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10-K – 2026-02-12 – ual-20251231.htm
In addition, disruptions to the Company's business could result from the deployment of new cellular networks (e.g., "5G") by wireless carriers, which, due to potential interference with aircraft systems, could cause flights to be cancelled or diverted, which in turn could affect consumer perceptions of the safety of air travel. For example, over the past years regulators have addressed potential "5G" interference on a temporary and piecemeal basis tailored to specific aircraft and airports, which could occur again. Systematic regulation of the overlap between aviation systems and cellular networks may not occur in the near term or may not involve terms that are favorable to the Company.
Moreover, any legislation that would result in a reshaping of the benefits that the Company is able to provide to its consumers through the co-branded credit cards issued by our partner could also materially negatively affect the Company's profitability and competitive position.
In addition, competition from revenue-sharing JBAs and other alliance arrangements by and among other airlines could impair the value of the Company's business and assets on the Open Skies routes. The Company's plans to enter into or expand U.S. antitrust immunized alliances and JBAs on various international routes are subject to receipt of approvals from applicable U.S. federal authorities and other applicable foreign government clearances or satisfaction of other applicable regulatory requirements. There can be no assurance that such approvals and clearances will be granted or will continue in effect upon further regulatory review or that changes in regulatory requirements or standards can be satisfied.
See Part I, Item 1. Business—Industry Regulation, of this report for additional information on government regulation impacting the Company.
Current or future litigation and regulatory actions, or failure to comply with the terms of any settlement, order or agreement relating to these actions, could have a material adverse impact on the Company.
From time to time, we are subject to litigation and other legal and regulatory proceedings relating to our business or investigations or other actions by governmental agencies, including as described in Part I, Item 3. Legal Proceedings, of this report. In addition, the Company was subject to an increased risk of litigation and other proceedings as a result of the COVID-19 pandemic and responsive measures. For example, the Company is involved in a certified class action lawsuit relating to its vaccination requirements for employees. No assurances can be given that the results of these or any potential new matters will be favorable to us. An adverse resolution of lawsuits, arbitrations, investigations or other proceedings or actions could have a material adverse effect on our financial condition and operating results, including as a result of non-monetary remedies, and could also result in adverse publicity. Defending ourselves in these matters may be time-consuming, expensive and disruptive to normal business operations and may result in significant expense and a diversion of management's time and attention from the operation of our business, which could impede our ability to achieve our business objectives. Additionally, any amount that we may be required to pay to satisfy a judgment, settlement, fine or penalty may not be covered by insurance. If we fail to comply with the terms contained in any settlement, order or agreement with a governmental authority relating to these matters, we could be subject to criminal or civil penalties, which could have a material adverse impact on the Company. Under our charter and certain indemnification agreements that we have entered into (and may in the future enter into) with our officers, directors and certain third parties, we could be required to indemnify and advance expenses to them in connection with their involvement in certain actions, suits, investigations and other proceedings. Any of these payments may be material.
We are subject to many forms of environmental regulation and liability as well as risks associated with climate change and may incur substantial costs as a result.
Many aspects of the Company's operations are subject to federal, state, local and international laws regarding the environment, including those relating to aircraft and ground-based carbon emissions, noise, plastic use, water discharges, safe drinking water and the use and management of hazardous materials and wastes. Compliance with existing and future environmental laws and regulations has required and may in the future require significant expenditures and operational changes. Violations have led and may in the future lead to significant fines, penalties, lawsuits and reputational harm. In addition, we have in the past been identified—and may in the future be identified—as a responsible party for environmental investigation and remediation costs under applicable environmental laws due to the disposal or release of hazardous substances generated by our operations, including PFAS, two of which, PFOA and PFOS, were designated by U.S. EPA as hazardous substances under the CERCLA. We could also be subject to environmental liability claims from various parties—including airport authorities and other third parties—related to our operations at our owned or leased premises, including our use of PFAS-containing fire suppression systems as required by fire codes and insurers, or the off-site disposal of waste generated at our facilities.
