Item 1. FINANCIAL STATEMENTS.

UNITED AIRLINES HOLDINGS, INC.

STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)

(In millions, except per share amounts)

			Three Months Ended March 31,
			2022						2021
Operating revenue:
Passenger revenue			$	6,348					$	2,316
Cargo			627						497
Other operating revenue			591						408
Total operating revenue			7,566						3,221
Operating expense:
Salaries and related costs			2,787						2,224
Aircraft fuel			2,230						851
Landing fees and other rent			612						519
Depreciation and amortization			611						623
Regional capacity purchase			565						479
Aircraft maintenance materials and outside repairs			407						269
Distribution expenses			226						85
Aircraft rent			61						55
Special charges (credits)			(8)						(1,377)
Other operating expenses			1,451						874
Total operating expense			8,942						4,602
Operating loss			(1,376)						(1,381)
Nonoperating income (expense):
Interest expense			(424)						(353)
Interest capitalized			24						17
Interest income			5						7
Unrealized losses on investments, net			—						(22)
Miscellaneous, net			19						(19)
Total nonoperating expense, net			(376)						(370)
Loss before income tax benefit			(1,752)						(1,751)
Income tax benefit			(375)						(394)
Net loss			$	(1,377)					$	(1,357)
Loss per share, basic and diluted			$	(4.24)					$	(4.29)

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

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UNITED AIRLINES HOLDINGS, INC.

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(In millions)

			Three Months Ended March 31,
			2022						2021
Net loss			$	(1,377)					$	(1,357)
Other comprehensive income (loss), net of tax:
Employee benefit plans			5						14
Investments and other			—						(1)
Total other comprehensive income, net of tax			5						13
Total comprehensive loss, net			$	(1,372)					$	(1,344)

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

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UNITED AIRLINES HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In millions, except shares)

			March 31, 2022						December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents			$	18,468					$	18,283
Short-term investments			211						123
Restricted cash			41						37
Receivables, less allowance for credit losses (2022 — $30; 2021 — $28)			2,062						1,663
Aircraft fuel, spare parts and supplies, less obsolescence allowance (2022 — $561; 2021 — $546)			1,068						983
Prepaid expenses and other			762						745
Total current assets			22,612						21,834
Operating property and equipment:
Flight equipment			39,733						39,584
Other property and equipment			8,941						8,764
Purchase deposits for flight equipment			2,260						2,215
Total operating property and equipment			50,934						50,563
Less — Accumulated depreciation and amortization			(19,053)						(18,489)
Total operating property and equipment, net			31,881						32,074
Operating lease right-of-use assets			4,579						4,645
Other assets:
Goodwill			4,527						4,527
Intangibles, less accumulated amortization (2022 — $1,554; 2021 — $1,544)			2,792						2,803
Restricted cash			214						213
Deferred income taxes			1,032						659
Investments in affiliates and other, less allowance for credit losses (2022 — $619; 2021 — $622)			1,401						1,420
Total other assets			9,966						9,622
Total assets			$	69,038					$	68,175

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UNITED AIRLINES HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In millions, except shares)

			March 31, 2022						December 31, 2021
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable			$	2,966					$	2,562
Accrued salaries and benefits			2,008						2,121
Advance ticket sales			8,904						6,354
Frequent flyer deferred revenue			2,516						2,239
Current maturities of long-term debt			2,994						3,002
Current maturities of other financial liabilities			1,185						834
Current maturities of operating leases			538						556
Current maturities of finance leases			64						76
Other			613						560
Total current liabilities			21,788						18,304
Long-term debt			29,665						30,361
Long-term obligations under operating leases			5,143						5,152
Long-term obligations under finance leases			210						219
Other liabilities and deferred credits:
Frequent flyer deferred revenue			3,901						4,043
Pension liability			1,929						1,920
Postretirement benefit liability			986						1,000
Other financial liabilities			499						863
Other			1,293						1,284
Total other liabilities and deferred credits			8,608						9,110
Commitments and contingencies
Stockholders' equity:
Preferred stock			—						—
Common stock at par, $0.01 par value; authorized 1,000,000,000 shares; outstanding 326,728,861 and 323,810,825 shares at March 31, 2022 and December 31, 2021, respectively			4						4
Additional capital invested			8,953						9,156
Stock held in treasury, at cost			(3,552)						(3,814)
Retained earnings (accumulated deficit)			(844)						625
Accumulated other comprehensive loss			(937)						(942)
Total stockholders' equity			3,624						5,029
Total liabilities and stockholders' equity			$	69,038					$	68,175

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

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UNITED AIRLINES HOLDINGS, INC.

