SEC Filing - United Airlines Holdings, Inc.

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ual-20230331

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, 2023


☐			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 13, 2023 is shown below:


United Airlines Holdings, Inc.	327,968,872	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, 2023

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			23
Item 3. Quantitative and Qualitative Disclosures About Market Risk			32
Item 4. Controls and Procedures			32

PART II. OTHER INFORMATION

Item 1. Legal Proceedings			32
Item 1A. Risk Factors			32
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			32
Item 6. Exhibits			33
Exhibit Index			33

Signatures			34


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,
	2023		2022
Operating revenue:
Passenger revenue	$	10,274	$	6,348
Cargo	398		627
Other operating revenue	757		591
Total operating revenue	11,429		7,566

Operating expense:
Salaries and related costs	3,322		2,787
Aircraft fuel	3,174		2,230
Landing fees and other rent	717		612
Aircraft maintenance materials and outside repairs	702		407
Depreciation and amortization	655		611
Regional capacity purchase	615		565
Distribution expenses	403		226
Aircraft rent	56		61
Special charges (credits)	14		(8)
Other operating expenses	1,814		1,451
Total operating expense	11,472		8,942
Operating loss	(43)		(1,376)

Nonoperating income (expense):
Interest expense	(486)		(424)
Interest income	170		5
Interest capitalized	38		24
Unrealized gains on investments, net	24		—
Miscellaneous, net	41		19
Total nonoperating expense, net	(213)		(376)
Loss before income tax benefit	(256)		(1,752)
Income tax benefit	(62)		(375)
Net loss	$	(194)	$	(1,377)

Loss per share, basic and diluted	$	(0.59)	$	(4.24)

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,
	2023		2022
Net loss	$	(194)	$	(1,377)

Other comprehensive income (loss), net of tax:
Employee benefit plans	(35)		5
Investments and other	21		—
Total other comprehensive income (loss), net of tax	(14)		5

Total comprehensive loss, net	$	(208)	$	(1,372)

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, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	7,634	$	7,166
Short-term investments	9,522		9,248
Restricted cash	173		45
Receivables, less allowance for credit losses (2023 — $12; 2022 — $11)	2,274		1,801
Aircraft fuel, spare parts and supplies, less obsolescence allowance (2023 — $629; 2022 — $610)	1,196		1,109
Prepaid expenses and other	787		689
Total current assets	21,586		20,058
Operating property and equipment:
Flight equipment	44,298		42,775
Other property and equipment	9,590		9,334
Purchase deposits for flight equipment	2,993		2,820
Total operating property and equipment	56,881		54,929
Less — Accumulated depreciation and amortization	(21,044)		(20,481)
Total operating property and equipment, net	35,837		34,448

Operating lease right-of-use assets	4,019		3,889

Other assets:
Goodwill	4,527		4,527
Intangibles, less accumulated amortization (2023 — $1,468; 2022 — $1,472)	2,753		2,762
Restricted cash	225		210
Deferred income taxes	159		91
Investments in affiliates and other, less allowance for credit losses (2023 — $17; 2022 — $21)	1,311		1,373
Total other assets	8,975		8,963
Total assets	$	70,417	$	67,358

(continued on next page)


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UNITED AIRLINES HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In millions, except shares)


	March 31, 2023		December 31, 2022
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	3,858	$	3,395
Accrued salaries and benefits	1,970		1,971
Advance ticket sales	10,158		7,555
Frequent flyer deferred revenue	2,832		2,693
Current maturities of long-term debt	3,206		2,911
Current maturities of operating leases	610		561
Current maturities of finance leases	75		104
Current maturities of other financial liabilities	29		23
Other	897		779
Total current liabilities	23,635		19,992

Long-term debt	27,460		28,283
Long-term obligations under operating leases	4,569		4,459
Long-term obligations under finance leases	105		115