As discussed in Part I, Item 1. Business—Our Approach to Corporate Citizenship and Value Creation—Environmental Sustainability Strategy, the Company has made commitments to reduce its GHG emissions by 100% by 2050 and its carbon emission intensity by 50% by 2035 compared to 2019. The Company has incurred, and expects to continue to incur, costs to achieve its climate goals—which will involve a transition to lower-carbon technologies (such as SAF)—and to comply with environmental sustainability legislation and regulation and non-binding standards and accords. Such activity may require the
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Company to modify its supply-chain practices, make capital investments to modify certain aspects of its operations or increase its operating costs (including fuel costs). The potential transition cost to a lower-carbon economy could be prohibitively expensive without appropriate government policies and incentives in place. The precise nature of future binding or non-binding legislation, regulation, standards and accords in this area of increased focus by global, national and regional regulators is difficult to predict and the financial impact to the Company could be significant if future legal standards and regulatory policies do not align with or support the Company's plans to achieve its climate goals. There is a risk that a patchwork of inconsistent or conflicting regional regulations, could unduly shift excessive cost burden to airlines and inhibit the development of carbon reduction technologies that the Company needs to reach its climate goals. In addition, while CORSIA-related costs cannot be fully predicted at this time, the program is expected to increase operating costs for airlines that operate internationally.
There can be no assurance of the extent to which any of our climate goals will be achieved or that any current or future investments that we make in furtherance of achieving our climate goals will produce the expected results or meet stakeholders' evolving expectations. Moreover, future events could lead the Company to prioritize other nearer-term interests over progressing toward our current climate goals based on business strategy, economic, regulatory and social factors or pressure from investors or other stakeholders. If we fail—or are perceived to fail—to meet or properly report on our progress toward achieving our climate change goals and commitments, we could face adverse reactions from investors or other stakeholders, which could result in adverse effects to the Company. In addition, the Company believes it is possible that, in the future, segments of the public may choose to fly less frequently as a result of negative perception of the environmental impact of air travel or fly on an airline based on carriers' GHG emissions or which carrier they perceive as operating in a manner that is more sustainable to the climate, which presents both a challenge and an opportunity for the Company; if this trend materializes, the Company's results of operations could be adversely impacted and those impacts could be exacerbated if the Company fails to meet or properly report on its climate change goals and commitments. More broadly, we could also be subject to climate litigation as groups, individuals and governmental authorities affected by climate change seek to recover climate-related damages from entities they perceive as being partially responsible for human-induced climate change because of the emission of GHGs from their operations.
The Company's key pathways to achieving its climate goals include investing in and using more SAF, reducing its conventional jet fuel consumption and working with strategic partners to advance the future of more sustainable flight. The achievement of our goals is therefore largely dependent on the significant development of and maturation in the SAF market. Currently, there is a premium for SAF above the cost of conventional jet fuel and this premium has recently increased in certain markets due to SAF blending mandates in Europe, the UK and other parts of the world. The Company has been able to increase its purchases of SAF in recent years due to its corporate customers' funding of the price premium for SAF through the Company's Eco-Skies Alliance, but the willingness of corporate customers to assist the Company in covering the price premium for SAF in the future could decrease for a number of reasons, including based on economic factors or concerns regarding the validity of a book-and-claim approach for claiming the emissions reductions from SAF, constraints on supplies of SAF that meet customer requirements, emerging SAF certification or book-and-claim restrictions developed by governments or non-governmental organizations or practices whereby corporate customers purchase the environmental attributes from SAF directly from fuel producers, bypassing the airlines. In addition, the demand for cost-competitive SAF within the aviation industry significantly exceeds the current available supply. While we have been able to increase our current supply of SAF year-over-year through definitive offtake agreements, we have also entered into certain conditional agreements with start-up companies for future SAF supply. These conditional SAF purchase agreements for future SAF supply may pertain to production from facilities that are planned but not yet operational and may utilize technology that has not been proven at commercial scale. There is no assurance that these facilities will produce SAF at commercial scale or that they will meet expected production timelines and volumes.
As we seek to mitigate our business risks associated with climate change by establishing robust environmental programs, the Company has incurred costs and substantial operational disruptions as a result of both its physical risks (such as extreme weather conditions or rising sea levels) and transition risks (such as regulatory or technological changes) associated with climate change. Climate change is expected to increase the frequency, severity, unpredictability and duration of severe weather events and other natural cycles and could affect travel demand for certain of our flight offerings as well as result in increases in delays and cancellations, turbulence-related injuries and fuel consumption to avoid such weather, any of which could result in a significant loss of revenue and higher costs. These events and the disruptions, alone or in combination, could also lead to increased costs for and reduced availability of insurance. In addition, certain of our and our vendors' and airport authorities' operations and facilities around the world are in locations that may be impacted by the physical impacts of climate change and we could incur significant costs to improve the climate resiliency of our infrastructure and supply chain and otherwise prepare for, respond to and mitigate the effects of climate change. We are not able to reasonably predict the future materiality of any potential losses or costs associated with the effects of climate change.