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)

(In millions)

			Three Months Ended March 31,
			2022						2021
Cash Flows from Operating Activities:
Net cash provided by operating activities			$	1,476					$	447
Cash Flows from Investing Activities:
Capital expenditures, net of flight equipment purchase deposit returns			(402)						(444)
Purchases of short-term and other investments			(156)						—
Proceeds from sale of short-term and other investments			62						105
Proceeds from sale of property and equipment			66						11
Other, net			—						(1)
Net cash used in investing activities			(430)						(329)
Cash Flows from Financing Activities:
Proceeds from issuance of debt, net of discounts and fees			—						1,336
Proceeds from equity issuance			—						532
Payments of long-term debt, finance leases and other financing liabilities			(783)						(569)
Other, net			(73)						(21)
Net cash provided by (used in) financing activities			(856)						1,278
Net increase in cash, cash equivalents and restricted cash			190						1,396
Cash, cash equivalents and restricted cash at beginning of the period			18,533						11,742
Cash, cash equivalents and restricted cash at end of the period (a)			$	18,723					$	13,138
Investing and Financing Activities Not Affecting Cash:
Property and equipment acquired through the issuance of debt, finance leases and other			$	—					$	509
Lease modifications and lease conversions			59						22
Right-of-use assets acquired through operating leases			68						180
Equity interest received in consideration for the sale of aircraft			42						—
Warrants received for entering into ancillary business agreements			—						81

(a) The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the consolidated balance sheet:

Current assets:
Cash and cash equivalents			$	18,468					$	12,666
Restricted cash — Current			41						254
Restricted cash — Non-Current			214						218
Total cash, cash equivalents and restricted cash			$	18,723					$	13,138

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

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UNITED AIRLINES HOLDINGS, INC.

STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY (UNAUDITED)

(In millions)

			Common Stock												Additional Capital Invested						Treasury Stock						Retained Earnings (Accumulated Deficit)						Accumulated Other Comprehensive Income (Loss)						Total
			Shares						Amount
Balance at December 31, 2021			323.8						$	4					$	9,156					$	(3,814)					$	625					$	(942)					$	5,029
Net loss			—						—						—						—						(1,377)						—						(1,377)
Other comprehensive income			—						—						—						—						—						5						5
Stock-settled share-based compensation			—						—						38						—						—						—						38
Stock issued for share-based awards, net of shares withheld for tax			2.9						—						(241)						262						(92)						—						(71)
Balance at March 31, 2022			326.7						$	4					$	8,953					$	(3,552)					$	(844)					$	(937)					$	3,624
Balance at December 31, 2020			311.8						$	4					$	8,366					$	(3,897)					$	2,626					$	(1,139)					$	5,960
Net loss			—						—						—						—						(1,357)						—						(1,357)
Other comprehensive income			—						—						—						—						—						13						13
Stock-settled share-based compensation			—						—						32						—						—						—						32
Issuance of common stock			11.0						—						532						—						—						—						532
Warrants issued			—						—						47						—						—						—						47
Stock issued for share-based awards, net of shares withheld for tax			0.8						—						(54)						63						(30)						—						(21)
Balance at March 31, 2021			323.6						$	4					$	8,923					$	(3,834)					$	1,239					$	(1,126)					$	5,206

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

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UNITED AIRLINES, INC.

STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)

(In millions)

			Three Months Ended March 31,
			2022						2021
Operating revenue:
Passenger revenue			$	6,348					$	2,316
Cargo			627						497
Other operating revenue			591						408
Total operating revenue			7,566						3,221
Operating expense:
Salaries and related costs			2,787						2,224
Aircraft fuel			2,230						851
Landing fees and other rent			612						519
Depreciation and amortization			611						623
Regional capacity purchase			565						479
Aircraft maintenance materials and outside repairs			407						269
Distribution expenses			226						85
Aircraft rent			61						55
Special charges (credits)			(8)						(1,377)
Other operating expenses			1,450						874
Total operating expense			8,941						4,602
Operating loss			(1,375)						(1,381)
Nonoperating income (expense):
Interest expense			(424)						(353)
Interest capitalized			24						17
Interest income			5						7
Unrealized losses on investments, net			—						(22)
Miscellaneous, net			19						(19)
Total nonoperating expense, net			(376)						(370)
Loss before income tax benefit			(1,751)						(1,751)
Income tax benefit			(374)						(394)
Net loss			$	(1,377)					$	(1,357)

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

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UNITED AIRLINES, INC.

