Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This 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 Quarterly Report on Form 10-Q to enhance the understanding of our results of operations, financial condition and cash flows.

EXECUTIVE SUMMARY

Overview

United Airlines Holdings, Inc. (together with its consolidated subsidiaries, "UAL" or the "Company") is a holding company and its 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.

Our shared purpose is "Connecting People. Uniting the World." We have 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 transports people and cargo through its mainline operations, which utilize jet aircraft with at least 126 seats, and regional operations, which utilize smaller aircraft that are operated under contract by United's regional carriers. The Company serves virtually every major market around the world, either directly or through participation in Star Alliance®, the world's largest airline alliance.

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 "Economic and Market Factors", "Governmental Actions" and "Forward-Looking Information" and in Part I, Item 1A. Risk Factors, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the "2023 Form 10-K"). The results presented in this report are not necessarily indicative of future operating results.

Economic and Market Factors

The airline industry is highly competitive, marked by significant competition with respect to routes, fares, schedules (both timing and frequency), services, products, customer service and frequent flyer programs. We, like other companies in our industry, have been subject to these and other industry-specific competitive dynamics. In addition, our operations, supply chain, partners and suppliers have been subject to various global macroeconomic factors. We expect to continue to remain vulnerable to a number of industry-specific and global macroeconomic factors that may cause our actual results of operations to differ from our historical results of operations or current expectations. The economic and market factors and trends that we currently believe are or will be most impactful to our results of operations and financial condition include the following: the execution risks associated with our United Next plan, especially relating to the growth in the scale of our operations as a result of the plan; the impact on the Company of significant operational challenges by third parties on which we rely; rising inflationary pressures; labor market and supply chain constraints and related costs affecting us and our partners; volatile fuel prices; aircraft delivery delays; increasing maintenance expenses; high interest rates; and changes in general economic conditions in the markets in which the Company operates, including an economic downturn leading to a decrease in demand for air travel or fluctuations in foreign currency exchange rates that may impact international travel demand. We continue to monitor the potential favorable or unfavorable impacts of these and other factors on our business, operations, financial condition, future results of operations, liquidity and financial flexibility, which are dependent on future developments, including as a result of those factors discussed in Part I, Item 1A. Risk Factors, of the 2023 Form 10-K. Our future results of operations may be subject to volatility and our growth plans may be delayed, particularly in the short term, due to the impact of the above factors and trends.

Governmental Actions

We operate in complex, highly regulated environments in the U.S., the European Union, the United Kingdom and other regions around the world. Compliance with laws, regulations, administrative practices and other restrictions or legal requirements in the countries in which we do business is onerous and expensive. In addition, changes to existing legal requirements or the

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implementation of new legal requirements and any failure to comply with such legal requirements could negatively impact our business, operations, financial condition, future results of operations, liquidity and financial flexibility by increasing the Company's costs, limiting the Company's ability to offer a product, service or feature to customers, impacting customer demand for the Company's products and services and requiring changes to the Company's supply chain and its business. Legal requirements that we currently believe are or will be most impactful to our results of operations and financial condition include the following: increased oversight by the Federal Aviation Administration ("FAA") of the Company’s operations in connection with its evaluation of the Company; the closure of our flying airspace and termination of other operations due to regional conflicts, including the suspension of our overflying in Russian airspace as a result of the Russia-Ukraine military conflict and interruptions of our flying to Tel Aviv as a result of the Israeli-Hamas military conflict, as well as any escalation of the broader economic consequences of these conflicts beyond their current scope; delays in aircraft certification (especially relating to the 737 MAX 10 aircraft); increased FAA oversight of the aircraft production process; and any legal requirement that would result in a reshaping of the benefits that we provide to our consumers through the co-branded credit cards issued by our partner. Changes in existing applicable legal requirements or new applicable legal requirements as well as the related interpretations and enforcement practices regarding them, create uncertainty about how such laws and regulations will be understood and applied. As a result, the impact of changing and new legal requirements generally cannot be reasonably predicted and those requirements may ultimately require extensive system and operational changes, be difficult to implement, increase our operating costs and require significant capital expenditures.

RESULTS OF OPERATIONS

The following discussion provides an analysis of our results of operations and reasons for material changes therein for the three and six months ended June 30, 2024, as compared to the corresponding period in 2023.

