Debt

12 Months Ended

Dec. 31, 2020

DEBT


(In millions)	Maturity Dates			Interest Rate(s) at December 31, 2020						At December 31,
										2020		2019
Secured
Aircraft notes (a)	2021	—	2032	0.73	%	—		9.80	%	$	14,538	$	11,585
MileagePlus Senior Secured Notes		2027				6.50	%			3,800		—
MileagePlus Term Loan Facility (a)		2027				5.49	%			3,000		—
Revolving Credit Facility (a)		2022				1.49	%			1,000		—
CARES Act Term Loan Facility (a)		2025				3.24	%			520		—
Term Loan Facility (a)		2024				2.49	%			1,444		1,459
Unsecured
Notes	2022	—	2025	4.25	%	—		5.00	%	1,050		1,350
PSP Note		2030				1.00	%			1,501		—
Other unsecured debt	2023	—	2029	4.00	%	—		5.75	%	448		339
										27,301		14,733
Less: unamortized debt discount, premiums and debt issuance costs										(554)		(181)
Less: current portion of long-term debt										(1,911)		(1,407)
Long-term debt, net										$	24,836	$	13,145
(a) Financing includes variable rate debt based on LIBOR (or another index rate), generally subject to a floor, plus a specified margin ranging from 0.49% to 5.25%.

The table below presents the Company's contractual principal payments (not including debt discount or debt issuance costs) at December 31, 2020 under then-outstanding long-term debt agreements in each of the next five calendar years (in millions):


2021	$	1,911
2022	3,852
2023	2,699
2024	5,132
2025	3,739
After 2025	9,968
	$	27,301

PSP Note. During 2020, pursuant to the PSP Agreement and in connection with Treasury providing the Company with total funding of approximately $5.1 billion under the Payroll Support Program of the CARES Act, UAL issued a promissory note to Treasury evidencing senior unsecured indebtedness of UAL of approximately $1.5 billion.

The PSP Note is guaranteed by United and will mature on April 20, 2030, ten years after the initial issuance. If any subsidiary of UAL (other than United) guarantees other unsecured indebtedness of UAL with a principal balance in excess of a specified

amount, or if certain subsidiaries are formed or acquired, then such 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 September 30, 2020 at a rate of 1.00% in years one through five, and at the Secured Overnight Financing Rate (SOFR) plus 2.00% in years six through ten.

MileagePlus Financing. On July 2, 2020, MPH and Mileage Plus Intellectual Property Assets, Ltd., an indirect wholly-owned subsidiary of MPH ("MIPA" and, together with MPH, the "Issuers") issued $3.8 billion aggregate principal amount of their 6.50% Senior Secured Notes due 2027 (the "Notes"). The Notes have a fixed annual interest rate of 6.50%, which will be paid in cash, quarterly in arrears on March 20, June 20, September 20 and December 20 of each year, beginning on September 21, 2020 (each a "Payment Date"). Concurrently with the issuance of the Notes, the Issuers entered into a credit agreement that provides for a term loan facility in an aggregate principal amount of up to $3.0 billion (the "MP Term Loan Facility"). On July 2, 2020, the Issuers borrowed $3.0 billion in aggregate principal amount under the MP Term Loan Facility. Loans outstanding under the MP Term Loan Facility will bear interest at a variable rate equal to LIBOR (but not less than 1.00% per annum), plus a margin of 5.25% per annum, payable on each Payment Date. The principal on the Notes and the MP Term Loan Facility will be repaid in quarterly installments on each Payment Date, beginning on September 20, 2022. The scheduled maturity date of the Notes and of the MP Term Loan Facility is June 20, 2027. The Issuers lent the proceeds of the Notes and of the MP Term Loan Facility to United, after depositing a portion of such proceeds in reserve accounts to cover future interest payments. The Notes and the loans under the MP Term Loan Facility are guaranteed by UAL, United and certain other subsidiaries of UAL. The Notes and the loans under the MP Term Loan Facility are secured by first-priority security interests in substantially all of the assets of the Issuers, other than excluded property and subject to certain permitted liens, including specified cash accounts that include the accounts into which MileagePlus revenues are or will be paid by United's marketing partners and by United.

CARES Act Credit Agreement. On September 28, 2020, the Company entered into a Loan and Guarantee Agreement (the "CARES Act 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, Treasury, as lender, and The Bank of New York Mellon, as administrative and collateral agent. The CARES Act Credit Agreement provides for a CARES Act Term Loan Facility of up to approximately $7.5 billion pursuant to the Loan Program established under Section 4003(b)(1) of the CARES Act. The loans under the CARES Act Term Loan Facility may be disbursed in up to three disbursements on or before May 28, 2021. On September 28, 2020, United borrowed an amount equal to $520 million under the CARES Act Term Loan Facility. The principal amount must be repaid in a single installment on the maturity date on September 26, 2025. United may prepay all or a portion of the CARES Act Term Loan Facility from time to time, at par plus accrued and unpaid interest on the amount prepaid. Borrowings under the CARES Act Credit Agreement bear interest at a variable rate equal to LIBOR (but not less than 0%), plus a margin of 3.00% per annum. The obligations of United under the CARES Act Credit Agreement are secured by liens (i) on certain route authorities of United and certain related slots and gate leaseholds and other related assets, (ii) certain aircraft and (iii) certain flight simulators and related assets.