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(In millions)

			Three Months Ended March 31,
			2022						2021
Net loss			$	(1,377)					$	(1,357)
Other comprehensive income (loss), net of tax:
Employee benefit plans			5						14
Investments and other			—						(1)
Total other comprehensive income, net of tax			5						13
Total comprehensive loss, net			$	(1,372)					$	(1,344)

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

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UNITED AIRLINES, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In millions, except shares)

			March 31, 2022						December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents			$	18,468					$	18,283
Short-term investments			211						123
Restricted cash			41						37
Receivables, less allowance for credit losses (2022 — $30; 2021 — $28)			2,062						1,663
Aircraft fuel, spare parts and supplies, less obsolescence allowance (2022 — $561; 2021 — $546)			1,068						983
Prepaid expenses and other			762						745
Total current assets			22,612						21,834
Operating property and equipment:
Flight equipment			39,733						39,584
Other property and equipment			8,941						8,764
Purchase deposits for flight equipment			2,260						2,215
Total operating property and equipment			50,934						50,563
Less — Accumulated depreciation and amortization			(19,053)						(18,489)
Total operating property and equipment, net			31,881						32,074
Operating lease right-of-use assets			4,579						4,645
Other assets:
Goodwill			4,527						4,527
Intangibles, less accumulated amortization (2022 — $1,554; 2021 — $1,544)			2,792						2,803
Restricted cash			214						213
Deferred income taxes			1,004						631
Investments in affiliates and other, less allowance for credit losses (2022 — $619; 2021 —$622)			1,400						1,420
Total other assets			9,937						9,594
Total assets			$	69,009					$	68,147

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UNITED AIRLINES, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In millions, except shares)

			March 31, 2022						December 31, 2021
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable			$	2,966					$	2,562
Accrued salaries and benefits			2,008						2,121
Advance ticket sales			8,904						6,354
Frequent flyer deferred revenue			2,516						2,239
Current maturities of long-term debt			2,994						3,002
Current maturities of other financial liabilities			1,185						834
Current maturities of operating leases			538						556
Current maturities of finance leases			64						76
Other			615						563
Total current liabilities			21,790						18,307
Long-term debt			29,665						30,361
Long-term obligations under operating leases			5,143						5,152
Long-term obligations under finance leases			210						219
Other liabilities and deferred credits:
Frequent flyer deferred revenue			3,901						4,043
Pension liability			1,929						1,920
Postretirement benefit liability			986						1,000
Other financial liabilities			499						863
Other			1,293						1,284
Total other liabilities and deferred credits			8,608						9,110
Commitments and contingencies
Stockholder's equity:
Common stock at par, $0.01 par value; authorized 1,000 shares; issued and outstanding 1,000 shares at both March 31, 2022 and December 31, 2021			—						—
Additional capital invested			355						317
Retained earnings			1,600						2,977
Accumulated other comprehensive loss			(937)						(942)
Payable to parent			2,575						2,646
Total stockholder's equity			3,593						4,998
Total liabilities and stockholder's equity			$	69,009					$	68,147

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

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UNITED AIRLINES, INC.

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)

(In millions)

			Three Months Ended March 31,
			2022						2021
Cash Flows from Operating Activities:
Net cash provided by operating activities			$	1,405					$	426
Cash Flows from Investing Activities:
Capital expenditures, net of flight equipment purchase deposit returns			(402)						(444)
Purchases of short-term and other investments			(156)						—
Proceeds from sale of short-term and other investments			62						105
Proceeds from sale of property and equipment			66						11
Other, net			—						(1)
Net cash used in investing activities			(430)						(329)
Cash Flows from Financing Activities:
Proceeds from issuance of debt, net of discounts and fees			—						1,336
Proceeds from issuance of parent company stock			—						532
Payments of long-term debt, finance leases and other financing liabilities			(783)						(569)
Other, net			(2)						—
Net cash provided by (used in) financing activities			(785)						1,299
Net increase in cash, cash equivalents and restricted cash			190						1,396
Cash, cash equivalents and restricted cash at beginning of the period			18,533						11,742
Cash, cash equivalents and restricted cash at end of the period (a)			$	18,723					$	13,138
Investing and Financing Activities Not Affecting Cash:
Property and equipment acquired through the issuance of debt, finance leases and other			$	—					$	509
Lease modifications and lease conversions			59						22
Right-of-use assets acquired through operating leases			68						180
Equity interest received in consideration for the sale of aircraft			42						—
Warrants received for entering into ancillary business agreements			—						81

(a) The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the consolidated balance sheet:

Current assets:
Cash and cash equivalents			$	18,468					$	12,666
Restricted cash — Current			41						254
Restricted cash — Non-Current			214						218
Total cash, cash equivalents and restricted cash			$	18,723					$	13,138

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

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UNITED AIRLINES, INC.