Second Quarter 2024 Compared to Second Quarter 2023

The Company recorded net income of $1.3 billion for the second quarter of 2024 as compared to net income of $1.1 billion for the second quarter of 2023. Significant components of the Company's operating results for the three months ended June 30 are as follows (in millions, except percentage changes):

20242023Increase (Decrease)% Change
Operating revenue$14,986$14,178$8085.7
Operating expense13,05712,6613963.1
Operating income1,9291,51741227.2
Nonoperating expense, net(190)(130)6046.2
Income before income taxes1,7391,38735225.4
Income tax expense41631210433.3
Net income$1,323$1,075$24823.1
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Certain consolidated statistical information for the Company's operations for the three months ended June 30 is as follows:

20242023Increase (Decrease)% Change
Passengers (thousands) (a)44,37541,9452,4305.8
Revenue passenger miles ("RPMs" or "traffic") (millions) (b)67,06463,5413,5235.5
Available seat miles ("ASMs" or "capacity") (millions) (c)79,67873,5386,1408.3
Passenger load factor (d)84.2%86.4%(2.2) pts.N/A
Passenger revenue per available seat mile ("PRASM") (cents)17.1717.68(0.51)(2.9)
Total revenue per ASM ("TRASM") (cents)18.8119.28(0.47)(2.4)
Average yield per revenue passenger mile ("Yield") (cents) (e)20.4020.46(0.06)(0.3)
Cargo revenue ton miles ("CTM") (millions) (f)89076812215.9
Cost per ASM ("CASM") (cents)16.3917.22(0.83)(4.8)
Average price per gallon of fuel, including fuel taxes$2.76$2.66$0.103.8
Fuel gallons consumed (millions)1,1341,062726.8
Employee headcount, as of June 30106,00099,8006,2006.2
(a) The number of revenue passengers measured by each flight segment flown.
(b) The number of scheduled miles flown by revenue passengers.
(c) The number of seats available for passengers multiplied by the number of scheduled miles those seats are flown.
(d) Revenue passenger miles divided by available seat miles.
(e) The average passenger revenue received for each revenue passenger mile flown.
(f) The number of cargo revenue tons transported multiplied by the number of miles flown.

Operating Revenue. The table below shows year-over-year comparisons by type of operating revenue for the three months ended June 30 (in millions, except for percentage changes):

20242023Increase (Decrease)% Change
Passenger$13,680$13,002$6785.2
Cargo4143625214.4
Other892814789.6
Total operating revenue$14,986$14,178$8085.7

The table below presents selected second quarter passenger revenue and operating data, broken out by geographic region, expressed as year-over-year changes:

Increase (decrease) from 2023:
DomesticAtlanticPacificLatinTotal
Passenger revenue (in millions)$256$87$271$64$678
Passenger revenue3.3%2.9%24.3%5.5%5.2%
Average fare per passenger(1.5)%5.9%(2.9)%(8.3)%(0.5)%
Yield(1.2)%7.6%(2.5)%(6.8)%(0.3)%
PRASM(1.9)%2.7%(9.4)%(8.6)%(2.9)%
Passengers4.9%(2.8)%28.0%15.0%5.8%
RPMs4.6%(4.3)%27.5%13.2%5.5%
ASMs5.3%0.2%37.2%15.4%8.3%
Passenger load factor (points)(0.6)(3.8)(5.9)(1.6)(2.2)

Passenger revenue increased $0.7 billion, or 5.2%, in the second quarter of 2024 as compared to the year-ago period, primarily due to an 8.3% increase in capacity and a 5.8% increase in passengers.

Cargo revenue increased $52 million, or 14.4%, in the second quarter of 2024 as compared to the year-ago period, primarily due to higher tonnage and partially offset by lower yields.

Other operating revenue increased $78 million, or 9.6%, in the second quarter of 2024 as compared to the year-ago period, primarily due to an increase in mileage revenue from non-airline partners, including credit card spending with our co-branded

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credit card partner, JPMorgan Chase Bank, N.A., as well as increases in the purchases of United Club memberships, visitor volume and purchases of one-time United Club passes.

