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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
unitedcoverlogoa01.jpg
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.
001-06033United Airlines Holdings, Inc.Delaware36-2675207
233 South Wacker Drive,Chicago,Illinois60606
(872) 825-4000
001-10323United Airlines, Inc.Delaware74-2099724
233 South Wacker Drive, Chicago,Illinois60606
(872)825-4000
Securities registered pursuant to Section 12(b) of the Act
RegistrantTitle of Each ClassTrading SymbolName of Each Exchange on Which Registered
United Airlines Holdings, Inc.Common Stock, $0.01 par valueUALThe Nasdaq Stock Market LLC
United Airlines Holdings, Inc.Preferred Stock Purchase RightsNoneThe Nasdaq Stock Market LLC
United Airlines, Inc.NoneNoneNone
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.YesNoUnited Airlines, Inc.YesNo
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.YesNoUnited Airlines, Inc.YesNo
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 filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
United Airlines, Inc.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging 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.YesNo
United Airlines, Inc.YesNo
The number of shares outstanding of each of the issuer's classes of common stock as of October 12, 2023 is shown below:
United Airlines Holdings, Inc. 328,014,680 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 September 30, 2023

Table of Contents
 
 Page



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 September 30,Nine Months Ended
September 30,
 2023202220232022
Operating revenue: 
Passenger revenue$13,349 $11,653 $36,625 $28,830 
Cargo333 498 1,093 1,699 
Other operating revenue802 726 2,373 2,026 
Total operating revenue14,484 12,877 40,091 32,555 
Operating expense:
Salaries and related costs3,914 2,843 10,946 8,466 
Aircraft fuel3,342 3,755 9,336 9,796 
Landing fees and other rent801 639 2,283 1,919 
Aircraft maintenance materials and outside repairs684 619 2,072 1,553 
Depreciation and amortization663 610 1,987 1,832 
Regional capacity purchase592 596 1,806 1,728 
Distribution expenses516 482 1,406 1,101 
Aircraft rent46 65 151 193 
Special charges29 20 902 124 
Other operating expenses2,158 1,790 5,989 4,883 
Total operating expense12,745 11,419 36,878 31,595 
Operating income1,739 1,458 3,213 960 
Nonoperating income (expense):
Interest expense(493)(455)(1,472)(1,299)
Interest income234 104 620 142 
Interest capitalized48 27 128 73 
Unrealized gains (losses) on investments, net(54)28 54 (12)
Miscellaneous, net 11 (9)73 (4)
Total nonoperating expense, net(254)(305)(597)(1,100)
Income (loss) before income tax expense (benefit)1,485 1,153 2,616 (140)
Income tax expense (benefit)348 211 598 (34)
Net income (loss)$1,137 $942 $2,018 $(106)
Earnings (loss) per share, basic$3.47 $2.88 $6.16 $(0.33)
Earnings (loss) per share, diluted$3.42 $2.86 $6.08 $(0.33)

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


3

UNITED AIRLINES HOLDINGS, INC.
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
(In millions)

 Three Months Ended September 30,Nine Months Ended
September 30,
 2023202220232022
Net income (loss)$1,137 $942 $2,018 $(106)
Other comprehensive income (loss), net of tax:
Employee benefit plans(20) (89)9 
Investments and other8 (20)5 (31)
Total other comprehensive loss, net of tax(12)(20)(84)(22)
Total comprehensive income (loss), net$1,125 $922 $1,934 $(128)


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



4

UNITED AIRLINES HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In millions, except shares)
 
 September 30, 2023December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents$7,478 $7,166 
Short-term investments9,608 9,248 
Restricted cash392 45 
Receivables, less allowance for credit losses (2023 — $14; 2022 — $11)
2,193 1,801 
Aircraft fuel, spare parts and supplies, less obsolescence allowance (2023 — $665; 2022 — $610)
1,513 1,109 
Prepaid expenses and other728 689 
Total current assets21,912 20,058 
Operating property and equipment:
Flight equipment46,938 42,775 
Other property and equipment10,157 9,334 
Purchase deposits for flight equipment3,379 2,820 
Total operating property and equipment60,474 54,929 
Less — Accumulated depreciation and amortization(22,114)(20,481)
Total operating property and equipment, net38,360 34,448 
Operating lease right-of-use assets3,975 3,889 
Other assets:
Goodwill4,527 4,527 
Intangibles, less accumulated amortization (2023 — $1,486; 2022 — $1,472)
2,735 2,762 
Restricted cash240 210 
Deferred income taxes 91 
Investments in affiliates and other, less allowance for credit losses (2023 — $27; 2022 — $21)
1,404 1,373 
Total other assets8,906 8,963 
Total assets$73,153 $67,358 
(continued on next page)