STATEMENTS OF CONSOLIDATED STOCKHOLDER'S EQUITY (UNAUDITED)

(In millions)

			Additional Capital Invested						Retained Earnings						Accumulated Other Comprehensive Income (Loss)						Payable to Parent						Total
Balance at December 31, 2021			$	317					$	2,977					$	(942)					$	2,646					$	4,998
Net loss			—						(1,377)						—						—						(1,377)
Other comprehensive loss			—						—						5						—						5
Stock-settled share-based compensation			38						—						—						—						38
Other			—						—						—						(71)						(71)
Balance at March 31, 2022			$	355					$	1,600					$	(937)					$	2,575					$	3,593
Balance at December 31, 2020			$	85					$	4,939					$	(1,139)					$	2,043					$	5,928
Net loss			—						(1,357)						—						—						(1,357)
Other comprehensive income			—						—						13						—						13
Stock-settled share-based compensation			32						—						—						—						32
Impact of UAL common stock issuance			—						—						—						532						532
Other			—						—						—						27						27
Balance at March 31, 2021			$	117					$	3,582					$	(1,126)					$	2,602					$	5,175

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

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UNITED AIRLINES HOLDINGS, INC. AND UNITED AIRLINES, INC.

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

United Airlines Holdings, Inc. (together with its consolidated subsidiaries, "UAL" or the "Company") is a holding company, and its principal, wholly-owned subsidiary is United Airlines, Inc. (together with its consolidated subsidiaries, "United"). This Quarterly Report on Form 10-Q is a combined report of UAL and United, including their respective consolidated financial statements. As UAL consolidates United for financial statement purposes, disclosures that relate to activities of United also apply to UAL, unless otherwise noted. United's operating revenues and operating expenses comprise nearly 100% of UAL's revenues and operating expenses. In addition, United comprises approximately the entire balance of UAL's assets, liabilities and operating cash flows. When appropriate, UAL and United are named specifically for their individual contractual obligations and related disclosures, and any significant differences between the operations and results of UAL and United are separately disclosed and explained. We sometimes use the words "we," "our," "us," and the "Company" in this report for disclosures that relate to all of UAL and United.

The UAL and United unaudited condensed consolidated financial statements shown here have been prepared as required by the U.S. Securities and Exchange Commission (the "SEC"). Some information and footnote disclosures normally included in financial statements that comply with accounting principles generally accepted in the United States ("GAAP") have been condensed or omitted as permitted by the SEC. The financial statements include all adjustments, including normal recurring adjustments and other adjustments, which are considered necessary for a fair presentation of the Company's financial position and results of operations for interim periods presented. The UAL and United financial statements should be read together with the information included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the "2021 Form 10-K"). The Company's quarterly financial data is subject to seasonal fluctuations. Historically its second and third quarter financial results have reflected higher travel demand, and were better than its first and fourth quarter financial results.

NOTE 1 — REVENUE

Revenue by Geography. The table below presents the Company's operating revenue by principal geographic region (as defined by the U.S. Department of Transportation) (in millions):

			Three Months Ended March 31,
			2022						2021
Domestic (U.S. and Canada)			$	5,086					$	2,111
Atlantic			1,089						410
Latin America			909						392
Pacific			482						308
Total			$	7,566					$	3,221

Advance Ticket Sales. All tickets sold at any given point in time have travel dates through the next 12 months. The Company defers amounts related to future travel in its Advance ticket sales liability account. The Company's Advance ticket sales liability also includes credits issued to customers on electronic travel certificates ("ETCs") and future flight credits ("FFCs"), primarily for ticket cancellations, which can be applied towards a purchase of a new ticket. ETCs are valid up to two years from the date of issuance; however, all ETCs due to expire on or before December 31, 2022 have been extended to December 31, 2023. FFCs are valid for 12 months from the original ticket date; however, all FFCs issued on or before December 31, 2022 will be extended for travel dates through December 31, 2023. The Company is unable to estimate the amount of the ETCs and FFCs that will be used within the next 12 months and has classified the entire amount of the Advance ticket sales liability in current liabilities even though some of the ETCs and FFCs could be used after the next 12 months.

