United Airlines' board hatches tax offset plan
United Airlines Holdings Inc. (UAL) said late Friday that its board of directors has adopted a plan to shield a potential tax offset in case of an ownership change. United said it has reported federal net operating losses, or NOLs, of about $8.2 billion. These NOLs have increased "significantly" in recent months in face of continued steep losses during the pandemic, and can be used to reduce the company's future federal income tax expenses. That ability, however, would be limited if the company were to change ownership, which would occur if the percentage of UAL's stock owned by one or more of some of its largest shareholders increases by more than 50 percentage points over a rolling three-year period. "In light of the volatility and decline in the market price of UAL's common stock resulting from the sharp decline in demand for air travel caused by the COVID-19 pandemic and other macroeconomic factors and in light of potential transactions involving the sale or issuance of UAL common stock, UAL's board of directors determined to adopt the plan to prevent an inadvertent impairment of the Company's NOLs," the company said. The plan will be put to a ratification vote at the company's annual shareholder meeting next year, the airline said. Shares of United were flat in the extended session Friday after ending the regular trading day down 1.3%.
-Claudia Assis; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
December 04, 2020 17:36 ET (22:36 GMT)
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