5



UNITED AIRLINES HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In millions, except shares)
 September 30, 2023December 31, 2022
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$4,206 $3,395 
Accrued salaries and benefits3,815 1,971 
Advance ticket sales8,392 7,555 
Frequent flyer deferred revenue2,969 2,693 
Current maturities of long-term debt3,649 2,911 
Current maturities of operating leases598 561 
Current maturities of finance leases271 104 
Current maturities of other financial liabilities44 23 
Other812 779 
Total current liabilities24,756 19,992 
Long-term debt25,932 28,283 
Long-term obligations under operating leases4,493 4,459 
Long-term obligations under finance leases71 115 
Other liabilities and deferred credits:
Frequent flyer deferred revenue4,107 3,982 
Pension liability800 747 
Postretirement benefit liability621 671 
Deferred income taxes472  
Other financial liabilities 1,648 844 
Other1,400 1,369 
Total other liabilities and deferred credits9,048 7,613 
Commitments and contingencies
Stockholders' equity:
Preferred stock  
Common stock at par, $0.01 par value; authorized 1,000,000,000 shares; outstanding 328,013,283 and 326,930,321 shares at September 30, 2023 and December 31, 2022, respectively
4 4 
Additional capital invested8,968 8,986 
Stock held in treasury, at cost(3,442)(3,534)
Retained earnings3,232 1,265 
Accumulated other comprehensive income91 175 
Total stockholders' equity8,853 6,896 
Total liabilities and stockholders' equity$73,153 $67,358 

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




6

UNITED AIRLINES HOLDINGS, INC.
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
(In millions)
 Nine Months Ended
September 30,
 20232022
Cash Flows from Operating Activities:
Net cash provided by operating activities$7,821 $4,908 
Cash Flows from Investing Activities:
Capital expenditures, net of flight equipment purchase deposit returns(5,105)(2,280)
Purchases of short-term and other investments(8,875)(8,384)
Proceeds from sale of short-term and other investments8,614 1,061 
Proceeds from sale of property and equipment20 184 
Other, net(17)(23)
Net cash used in investing activities(5,363)(9,442)
Cash Flows from Financing Activities:
Proceeds from issuance of debt and other financing liabilities, net of discounts and fees1,685 210 
Payments of long-term debt, finance leases and other financing liabilities(3,423)(2,605)
Other, net(31)(77)
Net cash used in financing activities(1,769)(2,472)
Net increase (decrease) in cash, cash equivalents and restricted cash689 (7,006)
Cash, cash equivalents and restricted cash at beginning of the period7,421 18,533 
Cash, cash equivalents and restricted cash at end of the period (a)$8,110 $11,527 
Investing and Financing Activities Not Affecting Cash:
Property and equipment acquired through the issuance of debt, finance leases and other$677 $ 
Right-of-use assets acquired through operating leases470 98 
Lease modifications and lease conversions438 61 
Investment interests received in exchange for goods and services25 93 

(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$7,478 $11,258 
Restricted cash — Current392 61 
Restricted cash — Non-Current240 208 
Total cash, cash equivalents and restricted cash $8,110 $11,527 

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
7

UNITED AIRLINES HOLDINGS, INC.
STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY (UNAUDITED)
(In millions)
 Common
Stock
Additional
Capital Invested
Treasury StockRetained Earnings (Accumulated Deficit)Accumulated
Other Comprehensive Income (Loss)
Total
SharesAmount
Balance at June 30, 2023328.0 $4 $8,945 $(3,442)$2,095 $103 $7,705 
Net income— — — — 1,137 — 1,137 
Other comprehensive loss— — — — — (12)(12)
Stock-settled share-based compensation— — 23 — — — 23 
Balance at September 30, 2023328.0 $4 $8,968 $(3,442)$3,232 $91 $8,853 
Balance at December 31, 2022326.9$4 $8,986 $(3,534)$1,265 $175 $6,896 
Net income— — — — 2,018 — 2,018 
Other comprehensive loss— — — — — (84)(84)
Stock-settled share-based compensation— — 55 — — — 55 
Stock issued for share-based awards, net of shares withheld for tax1.1 — (73)92 (51)— (32)
Balance at September 30, 2023328.0 $4 $8,968 $(3,442)$3,232 $91 $8,853 
Balance at June 30, 2022326.7 $4 $8,970 $(3,551)$(515)$(944)$3,964 
Net income— — — — 942 — 942 
Other comprehensive loss— — — — — (20)(20)
Stock-settled share-based compensation— — 15 — — — 15 
Stock issued for share-based awards, net of shares withheld for tax0.2 — (15)18 (6)— (3)
Balance at September 30, 2022326.9 $4 $8,970 $(3,533)$421 $(964)$4,898 
Balance at December 31, 2021323.8 $4 $9,156 $(3,814)$625 $(942)$5,029 
Net loss— — — — (106)— (106)
Other comprehensive loss— — — — — (22)(22)
Stock-settled share-based compensation— — 70 — — — 70 
Stock issued for share-based awards, net of shares withheld for tax3.1 — (256)281 (98)— (73)
Balance at September 30, 2022326.9 $4 $8,970 $(3,533)$421 $(964)$4,898 