The Company estimates the value of Advance tickets sales that will expire unused ("breakage") and recognizes revenue at the scheduled flight date. To determine breakage, the Company uses its historical experience with expired tickets and other facts, such as recent aging trends, program changes and modifications that could affect the ultimate expiration patterns of tickets. Given the uncertainty of travel demand caused by the novel coronavirus ("COVID-19") pandemic, changes in our estimates of ETCs and FFCs that may expire unused could have a significant impact on revenue. Changes in estimates of breakage are recognized prospectively in proportion to the remaining usage of the related tickets.

In the three months ended March 31, 2022 and 2021, the Company recognized approximately $1.9 billion and $0.7 billion, respectively, of passenger revenue for tickets that were included in Advance ticket sales at the beginning of those periods.

Ancillary Fees. The Company charges fees, separately from ticket sales, for certain ancillary services that are directly related to passengers' travel, such as baggage fees, premium seats, inflight amenities and other ticket-related fees. These ancillary fees are

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part of the travel performance obligation and, as such, are recognized as passenger revenue when the travel occurs. The Company recorded $661 million and $308 million of ancillary fees within passenger revenue in the three months ended March 31, 2022 and 2021, respectively.

Frequent Flyer Accounting. The table below presents a roll forward of Frequent flyer deferred revenue (in millions):

			Three Months Ended March 31,
			2022						2021
Total Frequent flyer deferred revenue - beginning balance			$	6,282					$	5,975
Total miles awarded			477						272
Travel miles redeemed			(322)						(123)
Non-travel miles redeemed			(20)						(15)
Total Frequent flyer deferred revenue - ending balance			$	6,417					$	6,109

In the three months ended March 31, 2022 and 2021, the Company recognized, in Other operating revenue, $519 million and $362 million, respectively, related to the marketing, advertising, non-travel miles redeemed (net of related costs) and other travel-related benefits of the mileage revenue associated with our various partner agreements including, but not limited to, our JPMorgan Chase Bank, N.A. co-brand agreement. The portion related to the MileagePlus miles awarded of the total amounts received from our various partner agreements is deferred and presented in the table above as an increase to the frequent flyer liability. We determine the current portion of our frequent flyer liability based on expected redemptions in the next 12 months.

NOTE 2 — LOSS PER SHARE

The computations of UAL's basic and diluted loss per share are set forth below (in millions, except per share amounts):

			Three Months Ended March 31,
			2022						2021
Loss available to common stockholders			$	(1,377)					$	(1,357)
Weighted-average shares outstanding, basic and diluted			325.0						316.6
Loss per share, basic and diluted			$	(4.24)					$	(4.29)
Potentially dilutive securities (a)
Stock warrants			1.5						—
Employee stock awards			0.7						0.7
(a) Weighted-average potentially dilutive securities outstanding excluded from the computation of diluted earnings per share because the securities would have had an antidilutive effect.

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NOTE 3 — ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The table below presents the components of the Company's accumulated other comprehensive income (loss), net of tax ("AOCI") (in millions):

						Pension and Other Postretirement Liabilities						Investments and Other						Deferred Taxes (a)						Total
Balance at December 31, 2021						$	(847)					$	—					$	(95)					$	(942)
Changes in value						8						—						(3)						5
Amounts reclassified to earnings						—						—						—						—
Balance at March 31, 2022						$	(839)					$	—					$	(98)					$	(937)
Balance at December 31, 2020						$	(1,102)					$	2					$	(39)					$	(1,139)
Changes in value						13						(1)						(3)						9
Amounts reclassified to earnings						5			(b)			—						(1)						4
Balance at March 31, 2021						$	(1,084)					$	1					$	(43)					$	(1,126)

(a) Relates primarily to pension and other postretirement benefit liabilities and includes approximately $285 million of deferred income tax expense that will not be recognized in net income until these obligations are fully extinguished. We consider all income sources, including other comprehensive income, in determining the amount of tax benefit allocated to results from operations.

(b) This AOCI component is included in the computation of net periodic pension and other postretirement costs (see Note 5 of this report for additional information).