See Part I, Item 1. Business—Industry Regulation—Environmental Regulation, of this report for additional information on environmental regulation impacting the Company.
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Market, Liquidity, Accounting and Financial Risks
High and/or volatile fuel prices or significant disruptions in the supply of aircraft fuel could have a material adverse impact on the Company's strategic plans, operating results, financial condition and liquidity.
Aircraft fuel is critical to the Company's operations and is one of our largest operating expenses. During the year ended December 31, 2025, the Company's fuel expense was approximately $11.4 billion. The timely and adequate supply of fuel to meet operational demand depends on the continued availability of reliable fuel supply sources as well as related service and shared delivery infrastructure. Although the Company has some ability to cover short-term fuel supply and infrastructure disruptions at some major demand locations, it depends significantly on the continued performance of its vendors and service providers to maintain supply integrity. While the Company plans for long-term fuel demand to support its strategic growth plan, it depends on securing adequate fuel supply for future needs at cost competitive rates and the timely completion of planned infrastructure investments. Consequently, the Company can neither predict nor guarantee the continued timely or adequate availability of aircraft fuel throughout the Company's system.
Aircraft fuel has historically been the Company's most volatile operating expense due to the highly unpredictable nature of market prices for fuel. The Company generally sources fuel at prevailing market prices, which have historically fluctuated substantially in short periods of time and continue to be volatile due to a multitude of unpredictable factors beyond the Company's control, including changes in global crude oil prices, closely related diesel prices, regional balances between aircraft fuel supply and demand, natural disasters, weather events, regional fuel inventory levels and availability and cost of oil refining and transportation infrastructure. Prices of aircraft fuel are also impacted by indirect factors, such as geopolitical events, economic growth indicators, strength of the U.S. dollar, fiscal/monetary policies, sanctions and tariffs that impede the global flow of oil and refined products, fuel tax policies, changes in regulations, environmental concerns and degree of financial investments in energy markets. Both actual changes in these factors, as well as changes in related market expectations, can potentially drive rapid changes in fuel prices in short periods of time. Rising fuel prices can also lead to constraints on the Company's regional partners, reduced capital available for other spending or other outcomes that could adversely impact the Company.
Given the highly competitive nature of the airline industry, the Company historically has had limited ability to, and may not be able to in the future, increase its fares and fees sufficiently to offset the full impact of increases in fuel prices, especially if these increases are significant, rapid and sustained. Further, any such fare or fee increase may not be sustainable, may reduce the general demand for air travel and may also eventually impact the Company's operations, strategic growth and investment plans for the future. In addition, decreases in fuel prices for an extended period of time may result in increased industry capacity, increased competitive actions for market share and lower fares or surcharges. If fuel prices were to then subsequently rise quickly, there may be a lag between the rise in fuel prices and any improvement of the revenue environment.
The Company does not currently hedge the market price of its future fuel requirements. However, to the extent the Company decides to start a hedging program to hedge a portion of its future fuel requirements, such hedging program may not be successful in mitigating higher fuel costs and any price protection provided may be limited due to the choice of hedging instruments and market conditions, including the breakdown of correlation between any such hedging instrument and the market price of aircraft fuel and failure of hedge counterparties. To the extent that the Company decides to use hedge contracts that have the potential to create an obligation to pay upon settlement if fuel prices decline significantly, such hedge contracts may limit the Company's ability to benefit fully from lower fuel prices in the future. If fuel prices decline significantly from the levels existing at the time the Company enters into a hedge contract, the Company may be required to post collateral (margin) beyond certain thresholds. There can be no assurance that any such hedging arrangements would provide any particular level of protection against rises in fuel prices or that the counterparties to any such hedging arrangements would be able to perform. Additionally, deterioration in the Company's financial condition could negatively affect its ability to enter into hedge contracts in the future.
The Company has a significant amount of financial leverage from fixed obligations and insufficient liquidity may have a material adverse effect on the Company's financial condition and business.
