Profit Sharing Program
Date:
January 15, 2023
Profit Sharing for 2023
Given United’s return to profitability, management has announced their expectation that we will see a Profit-Sharing payout in early 2023. Our last Profit-Sharing payout was based on the corporation’s 2019 profitability and was paid in 2020.
Profit Sharing, as provided for in Section 4.N. of our Contract, is based on our full year financial results and may vary based on corporate performance in the fourth quarter. While this was the final variable in determining the Profit Sharing, the corporation is forecasting pre-tax profits above the $10 million threshold for 2022.
The final result of the Profit-Sharing payout is based on corporate costs relative to corporate revenue. However, we should not over predict the size of the Profit-Sharing payment. While the payout is expected to be above $100 million, this amount is 20-25% of our 2019 Profit Sharing payout which was nearly $500 million. We should also be aware that there is still substantial corporate debt that also plays into and impacts our bottom line.
Final Profit-Sharing results are anticipated to be announced in the coming weeks.
Profit Sharing Program
- The Profit-Sharing Plan shall become effective on January 1, 2006. The Union will advise the Company whether in lieu of a cash distribution, Flight Attendants profit sharing distribution should be made as an additional Direct Company Contribution to the Flight Attendants’ 401(k) Plan accounts.
- All Flight Attendants who have completed one year of service as of December 31st of the year for which Pre-Tax Earnings are being measured will be eligible to participate in a pre-tax profit-sharing program with respect to calendar years beginning in 2005.
- Pre-tax Earnings is UAL consolidated net income as determined in accordance with U.S. generally accepted accounting principles (GAAP), but excluding (i) federal, state and local income tax expenses (or credit); (ii) unusual, special or nonrecurring charges or (iii) charges with respect to grant, exercise or vesting of equity, securities or options granted to UAL and United employees, and (iv) expenses associated with the profit-sharing contributions.
- The profit-sharing program described below shall become effective for-profit sharing payments in 2017, and profit-sharing payments thereafter. The Company profit sharing plan shall provide that in the event that the Company has more than $10 million in Pre-Tax Earnings in the relevant calendar year, then the Flight Attendant Annual Profit-Sharing Pool shall be based on two components:
a. 10% of Pre-Tax Earnings that are not in excess of the Pretax Earnings for the previous calendar year; and
b. 20% of Pre-Tax Earnings that are in excess of the Pre-Tax Earnings for the previous calendar year. - The allocation to each eligible Flight Attendant will be a pro rata share of the Annual Profit-Sharing Pool based on the ratio of the Flight Attendant’s Considered Earnings, (as defined in the Success Sharing Plan) for the year to the aggregate amount of Considered Earnings for all eligible employees that year.
- Profit Sharing payments will be made no later than April 30th each year.
- Profit Sharing payments will be paid to the Flight Attendant, subject to applicable 401(k) deferral election, withholding and taxes.
2006 Profit Sharing
Paid in 2007 | 2010 Profit Sharing
Paid in 2011 | 2011 Profit Sharing
Paid in 2012 | 2012 Profit Sharing
Paid in 2013 | 2013 Profit Sharing
Paid in 2014 |
|---|
| 4%of Considered Earnings | 5.9%of Considered Earnings | 5%of Considered Earnings | 2%of Considered Earnings | 3.3%of Considered Earnings |
| Profit Sharing Pool $170 Million | Profit Sharing Pool $153 Million | Profit Sharing Pool $245 Million | Profit Sharing Pool $119 Million | Profit Sharing Pool $190 Million |
| 2014 Profit Sharing Paid in 2015 | 2015 Profit Sharing Paid in 2016 | 2016 Profit Sharing Paid in 2017 | 2017 Profit Sharing Paid in 2018 | 2018 Profit Sharing Paid in 2019 | 2019 Profit Sharing Paid in 2020 |
|---|
| 5.6658% of Considered Earning | 13.0029% of Considered Earnings | 7.8766% of Considered Earnings | 4.7969% of Considered Earnings | 4.6115% of Considered Earnings | 6.9311% of Considered Earnings |
| Pool: $235 Million | Pool: $6.061 Million | Pool: $6,551 Million | Pool: | Pool: $3,585 Million | Pool: $4,598 Million |
| 2020 Profit Sharing Paid in 2021 | 2021 Profit Sharing Paid in 2022 | 2022 Profit Sharing Paid in 2023 | 2023 Profit Sharing Paid in 2024 | 2024 Profit Sharing Paid in 2025 | 2025 Profit Sharing Paid in 2026 |
|---|
| N/A (COVID) % of Considered Earnings | N/A (COVID) % of Considered Earnings | TBD % of Considered Earnings | TBD % of Considered Earnings | TBD % of Considered Earnings | TBD % of Considered Earnings |
| Pool: N/A (COVID) | Pool: N/A (COVID) | Pool: TBD | Pool: TBD | Pool: TBD | Pool: TBD |
Profit Sharing under calendar year 2019
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