SEC Filing - United Airlines Holdings, Inc.

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ual-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


			FORM			10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to


Commission File Number	Exact Name of Registrant as Specified in its Charter, Principal Executive Office Address and Telephone Number					State of Incorporation	I.R.S. Employer Identification No.
001-06033	United Airlines Holdings, Inc.					Delaware	36-2675207
	233 South Wacker Drive,		Chicago,	Illinois	60606
	(872)	825-4000

001-10323	United Airlines, Inc.					Delaware	74-2099724
	233 South Wacker Drive,		Chicago,	Illinois	60606
	(872)	825-4000

Securities registered pursuant to Section 12(b) of the Act

Registrant

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

United Airlines Holdings, Inc.

Common Stock, $0.01 par value

UAL

The Nasdaq Stock Market LLC

United Airlines Holdings, Inc.

Preferred Stock Purchase Rights

None

The Nasdaq Stock Market LLC

United Airlines, Inc.

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

United Airlines Holdings, Inc.

Yes

☒

☐

United Airlines, Inc.

Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

United Airlines Holdings, Inc.

Yes

☒

☐

United Airlines, Inc.

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

United Airlines Holdings, Inc.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

United Airlines, Inc.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


United Airlines Holdings, Inc.						☐
United Airlines, Inc.						☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

United Airlines Holdings, Inc.

Yes

☐

☒

United Airlines, Inc.

Yes

☐

☒

The number of shares outstanding of each of the issuer's classes of common stock as of April 14, 2022 is shown below:


United Airlines Holdings, Inc.	326,730,982	shares of common stock ($0.01 par value)
United Airlines, Inc.	1,000	shares of common stock ($0.01 par value) (100% owned by United Airlines Holdings, Inc.)

OMISSION OF CERTAIN INFORMATION

This combined Quarterly Report on Form 10-Q is separately filed by United Airlines Holdings, Inc. and United Airlines, Inc. United Airlines, Inc. meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format allowed under that General Instruction.

United Airlines Holdings, Inc.

United Airlines, Inc.

Quarterly Report on Form 10-Q

For the Quarterly Period Ended March 31, 2022

Table of Contents


			Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
United Airlines Holdings, Inc.:
Statements of Consolidated Operations			3
Statements of Consolidated Comprehensive Income (Loss)			4
Consolidated Balance Sheets			5
Condensed Statements of Consolidated Cash Flows			7
Statement of Consolidated Stockholders' Equity			8

United Airlines, Inc.:
Statements of Consolidated Operations			9
Statements of Consolidated Comprehensive Income (Loss)			10
Consolidated Balance Sheets			11
Condensed Statements of Consolidated Cash Flows			13
Statement of Consolidated Stockholder's Equity			14

Combined Notes to Condensed Consolidated Financial Statements (United Airlines Holdings, Inc. and United Airlines, Inc.)			15

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			22
Item 3. Quantitative and Qualitative Disclosures About Market Risk			31
Item 4. Controls and Procedures			31

PART II. OTHER INFORMATION

Item 1. Legal Proceedings			31
Item 1A. Risk Factors			31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			31
Item 6. Exhibits			32
Exhibit Index			32

Signatures			33


Table of Contents

PART I. FINANCIAL INFORMATION

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.


Table of Contents

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.


Table of Contents

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

(continued on next page)


Table of Contents

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.


Table of Contents

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.


Table of Contents

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.


Table of Contents

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.


Table of Contents

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.


Table of Contents

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

(continued on next page)


Table of Contents

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.


Table of Contents

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.


Table of Contents

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.


Table of Contents

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)