The Company has a significant amount of financial leverage from fixed obligations, including aircraft lease and debt financings, leases of airport property, secured bonds, secured and unsecured loan facilities and other facilities, and other material cash obligations. In addition, the Company has substantial noncancelable commitments for capital expenditures, including for the acquisition of new aircraft and related spare engines. If the Company's liquidity is materially diminished, the Company's substantial level of indebtedness, the Company's non-investment grade credit ratings and the lack of availability of Company assets as collateral for loans or other indebtedness may make it difficult for the Company to raise additional capital if needed to meet its liquidity needs on acceptable terms, or at all, and the Company may not be able to timely pay its leases and debts or
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comply with material provisions of its contractual obligations, including covenants under its financing and credit card processing agreements.
In addition to the foregoing, the degree to which we are leveraged could have important consequences to holders of our securities, including the following: we must dedicate a substantial portion of cash flow from operations to the payment of principal and interest on applicable indebtedness, which, in turn, reduces funds available for operations and capital expenditures; our flexibility in planning for, or reacting to, changes in the markets in which we compete may be limited; we may be at a competitive disadvantage relative to our competitors with less indebtedness; we are rendered more vulnerable to general adverse economic and industry conditions; we are exposed to increased interest rate risk given that a portion of our indebtedness obligations are at variable interest rates; and our credit ratings may be reduced and our debt and equity securities may significantly decrease in value.
See Part II, Item 7., Management's Discussion and Analysis of Financial Condition and Results of Operations, of this report for additional information regarding the Company's liquidity.
Agreements governing our debt include financial and other covenants. Failure to comply with these covenants could result in events of default.
Our financing agreements include various financial and other covenants. Certain of these covenants require UAL or United, as applicable, to maintain minimum liquidity and/or minimum collateral coverage ratios. UAL's or United's ability to comply with these covenants may be affected by events beyond its control, including the overall industry revenue environment, the level of fuel costs and the appraised value of the collateral. In addition, our financing agreements contain other negative covenants customary for such financings. If we fail to comply with these covenants and are unable to remedy or obtain a waiver or amendment, an event of default would result.
If an event of default were to occur, the lenders could, among other things, declare outstanding amounts immediately due and payable. In addition, an event of default or declaration of acceleration under one financing agreement could also result in an event of default under other of our financing agreements due to cross-default and cross-acceleration provisions. The acceleration of significant amounts of debt could require us to renegotiate, repay or refinance the obligations under our financing arrangements, and there can be no assurance that we will be able to do so on commercially reasonable terms or at all.
The Company's ability to use its net operating loss carryforwards and certain other tax attributes to offset future taxable income for U.S. federal income tax purposes may be significantly limited due to various circumstances, including certain possible future transactions involving the sale or issuance of UAL common stock, or if taxable income does not reach sufficient levels.
As of December 31, 2025, UAL reported consolidated U.S. federal net operating loss ("NOL") carryforwards of approximately $10.6 billion. The Company's ability to use its NOL carryforwards and certain other tax attributes will depend on the amount of taxable income it generates in future periods and, as a result, certain of the Company's NOL carryforwards and other tax attributes may expire before it can generate sufficient taxable income to use them in full. In addition, the Company's ability to use its NOL carryforwards and certain other tax attributes to offset future taxable income may be limited if it experiences an "ownership change" as defined in Section 382 of the Internal Revenue Code of 1986, as amended. Potential future transactions involving the sale or issuance of UAL common stock may increase the possibility that the Company will experience a future "ownership change" under Section 382. Such transactions may include the conversion of any future convertible debt, the repurchase of any debt with the Company's common stock, the acquisition or disposition of any stock by a stockholder owning 5% or more of the outstanding shares of UAL common stock, or a combination of the foregoing.
The Company has established a tax benefits preservation plan (the "Plan") in order to preserve the Company's ability to use its NOLs and certain other tax attributes to reduce potential future income tax obligations, which expires December 4, 2026. The Plan is designed to reduce the likelihood that the Company experiences an "ownership change" by deterring certain acquisitions of Company securities. There is no assurance, however, that the deterrent mechanism in the Plan will be effective, and such acquisitions may still occur. In addition, the Plan may adversely affect the marketability of UAL common stock by discouraging existing or potential investors from acquiring UAL common stock or additional shares of UAL common stock because any non-exempt third party that acquires 4.9% or more of the then-outstanding shares of UAL common stock would suffer substantial dilution of its ownership interest in the Company.