The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
8


UNITED AIRLINES, INC.
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
(In millions)
 Three Months Ended September 30,Nine Months Ended
September 30,
 2023202220232022
Operating revenue: 
Passenger revenue$13,349 $11,653 $36,625 $28,830 
Cargo333 498 1,093 1,699 
Other operating revenue802 726 2,373 2,026 
Total operating revenue14,484 12,877 40,091 32,555 
Operating expense:
Salaries and related costs3,914 2,843 10,946 8,466 
Aircraft fuel3,342 3,755 9,336 9,796 
Landing fees and other rent801 639 2,283 1,919 
Aircraft maintenance materials and outside repairs684 619 2,072 1,553 
Depreciation and amortization663 610 1,987 1,832 
Regional capacity purchase592 596 1,806 1,728 
Distribution expenses516 482 1,406 1,101 
Aircraft rent46 65 151 193 
Special charges29 20 902 124 
Other operating expenses2,158 1,789 5,988 4,881 
Total operating expense12,745 11,418 36,877 31,593 
Operating income1,739 1,459 3,214 962 
Nonoperating income (expense): 
Interest expense(493)(455)(1,472)(1,299)
Interest income234 104 620 142 
Interest capitalized48 27 128 73 
Unrealized gains (losses) on investments, net(54)28 54 (12)
Miscellaneous, net 12 (9)74 (4)
Total nonoperating expense, net(253)(305)(596)(1,100)
Income (loss) before income tax expense (benefit)1,486 1,154 2,618 (138)
Income tax expense (benefit)348 212 599 (33)
Net income (loss)$1,138 $942 $2,019 $(105)
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.



9

UNITED AIRLINES, INC.
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
(In millions)

 Three Months Ended September 30,Nine Months Ended
September 30,
 2023202220232022
Net income (loss)$1,138 $942 $2,019 $(105)
Other comprehensive income (loss), net of tax:
Employee benefit plans(20)0(89)9
Investments and other8 (20)5 (31)
Total other comprehensive loss, net of tax(12)(20)(84)(22)
Total comprehensive income (loss), net$1,126 $922 $1,935 $(127)
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

10

UNITED AIRLINES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In millions, except shares)
 
 September 30, 2023December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents$7,478 $7,166 
Short-term investments9,608 9,248 
Restricted cash392 45 
Receivables, less allowance for credit losses (2023 — $14; 2022 — $11)
2,193 1,801 
Aircraft fuel, spare parts and supplies, less obsolescence allowance (2023 — $665; 2022 — $610)
1,513 1,109 
Prepaid expenses and other728 689 
Total current assets21,912 20,058 
Operating property and equipment:
Flight equipment46,938 42,775 
Other property and equipment10,157 9,334 
Purchase deposits for flight equipment3,379 2,820 
Total operating property and equipment60,474 54,929 
Less — Accumulated depreciation and amortization(22,114)(20,481)
Total operating property and equipment, net38,360 34,448 
Operating lease right-of-use assets3,975 3,889 
Other assets:
Goodwill4,527 4,527 
Intangibles, less accumulated amortization (2023 — $1,486; 2022 — $1,472)
2,735 2,762 
Restricted cash240 210 
Deferred income taxes 62 
Investments in affiliates and other, less allowance for credit losses (2023 — $27; 2022 —$21)
1,404 1,373 
Total other assets8,906 8,934 
Total assets$73,153 $67,329 

(continued on next page)
11

UNITED AIRLINES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In millions, except shares)
 