Other liabilities and deferred credits:
Frequent flyer deferred revenue	4,028		3,982
Pension liability	778		747
Postretirement benefit liability	658		671
Other financial liabilities	1,130		844
Other	1,386		1,369
Total other liabilities and deferred credits	7,980		7,613
Commitments and contingencies
Stockholders' equity:
Preferred stock	—		—
Common stock at par, $0.01 par value; authorized 1,000,000,000 shares; outstanding 327,968,615 and 326,930,321 shares at March 31, 2023 and December 31, 2022, respectively	4		4
Additional capital invested	8,926		8,986
Stock held in treasury, at cost	(3,443)		(3,534)
Retained earnings	1,020		1,265
Accumulated other comprehensive income	161		175
Total stockholders' equity	6,668		6,896
Total liabilities and stockholders' equity	$	70,417	$	67,358

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,
	2023		2022
Cash Flows from Operating Activities:
Net cash provided by operating activities	$	3,142	$	1,476

Cash Flows from Investing Activities:
Capital expenditures, net of flight equipment purchase deposit returns	(1,843)		(402)
Purchases of short-term and other investments	(4,193)		(156)
Proceeds from sale of short-term and other investments	4,061		62
Proceeds from sale of property and equipment	1		66
Other, net	6		—
Net cash used in investing activities	(1,968)		(430)

Cash Flows from Financing Activities:
Proceeds from issuance of debt and other financing liabilities, net of discounts and fees	288		—
Payments of long-term debt, finance leases and other financing liabilities	(820)		(783)
Other, net	(31)		(73)
Net cash used in financing activities	(563)		(856)
Net increase in cash, cash equivalents and restricted cash	611		190
Cash, cash equivalents and restricted cash at beginning of the period	7,421		18,533
Cash, cash equivalents and restricted cash at end of the period (a)	$	8,032	$	18,723

Investing and Financing Activities Not Affecting Cash:
Property and equipment acquired through the issuance of debt, finance leases and other	$	200	$	—
Right-of-use assets acquired through operating leases	295		68
Lease modifications and lease conversions	23		59
Investment interests received in exchange for goods and services	21		42

(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	$	7,634	$	18,468
Restricted cash — Current	173		41
Restricted cash — Non-Current	225		214
Total cash, cash equivalents and restricted cash	$	8,032	$	18,723

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, 2022	326.9	$	4	$	8,986	$	(3,534)	$	1,265	$	175	$	6,896
Net loss	—	—		—		—		(194)		—		(194)
Other comprehensive loss	—	—		—		—		—		(14)		(14)
Stock-settled share-based compensation	—	—		11		—		—		—		11
Stock issued for share-based awards, net of shares withheld for tax	1.1	—		(71)		91		(51)		—		(31)
Balance at March 31, 2023	328.0	$	4	$	8,926	$	(3,443)	$	1,020	$	161	$	6,668








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

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,
	2023		2022
Operating revenue:
Passenger revenue	$	10,274	$	6,348
Cargo	398		627
Other operating revenue	757		591
Total operating revenue	11,429		7,566

Operating expense:
Salaries and related costs	3,322		2,787
Aircraft fuel	3,174		2,230
Landing fees and other rent	717		612
Aircraft maintenance materials and outside repairs	702		407
Depreciation and amortization	655		611
Regional capacity purchase	615		565
Distribution expenses	403		226
Aircraft rent	56		61
Special charges (credits)	14		(8)
Other operating expenses	1,814		1,450
Total operating expense	11,472		8,941
Operating loss	(43)		(1,375)

Nonoperating income (expense):
Interest expense	(486)		(424)
Interest income	170		5
Interest capitalized	38		24
Unrealized gains on investments, net	24		—
Miscellaneous, net	41		19
Total nonoperating expense, net	(213)		(376)
Loss before income tax benefit	(256)		(1,751)
Income tax benefit	(62)		(374)
Net loss	$	(194)	$	(1,377)

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,
	2023		2022
Net loss	$	(194)	$	(1,377)

Other comprehensive income (loss), net of tax:
Employee benefit plans	(35)		5
Investments and other	21		—
Total other comprehensive income (loss), net of tax	(14)		5

Total comprehensive loss, net	$	(208)	$	(1,372)