The Company may never realize the full value of its intangible assets or its long-lived assets causing it to record impairments that may negatively affect its financial condition and operating results.
In accordance with applicable accounting standards, the Company is required to test its indefinite-lived intangible assets for impairment on an annual basis, or more frequently where there is an indication of impairment, and certain of its other assets for
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impairment where there is any indication that an asset may be impaired. The Company may be required to recognize losses in the future due to, among other factors, extreme fuel price volatility, tight credit markets, government regulatory changes, decline in the fair values of certain tangible or intangible assets, such as our aircraft, route authorities, airport slots and frequent flyer database, unfavorable trends in historical or forecasted results of operations and cash flows and an uncertain economic environment, as well as other uncertainties. The Company can provide no assurance that a material impairment loss of tangible or intangible assets will not occur in a future period.
The price of our common stock may fluctuate significantly.
The closing price for our common stock has varied between a high of $116.02 and a low of $56.15 in the year ended December 31, 2025. Volatility in the market price of our common stock may prevent holders from selling shares at or above the prices paid for them. The market price of our common stock could fluctuate significantly for various reasons which include: changes in the prices or availability of oil or jet fuel; our quarterly or annual earnings or those of other companies in our industry; changes in our earnings or recommendations by research analysts who track our common stock or the stock of other airlines; the public's reaction to our press releases, our other public announcements and our filings with the SEC; changes in the competitive landscape for the airline industry, including any changes resulting from industry consolidation whether or not involving the Company; an accident, catastrophe or incident involving an aircraft that the Company operates; mandatory grounding of an aircraft that the Company operates; changes in general conditions in the United States and global economies, financial markets or airline industries, including those resulting from changes in fuel prices or fuel shortages, war, incidents of terrorism, pandemics, geopolitical conflicts or responses to such events; our liquidity position; the sale of substantial amounts of our common stock; and the other risks described in these "Risk Factors."
The Company's operating results fluctuate due to seasonality and other factors associated with the airline industry, many of which are beyond the Company's control.
Due to greater demand for air travel during the spring and summer months, revenues in the airline industry in the second and third quarters of the year are generally stronger than revenues in the first and fourth quarters of the year, which are periods of lower travel demand. The Company's operating results have historically reflected this seasonality and have also been impacted by numerous other factors that are not necessarily seasonal, including, among others, extreme or severe weather, outbreaks of disease, public health issues (such as the COVID-19 pandemic) and associated government restrictions and regulations, ATC congestion, geological events, political instability, terrorism, natural disasters, changes in the competitive environment due to industry consolidation, tax obligations, general economic conditions and other factors, as well as related consumer perceptions. Such factors have adversely affected, and could in the future continue to adversely affect, the Company. As a result, the Company's quarterly operating results are not necessarily indicative of operating results for an entire year and historical operating results in a quarterly or annual period are not necessarily indicative of future operating results.
Increases in insurance costs or inadequate insurance coverage may materially and adversely impact our business, operating results and financial condition.
The Company maintains insurance policies, including, but not limited to, terrorism, aviation hull and liability, workers' compensation and property and business interruption insurance, but we are not fully insured against all potential hazards and risks incident to our business. If the Company is unable to obtain sufficient insurance with acceptable terms, the costs of such insurance increase materially, or if the coverage obtained is unable to pay or is insufficient relative to actual liability or losses that the Company experiences, whether due to insurance market conditions, policy limitations and exclusions or otherwise, our business, operating results and financial condition could be materially and adversely affected.
We cannot guarantee that our share repurchase program will enhance long-term stockholder value.
As part of our capital deployment program, in the fourth quarter of 2024, the Board authorized a share repurchase program. The Company believes the price of its stock should reflect expectations that the share repurchase program will be fully consummated. However, the program does not obligate us to purchase any specific dollar amount or to acquire any specific number of shares of UAL common stock. The specific timing and amount of any share purchases will depend on the capital needs of the business, the market price of UAL common stock, general market conditions, securities law limitations and other factors. Our future repurchases of UAL common stock, if any, may be limited, suspended or discontinued at any time at our discretion and without prior notice, which could adversely affect our stock price. We, therefore, cannot guarantee that the share repurchase program will enhance long-term stockholder value.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
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ITEM 1C. CYBERSECURITY.
