United Airlines Holdings UAL · USD

REVENUE RECOGNITIONPassenger Revenue. Passenger revenue is recognized when transportation is provided.Passenger tickets and related ancillary services sold by the Company for flights are purchased primarily via credit card transactions, with payments collected by the Company in advance of the performance of related services. The Company initially records ticket sales in its Advance ticket sales liability, deferring revenue recognition until the travel occurs. For travel that has more than one flight segment, the Company deems each segment as a separate performance obligation and recognizes revenue for each segment as travel occurs. Tickets sold by other airlines where the Company provides the transportation are recognized as passenger revenue at the estimated value to be billed to the other airline when travel is provided. Differences between amounts billed and the actual amounts may be rejected and rebilled or written off if the amount recorded was different from the original estimate. When necessary, the Company records a reserve against its billings and payables with other airlines based on historical experience.The Company sells certain tickets with connecting flights with one or more segments operated by its other airline partners. For segments operated by its other airline partners, the Company has determined that it is acting as an agent on behalf of the other airlines as they are responsible for their portion of the contract (i.e., transportation of the passenger). The Company, as the agent, recognizes revenue within Other operating revenue at the time of the travel for the net amount representing commission to be retained by the Company for any segments flown by other airlines.Refundable tickets expire after one year from the date of issuance. Non-refundable tickets generally expire on the date of the intended travel, unless the date is extended by notification from the customer on or before the intended travel date.United initially capitalizes the costs of selling airline travel tickets and then recognizes those costs as Distribution expense at the time of travel. Costs to sell a ticket include credit card fees, travel agency and other commissions paid, as well as global distribution systems booking fees.Advance ticket sales. Advance ticket sales represent the Company's liability to provide air transportation in the future. All tickets sold at any given point in time have travel dates through the next 12 months.

COMMITMENTS, CONTINGENCIES, AND GUARANTEES Purchase Commitments. The table below summarizes United's firm commitments as of December 31, 2025, which include aircraft and related spare engines, aircraft improvements and non-aircraft commitments (in billions): 20262027202820292030After 2030TotalPurchase commitments$12.6 $5.6 $7.4 $9.0 $8.7 $13.8 $57.0 Aircraft commitments included in the table above are based on contractual scheduled aircraft deliveries. The amount and timing of these commitments could change to the extent that: (i) the Company and the aircraft manufacturers, with whom the Company has existing orders for new aircraft, agree to modify (or further modify) the contracts governing those orders, (ii) rights are exercised pursuant to the relevant agreements to cancel deliveries or modify the timing of deliveries, or (iii) the aircraft manufacturers are unable to deliver in accordance with the terms of those orders.Regional CPAs. United has contractual relationships with various regional carriers to provide regional aircraft service branded as United Express. Under these CPAs, the Company pays the regional carriers contractually agreed fees (carrier costs) for operating these flights plus a variable rate adjustment based on agreed performance metrics, subject to annual adjustments. The fees are based on rates multiplied by specific operating statistics (e.g., block hours, departures), as well as fixed monthly amounts. Under these CPAs, the Company is also responsible for all fuel costs incurred, as well as landing fees and other costs, which are either passed through by the regional carrier to the Company without any markup or directly incurred by the Company. In some cases, the Company owns some or all of the aircraft subject to the CPA and leases such aircraft to the regional carrier. United's CPAs are for 424 regional aircraft as of December 31, 2025, and the CPAs have terms expiring through 2037. Aircraft operated under CPAs include aircraft leased directly from the regional carriers and those owned by United and operated by the regional carriers. In 2025, United amended several of its CPAs with certain of its regional carriers to amend the contractually agreed fees (carrier costs) paid to those carriers, modify the terms for certain aircraft, and modify service entry dates for certain new aircraft.United recorded approximately $1.1 billion, $1.1 billion and $1.