NOTE 4 — INCOME TAXES

The Company's effective tax rates for the three months ended March 31, 2022 and March 31, 2021 were 21.4% and 22.5%, respectively. The effective tax rate represents a blend of federal, state and foreign taxes and includes the impact of certain nondeductible items. We have historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to income or loss for the reporting period. We have used a discrete effective tax rate method to calculate taxes for the three months ended March 31, 2022. We determined that since small changes in estimated income would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate for the three months ended March 31, 2022.

NOTE 5 — EMPLOYEE BENEFIT PLANS

Defined Benefit Pension and Other Postretirement Benefit Plans. The Company's net periodic benefit cost includes the following components for the three months ended March 31 (in millions):

						Pension Benefits												Other Postretirement Benefits												Affected Line Item in the Statements of Consolidated Operations
						2022						2021						2022						2021
Service cost						$	51					$	60					$	2					$	2					Salaries and related costs
Interest cost						47						46						7						6						Miscellaneous, net
Expected return on plan assets						(78)						(71)						—						—						Miscellaneous, net
Amortization of unrecognized (gain) loss						30						43						(3)						(7)						Miscellaneous, net
Amortization of prior service credit						—						—						(28)						(31)						Miscellaneous, net
Special termination benefits						—						—						—						46						Miscellaneous, net
Other						1						—						—						—						Miscellaneous, net
Total						$	51					$	78					$	(22)					$	16

During the first quarter of 2021, the Company offered special separation benefits in the form of additional subsidies for retiree medical costs for certain U.S.-based front-line employees. The subsidies are in the form of a one-time contribution to a notional Retiree Health Account of $125,000 for full-time employees and $75,000 for part-time employees. As a result, the Company recorded $46 million for those additional benefits in the three months ended March 31, 2021.

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NOTE 6 — FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The table below presents disclosures about the financial assets and liabilities measured at fair value on a recurring basis in UAL's financial statements (in millions):

			March 31, 2022																								December 31, 2021
			Total						Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3
Cash and cash equivalents			$	18,468					$	18,468					$	—					$	—					$	18,283					$	18,283					$	—					$	—
Restricted cash - current			41						41						—						—						37						37						—						—
Restricted cash - non-current			214						214						—						—						213						213						—						—
Short-term investments:
Corporate debt			65						—						65						—						95						—						95						—
Asset-backed securities			144						—						144						—						26						—						26						—
U.S. government and agency notes			2						—						2						—						2						—						2						—
Long-term investments:
Equity securities			228						228												—						229						229						—						—

Investments presented in the table above have the same fair value as their carrying value.

Restricted cash - current — Primarily includes amounts to be used for the payment of fees, principal and interest on senior secured notes and a secured term loan facility (the "MileagePlus Financing") secured by substantially all of the assets of Mileage Plus Holdings, LLC, a direct wholly-owned subsidiary of United.

Restricted cash - non-current — Primarily includes collateral associated with the MileagePlus Financing, collateral for letters of credit and collateral associated with facility leases and other insurance-related obligations.

Short-term investments — The short-term investments shown in the table above are classified as available-for-sale and have remaining maturities of up to one year.

Equity securities — Represents equity and equity-linked securities (such as vested warrants) that make up United's investments in Azul Linhas Aéreas Brasileiras S.A., Clear Secure, Inc. and Archer Aviation Inc.

Other fair value information. The table below presents the carrying values and estimated fair values of financial instruments not presented in the tables above (in millions). Carrying amounts include any related discounts, premiums and issuance costs:

			March 31, 2022																														December 31, 2021
			Carrying Amount						Fair Value																								Carrying Amount						Fair Value
									Total						Level 1						Level 2						Level 3												Total						Level 1						Level 2						Level 3
Long-term debt			$	32,659					$	32,199					$	—					$	27,066					$	5,133					$	33,363					$	34,550					$	—					$	29,088					$	5,462

Fair value of the financial instruments included in the tables above was determined as follows:

Description			Fair Value Methodology
Cash and cash equivalents and Restricted cash (current and non-current)			The carrying amounts of these assets approximate fair value.
Short-term investments and Equity securities			Fair value is based on (a) the trading prices of the investment or similar instruments, (b) an income approach, which uses valuation techniques to convert future amounts into a single present amount based on current market expectations about those future amounts when observable trading prices are not available, or (c) broker quotes obtained by third-party valuation services.
Long-term debt			Fair values were based on either market prices or the discounted amount of future cash flows using our current incremental rate of borrowing for similar liabilities or assets.