Board and Management Oversight of Cybersecurity Risks
The Company considers management of cybersecurity and digital risk as essential for enabling its success. The Audit Committee (the "Audit Committee") of the Board provides oversight of the Company's risk assessment and risk management policies and strategies with respect to significant business risks, including cybersecurity and digital risk. On a regular basis, the Audit Committee reviews reports from the Company's Chief Information Security Officer ("CISO")—as well as its Chief Information Officer, Chief Risk Officer, Chief Legal Officer and Chief Compliance Officer —regarding the Company's processes for assessing, identifying and managing of cybersecurity risks, including when applicable, notable cybersecurity threats or incidents impacting the aviation sector and the Company; results of independent third-party assessments of the Company's cybersecurity program; key metrics, capabilities, resourcing and strategy regarding the Company's cybersecurity program; and updates related to cybersecurity regulatory developments. The Chair of the Audit Committee regularly reports its activities—including those related to cybersecurity risks—to the Board and, as necessary, recommends actions to the Board that the Audit Committee deems appropriate.
The CISO leads the Company's Cybersecurity and Digital Risk ("CDR") organization, which oversees the Company's approach to prevent, detect, mitigate and remediate cybersecurity and digital risk. The Company's current CISO has extensive technology and risk management experience in critical infrastructure sectors, including aviation, and is certified as a boardroom Qualified Technology Expert by the Digital Directors Network. She has served on the U.S. President's National Infrastructure Advisory Council, examining and providing recommendations related to cross-sector critical infrastructure security and resilience. She currently serves on the board of directors of the Internet Security Alliance, is currently a member of the Cybersecurity Council at Airlines for America (and has served as its Chair) and is currently a member of the board of directors of the Aviation Information Sharing and Analysis Center (A-ISAC). The Company's CDR organization includes teams focusing on cyber defense, identity and digital trust, secure product solutions and aircraft cybersecurity operations. These teams include individuals with a variety of cybersecurity expertise, including expertise in penetration testing; application cybersecurity; product cybersecurity; cloud cybersecurity; infrastructure cybersecurity; cybersecurity engineering and architecture; identity and access management; vulnerability and asset management; cybersecurity threat intelligence; cybersecurity regulatory compliance; digital fraud; digital trust; incident response; insider threat assessment; and aircraft cybersecurity.
The Company's senior leadership—including across the Company's safety, legal, government affairs, operations, aviation security, finance, communications and digital technology organizations as well as others when appropriate—support the CDR organization and contribute to the management of cybersecurity and digital risk by attending regular cybersecurity risk reviews and participating in cybersecurity exercises.
Cybersecurity Risk Management and Strategy
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. Additionally, internal audits, security maturity assessments, security attestations and certifications, security testing and post-remediation reviews of the Company's cybersecurity program are periodically conducted by independent third-party service provides to
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identify areas of potential weakness and for continued improvement as well as to ensure ongoing compliance with regulatory requirements to which we are subject. In addition, the Company actively engages with intelligence agencies, law enforcement and advocacy and industry groups.
The Company is subject to cybersecurity risks related to its business partners and third-party service providers, as further detailed under the heading "Increasing privacy, data security and cybersecurity obligations or a significant data breach may adversely affect the Company's business" included as part of the risk factor disclosures in Part I, Item 1A. of this report. To assess these risks, the Company considers the impact of third-party incidents as part of its cybersecurity incident response processes. The Company also conducts evaluations of key suppliers based on risk and seeks to incorporate appropriate security standards to address the risk. In addition, the Company regularly monitors the external cybersecurity posture of select third parties through various service providers.
The Company strives to design and implement technical and organizational controls comprehensively, consistently and effectively as intended to protect the confidentiality, integrity or availability of systems and data. However, because the Company utilizes a risk-based strategy, based on professional judgment and analysis of the risks, it is possible that the Company may underappreciate or not recognize specific risks and may fail to fully implement the necessary technical and organizational controls. Moreover, even well designed and implemented security controls may not eliminate the occurrence of cybersecurity incidents.
