United(UAL) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Overview of UAL's unaudited condensed consolidated financial statements for Q2 and H1 2025, including key financial performance and position Item 1. Financial Statements Presents UAL's unaudited condensed consolidated financial statements for Q2 and H1 2025, showing a Q2 net income decrease but H1 increase United Airlines Holdings, Inc. Financial Statements UAL reported Q2 2025 operating revenues of $15.2 billion and net income of $973 million, with H1 net income at $1.4 billion UAL Statement of Operations Highlights (Q2 & H1 2025 vs 2024) | Metric (in millions, except per share amounts) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenue | $15,236 | $14,986 | $28,448 | $27,525 | | Operating income | $1,325 | $1,929 | $1,932 | $2,028 | | Net income | $973 | $1,323 | $1,361 | $1,199 | | Diluted EPS | $2.97 | $3.96 | $4.12 | $3.60 | UAL Balance Sheet Highlights (as of June 30, 2025) | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $20,258 | $18,883 | | Total assets | $77,163 | $74,083 | | Total current liabilities | $28,992 | $23,314 | | Total liabilities | $63,790 | $61,408 | | Total stockholders' equity | $13,373 | $12,675 | UAL Cash Flow Highlights (Six Months Ended June 30) | Metric (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $5,927 | $5,723 | | Net cash provided by (used in) investing activities | $(3,042) | $1,575 | | Net cash used in financing activities | $(2,300) | $(2,518) | United Airlines, Inc. Financial Statements Financial statements for the primary operating subsidiary, United Airlines, Inc., whose results are nearly identical to UAL's consolidated figures - United Airlines, Inc. comprises substantially all of UAL's operating revenues, expenses, assets, and liabilities, with its financial results consolidated into UAL's statements[25] United Airlines, Inc. Net Income (Q2 & H1 2025 vs 2024) | Metric (in millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $974 | $1,324 | $1,361 | $1,200 | Combined Notes to Condensed Consolidated Financial Statements Detailed disclosures on revenue by geography, share repurchases, debt, aircraft commitments, and labor agreements Operating Revenue by Geography (Six Months Ended June 30) | Region (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Domestic (U.S. and Canada) | $16,818 | $16,434 | | Atlantic | $5,270 | $5,110 | | Latin America | $2,919 | $2,791 | | Pacific | $3,442 | $3,190 | | Total | $28,448 | $27,525 | - In the first six months of 2025, the company repurchased 7.6 million shares of common stock for approximately $0.6 billion, with approximately $0.8 billion remaining available under the share repurchase program as of July 10, 2025[37] - In May 2025, the company reached a Tentative Agreement (TA) with the Association of Flight Attendants (AFA), resulting in a special charge of $561 million in Q2 2025 for a one-time ratification payment[59][60] Firm Aircraft Commitments as of June 30, 2025 (in billions) | Period | Last Six Months of 2025 | 2026 | 2027 | 2028 | 2029 | After 2029 | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Purchase commitments | $6.3 | $6.9 | $5.0 | $6.3 | $8.0 | $22.4 | $54.8 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 2025 financial results, highlighting revenue growth, expense increases, and strong liquidity amidst market challenges Executive Summary Overview of UAL's business, key economic, market, and governmental factors impacting performance, including aircraft delivery delays and geopolitical conflicts - The company operates a comprehensive route network with mainland U.S. hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco, and Washington, D.C[65] - Key economic and market factors impacting the business include aircraft delivery delays (especially the 737 MAX 10), rising inflation, volatile fuel prices, and changes in travel patterns[66][67] - Significant governmental factors include airspace closures due to conflicts in Russia/Ukraine and the Middle East, and increased FAA oversight of aircraft production[67] Results of Operations Detailed comparison of Q2 and H1 2025 