Operating Expenses. The table below includes data related to the Company's operating expenses for the three months ended June 30 (in millions, except for percentage changes):

20242023Increase (Decrease)% Change (a)
Salaries and related costs$4,098$3,710$38810.5
Aircraft fuel3,1332,82031311.1
Landing fees and other rent86676510113.2
Aircraft maintenance materials and outside repairs716686304.4
Depreciation and amortization719669507.5
Regional capacity purchase612599132.2
Distribution expenses62648713928.5
Aircraft rent4049(9)(18.4)
Special charges36859(823)NM
Other2,2112,0171949.6
Total operating expenses$13,057$12,661$3963.1
(a) NM - Greater than 100% change or otherwise not meaningful.

Salaries and related costs increased $388 million, or 10.5%, in the second quarter of 2024 as compared to the year-ago period, primarily due to annual wage rate increases across certain employee groups and a 6.2% increase in headcount largely due to increased flight activity.

Aircraft fuel expense increased by $313 million, or 11.1%, in the second quarter of 2024 as compared to the year-ago period, due to increased consumption from higher flight activity and a higher average price per gallon of fuel. The table below presents the significant changes in aircraft fuel cost per gallon in the three months ended June 30 (in millions, except percentage change and per gallon data):

20242023Increase (Decrease)% Change
Fuel expense$3,133$2,820$31311.1%
Fuel consumption (gallons)1,1341,062726.8%
Average price per gallon$2.76$2.66$0.103.8%

Landing fees and other rent increased $101 million, or 13.2%, in the second quarter of 2024 as compared to the year-ago period, primarily due to rate increases at various airports, terminal expansions and other increases in the number of airport gates and higher landed weight volume due to increased flight activity.

Depreciation expense increased $50 million, or 7.5%, in the second quarter of 2024 as compared to the year-ago period, primarily due to the induction of new aircraft and related spare parts, as well as certain aircraft improvements.

Distribution expenses increased $139 million, or 28.5%, in the second quarter of 2024 as compared to the year-ago period, primarily due to higher credit card fees, agency commissions and global distribution fees driven by the overall increase in passenger revenue and $64 million of commissions that were recorded as contra-revenue in 2023.

Details of the Company's special charges include the following for the three months ended June 30 (in millions):

20242023
(Gains) losses on sale of assets and other special charges$36$46
Labor contract ratification bonuses—813
Special charges$36$859

See Note 9 to the financial statements included in Part I, Item 1 of this report for additional information on the Company's special charges.

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Other operating expenses increased $194 million, or 9.6%, in the second quarter of 2024 as compared to the year ago period, primarily as a direct result of the increase in flight activity and onboard passengers as well as the impacts of inflationary pressures. Other operating expenses include expenditures related to information technology projects and services, food and beverage offerings, passenger services, personnel-related costs and ground handling.

Nonoperating Income (Expense*).* The table below shows year-over-year comparisons of the Company's nonoperating income (expense) for the three months ended June 30 (in millions, except for percentage changes):

20242023Increase (Decrease)% Change
Interest expense$(427)$(493)$(66)(13.4)
Interest income190216(26)(12.0)
Interest capitalized60421842.9
Unrealized gains (losses) on investments, net(33)84(117)NM
Miscellaneous, net2021(1)(4.8)
Total$(190)$(130)$6046.2

Interest expense decreased $66 million, or 13.4%, in the second quarter of 2024 as compared to the year-ago period, primarily due to declining debt balances and lower interest rates on refinanced debt.

Interest income decreased $26 million, or 12.0%, in the second quarter of 2024 as compared to the year-ago period, primarily due to lower short-term investments in U.S. government and agency notes, which was partially offset by higher interest rates.

Unrealized losses on investments, net, was $33 million in the second quarter of 2024 as compared to $84 million in unrealized gains in the year-ago period, primarily due to the change in the market value of the Company's investments in equity securities. See Note 6 to the financial statements included in Part I, Item 1 of this report for information related to these equity investments.

Income Taxes. See Note 4 to the financial statements included in Part I, Item 1 of this report for information related to income taxes.

