our audit procedures included, among others, involving a valuation specialist to assist in testing the method used to develop the selling price of the Company's brand deliverable, and assessing the reasonableness of the inputs used to develop the estimate, which included corroborating those inputs to publicly available data. Additionally, we performed sensitivity analyses to evaluate the changes to the Company's deferred revenue that would result from changes in the estimated standalone selling price of the Company's brand deliverable. | | | | | | | | |

March 1, 2021

| *Description of the matter* | | | | | | At December 31, 2020, the Company's frequent flyer deferred revenue liability was $6.0 billion. For the year ended December 31, 2020, the Company recognized revenue of 568 million classified as travel miles redeemed within passenger revenue, revenue of $69 million classified as non-travel miles redeemed within other operating revenue and revenue of $1.7 billion associated with various partner agreements including, but not limited to, the JPMorgan Chase Bank, N.A. ("Chase") co-brand agreement, classified as other operating revenue in the consolidated statement of operations. As disclosed in Note 1 to the consolidated financial statements, effective January 1, 2020, the Company amended its co-brand agreement with Chase. The Company allocates the consideration received from Chase based on its best estimate of the relative selling price of the products and services delivered, including the use of the Company's brand. | | |

| | | | Auditing the Company's accounting for its co-brand agreement with Chase was complex and highly judgmental due to the significant estimation required in determining the selling price of the Company's brand deliverable primarily resulting from the absence of observable standalone selling prices. A change in the estimated selling price of the brand deliverable could have a material impact on the deferred revenue balance and the timing of revenue recognition. | | | | | |

| | | | To test the estimated selling price of the brand deliverable, our audit procedures included, among others, involving a valuation specialist to assist in testing the method used to develop the selling price of the Company's brand deliverable, and assessing the reasonableness of the inputs used to develop the estimate, which included corroborating those inputs to publicly available data. Additionally, we performed sensitivity analyses to evaluate the changes to the Company's deferred revenue that would result from changes in the estimated standalone selling price of the Company's brand deliverable. | | | | | |

| Other | | | 724 | | | | | | 566 | | |

| Investment in affiliates | | | — | | | | | | (36) | | | | | | (139) | | |

| Proceeds from issuance of debt | | | 16,044 | | | | | | 1,847 | | | | | | 1,594 | | |

| Payments of long-term debt | | | (4,383) | | | | | | (1,240) | | | | | | (1,727) | | |

| Principal payments under finance leases | | | (66) | | | | | | (151) | | | | | | (79) | | |

| Capitalized financing costs | | | (368) | | | | | | (61) | | | | | | (37) | | |

| Capacity purchase agreement liability converted to debt | | | 33 | | | | | | — | | | | | | — | | |

| Debt associated with termination of a maintenance service agreement | | | — | | | | | | — | | | | | | 163 | | |

| Balance at December 31, 2017 | | | 287.0 | | | | | | $ | 3 | | | | | $ | 6,098 | | | | | $ | (769) | | | | | $ | 4,603 | | | | | $ | (1,147) | | | | | $ | 8,788 | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,122 | | | | | | — | | | | | | 2,122 | | |

| Repurchases of common stock | | | (17.5) | | | | | | — | | | | | | — | | | | | | (1,250) | | | | | | — | | | | | | — | | | | | | (1,250) | | |

| Adoption of accounting standard related to equity investments | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (6) | | | | | | 6 | | | | | | — | | |

See Note 1 to the financial statements contained in Part II, Item 8 of this report.

| Other | | | 728 | | | | | | 571 | | |

| Deferred income taxes | | | — | | | | | | 1,763 | | |

| Balance at December 31, 2017 | | | $ | 1,787 | | | | | $ | 8,201 | | | | | $ | (1,147) | | | | | $ | (90) | | | | | $ | 8,751 | |

| Net income | | | — | | | | | | 2,123 | | | | | | — | | | | | | — | | | | | | 2,123 | | |

| Other comprehensive income | | | — | | | | | | — | | | | | | 338 | | | | | | — | | | | | | 338 | | |

| Dividend to UAL | | | (1,249) | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,249) | | |

| Other (b) | | | — | | | | | | — | | | | | | — | | | | | | 2,186 | | | | | | 2,186 | | |

(b) Primarily relates to equity issuances of UAL common stock.

Recent Developments

The novel coronavirus (COVID-19) pandemic, together with the measures implemented or recommended by governmental authorities and private organizations in response to the pandemic, has had an adverse impact that has been material to the Company's business, operating results, financial condition and liquidity.

The Company began experiencing a significant decline in international and domestic demand related to COVID-19 during the first quarter of 2020.

The decline in demand caused a material deterioration in our revenues in 2020, resulting in a net loss of $7.1 billion.

The full extent of the ongoing impact of COVID-19 on the Company's longer-term operational and financial performance will depend on future developments, including those outside our control related to the efficacy and speed of vaccination programs in curbing the spread of the virus, the introduction and spread of new variants of the virus which may be resistant to currently approved vaccines, passenger testing requirements, mask mandates or other restrictions on travel, all of which are highly uncertain and cannot be predicted with certainty

In response to decreased demand, the Company cut, relative to 2019 capacity, approximately 57% of its scheduled capacity for 2020.

In the first quarter of 2021, the Company expects scheduled capacity to be down at least 51% versus the first quarter of 2019.

The Company plans to continue to proactively evaluate and cancel flights on a rolling 60-day basis until it sees signs of a recovery in demand and expects demand to remain suppressed, relative to 2019 levels, until vaccines for COVID-19 are widely distributed and are effective in curbing the spread of the virus.

The management of UAL and United, including the Chief Executive Officer and Chief Financial Officer, performed an evaluation to conclude with reasonable assurance that UAL's and United's disclosure controls and procedures [added: as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended ("Exchange Act")] were designed and operating effectively to report the information each company is required to disclose in the reports they file with the SEC on a timely basis.

Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer of UAL and United have concluded that as of December 31, [removed: 2020,] [added: 2021,] disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting during the Quarter Ended December 31, [removed: 2020][added: 2021]