Revolving Credit Facility. As of December 31, 2020, United had $1.0 billion available under the revolving credit facility of the Credit Agreement. The Credit Agreement provides for a term loan facility (the "Term Loan Facility") and a revolving credit facility (the "Revolving Credit Facility"). To maximize United's flexibility under a debt incurrence covenant contained in two of United's financings, on July 2, 2020, United took the proactive step of borrowing $1.0 billion under the Revolving Credit Facility, which leaves $1.0 billion available for borrowing under such agreement by United at any time until April 1, 2022. Borrowings under the Revolving Credit Facility bear interest at a variable rate equal to LIBOR (but not less than 0% per annum), plus a margin of 2.25% per annum, or (at United's election) another rate based on certain market interest rates, plus a margin of 1.25% per annum. United pays a commitment fee equal to 0.75% per annum on the undrawn amount available under the Revolving Credit Facility.

Used Aircraft Bridge Loan. On March 9, 2020, the Company entered into a Term Loan Credit and Guaranty Agreement (the "Used Aircraft 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 lenders party thereto from time to time and JP Morgan Chase Bank N.A., as administrative agent. United borrowed the full amount of $2 billion under the Used Aircraft Credit Agreement (the "Used Aircraft Facility"). The obligations of United under the Used Aircraft Bridge Loan were secured by liens on certain aircraft of United. The principal amount of the Used Aircraft Facility plus accrued interest was paid in full on October 28, 2020.

Spare Parts Bridge Loan. On March 20, 2020, the Company entered into a Term Loan Credit and Guaranty Agreement (the "Spare Parts 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 lenders party thereto from time to time and Goldman Sachs Bank USA, as administrative agent. United borrowed the full amount of $500 million under the Spare Parts Credit Agreement (the "Spare Parts Bridge Loan"). The obligations of United under the Spare Parts Bridge Loan were secured by liens on certain aircraft spare parts of United. The principal amount of the Spare Parts Bridge Loan plus accrued interest was paid in full on October 28, 2020.

Spare Engines Bridge Loan. On April 7, 2020, the Company entered into a Term Loan Credit and Guaranty Agreement (the "Spare Engines 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 lenders party thereto from time to time and Bank of America, N.A., as administrative agent. United borrowed the full amount of $250 million under the Spare Engines Credit Agreement (the "Spare Engines Bridge Loan"). The obligations of United under the Spare Engines Bridge Loan were secured by liens on certain aircraft spare engines of United. The principal amount of the Spare Engines Bridge Loan plus accrued interest was paid in full on October 28, 2020.

SRG Bridge Loan. On June 30, 2020, the Company entered into a $200 million Term Loan Credit and Guaranty Agreement (the "SRG Bridge Loan"), among United, as borrower, UAL, as parent and guarantor, and Barclays Bank PLC, as administrative agent. The obligations of United under the SRG Bridge Loan were secured by liens on certain routes of United between cities in the U.S. and Europe, Israel, South America, and Mexico. United borrowed the full amount of the SRG Bridge Loan on July 1, 2020 and repaid it in full on September 29, 2020.

Aircraft Notes. As of December 31, 2020, United had $12.1 billion principal amount of equipment notes outstanding issued under enhanced equipment trust certificates ("EETC") financings included in notes payable in the table of outstanding debt above. Generally, the structure of these EETC financings consists of pass-through trusts created by United to issue pass-through certificates, which represent fractional undivided interests in the respective pass-through trusts and are not obligations of United. The proceeds of the issuance of the pass-through certificates are used to purchase equipment notes which are issued by United and secured by aircraft and, in certain structures, spare engines and spare parts. United is responsible for the payment obligations under the equipment notes. In certain EETC structures, proceeds received from the sale of pass-through certificates are initially held by a depositary in escrow for the benefit of the certificate holders until United issues equipment notes to the trust, which purchases such notes with a portion of the escrowed funds. These escrowed funds are not guaranteed by United and are not reported as debt on United's consolidated balance sheet because the proceeds held by the depositary are not United's assets.

In September 2019, October 2020 and February 2021, United created new EETC pass-through trusts, each of which issued pass-through certificates. The proceeds from the issuance of the pass-through certificates were used to purchase equipment notes issued by United and secured by aircraft and, in the case of the EETC entered into in October 2020, also by spare engines and spare parts. The Company records the debt obligation upon issuance of the equipment notes rather than upon the initial issuance of the pass-through certificates. Certain details of the pass-through trusts with proceeds received from issuance of debt in 2020 are as follows (in millions, except stated interest rate):


EETC Issuance Date	Class	Principal		Final expected distribution date	Stated interest rate	Total proceeds received from issuance of debt during 2020		Total debt recorded as of December 31, 2020
September 2019	AA	$	702	May 2032	2.70%	$	189	$	702
September 2019	A	287		May 2028	2.90%	77		287
September 2019	B	232		May 2028	3.50%	62		232
October 2020	A	3,000		October 2027	5.88%	3,000		3,000
February 2021	B	600		January 2026	4.88%	—		—
		$	4,821			$	3,328	$	4,221

In 2020, United borrowed approximately $691 million aggregate principal amount from various financial institutions to finance the purchase of several aircraft delivered in 2020. The notes evidencing these borrowings, which are secured by the related aircraft, mature in 2032 and have interest rates comprised of LIBOR plus a specified margin.