operating results, showing revenue growth, increased expenses, and a decrease in operating income Key Operating Metrics (Q2 2025 vs Q2 2024) | Metric | 2025 | 2024 | % Change / Point Change | | :--- | :--- | :--- | :--- | | Capacity (ASMs in millions) | 84,347 | 79,678 | 5.9% | | Passenger Load Factor | 83.1% | 84.2% | (1.1) pts | | PRASM (cents) | 16.40 | 17.17 | (4.5)% | | TRASM (cents) | 18.06 | 18.81 | (4.0)% | | CASM (cents) | 16.49 | 16.39 | 0.6% | | Avg. Fuel Price per Gallon ($) | $2.34 | $2.76 | (15.2)% | Key Operating Metrics (H1 2025 vs H1 2024) | Metric | 2025 | 2024 | % Change / Point Change | | :--- | :--- | :--- | :--- | | Capacity (ASMs in millions) | 159,503 | 151,346 | 5.4% | | Passenger Load Factor | 81.3% | 82.3% | (1.0) pt | | PRASM (cents) | 16.11 | 16.51 | (2.4)% | | TRASM (cents) | 17.84 | 18.19 | (1.9)% | | CASM (cents) | 16.62 | 16.85 | (1.3)% | | Avg. Fuel Price per Gallon ($) | $2.43 | $2.82 | (13.8)% | - Q2 2025 operating expenses increased by $854 million (6.5%) YoY, primarily driven by a $411 million increase in special charges (related to the AFA labor agreement), a $315 million increase in salaries, and a $149 million increase in aircraft maintenance[74] Liquidity and Capital Resources UAL maintains strong liquidity with $15.6 billion in cash and investments, managing significant debt and aircraft purchase commitments - As of June 30, 2025, the company had $15.6 billion in unrestricted cash, cash equivalents, and short-term investments, plus an undrawn $3.0 billion revolving credit facility[101][102] - On July 7, 2025, the company prepaid the entire $1.52 billion outstanding principal balance of its MileagePlus senior secured notes[103] Expected vs. Contractual Aircraft Deliveries (Select Types) | Aircraft Type | Number of Firm Commitments | Expected Deliveries (Last half 2025) | Expected Deliveries (2026) | | :--- | :--- | :--- | :--- | | 787 | 143 | 5 | 20 | | 737 MAX 9 | 119 | 13 | 69 | | 737 MAX 10 | 167 | 0 | 0 | | A321neo | 135 | 13 | 18 | Item 3. Quantitative and Qualitative Disclosures About Market Risk No material changes in market risk from the information provided in the 2024 Annual Report on Form 10-K - There have been no material changes in market risk from the information provided in the 2024 Form 10-K[123] Item 4. Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[124] - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[125] PART II. OTHER INFORMATION Provides additional information including legal proceedings, risk factors, equity sales, and other disclosures Item 1. Legal Proceedings Refers to the 2024 Annual Report on Form 10-K for a description of legal proceedings - For a description of legal proceedings, the report refers to the 2024 Form 10-K[126] Item 1A. Risk Factors Refers to the 2024 Annual Report on Form 10-K for a discussion of risk factors affecting the company - For a discussion of risk factors, the report refers to the 2024 Form 10-K[127] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details common stock repurchases during Q2 2025, totaling 3,543,780 shares under a $1.5 billion program Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share ($) | | :--- | :--- | :--- | | April 1-30 | 2,678,987 | $62.78 | | May 1-31 | 475,951 | $76.21 | | June 1-30 | 388,842 | $77.87 | | Total | 3,543,780 | - | - The Board of Directors authorized a new $1.5 billion share repurchase program on October 15, 2024, with approximately $0.7 billion used to repurchase 8.7 million shares as of July 10, 2025[129] Item 5. Other Information No director or officer adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q2 2025 - During Q2 2025, no director or officer informed the company of the adoption, modification, or termination of a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement[131] Item 6. Exhibits This section provides an index of the exhibits filed with the Form 10-Q, including certifications and an amendment to an aircraft purchase agreement - Exhibits filed include Sarbanes-Oxley Act certifications (Exhibits 31.1-32.2) and an amendment to the Airbus A350-900 Purchase Agreement (Exhibit 10.2)[134]