First Six Months 2024 Compared to First Six Months 2023

The Company recorded net income of $1.2 billion in the first six months of 2024 as compared to net income of $0.9 billion in the first six months of 2023. Significant components of the Company's operating results for the six months ended June 30 are as follows (in millions, except percentage changes):

20242023Increase (Decrease)% Change
Operating revenue$27,525$25,607$1,9187.5
Operating expense25,49724,1331,3645.7
Operating income2,0281,47455437.6
Nonoperating expense, net(453)(343)11032.1
Income before income taxes1,5751,13144439.3
Income tax expense37625012650.4
Net income$1,199$881$31836.1
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Certain consolidated statistical information for the Company's operations for the six months ended June 30 is as follows:

20242023Increase (Decrease)% Change
Passengers (thousands)83,70078,7674,9336.3
RPMs (millions)124,491116,0738,4187.3
ASMs (millions)151,346139,25812,0888.7
Passenger load factor82.3%83.4%(1.1) pts.N/A
PRASM (cents)16.5116.71(0.20)(1.2)
TRASM (cents)18.1918.39(0.20)(1.1)
Yield (cents)20.0820.050.030.1
CTM (millions)1,7421,49924316.2
CASM (cents)16.8517.33(0.48)(2.8)
Average price per gallon of fuel, including fuel taxes$2.82$2.98$(0.16)(5.4)
Fuel gallons consumed (millions)2,1592,0141457.2
Employee headcount, as of June 30106,00099,8006,2006.2

Operating Revenue. The table below shows year-over-year comparisons by type of operating revenue for the six months ended June 30 (in millions, except for percentage changes):

20242023Increase (Decrease)% Change
Passenger revenue$24,993$23,276$1,7177.4
Cargo805760455.9
Other operating revenue1,7271,5711569.9
Total operating revenue$27,525$25,607$1,9187.5

The table below presents selected passenger revenue and operating data, broken out by geographic region, expressed as year-over-year changes for the six months ended June 30, 2024 compared to the six months ended June 30, 2023:

Increase (decrease) from 2023:
DomesticAtlanticPacificLatinTotal
Passenger revenue (in millions)$687$153$697$180$1,717
Passenger revenue4.8%3.3%33.6%7.6%7.4%
Average fare per passenger0.1%6.2%(2.8)%(8.1)%1.0%
Yield0.6%8.1%(3.1)%(8.4)%0.1%
PRASM1.8%5.8%(11.6)%(10.6)%(1.2)%
Passengers4.7%(2.7)%37.4%17.1%6.3%
RPMs4.2%(4.4)%37.8%17.3%7.3%
ASMs3.0%(2.3)%51.0%20.3%8.7%
Passenger load factor (points)1.0(1.7)(7.2)(2.1)(1.1)

Passenger revenue increased $1.7 billion, or 7.4%, in the first six months of 2024 as compared to the year-ago period, primarily due to an 8.7% increase in capacity as well as a 6.3% increase in passengers.

Cargo revenue increased $45 million, or 5.9%, in the first six months of 2024 as compared to the year-ago period, primarily due to higher tonnage and partially offset by lower yields.

Other operating revenue increased $156 million, or 9.9%, in the first six months of 2024 as compared to the year-ago period, primarily due to an increase in mileage revenue from non-airline partners, including credit card spending with our co-branded credit card partner, JPMorgan Chase Bank, N.A., as well as increases in the purchases of United Club memberships, visitor volume and purchases of one-time United Club passes.

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Operating Expenses. The table below includes data related to the Company's operating expenses for the six months ended June 30 (in millions, except for percentage changes):

20242023Increase (Decrease)% Change
Salaries and related costs$8,030$7,032$99814.2
Aircraft fuel6,0875,994931.6
Landing fees and other rent1,6701,48218812.7
Aircraft maintenance materials and outside repairs1,4891,3881017.3
Depreciation and amortization1,4271,3241037.8
Regional capacity purchase1,1971,214(17)(1.4)
Distribution expenses1,10689021624.3
Aircraft rent83105(22)(21.0)
Special charges49873(824)NM
Other operating expenses4,3593,83152813.8
Total operating expenses$25,497$24,133$1,3645.7

Salaries and related costs increased $1.0 billion, or 14.2%, in the first six months of 2024 as compared to the year-ago period, primarily due to annual wage rate increases across certain employee groups and a 6.2% increase in headcount largely due to increased flight activity.