In November 2019, at the request of United, the California Municipal Finance Authority issued its approximately $295 million special facility revenue bonds and loaned the proceeds of such bonds to United pursuant to a loan agreement to finance the costs of construction of an aircraft maintenance and ground service equipment complex at Los Angeles International Airport. The bonds bear interest at 4% per annum, payable semiannually, commencing July 15, 2020 through the July 15, 2029 maturity

date. As security for United's obligations under the loan agreement, United also entered into a leasehold mortgage which grants to the trustee of the bonds (acting on behalf of the bondholders) a lien on United's interest in the leased premises and any improvements thereon owned by or leased to United. As of December 31, 2020, United had recorded approximately $159 million related to this debt.

PSP2 Note. During the first quarter of 2021, UAL issued the PSP2 Note to Treasury evidencing senior unsecured indebtedness of UAL. The principal amount of the PSP2 Note will increase to 30% of any disbursement made by Treasury to United under the PSP2 Agreement after the initial issuance date to approximately $753 million aggregate principal amount after all disbursements. The PSP2 Note is 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 such subsidiary shall be required to guarantee the obligations of UAL under the PSP2 Note. UAL may, at its option, prepay the PSP2 Note, at any time, and from time to time, at par. UAL is required to prepay the PSP2 Note upon the occurrence of certain change of control triggering events. The PSP2 Note does not require any amortization, and is to be repaid in full on the Maturity Date. Interest on the PSP2 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.

As of December 31, 2020, UAL and United were in compliance with their respective debt covenants. The collateral, covenants and cross default provisions of the Company's principal debt instruments that contain such provisions are summarized in the table below:


Debt Instrument			Collateral, Covenants and Cross Default Provisions
Various equipment notes and other notes payable			Secured by certain aircraft, spare engines and spare parts. The indentures contain events of default that are customary for aircraft financings, including in certain cases cross default to other related aircraft.
Credit Agreement			Secured by certain of United's international route authorities, specified take-off and landing slots at certain airports and certain other assets. The Credit Agreement requires the Company to maintain at least $2.0 billion of unrestricted liquidity at all times, which includes unrestricted cash, short-term investments and any undrawn amounts under any revolving credit facility, and to maintain a minimum ratio of appraised value of collateral to the outstanding obligations under the Credit Agreement of 1.6 to 1.0 at all times. The Credit Agreement contains covenants that, among other things, restrict the ability of UAL and its restricted subsidiaries (as defined in the Credit Agreement) to make investments and to pay dividends on or repurchase stock. The Credit Agreement contains events of default customary for this type of financing, including a cross payment default and cross acceleration provision to certain other material indebtedness of the Company.
CARES Act Credit Agreement			Secured by liens on (i) certain route authorities of United and certain related slots and gate leaseholds and other related assets, (ii) certain aircraft and (iii) certain flight simulators and related assets. The CARES Act Credit Agreement requires the Company to maintain at least $2.0 billion of unrestricted liquidity at all times, which includes, among other things, unrestricted cash, certain short-term investments and any undrawn amounts under any revolving credit facility or under the CARES Act Credit Agreement, and to maintain a minimum ratio of appraised value of collateral to the outstanding obligations under the CARES Act Credit Agreement of 1.6 to 1.0. The CARES Act Credit Agreement contains covenants that, among other things, (i) restrict the ability of UAL and its subsidiaries to make investments and to pay dividends on or repurchase stock, (ii) require United to maintain certain levels of scheduled service and (iii) create certain limitations on executive compensation. The CARES Act Credit Agreement contains events of default customary for this type of financing, including a cross payment default and cross acceleration provision to certain other material indebtedness of the Company.

MileagePlus Notes and Term Loan Facility			Secured by first-priority security interests in substantially all of the assets of the Issuers, other than excluded property and subject to certain permitted liens, including security interests in specified cash accounts that include the accounts into which MileagePlus revenues are or will be paid by United's marketing partners and by United.
PSP and PSP2 Notes			The PSP Note and the PSP2 Note represent senior unsecured indebtedness of UAL. The PSP Note and the PSP2 Note are guaranteed by United. 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 such subsidiary shall be required to guarantee the obligations of UAL under the PSP Note and the PSP2 Note.
Unsecured notes			The indentures for these notes contain covenants that, among other things, restrict the ability of the Company and its restricted subsidiaries (as defined in the indentures) to incur additional indebtedness and pay dividends on or repurchase stock, although the Company currently has ample ability under these restrictions to repurchase stock under the Company's share repurchase programs.