Item 1.01 Entry into a Material Definitive Agreement.
Payroll Support Program Extension Agreement
United Airlines Holdings, Inc. ("UAL") and United Airlines, Inc., a wholly-owned
subsidiary of UAL ("United" and, together with UAL, the "Company") submitted an
application to the United States Department of the Treasury (the "U.S. Treasury
Department") pursuant to the Payroll Support Program established under Subtitle
A of Title IV of Division N of the Consolidated Appropriations Act, 2021 (the
"PSP Extension Law").
On January 15, 2021, in connection with the Payroll Support Program, United
entered into a Payroll Support Program Extension Agreement (the "PSP Agreement")
with the U.S. Treasury Department providing the Company with total funding of
approximately $2.6 billion.
Pursuant to the PSP Agreement, United and its affiliates will be required to
comply with certain provisions of the PSP Extension Law, including, among
others, the requirement that all funds provided under the Payroll Support
Program will be used by United exclusively for the continuation of payment of
its U.S. employee wages, salaries and benefits, including the payment of lost
wages, salaries and benefits to returning U.S. employees; requirements to
maintain U.S. employment levels from the date of the PSP Agreement through March
31, 2021; the requirements to recall (as such term is defined in the PSP
Agreement), not later than 72 hours after the PSP Agreement has been executed,
any U.S. employees subject to involuntary termination or furlough between
October 1, 2020 and the date of the PSP Agreement, compensate such returning
employees for certain lost salary, wages and benefits between December 1, 2020
and the date of the PSP Agreement and restore certain rights and protections for
such returning employees; provisions prohibiting certain reductions in U.S.
employee wages, salaries and benefits; provisions prohibiting the payment of
dividends and the repurchase of certain equity until March 31, 2022; audit and
reporting requirements; provisions to comply with certain continuation of
service requirements until March 1, 2022; and provisions restricting the payment
of certain executive compensation until October 1, 2022.
Promissory Note
On January 15, 2021, UAL issued a promissory note (the "PSP Note") to the U.S.
Treasury Department evidencing senior unsecured indebtedness of UAL in the
initial principal amount of approximately $361 million. The principal amount of
the PSP Note will increase in an amount equal to 30% of any disbursement made by
the U.S. Treasury Department to United under the PSP Agreement after the initial
issuance date. The aggregate principal amount of the PSP Note after all
disbursements will be approximately $753 million.
The PSP Note will be guaranteed by United, and will mature ten years after
issuance on January 15, 2031 (the "Maturity Date"). If any subsidiary of UAL
(other than United) guarantees other unsecured indebtedness of UAL with a
principal balance in excess of a specified amount, then the subsidiary shall be
required to guarantee the obligations of UAL under the PSP Note. UAL may, at its
option, prepay the PSP Note, at any time, and from time to time, at par. UAL is
required to prepay the PSP Note upon the occurrence of certain change of control
triggering events. The PSP Note does not require any amortization, and is to be
repaid in full on the Maturity Date.
Interest on the PSP Note is payable semi-annually in arrears on the last
business day of March and September of each year, beginning on March 31, 2021,
at a rate of 1.00% in years 1 through 5, and at the Secured Overnight Financing
Rate (SOFR) plus 2.00% in years 6 through 10.
Warrant Agreement
In addition to the PSP Note, UAL also entered into a warrant agreement (the
"Warrant Agreement") with the U.S. Treasury Department on January 15, 2021,
pursuant to which UAL will issue to the U.S. Treasury Department warrants to
purchase up to approximately 1.7 million shares of UAL common stock, pro rata in
conjunction with increases to the principal amount outstanding under the PSP
Note (the "Warrants"), with an initial issuance of warrants to purchase up to
approximately 0.8 million shares of common stock. The Warrants will have a
strike price of $43.26 per share (which was the closing price of UAL's common
stock on The Nasdaq Stock Market on December 24, 2020). The Warrants will expire
five years after issuance, and are exercisable either through net share
settlement in cash or in shares of UAL common stock, at UAL's option.
The Warrants contain customary anti-dilution provisions, registration rights and
are freely transferable. Pursuant to the terms of the Warrants, Warrant holders
do not have any voting rights.
The foregoing descriptions do not purport to be complete and are qualified in
their entirety by reference to each of the PSP Agreement, the PSP Note, the
Warrant Agreement and the Form of Warrant. The PSP Note, the Warrant Agreement,
the Form of Warrant and the PSP Agreement are attached as Exhibits 4.1, 4.2, 4.3
and 10.1, respectively, to this Current Report on Form 8-K and are incorporated
herein by reference.
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Third Amendment to Loan and Guarantee Agreement
On January 15, 2021 (the "Amendment Date"), the Company entered into a Third
