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Fair Value Measurements, Investments and Notes Receivable

12 Months Ended

Dec. 31, 2022

FAIR VALUE MEASUREMENTS, INVESTMENTS AND NOTES RECEIVABLE

FAIR VALUE MEASUREMENTS, INVESTMENTS AND NOTES RECEIVABLEFair Value Information. Accounting standards require us to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are described in Note 7 of this report. The table below presents disclosures about the fair value of financial assets and liabilities measured at fair value on a recurring basis in the Company's financial statements as of December 31 (in millions):


	2022								2021
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	7,166	$	7,166	$	—	$	—	$	18,283	$	18,283	$	—	$	—
Restricted cash - current (Note 1)	45		45		—		—		37		37		—		—
Restricted cash - non-current (Note 1)	210		210		—		—		213		213		—		—
Short-term investments:
U.S. government and agency notes	8,914		—		8,914		—		2		—		2		—
Asset-backed securities	325		—		325		—		26		—		26		—
Corporate debt	9		—		9		—		95		—		95		—
Long-term investments:
Equity securities	189		189		—		—		229		229		—		—

Investments presented in the table above have the same fair value as their carrying value.

Short-term investments — The short-term investments shown in the table above are classified as available-for-sale and have remaining maturities of approximately one year or less.

Long Term Investments: Equity securities — Represents equity and equity-linked securities (such as vested warrants) in Azul Linhas Aéreas Brasileiras S.A., Clear Secure, Inc., Archer Aviation Inc. and Eve Holding, Inc.

Other fair value information - The table below presents the carrying values and estimated fair values of financial instruments not presented in the tables above as of December 31 (in millions). Carrying amounts include any related discounts, premiums and issuance costs:


	2022										2021
	Carrying Amount		Fair Value								Carrying Amount		Fair Value
			Total		Level 1		Level 2		Level 3				Total		Level 1		Level 2		Level 3
Long-term debt	$	31,194	$	29,371	$	—	$	23,990	$	5,381	$	33,363	$	34,550	$	—	$	29,088	$	5,462

Fair value of the financial instruments included in the tables above was determined as follows:


Description			Fair Value Methodology
Cash and cash equivalents and Restricted cash (current and non-current)			The carrying amounts of these assets approximate fair value.
Short-term and Long-term investments			Fair value is based on (a) the trading prices of the investment or similar instruments or (b) broker quotes obtained by third-party valuation services.
Long-term debt			Fair values were based on either market prices or the discounted amount of future cash flows using our current incremental rate of borrowing for similar liabilities or assets.

Investments in Regional Carriers. United holds investments in three regional carriers that fly for the Company as United Express under its CPAs. The combined carrying value of the investments was approximately $188 million as of December 31, 2022. Each investment and United's ownership stake are listed below.

•CommuteAir LLC. United owns a 40% minority ownership stake in CommuteAir LLC, which does business as CommuteAir. CommuteAir currently operates 63 regional aircraft under a CPA that has a term through 2026. We account for this investment using the equity method.

•Republic Airways Holdings Inc. ("Republic Holdings"). United holds a 19% minority interest in Republic Holdings. Republic Holdings is the parent company of Republic Airways Inc. ("Republic"). Republic currently operates 66 regional aircraft under CPAs that have terms through 2036. We account for this investment using the equity method.

•Mesa Air Group, Inc. ("Mesa Air Group"). In January 2023, United obtained a 10% minority interest in Mesa Air Group, the parent company of Mesa Airlines, Inc. ("Mesa"). Mesa currently operates 63 regional aircraft, with the opportunity to operate up to 80 regional aircraft, under a CPA that has a term through 2032.

Other Investments. United holds equity investments in a number of companies with emerging technologies and sustainable solutions. United also has equity investments in Avianca Group International Limited, a multinational airline holding company, and JetSuiteX, Inc., an independent air carrier doing business as JSX. None of these investments have readily determinable fair values. We account for these investments at cost less impairment, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same issuer. As of December 31, 2022, the carrying value of these investments was $434 million.

Notes Receivable. The Company has $101 million of notes receivable, net of allowance for credit losses, the majority of which is from certain of its regional carriers. The loans are recorded in Investments in affiliates and other, less allowance for credit losses on the Company's consolidated balance sheet.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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