Investments in Regional Carriers. United holds investments in several regional carriers that fly or used to fly for the Company as United Express under its capacity purchase agreements. The combined carrying value of the investments was approximately $177 million as of March 31, 2022. United accounts for each investment using the equity method.

Other Investments. United holds equity investments in a number of companies with emerging technologies and sustainable solutions. United also has equity investments in Avianca Group International Limited, a multinational airline holding company,

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and JetSuiteX, Inc., an independent air carrier doing business as JSX. None of these investments have readily determinable fair values. We account for these investments at cost less impairment, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same issuer. As of March 31, 2022, the carrying value of these investments was $278 million.

NOTE 7 — COMMITMENTS AND CONTINGENCIES

Commitments. As of March 31, 2022, United had firm commitments and options to purchase aircraft from The Boeing Company ("Boeing") and Airbus S.A.S. ("Airbus") as presented in the table below:

												Scheduled Aircraft Deliveries
Aircraft Type						Number of Firm Commitments (a)						Last Nine Months of 2022						2023						After 2023
Airbus A321XLR						50						—						—						50
Airbus A321neo						70						—						12						58
Airbus A350						45						—						—						45
Boeing 737 MAX						367						53						109						205
Boeing 787						8						8						—						—
(a) United also has options and purchase rights for additional aircraft.

The aircraft listed in the table above are scheduled for delivery through 2030. The amount and timing of the Company's future capital commitments could change to the extent that: (i) the Company and the aircraft manufacturers, with whom the Company has existing orders for new aircraft, agree to modify the contracts governing those orders; (ii) rights are exercised pursuant to the relevant agreements to modify the timing of deliveries; or (iii) the aircraft manufacturers are unable to deliver in accordance with the terms of those orders. Furthermore, subsequent to March 31, 2022, Boeing notified United that seven Boeing 737 MAX aircraft and two Boeing 787 aircraft scheduled for delivery in 2022, as shown in the table above, are now expected to deliver in 2023.

In the first quarter of 2022, United gave notice of its intent to exercise options to purchase, in 2023, eight Boeing 737 MAX aircraft that are currently leased under sale and leaseback arrangements.

The table below summarizes United's commitments as of March 31, 2022, which include aircraft and related spare engines, aircraft improvements and all non-aircraft capital commitments (in billions):

Last nine months of 2022						$	5.4
2023						7.7
2024						5.0
2025						4.4
2026						3.4
After 2026						8.8
						$	34.7

Guarantees. As of March 31, 2022, United is the guarantor of approximately $2.1 billion in aggregate principal amount of tax-exempt special facilities revenue bonds and interest thereon. These bonds, issued by various airport municipalities, are payable solely from rentals paid under long-term agreements with the respective governing bodies. The leasing arrangements associated with these obligations are accounted for as operating leases recognized on the Company's consolidated balance sheet with the associated expense recorded on a straight-line basis over the expected lease term. All of these bonds are due between 2023 and 2041.

As of March 31, 2022, United is the guarantor of $102 million of aircraft mortgage debt issued by one of United's regional carriers. The aircraft mortgage debt is subject to similar increased cost provisions as described below for the Company's debt, and the Company would potentially be responsible for those costs under the guarantees.

Increased Cost Provisions. In United's financing transactions that include loans in which United is the borrower, United typically agrees to reimburse lenders for any reduced returns with respect to the loans due to any change in capital requirements and, in the case of loans with respect to which the interest rate is based on the London Interbank Offered Rate (LIBOR), for certain other increased costs that the lenders incur in carrying these loans as a result of any change in law, subject, in most cases, to obligations of the lenders to take certain limited steps to mitigate the requirement for, or the amount of, such increased

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costs. At March 31, 2022, the Company had $13.2 billion of floating rate debt with remaining terms of up to approximately 11 years that are subject to these increased cost provisions. In several financing transactions involving loans or leases from non-U.S. entities, with remaining terms of up to approximately 11 years and an aggregate balance of $10.0 billion, the Company bears the risk of any change in tax laws that would subject loan or lease payments thereunder to non-U.S. entities to withholding taxes, subject to customary exclusions.

Credit Card Processing Agreements. The Company has agreements with financial institutions that process customer credit card transactions for the sale of air travel and other services. Under certain of the Company's credit card processing agreements, the financial institutions in certain circumstances have the right to require that the Company maintain a reserve equal to a portion of advance ticket sales that has been processed by that financial institution, but for which the Company has not yet provided the air transportation. Such financial institutions may require additional cash or other collateral reserves to be established or additional withholding of payments related to receivables collected if the Company does not maintain certain minimum levels of unrestricted cash, cash equivalents and short-term investments (collectively, "Unrestricted Liquidity"). The Company's current level of Unrestricted Liquidity is substantially in excess of these minimum levels.