DEBT(In millions)Maturity DatesInterest Rate(s) at December 31, 2025At December 31,20252024Equipment Notes (a)2026—20372.70%—6.25%$11,708 $12,983 2026 and 2029 Notes2026—20294.38%—4.63%4,000 4,000 2024 Term Loans (b)20315.73%2,061 2,082 MileagePlus Senior Secured Notesn/an/a— 1,900 Other secured debt2029—20354.00%—5.25%361295 UnsecuredPSP Notes (c)2030—20311.00%—5.93%3,181 3,181 Notesn/an/a— 315 Other unsecured debt20275.75%71 81 21,383 24,837 Less: unamortized debt discount, premiums and debt issuance costs (117)(184)Less: current portion of long-term debt(4,096)(2,973)Long-term debt, net$17,170 $21,680 (a)Financing includes variable rate debt based on the Secured Overnight Financing Rate ("SOFR") (or another index rate), generally subject to a floor, plus a specified margin of 0.64% to 2.00%.(b)Financing includes variable rate debt based on SOFR (or another index rate), subject to a floor, plus a specified margin of 2.00%.(c)The PSP Notes include $1.50 billion of indebtedness evidenced by a 10-year senior unsecured promissory note with Treasury provided under PSP, $0.9 billion of indebtedness evidenced by a 10-year senior unsecured promissory note issued to Treasury pursuant to PSP2 and $0.8 billion of indebtedness evidenced by a 10-year senior unsecured promissory note issued to Treasury pursuant to PSP3. These PSP Notes have a rate of 1.00% in years 1 through 5, and a rate of the SOFR plus 2.00% in years 6 through 10.As of December 31, 2025, we had $3.0 billion undrawn and available under our revolving credit facility. The table below presents the Company's contractual principal payments (not including debt discount or debt issuance costs) as of December 31, 2025 under then-outstanding long-term debt agreements (in millions):20262027202820292030After 2030TotalContractual principal payments$4,096 $2,011 $1,839 $2,932 $2,467 $8,039 $21,383 In 2025, United borrowed $0.5 billion aggregate principal amount from financial institutions to finance the purchase of aircraft. The notes evidencing these borrowings, which are secured by the related aircraft, mature between 2035 and 2037 and bear interest equal to Term SOFR plus a margin with variable rates ranging from 5.29% to 5.39%.

INCOME TAXESThe income tax provision differed from amounts computed at the statutory federal income tax rate and consisted of the following significant components for the years ended December 31 (in millions):202520242023Income tax provision at statutory rate$904 21.0 %$875 21.0 %$711 21.0 %State income tax provision, net of federal income tax benefit (a)74 1.7 %59 1.4 %37 1.1 %Change in valuation allowance(68)(1.6)%27 0.6 %(24)(0.7)%Nontaxable or nondeductible items27 0.6 %48 1.2 %39 1.1 %Other, net16 0.4 %10 0.2 %6 0.2 %Income tax expense$953 22.1 %$1,019 24.4 %$769 22.7 %(a) California and Colorado make up more than 50% of the state income tax expense category in 2025.

SHARE-BASED COMPENSATION PLANSUAL maintains share-based compensation plans for our management employees and our non-employee directors. These plans provide for grants of nonqualified stock options; incentive stock options (within the meaning of Section 422 of the Internal Revenue Code of 1986); stock appreciation rights ("SARs"); restricted stock; RSUs; performance units; cash incentive awards and other equity-based and equity-related awards. An award (other than an option, SAR or cash incentive award) may provide the holder with dividends or dividend equivalents.Awards are recorded as either equity or a liability in the Company's consolidated balance sheets. Share-based compensation expense is recorded in Salaries and related costs. During 2025, UAL granted share-based compensation awards pursuant to the United Airlines Holdings, Inc. 2021 Incentive Compensation Plan. These share-based compensation awards included approximately 1.8 million RSUs consisting of approximately 1.0 million time-vested RSUs and approximately 0.8 million performance-based RSUs. The time-vested RSUs vest pro-rata, a majority of which vest on February 28th of each year, over a three-year period from the date of grant. Performance-based awards vest either pro-rata, one-third each year, over a three-year period from the date of grant or all at once upon continuous employment with the Company over a three-year period. Payout under the performance-based awards can range from 0% to 300% depending on the achievement level of certain financial and strategic goals. RSUs are generally equity awards settled in stock for domestic employees and liability awards settled in cash for international employees. The cash payments are based on the 20-day average closing price of UAL common stock immediately prior to the vesting date. The following table provides information related to UAL's share-based compensation plan cost for the years ended December 31 (in millions):Compensation cost202520242023RSUs$147 $141 $78 Stock options 1 1 2 Total$148 $142 $80 The table below summarizes UAL's unearned compensation and weighted-average remaining period to recognize costs for all outstanding share-based awards that are probable of being achieved as of December 31, 2025 (in millions, except as noted): Unearned CompensationWeighted-AverageRemaining Period (in years)RSUs$90 1.3Stock options 1 1.7Total$91 Restricted stock units.