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, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	7,634	$	7,166
Short-term investments	9,522		9,248
Restricted cash	173		45
Receivables, less allowance for credit losses (2023 — $12; 2022 — $11)	2,274		1,801
Aircraft fuel, spare parts and supplies, less obsolescence allowance (2023 — $629; 2022 — $610)	1,196		1,109
Prepaid expenses and other	787		689
Total current assets	21,586		20,058
Operating property and equipment:
Flight equipment	44,298		42,775
Other property and equipment	9,590		9,334
Purchase deposits for flight equipment	2,993		2,820
Total operating property and equipment	56,881		54,929
Less — Accumulated depreciation and amortization	(21,044)		(20,481)
Total operating property and equipment, net	35,837		34,448

Operating lease right-of-use assets	4,019		3,889

Other assets:
Goodwill	4,527		4,527
Intangibles, less accumulated amortization (2023 — $1,468; 2022 — $1,472)	2,753		2,762
Restricted cash	225		210
Deferred income taxes	130		62
Investments in affiliates and other, less allowance for credit losses (2023 — $17; 2022 —$21)	1,311		1,373
Total other assets	8,946		8,934
Total assets	$	70,388	$	67,329

(continued on next page)


Table of Contents

UNITED AIRLINES, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In millions, except shares)


	March 31, 2023		December 31, 2022
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable	$	3,858	$	3,395
Accrued salaries and benefits	1,970		1,971
Advance ticket sales	10,158		7,555
Frequent flyer deferred revenue	2,832		2,693
Current maturities of long-term debt	3,206		2,911
Current maturities of operating leases	610		561
Current maturities of finance leases	75		104
Current maturities of other financial liabilities	29		23
Other	900		781
Total current liabilities	23,638		19,994

Long-term debt	27,460		28,283
Long-term obligations under operating leases	4,569		4,459
Long-term obligations under finance leases	105		115

Other liabilities and deferred credits:
Frequent flyer deferred revenue	4,028		3,982
Pension liability	778		747
Postretirement benefit liability	658		671
Other financial liabilities	1,130		844
Other	1,386		1,369
Total other liabilities and deferred credits	7,980		7,613
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, 2023 and December 31, 2022	—		—
Additional capital invested	414		403
Retained earnings	3,522		3,716
Accumulated other comprehensive income	161		175
Payable to parent	2,539		2,571
Total stockholder's equity	6,636		6,865
Total liabilities and stockholder's equity	$	70,388	$	67,329

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,
	2023		2022

Cash Flows from Operating Activities:
Net cash provided by operating activities	$	3,111	$	1,405

Cash Flows from Investing Activities:
Capital expenditures, net of flight equipment purchase deposit returns	(1,843)		(402)
Purchases of short-term and other investments	(4,193)		(156)
Proceeds from sale of short-term and other investments	4,061		62
Proceeds from sale of property and equipment	1		66
Other, net	6		—
Net cash used in investing activities	(1,968)		(430)

Cash Flows from Financing Activities:
Proceeds from issuance of debt and other financing liabilities, net of discounts and fees	288		—
Payments of long-term debt, finance leases and other financing liabilities	(820)		(783)
Other, net	—		(2)
Net cash used in financing activities	(532)		(785)
Net increase in cash, cash equivalents and restricted cash	611		190
Cash, cash equivalents and restricted cash at beginning of the period	7,421		18,533
Cash, cash equivalents and restricted cash at end of the period (a)	$	8,032	$	18,723

Investing and Financing Activities Not Affecting Cash:
Property and equipment acquired through the issuance of debt, finance leases and other	$	200	$	—
Right-of-use assets acquired through operating leases	295		68
Lease modifications and lease conversions	23		59
Investment interests received in exchange for goods and services	21		42

(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	$	7,634	$	18,468
Restricted cash — Current	173		41
Restricted cash — Non-Current	225		214
Total cash, cash equivalents and restricted cash	$	8,032	$	18,723

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, 2022	$	403	$	3,716	$	175	$	2,571	$	6,865
Net loss	—		(194)		—		—		(194)
Other comprehensive loss	—		—		(14)		—		(14)
Stock-settled share-based compensation	11		—		—		—		11
Other	—		—		—		(32)		(32)
Balance at March 31, 2023	$	414	$	3,522	$	161	$	2,539	$	6,636








