Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
On
On
Borrowings under the Revolving Credit Facility bear interest at a variable rate
equal to the
The obligations of United under the 2017 Credit Agreement are secured by liens
on certain route authorities of United to operate between
The 2017 Credit Agreement includes covenants that restrict the Company's ability
to, among other things, make investments and to pay dividends on, or to
repurchase, UAL common stock. In addition, the 2017 Credit Agreement requires
the Company to maintain unrestricted cash and cash equivalents and unused
commitments available under all revolving credit facilities (including any
availability under the Revolving Credit Facility) aggregating not less than
The 2017 Credit Agreement contains events of default customary for this type of financing, including a cross default and cross acceleration provision to certain other material indebtedness of the Company. Upon the occurrence of an event of default, the outstanding obligations under the 2017 Credit Agreement may be accelerated and become due and payable immediately. In addition, if certain change of control events occur with respect to UAL, the Company is required to repay the loans outstanding under the 2017 Credit Agreement and terminate the Revolving Credit Facility.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the 2017 Credit Agreement, which is Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 2.05 Costs Associated with Exit or Disposal Activities
On
In connection with these workforce reductions, the Company expects that it will
recognize employee separation charges aggregating approximately
At this time, the Company is unable to in good faith make a determination of an estimate or range of estimates required by paragraphs (b), (c) and (d) of Item 2.05 of Form 8-K with respect to workforce reduction actions in the remainder of 2020. The Company will file an amendment to this report after it makes a determination of such estimate or range of estimates.
Cautionary Statement Regarding Forward-Looking Statements:
Certain statements in this Current Report on Form 8-K are forward-looking and thus reflect the Company's current expectations and beliefs with respect to certain current and future events and anticipated financial and operating performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to the Company's operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as "expects," "will," "plans," "anticipates," "indicates," "remains," "believes," "estimates," "forecast," "guidance," "outlook," "goals," "targets" and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this report are based upon information available to the Company on the date of this report. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law.
The Company's actual results could differ materially from these forward-looking
statements due to numerous factors including, without limitation, the following:
the duration and spread of the ongoing global COVID-19 pandemic and the outbreak
of any other disease or similar public health threat and the impact on the
business, results of operations and financial condition of the Company; the
lenders' ability to accelerate the MileagePlus indebtedness, foreclose upon the
collateral securing the MileagePlus indebtedness or exercise other remedies if
the Company is not able to comply with the covenants in the MileagePlus
financing agreement; the final terms of borrowing pursuant to the Loan Program
under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"),
if any, and the effects of the grant and promissory note through the Payroll
Support Program under the CARES Act; the costs and availability of financing;
the Company's significant amount of financial leverage from fixed obligations
and ability to seek additional liquidity and maintain adequate liquidity;
the Company's ability to comply with the terms of its various financing
arrangements; the material disruption of the Company's strategic operating plan
as a result of the COVID-19 pandemic and the Company's ability to execute its
strategic operating plans in the long term; general economic conditions
(including interest rates, foreign currency exchange rates, investment or credit
market conditions, crude oil prices, costs of aircraft fuel and energy refining
capacity in relevant markets); risks of doing business globally, including
instability and political developments that may impact its operations in certain
countries; demand for travel and the impact that global economic and political
conditions have on customer travel patterns; the Company's capacity decisions
and the capacity decisions of its competitors; competitive pressures on pricing
and on demand; changes in aircraft fuel prices; disruptions in the Company's
supply of aircraft fuel; the Company's ability to cost-effectively hedge against
increases in the price of aircraft fuel, if it decides to do so; the effects of
any technology failures, cybersecurity or significant data breaches; disruptions
to services provided by third-party service providers; potential reputational or
other impact from adverse events involving the Company's aircraft or operations,
the aircraft or operations of its regional carriers or its code share partners
or the aircraft or operations of another airline; the Company's ability to
attract and retain customers; the effects of any terrorist attacks,
international hostilities or other security events, or the fear of such events;
the mandatory grounding of aircraft in the Company's fleet; disruptions to the
Company's regional network as a result of the COVID-19 pandemic or otherwise;
the impact of regulatory, investigative and legal proceedings and legal
compliance risks; the success of the Company's investments in other airlines,
including in other parts of the world, which involve significant challenges and
risks, particularly given the impact of the COVID-19 pandemic; industry
consolidation or changes in airline alliances; the ability of other air carriers
with whom the Company has alliances or partnerships to provide the services
contemplated by the respective arrangements with such carriers; costs associated
with any modification or termination of the Company's aircraft orders;
disruptions in the availability of aircraft, parts or support from its
suppliers; the Company's ability to maintain satisfactory labor relations and
the results of any collective bargaining agreement process with its union
groups; any disruptions to operations due to any potential actions by the
Company's labor groups; labor costs; the impact of any management changes;
extended interruptions or disruptions in service at major airports where the
Company operates;
Item 9.01 Financial Statements and Exhibits
Exhibit No. Description 10.1 Amended and Restated Credit and Guaranty Agreement, dated as ofMarch 29, 2017 , among United, as borrower, UAL, as parent and a guarantor, the subsidiaries of UAL from time to time party thereto other than United, the lenders from time to time party thereto, andJPMorgan Chase Bank, N.A ., as administrative agent (filed as Exhibit 10.1 to UAL's Form 8-K filedApril 4, 2017 , Commission file number 1-6033, and incorporated herein by reference). Cover Page, Interactive Data File (embedded with the Inline XBRL 104 document).
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