Aircraft fuel expense increased $93 million, or 1.6%, in the first six months of 2024 as compared to the year-ago period, primarily due to increased consumption from higher flight activity and partially offset by a lower average price per gallon of fuel. The table below presents the significant changes in aircraft fuel cost per gallon in the six months ended June 30 (in millions, except percentage change and per gallon data):

20242023Increase (Decrease)% Change
Fuel expense$6,087$5,994$931.6%
Fuel consumption (gallons)2,1592,0141457.2%
Average price per gallon$2.82$2.98$(0.16)(5.4)%

Landing fees and other rent increased $188 million, or 12.7%, in the first six months of 2024 as compared to the year-ago period, primarily due to rate increases at various airports, terminal expansions and other increases in the number of airport gates and higher landed weight volume due to increased flight activity.

Aircraft maintenance materials and outside repairs increased $101 million, or 7.3%, in the first six months of 2024 as compared to the year-ago period, primarily due to increased flight activity and increased volumes of engine overhauls, materials use, and component repair costs.

Depreciation expense increased $103 million, or 7.8%, in the first six months of 2024 as compared to the year-ago period, primarily due the induction of new aircraft and related spare parts, as well as certain aircraft improvements.

Distribution expenses increased $216 million, or 24.3%, in the first six months of 2024 as compared to the year-ago period, primarily due to higher credit card fees driven by an increase in passenger revenue and $120 million of commissions that were recorded as contra-revenue in 2023.

Details of the Company's special charges include the following for the three months ended June 30 (in millions):

20242023
(Gains) losses on sale of assets and other special charges$49$60
Labor contract ratification bonuses—813
Special charges$49$873

See Note 9 to the financial statements included in Part I, Item 1 of this report for additional information on the Company's special charges.

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Other operating expenses increased $0.5 billion, or 13.8%, in the first six months of 2024 as compared to the year-ago period, primarily as a direct result of the increase in flight activity and onboard passengers, as well as the impacts of inflationary pressures. Other operating expenses include expenditures related to information technology projects and services, food and beverage offerings, passenger services, personnel-related costs and ground handling.

Nonoperating Income (Expense). The following table illustrates the year-over-year dollar and percentage changes in the Company's nonoperating income (expense) for the six months ended June 30 (in millions, except for percentage changes):

20242023Increase (Decrease)% Change
Interest expense$(881)$(979)$(98)(10.0)
Interest income367386(19)(4.9)
Interest capitalized121804151.3
Unrealized gains (losses) on investments, net(70)108(178)NM
Miscellaneous, net1062(52)(83.9)
Total$(453)$(343)$11032.1

Interest expense decreased $98 million, or 10.0%, in the first six months of 2024 as compared to the year-ago period, primarily due to declining debt balances and lower interest rates on refinanced debt.

Interest capitalized increased $41 million, or 51.3%, in the first six months of 2024 as compared to the year-ago period, primarily due to an increase in accumulated spend on capital projects and an increase in aircraft purchase deposit balances.

Unrealized losses on investments, net, was $70 million in the first six months of 2024 as compared to $108 million in unrealized gains in the year-ago period, primarily due to the change in the market value of the Company's investments in equity securities. See Note 6 to the financial statements included in Part I, Item 1 of this report for information related to these equity investments.

Miscellaneous, net changed by $52 million in the first six months of 2024 as compared to the year-ago period, primarily due to debt extinguishment and modification fees related to the refinancing of the Company's 2021 term loans, higher foreign exchange losses and a decrease in the benefit from the Company's net periodic benefit cost of its pension and postretirement benefit plans.

Income Taxes. See Note 4 to the financial statements included in Part I, Item 1 of this report for information related to income taxes.

LIQUIDITY AND CAPITAL RESOURCES

Current Liquidity

As of June 30, 2024, the Company had $15.2 billion in unrestricted cash, cash equivalents and short-term investments, as compared to $14.4 billion at December 31, 2023. We believe that our existing cash, cash equivalents and short-term investments, together with cash generated from operations, will be sufficient to satisfy our anticipated liquidity needs for the next twelve months, and we expect to meet our long-term liquidity needs with our anticipated access to the capital markets and projected cash from operations. We regularly assess our anticipated working capital needs, debt and leverage levels, debt maturities, capital expenditure requirements (including in connection with our capital commitments for our firm order aircraft) and future investments or acquisitions in order to maximize shareholder return, efficiently finance our ongoing operations and maintain flexibility for future strategic transactions. We also regularly evaluate our liquidity and capital structure to ensure financial risks, liquidity access and cost of capital are efficiently managed.