Amendment to Loan and Guarantee Agreement, dated as of the Amendment Date (the
"Amendment"), which amended the Loan and Guarantee Agreement dated as of
September 28, 2020 (as amended and restated by the Restatement Agreement dated
November 6, 2020 and by the Second Amendment to Loan and Guarantee Agreement
dated as of December 8, 2020, the "Previous Credit Agreement", and, the Previous
Credit Agreement, as amended by the Amendment, the "Amended Credit Agreement"),
among United, as borrower, UAL, as parent and guarantor, the subsidiaries of UAL
other than United party thereto from time to time, as guarantors, the U.S.
Treasury Department, as lender, and The Bank of New York Mellon, as
administrative agent and collateral agent.
The Amendment (i) extends the termination date of the commitments for the $7.491
billion term loan facility (the "Term Loan Facility") under the Amended Credit
Agreement from March 26, 2021 to May 28, 2021, and (ii) includes certain
technical amendments.
On September 28, 2020, United borrowed the initial term loan under the Term Loan
Facility in an amount equal to $520 million. United has not borrowed additional
amounts under the Term Loan Facility as of the date of this report.
The other material terms of the Previous Credit Agreement remain effective as
described in the   Current Report on Form 8-K     of the Company filed on
September 30, 2020   as updated by the   Current Report on Form 8-K     of the
Company filed on November 9, 2020   and by the   Current Report on Form 8-K
  of the Company filed on December 8, 2020  .
The foregoing description does not purport to be complete and is qualified in
its entirety by reference to each of the Restatement Agreement dated November 6,
2020 and the Second Amendment to Loan and Guarantee Agreement dated as of
December 8, 2020, copies of which will be filed as exhibits to the Company's
Annual Report on Form 10-K for the year ending December 31, 2020, and by
reference to the Amendment (including the Amended Credit Agreement), a copy of
which will be filed as an exhibit to the Company's Quarterly Report on Form 10-Q
for the quarter ending March 31, 2021.
Item 2.02 Results of Operations and Financial Condition.
On January 15, 2021, UAL issued a press release announcing the financial results
of the Company for fourth quarter and full year 2020. The press release is
attached as Exhibit 99.1 and is incorporated herein by reference.
The information in this Item 2.02, including Exhibit 99.1, is being furnished
and shall not be deemed to be "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise
subject to the liabilities of that Section and shall not be deemed incorporated
by reference into any registration statement or other document filed pursuant to
the Securities Act of 1933, as amended (the "Securities Act"), except as shall
be expressly set forth by specific reference in such filing.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information described under Item 1.01 is incorporated herein by reference to
the extent responsive to Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities.
The information described under Item 1.01 is incorporated herein by reference to
the extent responsive to Item 3.02. The Warrants were or will be issued pursuant
to an exemption from registration provided for under Section 4(a)(2) of the
Securities Act.
Item 8.01 Other Events.
Financial Results for Fourth Quarter and Full Year 2020
The following are certain excerpts from UAL's press release announcing the
financial results of the Company for fourth quarter and full year 2020:
•Since the beginning of the COVID-19 crisis, United has raised over $26 billion
in liquidity and made important progress in reducing core cash burn (see
detailed chart below) to ensure the company's survival. Over the last three
quarters, the company has identified $1.4 billion of annual cost savings and has
a path to achieve at least $2.0 billion in structural reductions moving forward.
United ended 2020 with $19.7 billion in liquidity1, including an undrawn
revolver and funds available under the CARES Act loan program from the U.S.
Treasury.
•Reported fourth-quarter net loss2 of $1.9 billion, $7.1 billion for the
full-year 2020.
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•Reported fourth-quarter total operating revenue of $3.4 billion, down 69%
versus fourth-quarter 2019.
•Reported fourth-quarter operating expenses down 45% versus fourth-quarter 2019,
down 42% excluding special
charges3.
•Received $968 million in net proceeds from the sale of 20.8 million shares in
the ATM program in the fourth quarter 2020. For the full year 2020, total net
proceeds were $989 million from the sale of 21.4 million shares through the ATM
program.
•Expects first quarter 2021 capacity to be down at least 51 percent versus the
first quarter of 2019.
•Reported fourth-quarter daily cash burn4 of $23 million, plus $10 million of
average debt principal payments and severance payments per day.
•Reported fourth-quarter core cash burn4 of $19 million per day, an improvement
of an average of $5 million per day versus the third-quarter 2020.
•Core cash burn captures underlying operational performance of the company
throughout the pandemic; a reconciliation with cash burn4 is provided below.
$M/day                                                        2Q20                 3Q20                 4Q20