Balance at December 31, 2021	$	317	$	2,977	$	(942)	$	2,646	$	4,998
Net loss	—		(1,377)		—		—		(1,377)
Other comprehensive income	—		—		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

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 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, 2022 (the "2022 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,
	2023		2022
Domestic (U.S. and Canada)	$	7,167	$	5,086
Atlantic (including Europe, Africa, India and Middle East destinations)	1,832		1,089
Latin America	1,316		909
Pacific	1,114		482
Total	$	11,429	$	7,566

Advance Ticket Sales. The Company defers amounts related to future travel in its Advance ticket sales liability account. All tickets sold at any given point in time have travel dates through the next 12 months. The Company's Advance ticket sales liability also includes credits issued to customers for future flights ("FFCs") and electronic travel certificates ("ETCs"), primarily for ticket cancellations, which can be applied towards a purchase of a new ticket. FFCs and ETCs are valid up to one year from the date of issuance; however, all credits issued on or before December 31, 2022 have been extended to December 31, 2023.

The Company estimates the value of Advance tickets sales that will expire unused ("breakage") and recognizes revenue in proportion to the usage of the related tickets. To determine breakage, the Company uses its historical experience with expired tickets and certificates and other facts, such as recent aging trends, program changes and modifications that could affect the ultimate expiration patterns. Changes in our estimates of FFCs and ETCs that may expire unused could have a material 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, 2023 and 2022, the Company recognized approximately $3.5 billion and $1.9 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 seat fees, inflight amenity fees and other ticket-related fees. These ancillary fees are part of the travel performance obligation and, as such, are recognized as passenger revenue when the travel occurs. The Company recorded $892 million and $661 million of ancillary fees within passenger revenue in the three months ended March 31, 2023 and 2022, respectively.


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


	Three Months Ended March 31,
	2023		2022
Total Frequent flyer deferred revenue - beginning balance	$	6,675	$	6,282
Total miles awarded	747		477
Travel miles redeemed	(531)		(322)
Non-travel miles redeemed	(31)		(20)
Total Frequent flyer deferred revenue - ending balance	$	6,860	$	6,417

In the three months ended March 31, 2023 and 2022, the Company recognized, in Other operating revenue, $646 million and $519 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. MileagePlus 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 deferred revenue. We determine the current portion of that account 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,
	2023		2022
Loss available to common stockholders	$	(194)	$	(1,377)

Weighted-average shares outstanding, basic and diluted	327.4		325.0

Loss per share, basic and diluted	$	(0.59)	$	(4.24)

Potentially dilutive securities (a)
Stock warrants (b)	1.5		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.
(b) Represent warrants issued to the U.S. Treasury Department ("Treasury") pursuant to the payroll support program, including extensions, and the loan program established under the Coronavirus Aid, Relief, and Economic Security Act. The Company issued, to Treasury, warrants to purchase up to approximately 10 million shares of UAL common stock at exercise prices ranging from $31.50 to $53.92 and expiration dates ranging from April 20, 2025 to June 10, 2026. All warrants were outstanding as of March 31, 2023.

On March 3, 2021, the Company entered into an equity distribution agreement (the "Distribution Agreement") with several financial institutions (collectively, the "Managers"), relating to the issuance and sale from time to time by UAL (the "2021 ATM Offering"), through the Managers, of up to 37 million shares of UAL common stock (the "2021 ATM Shares"). Sales of the 2021 ATM Shares under the Distribution Agreement were allowed to be made in any transactions that were deemed to be "at the market offerings" as defined in Rule 415 under the Securities Act of 1933, as amended. During 2021, approximately 4 million shares were sold in the 2021 ATM Offering at an average price of $57.50 per share, with net proceeds to the Company totaling approximately $250 million. No shares were sold in 2022 or 2023 under the 2021 ATM Offering, which expired in March 2023.


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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, 2022	$	626		$	(35)	$	(416)	$	175
Changes in value	(9)			27		(4)		14
Amounts reclassified to earnings	(35)		(b)	—		7		(28)
Balance at March 31, 2023	$	582		$	(8)	$	(413)	$	161






Balance at December 31, 2021	$	(847)		$	—	$	(95)	$	(942)
Changes in value	8			—		(3)		5

Balance at March 31, 2022	$	(