On April 16, 2024, the Company increased its revolving credit facility (the "Revolving Credit Facility") loan commitments by $100 million for a total amount of $2.965 billion as of June 30, 2024, of which $2.8 billion expires February 15, 2029 and $165 million expires April 21, 2025. The Revolving Credit Facility is secured by certain route authorities and airport slots and gates. No borrowings were outstanding under the Revolving Credit Facility as of June 30, 2024.

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We have a significant amount of fixed obligations, including debt, leases of aircraft, airport and other facilities, and pension funding obligations. As of June 30, 2024, the Company had approximately $34.3 billion of debt, finance lease, operating lease and other financial liabilities, including $5.5 billion that will become due in the next 12 months. In addition, we have substantial noncancelable commitments for capital expenditures, including the acquisition of certain new aircraft and related spare engines. 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 June 30, 2024, UAL and United were in compliance with their respective debt covenants. As of June 30, 2024, a substantial portion of the Company's assets, principally aircraft and certain related assets, its loyalty program, certain route authorities and airport slots and gates, was pledged under various loan and other agreements. See Note 8 to the financial statements included in Part I, Item 1 of this report for additional information on aircraft financing and other debt instruments.

On July 2, 2024, the Company voluntarily prepaid in full the outstanding principal balance of the term loan facility of our MileagePlus term loan, which was $1.8 billion as of June 30, 2024, in addition to all accrued and unpaid interest and fees under the term loan facility and terminated all commitments thereunder.

The Company has backstop financing commitments available from certain of its aircraft manufacturers for a limited number of its future aircraft deliveries, subject to certain customary conditions. See Note 7 to the financial statements included in Part I, Item 1 of this report for additional information on commitments.

As of June 30, 2024, United had firm commitments to purchase aircraft from The Boeing Company ("Boeing") and Airbus S.A.S. ("Airbus") as presented in the table below:

Contractual Aircraft Deliveries (b)Expected Aircraft Deliveries (c)
Aircraft TypeNumber of Firm Commitments (a)Last Six Months of 20242025After 2025Last Six Months of 20242025After 2025
787150818124411135
737 MAX 83333——1617—
737 MAX 914333407094490
737 MAX 10167——167——167
A321neo118182278182278
A321XLR50——50——50
A35045——45——45
(a) United also has options and purchase rights for additional aircraft.
(b) Contractual aircraft deliveries reflect an agreement United entered into with Airbus on July 16, 2024 to adjust delivery schedules for the A321neo ("Airbus Agreement").
(c) Expected aircraft deliveries reflect adjustments to contractual delivery schedules as communicated by Boeing and Airbus or estimated by United. However, aircraft deliveries are subject to a number of variables, as further described in Part I, Item 1A. Risk Factors of the 2023 Form 10-K, and we cannot guarantee delivery of any particular aircraft at any specific time notwithstanding firm purchase commitments.

The aircraft listed in the table above are scheduled for delivery through 2033. 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 cancel deliveries or modify the timing of deliveries; or (iii) the aircraft manufacturers are unable to deliver in accordance with the terms of those orders.

On April 14, 2024, the Company entered into confidential arrangements with Boeing with respect to compensation for financial damages incurred in the first quarter of 2024 due to the FAA grounding of the Boeing 737 MAX 9 aircraft, and a confidential agreement to accommodate certification delays for the Boeing 737 MAX 10 aircraft. The compensation provided by Boeing for the grounding damages and in connection with rescheduling deliveries was in the form of credit memos for use on future purchases from Boeing. The Company is accounting for these arrangements as a reduction to the cost basis of the previously-delivered Boeing 737 MAX 9 aircraft and future deliveries of the Boeing 737 MAX 9 and Boeing 737 MAX 10 aircraft, which will reduce future depreciation expense associated with these aircraft.

The table below summarizes United's firm commitments as of June 30, 2024, which include aircraft and related spare engines, aircraft improvements and non-aircraft capital commitments. Aircraft commitments are based on contractual scheduled aircraft deliveries without any adjustments communicated by Boeing and Airbus or estimated by United but reflecting the Airbus Agreement and the April 14, 2024 arrangements between United and Boeing.