Cash burn4                                                   $(40)                $(25)                 $(33)
 Debt principal and severance payments                        (3)                  (4)                  (10)
 Timing of certain payments5                                   2                    1                    (2)
 Investments in the recovery6                                  -                   (1)                   (2)
 Capital expenditures, net of flight equipment
purchase deposit returns                                       -                    4                    (1)
Core cash burn4                                              $(38)                $(24)                 $(19)


1 Total available liquidity includes cash and cash equivalents, short-term
investments and $1 billion available under our undrawn revolving credit
facility, as well as $7 billion available under the CARES Act Loan program.
2 Excludes operating and nonoperating special charges, and unrealized gains and
losses on investments. Reconciliations of non-GAAP financial measures to the
most directly comparable GAAP measures are included in the tables accompanying
this release.
3 Reconciliations of non-GAAP financial measures to the most directly comparable
GAAP measures are included in the tables accompanying this release.
4 Cash burn, as previously guided, is defined as: Net cash from operations, less
investing and financing activities. Proceeds from the issuance of new debt
(excluding expected aircraft financing), government grants associated with the
Payroll Support Program of the CARES Act, issuance of new stock, net proceeds
from the sale of short-term and other investments and changes in certain
restricted cash balances are not included in this figure. Core cash burn is
defined as: Cash burn, as further adjusted to exclude: debt principal payments,
timing of certain payments5, capital expenditures (net of flight equipment
purchase deposit returns), investments in the recovery6 and severance payments.
Amounts may not add due to rounding. See the tables accompanying this release
for further information.
5 Timing of certain payments refers to exclusion of payments in the quarter that
had been deferred from prior periods or additions of payments that were deferred
to a future period to maximize cash preservation.
6 Investments in the recovery primarily include, but are not limited to,
spending on engine and airframe maintenance to prepare for the efficient
operations ramp up as air travel demand returns.














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                         UNITED AIRLINES HOLDINGS, INC
               STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)

                                                 Three Months Ended                     %                             Year Ended                        %
                                                    December 31,                    Increase/                        December 31,                  

Increase/


(In millions, except per share data)            2020               2019            (Decrease)                   2020              2019             (Decrease)
Operating revenue:
Passenger                                  $     2,410          $ 9,933              (75.7)                  $ 11,805          $ 39,625              (70.2)
Cargo                                              560              316               77.2                      1,648             1,179               39.8
. . .


Item 9.01   Financial Statements and Exhibits.
Exhibit No.            Description

                         Promissory Note, dated as of     January 15, 2021    , among UAL, United,
4.1                    as guarantor, and the United States Department of 

the Treasury.



                         Warrant Agreement, dated as of January 15, 2021, between UAL and the United
4.2                    States Department of the Treasury.

4.3                      Form of Warrant (included in Exhibit 4.2 as Annex B thereto).

                         Payroll Support Program Agreement, dated as of     January 15, 2021    ,
10.1                   between United and the United States Department of the Treasury.

                         Press Release issued by United Airlines Holdings, Inc. dated January 20,
99.1                   2021.

104                    Cover Page Interactive Data File (embedded within the Inline XBRL document)


























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