 September 30, 2023December 31, 2022
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable$4,206 $3,395 
Accrued salaries and benefits3,815 1,971 
Advance ticket sales8,392 7,555 
Frequent flyer deferred revenue2,969 2,693 
Current maturities of long-term debt3,649 2,911 
Current maturities of operating leases598 561 
Current maturities of finance leases271 104 
Current maturities of other financial liabilities44 23 
Other814 781 
Total current liabilities24,758 19,994 
Long-term debt25,932 28,283 
Long-term obligations under operating leases4,493 4,459 
Long-term obligations under finance leases71 115 
Other liabilities and deferred credits:
Frequent flyer deferred revenue4,107 3,982 
Pension liability800 747 
Postretirement benefit liability621 671 
Deferred income taxes500  
Other financial liabilities 1,648 844 
Other1,400 1,369 
Total other liabilities and deferred credits9,076 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 September 30, 2023 and December 31, 2022
  
Additional capital invested458 403 
Retained earnings5,735 3,716 
Accumulated other comprehensive income91 175 
Payable to parent2,539 2,571 
Total stockholder's equity8,823 6,865 
Total liabilities and stockholder's equity$73,153 $67,329 

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





12

UNITED AIRLINES, INC.
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
(In millions)
 Nine Months Ended
September 30,
 20232022
Cash Flows from Operating Activities:
Net cash provided by operating activities$7,790 $4,834 
Cash Flows from Investing Activities:
Capital expenditures, net of flight equipment purchase deposit returns(5,105)(2,280)
Purchases of short-term and other investments(8,875)(8,384)
Proceeds from sale of short-term and other investments8,614 1,061 
Proceeds from sale of property and equipment20 184 
Other, net(17)(23)
Net cash used in investing activities(5,363) (9,442)
Cash Flows from Financing Activities:
Proceeds from issuance of debt and other financing liabilities, net of discounts and fees1,685 210 
Payments of long-term debt, finance leases and other financing liabilities(3,423)(2,605)
Other, net (3)
Net cash used in financing activities(1,738)(2,398)
Net increase (decrease) in cash, cash equivalents and restricted cash689 (7,006)
Cash, cash equivalents and restricted cash at beginning of the period7,421 18,533 
Cash, cash equivalents and restricted cash at end of the period (a)$8,110 $11,527 
Investing and Financing Activities Not Affecting Cash:
Property and equipment acquired through the issuance of debt, finance leases and other$677 $ 
Right-of-use assets acquired through operating leases470 98 
Lease modifications and lease conversions438 61 
Investment interests received in exchange for goods and services25 93 

(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$7,478 $11,258 
Restricted cash — Current392 61 
Restricted cash — Non-Current240 208 
Total cash, cash equivalents and restricted cash$8,110 $11,527 

The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
13

UNITED AIRLINES, INC.
STATEMENTS OF CONSOLIDATED STOCKHOLDER'S EQUITY (UNAUDITED)
(In millions)
 Additional
Capital Invested
Retained EarningsAccumulated
Other Comprehensive Income (Loss)
Payable to ParentTotal
Balance at June 30, 2023$435 $4,597 $103 $2,539 $7,674 
Net income— 1,138 — — 1,138 
Other comprehensive loss— — (12)— (12)
Stock-settled share-based compensation23 — — — 23 
Balance at September 30, 2023$458 $5,735 $91 $2,539 $8,823 
Balance at December 31, 2022$403 $3,716 $175 $2,571 $6,865 
Net income— 2,019 — — 2,019 
Other comprehensive loss— — (84)— (84)
Stock-settled share-based compensation55 — — — 55 
Other— — — (32)(32)
Balance at September 30, 2023$458 $5,735 $91 $2,539 $8,823 
Balance at June 30, 2022$373 $1,930 $(944)$2,574 $3,933 
Net income— 942 — — 942 
Other comprehensive loss— — (20)— (20)
Stock-settled share-based compensation14 — — — 14 
Other— — — (3)(3)
Balance at September 30, 2022$387 $2,872 $(964)$2,571 $4,866 
Balance at December 31, 2021$317 $2,977 $(942)$2,646 $4,998 
Net loss— (105)— — (105)
Other comprehensive loss— — (22)— (22)
Stock-settled share-based compensation70 — — — 70 
Other— — — (75)(75)
Balance at September 30, 2022$387 $2,872 $(964)$2,571 $4,866 



The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
14

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 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 September 30,Nine Months Ended
September 30,
2023202220232022
Domestic (U.S. and Canada)$8,379 $7,718 $23,963 $20,623 
Atlantic3,543 3,186 8,604 6,756 
Latin America1,184 1,162 3,773 3,266 
Pacific1,378 811 3,751 1,910 
Total$14,484 $12,877 $40,091 $32,555 
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 ticket 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 nine months ended September 30, 2023 and 2022, the Company recognized approximately $5.3 billion and $3.0 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 $1.1 billion and $3.0 billion of ancillary fees within passenger revenue in the three and nine months ended
15