The table below summarizes UAL's RSU activity for the years ended December 31 (shares in millions):Liability AwardsEquity AwardsRSUsRSUsWeighted-AverageGrant PriceOutstanding at December 31, 20220.1 3.3 $37.88 Granted0.1 2.5 43.42 Vested(0.1)(1.6)44.03 Forfeited— (0.1)36.90 Outstanding at December 31, 20230.1 4.1 38.86 Granted0.1 3.6 46.65 Vested(0.1)(2.3)39.37 Forfeited— (0.3)43.28 Outstanding at December 31, 20240.1 5.1 43.89 Granted— 1.8 79.30 Vested (0.1)(2.9) 45.23 Forfeited — (0.3)53.41 Outstanding at December 31, 2025 0.1 3.8 59.

LEASESUnited leases aircraft, airport passenger terminal space, aircraft hangars and related maintenance facilities, cargo terminals, other airport facilities, other commercial real estate, office and computer equipment and vehicles, among other items. Certain of these leases include provisions for variable lease payments which are based on several factors, including, but not limited to, relative leased square footage, available seat miles, enplaned passengers, passenger facility charges, terminal equipment usage fees, departures, and airports' annual operating budgets. Due to the variable nature of these payments, they are not included in the calculation of the right-of-use asset and lease liability.Lease Cost. The Company's lease cost for the years ended December 31 included the following components (in millions):202520242023Operating lease cost$894 $855 $925 Variable and short-term lease cost4,003 3,592 3,028 Amortization of finance lease assets86 62 52 Interest on finance lease liabilities15 16 20 Sublease income(33)(35)(39)Total lease cost$4,964 $4,490 $3,986 Lease Terms and Commitments. United's leases include aircraft leases for aircraft that are directly leased by United and aircraft that are operated by regional carriers on United's behalf under CPAs (but excluding aircraft owned by United) and non-aircraft leases. Aircraft operating leases relate to leases of 81 mainline and 217 regional aircraft while finance leases relate to leases of 27 mainline and 11 regional aircraft. United's aircraft leases have remaining lease terms of up to 12 years with expiration dates ranging from 2026 through 2037. Under the terms of most aircraft leases, United has the right to purchase the aircraft at the end of the lease term, in some cases at fair market value, and in others, at a percentage of cost.In addition, United also has 63 leases of Boeing 737 MAX, Boeing 787 and Airbus A321neo aircraft under various sale-leaseback transactions. These transactions did not qualify as a sale under the applicable accounting guidance, and, as such, the associated aircraft remain on the Company's consolidated balance sheet as part of Operating property and equipment, net. The related obligations are recorded in Current maturities of long-term debt, finance leases, and other financial liabilities and Long-term debt, finance leases, and other financial liabilities.

Managing cybersecurity and digital risk is a significant part of the Company's overall strategy for safely operating its business. The Company has developed a risk-based cybersecurity and digital risk management strategy. This risk-based strategy is informed by guiding principles from industry standard cybersecurity and risk management frameworks—such as those published by the National Institute of Standards and Technology—and industry-recognized practices to protect the confidentiality, integrity and availability of the Company's information technology systems and data. The Company is also subject to extensive cybersecurity regulation, including but not limited to those regulations overseen by the FAA, TSA, and DOT. This risk-based framework is also integrated into the Company's Enterprise Risk Management ("ERM") process that is subject to oversight by the Board. Cybersecurity risks are one of the key risks regularly evaluated, assessed and monitored as part of the Company's overall ERM process.As part of its risk-based strategy, the Company maintains appropriate technical and organizational measures and regularly reviews the appropriateness of those controls based on changes to the technical or regulatory environment to protect as well as minimize threats to the Company's information; the information of the Company's customers, suppliers and other third parties; the Company's information systems; the Company's business operations; and the Company's services. The Company also regularly incorporates cybersecurity awareness training into employee communications, engagement and training activities. The Company participates in various information-sharing organizations to timely share and receive threat information, thereby improving the collective defense of the aviation, retail and hospitality and other critical infrastructure sectors. The Company regularly seeks opportunities to improve its capabilities, including through cybersecurity trainings and skill-development programs for its CDR organization members.The Company utilizes a variety of third parties, as appropriate, in connection with its cybersecurity risk management. The Company employs these third-party cybersecurity companies to add capacity or expertise when necessary.