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(in billions)
Last six months of 2024$5.6
20256.6
20265.5
20274.7
20287.2
After 202827.8
$57.4

In the second quarter of 2024, the Company signed letters of intent to enter into future leasing arrangements with major aircraft leasing companies for 40 Airbus A321neo aircraft with expected deliveries in 2026 and 2027. In July 2024, the Company entered into definitive agreements to lease 35 of the 40 Airbus A321neo aircraft, which will commence between 2026 and 2027. As of the filing date of this report, we have leases of approximately $3.7 billion for several mainline aircraft, regional aircraft under CPAs, airport facility and office space leases, none of which had commenced as of such date. These leases will commence between 2024 and 2038 with lease terms of up to 12 years.

Sources and Uses of Cash

The following table summarizes our cash flows for the six months ended June 30 (in millions):

20242023Increase (Decrease)
Total cash provided by (used in):
Operating activities$5,723$6,941$(1,218)
Investing activities1,575(3,427)(5,002)
Financing activities(2,518)(1,054)1,464
Net increase in cash, cash equivalents and restricted cash$4,780$2,460$2,320

Operating Activities. Cash flows provided by operations decreased $1.2 billion in the first six months of 2024 as compared to the year-ago period, primarily due to changes in various working capital items, including higher payments for employee wages and incentives in 2024 as compared to 2023.

Investing Activities. Cash flows used in investing activities decreased $5.0 billion in the first six months of 2024 as compared to the year-ago period, primarily due to a decrease in the purchase of short-term and other investments.

Financing Activities. Significant financing events in the six months ended June 30, 2024 were as follows:

Debt, Finance Lease and Other Financing Liability Principal Payments. During the six months ended June 30, 2024, the Company made payments for debt, finance leases, and other financing liabilities of $6.2 billion, including the $3.9 billion prepayment of its 2021 term loan.

Debt and Other Financing Liabilities Issuances. The Company borrowed the entire term loan commitment available under the new term loan facility in an amount equal to $2.5 billion. Also, the Company borrowed $895 million for aircraft financings.

See Note 8 to the financial statements included in Part I, Item 1 of this report for additional information on these financing activities.

Credit Ratings. As of the filing date of this report, UAL and United had the following corporate credit ratings:

S&PMoody'sFitch
UALBB-Ba2BB-
UnitedBB-*BB-
*The credit agency does not issue corporate credit ratings for subsidiary entities.

These credit ratings are below investment grade levels; however, the Company has been able to secure financing with investment grade credit ratings for certain enhanced equipment trust certificates, term loans and secured bond financings.

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Downgrades from these rating levels, among other things, could restrict the availability, or increase the cost, of future financing for the Company as well as affect the fair market value of existing debt. A rating reflects only the view of a rating agency and is not a recommendation to buy, sell or hold securities. Ratings can be revised upward or downward at any time by a rating agency if such rating agency decides that circumstances warrant such a change.

Commitments, Contingencies and Liquidity Matters. As described in the 2023 Form 10-K, the Company's liquidity may be adversely impacted by a variety of factors, including, but not limited to, pension funding obligations, reserve requirements associated with credit card processing agreements, guarantees, commitments and contingencies.

See the 2023 Form 10-K and Notes 6, 7 and 8 to the financial statements contained in Part I, Item 1 of this report for additional information.

CRITICAL ACCOUNTING POLICIES

See "Critical Accounting Policies" in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in the 2023 Form 10-K.

FORWARD-LOOKING INFORMATION

This report contains certain "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including in Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere, relating to, among other things, goals, plans and projections regarding the Company's financial position, results of operations, market position, capacity, fleet plan strategy, product development, ESG-related strategy initiatives and business strategy. Such forward-looking statements are based on historical performance and current expectations, estimates, forecasts and projections about the Company's future financial results, goals, plans, commitments, strategies and objectives and involve inherent risks, assumptions and uncertainties, known or unknown, including internal or external factors that could delay, divert or change any of them, that are difficult to predict, may be beyond the Company's control and could cause the Company's future financial results, goals, plans, commitments, strategies and objectives to differ materially from those expressed in, or implied by, the statements. Words such as "should," "could," "would," "will," "may," "expects," "plans," "intends," "anticipates," "indicates," "remains," "believes," "estimates," "projects," "forecast," "guidance," "outlook," "goals," "targets," "pledge," "confident," "optimistic," "dedicated," "positioned," "on track" and other words and terms of similar meaning and expression are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. All statements, other than those that relate solely to historical facts, are forward-looking statements.