September 30, 2023, respectively. The Company recorded $0.9 billion and $2.4 billion of ancillary fees within passenger revenue in the three and nine months ended September 30, 2022, respectively.
Frequent Flyer Accounting. The table below presents a roll forward of Frequent flyer deferred revenue (in millions):
Three Months Ended September 30,Nine Months Ended
September 30,
2023202220232022
Total Frequent flyer deferred revenue - beginning balance$7,024 $6,495 $6,675 $6,282 
Total miles awarded816 705 2,465 1,848 
Travel miles redeemed(740)(601)(1,983)(1,489)
Non-travel miles redeemed(24)(21)(81)(63)
Total Frequent flyer deferred revenue - ending balance$7,076 $6,578 $7,076 $6,578 
In the three and nine months ended September 30, 2023, the Company recognized, in Other operating revenue, $0.7 billion and $2.0 billion, 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 Company recognized $0.6 billion and $1.7 billion, respectively, in the three and nine months ended September 30, 2022, related to those agreements. 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 — EARNINGS (LOSS) PER SHARE
The computations of UAL's basic and diluted earnings (loss) per share are set forth below (in millions, except per share amounts):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Earnings (loss) available to common stockholders$1,137 $942 $2,018 $(106)
Basic weighted-average shares outstanding328.0 326.8 327.8 326.2 
Dilutive effect of stock warrants (a)2.7 1.0 2.5  
Dilutive effect of employee stock awards1.7 1.7 1.5  
Diluted weighted-average shares outstanding332.4 329.5 331.8 326.2 
Earnings (loss) per share, basic$3.47 $2.88 $6.16 $(0.33)
Earnings (loss) per share, diluted$3.42 $2.86 $6.08 $(0.33)
Potentially dilutive securities (b)
Stock warrants (a)1.5 3.5 1.5 3.5 
Employee stock awards0.6 0.7 0.6 0.7 
(a) 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 September 30, 2023.
(b) Weighted-average potentially dilutive securities outstanding excluded from the computation of diluted earnings per share because the securities would have had an antidilutive effect.
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
16

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.
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 LiabilitiesInvestments and OtherDeferred Taxes (a)Total
Balance at June 30, 2023$539 $(39)$(397)$103 
Changes in value7 10 (3)14 
Amounts reclassified to earnings(33)(b) 7 (26)
Balance at September 30, 2023$513 $(29)$(393)$91 
Balance at December 31, 2022$626 $(35)$(416)$175 
Changes in value(10)6 1 (3)
Amounts reclassified to earnings(103)(b) 22 (81)
Balance at September 30, 2023$513 $(29)$(393)$91 
Balance at June 30, 2022$(834)$(14)$(96)$(944)
Changes in value(1)(25)6 (20)
Amounts reclassified to earnings (b)   
Balance at September 30, 2022$(835)$(39)$(90)$(964)
Balance at December 31, 2021$(847)$ $(95)$(942)
Changes in value13 (39)5 (21)
Amounts reclassified to earnings(1)(b)  (1)
Balance at September 30, 2022$(835)$(39)$(90)$(964)
(a) Includes approximately $285 million of deferred income tax expense that will not be recognized in net income until the related pension and postretirement benefit obligations are fully extinguished. We consider all income sources, including other comprehensive income, in determining the amount of tax benefit allocated to results from operations.
(b) This AOCI component is included in the computation of net periodic pension and other postretirement costs, specifically the following components: amortization of unrecognized (gain) loss, amortization of prior service credit and other (see Note 5 of this report for additional information).
NOTE 4 — INCOME TAXES
The Company's effective tax rates for the three and nine months ended September 30, 2023 were 23.4% and 22.9%, respectively. The Company's effective tax rates for the three and nine months ended September 30, 2022 were 18.3% and 24.3%, respectively. The provision for income taxes is based on the estimated annual effective tax rate, which represents a blend of federal, state and foreign taxes and includes the impact of certain nondeductible items.
17

NOTE 5 — EMPLOYEE BENEFIT PLANS
Defined Benefit Pension and Other Postretirement Benefit Plans. The Company's net periodic benefit cost includes the following components for the three months ended September 30 (in millions):
Pension BenefitsOther Postretirement BenefitsAffected Line Item
in the Statements of
 Consolidated Operations
2023202220232022
Service cost$31 $51 $1 $2 Salaries and related costs
Interest cost53 47 10 8 Miscellaneous, net
Expected return on plan assets(62)(76)  Miscellaneous, net
Amortization of unrecognized (gain) loss 2