Labor Negotiations. As of March 31, 2022, the Company had approximately 87,400 employees, of whom approximately 85% were represented by various U.S. labor organizations. This total includes employees who elected to voluntarily separate from the Company pursuant to voluntary leave programs and voluntary separation programs offered in 2020 and 2021 but who are still on pre-separation leave of absence with pay and benefits.

NOTE 8 — DEBT

As of March 31, 2022, we had $1.75 billion undrawn and available under our revolving credit facility.

Our debt agreements contain customary terms and conditions as well as various affirmative, negative and financial covenants that, among other things, restrict the ability of the Company and its subsidiaries to incur additional indebtedness and pay dividends or repurchase stock. As of March 31, 2022, UAL and United were in compliance with their respective debt covenants.

The table below presents the Company's contractual principal payments (not including $479 million of unamortized debt discount, premiums and debt issuance costs) at March 31, 2022 under then-outstanding long-term debt agreements (in millions):

Last nine months of 2022						$	2,264
2023						2,853
2024						3,908
2025						3,378
2026						5,134
After 2026						15,601
						$	33,138

NOTE 9 — SPECIAL CHARGES (CREDITS)

For the three months ended March 31, operating and nonoperating special charges (credits) and unrealized (gains) losses on investments in the statements of consolidated operations consisted of the following (in millions):

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			Three Months Ended March 31,
			2022						2021
CARES Act grant			$	—					$	(1,810)
Severance and benefit costs			—						417
(Gains) losses on sale of assets and other special charges			(8)						16
Total operating special charges (credits)			(8)						(1,377)
Nonoperating unrealized losses on investments, net			—						22
Nonoperating debt extinguishment fees			7						—
Nonoperating special termination benefits			—						46
Total nonoperating special charges and unrealized losses on investments, net			7						68
Total operating and nonoperating special charges (credits) and unrealized losses on investments, net			(1)						(1,309)
Income tax expense, net of valuation allowance			—						291
Total operating and nonoperating special charges (credits) and unrealized losses on investments, net of income taxes			$	(1)					$	(1,018)

2022

(Gains) losses on sale of assets and other special charges. During the three months ended March 31, 2022, the Company recorded net gains of $8 million primarily related to sale-leaseback transactions and the sale of aircraft.

Nonoperating debt extinguishment fees. During the three months ended March 31, 2022, the Company recorded $7 million of charges related to the early redemption of $400 million of its outstanding principal amount of the 4.25% senior notes due 2022.

2021

CARES Act grant. During the three months ended March 31, 2021, the Company received approximately $2.6 billion in funding pursuant to a Payroll Support Program agreement under the Coronavirus Aid, Relief, and Economic Security Act (the "PSP2 Agreement"), which included a $753 million unsecured loan. The Company recorded $1.8 billion as grant income and $47 million for the warrants issued to the U.S. Department of the Treasury as part of the PSP2 Agreement, within stockholders' equity, as an offset to the grant income.

Severance and benefit costs. During the three months ended March 31, 2021, the Company recorded $417 million related to pay continuation and benefits-related costs provided to employees who chose to voluntarily separate from the Company. The Company offered, based on employee group, age and completed years of service, pay continuation, health care coverage, and travel benefits. Approximately 4,500 employees elected to voluntarily separate from the Company.

(Gains) losses on sale of assets and other special charges. During the three months ended March 31, 2021, the Company recorded $16 million of net charges, driven by charges for the termination of the lease associated with three floors of its headquarters at the Willis Tower in Chicago and utility charges related to the February winter storms in Texas, partially offset by net gains, primarily on sale-leaseback transactions.

Nonoperating special termination benefits. During the three months ended March 31, 2021, the Company recorded $46 million of special termination benefits in the form of additional subsidies for retiree medical costs for certain U.S.-based front-line employees. The subsidies were in the form of a one-time contribution to a notional Retiree Health Account of $125,000 for full-time employees and $75,000 for part-time employees offered as part of first quarter voluntary leave programs.

Nonoperating unrealized losses on investments, net. During the three months ended March 31, 2021, the Company recorded losses of $22 million primarily for the decrease in the market value of its equity investments.

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