Additionally, forward-looking statements include conditional statements and statements that identify uncertainties or trends, discuss the possible future effects of known trends or uncertainties, or that indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this report are based upon information available to us on the date of this report. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law or regulation.

Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: execution risks associated with our strategic operating plan; changes in our fleet and 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 aircraft orders on less favorable terms, as well as any inability to accept or integrate new aircraft into our fleet as planned, including as a result of any mandatory groundings of aircraft; any failure to effectively manage, and receive anticipated benefits and returns from, acquisitions, divestitures, investments, joint ventures and other portfolio actions, or related exposures to unknown liabilities or other issues or underperformance as compared to our expectations; adverse publicity, harm to our brand, reduced travel demand, potential tort liability and operational restrictions as a result of an accident, catastrophe or incident involving us, our regional carriers, our codeshare partners or another airline; the highly competitive nature of the global airline industry and susceptibility of the industry to price discounting and changes in capacity, including as a result of alliances, joint business arrangements or other consolidations; our reliance on a limited number of suppliers to source a majority of our aircraft, engines and certain parts, and the impact of any failure to obtain timely deliveries, additional equipment or support from any of these suppliers; disruptions to our regional network and United Express flights provided by third-party regional carriers; unfavorable economic and political conditions in the United States and globally; reliance on third-party service providers and the impact of any significant failure of these parties to perform as expected, or interruptions in our relationships with these providers or their provision of services; extended interruptions or disruptions in service at major airports where we operate and space, facility and infrastructure constraints at our hubs or other airports; geopolitical conflict, terrorist attacks or security events (including the suspension of our overflying in Russian airspace as a result of the Russia-Ukraine military conflict and interruptions of our flying to Tel Aviv as a result of the Israeli-Hamas military conflict, as well as

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any escalation of the broader economic consequences of these conflicts beyond their current scope); any damage to our reputation or brand image; our reliance on technology and automated systems to operate our business and the impact of any significant failure or disruption of, or failure to effectively integrate and implement, these technologies or systems; increasing privacy, data security and cybersecurity obligations or a significant data breach; increased use of social media platforms by us, our employees and others; the impacts of union disputes, employee strikes or slowdowns, and other labor-related disruptions or regulatory compliance costs on our operations or financial performance; any failure to attract, train or retain skilled personnel, including our senior management team or other key employees; the monetary and operational costs of compliance with extensive government regulation of the airline industry; current or future litigation and regulatory actions, or failure to comply with the terms of any settlement, order or agreement relating to these actions; costs, liabilities and risks associated with environmental regulation and climate change, and any failure to achieve or demonstrate progress towards our climate goals; high and/or volatile fuel prices or significant disruptions in the supply of aircraft fuel; the impacts of our significant amount of financial leverage from fixed obligations and the impacts of insufficient liquidity on our financial condition and business; failure to comply with financial and other covenants governing our debt, including our MileagePlus® financing agreements; limitations on our ability to use our net operating loss carryforwards and certain other tax attributes to offset future taxable income for U.S. federal income tax purposes; our failure to realize the full value of our intangible assets or our long-lived assets, causing us to record impairments; fluctuations in the price of our common stock; the impacts of seasonality and other factors associated with the airline industry; increases in insurance costs or inadequate insurance coverage; and other risks and uncertainties set forth under Part I, Item 1A. Risk Factors, of the 2023 Form 10-K, and under "Economic and Market Factors" and "Governmental Actions" in Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, of this report, as well as other risks and uncertainties set forth from time to time in the reports we file with the SEC.

The foregoing list sets forth many, but not all, of the factors that could impact our ability to achieve results described in any forward-looking statements. Investors should understand that it is not possible to predict or identify all such factors and should not consider this list to be a complete statement of all potential risks and uncertainties. It is routine for our internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections, beliefs and assumptions upon which we base our expectations may change. For instance, we regularly monitor future demand and booking trends and adjust capacity, as needed. As such, our actual flown capacity may differ materially from currently published flight schedules or current estimations.

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