Cybersecurity Incident Management
The CDR organization monitors the Company's information systems to prevent, detect, mitigate and remediate cybersecurity threats. The CDR organization uses a variety of prevention and detection tools and other resources to monitor cybersecurity vulnerabilities and identify potential cybersecurity incidents. When a cybersecurity incident is identified, the CDR organization's incident response team engages with the appropriate subject matter experts, the relevant management of impacted organization(s) and others to analyze, contain, eradicate, mitigate and recover from the incident as applicable. When appropriate, during the incident response process, the CISO, the CDR organization's leadership and the Company's Chief Legal Officer may be informed and consulted and if deemed necessary, incidents may be escalated for review by the Senior Leader Crisis Team, which consists of cross-functional leaders of the Company. The Company maintains a process in which a subgroup of the Company's Disclosure Council makes a recommendation regarding the materiality of certain cybersecurity incidents to the full Disclosure Council and, if determined to be material, subsequently to the Audit Committee. Additionally, the CDR organization has frequent operating rhythms to, among other things, review cybersecurity incidents and track the progress of cybersecurity initiatives.
The Company faces risks from network disruptions, cybersecurity threats (including as a result of any cybersecurity incident) and other efforts to compromise its services and underlying infrastructure that could have a material adverse effect on or are reasonably likely to materially adversely affect—individually or in the aggregate—its business strategy, results of operations, financial condition, cash flows or reputation. To the Company's knowledge, based on information available as of December 31, 2025 and through the date of this filing, such risks did not have a material adverse effect on the Company in the last three fiscal years. However, from time to time the Company has experienced and expects to continue to face increasing cybersecurity risks as well as potential network disruptions—whether directly or through its supply chain or other channels—in the normal course of its business. For more information about the cybersecurity-related risks that the Company faces, see the risks detailed under the headings "The Company relies heavily on technology and automated systems to operate its business and any significant failure or disruption of, or failure to effectively integrate and implement, these technologies or systems could materially harm its business or business strategy" and "Increasing privacy, data security and cybersecurity obligations or a significant data breach may adversely affect the Company's business" included as part of the Company's risk factor disclosures in Part I, Item 1A. of this Form 10-K.
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ITEM 2. PROPERTIES.
Fleet. As of December 31, 2025, United's mainline and regional fleets consisted of the following:
Aircraft Type Total Owned Leased Seats in Standard Configuration Average Age
(In Years)
Mainline:
777-300ER 22 22 — 350 8.0
777-200ER 55 54 1 276-362 25.8
777-200 19 19 — 364 28.5
787-10 21 21 — 318 5.2
787-9 48 48 — 257 6.7
787-8 12 12 — 243 12.5
767-400ER 16 16 — 231 24.3
767-300ER 37 37 — 167-203 29.8
757-300 21 21 — 234 23.3
757-200 40 39 1 176 28.9
737 MAX 9 120 76 44 179 2.9
737 MAX 8 123 107 16 166 2.4
737-900ER 136 136 — 179 13.0
737-900 12 12 — 179 24.3
737-800 141 130 11 166 21.8
737-700 40 38 2 126 26.8
A321neo 59 51 8 200 0.9
A320-200 68 68 — 150 25.7
A319-100 76 51 25 126 23.9
Total mainline 1,066 958 108 15.3
Aircraft Type Total Owned Owned or Leased by Regional Carrier Regional Carrier Operator Number of Aircraft Seats in Standard Configuration
Regional:
E175 241 117 124 SkyWest
Mesa
Republic 119
60
62 70/76
E170 4 — 4 Republic 4 70
CRJ700 10 — 10 SkyWest 10 70
CRJ550 80 20 60 GoJet
SkyWest 54
26 50
CRJ200 30 — 30 SkyWest 30 50
ERJ145XR 59 59 — CommuteAir 59 50
Total regional 424 196 228
In addition to the aircraft presented in the table above, United owned the following regional aircraft as of December 31, 2025:
• 29 ERJ145XRs that are temporarily grounded; and
• Two CRJ700s awaiting conversion to CRJ550s.
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Firm Order and Option Aircraft. As of December 31, 2025, United had firm commitments to purchase aircraft from Boeing and Airbus presented in the table below:
Contractual Aircraft Deliveries Expected Aircraft Deliveries (b)
Aircraft Type Number of Firm
Commitments (a) 2026 2027 After 2027 2026 2027 After 2027
787 150 48 9 93 20 26 104
737 MAX 9 103 103 — — 76 27 —
737 MAX 10 167 3 44 120 — 21 146
A321neo 119 18 1 100 16 3 100
A321XLR 50 8 26 16 8 16 26
A350 45 — — 45 — — —
(a) United also has options and purchase rights for additional aircraft.
(b) Expected aircraft deliveries reflect adjustments communicated by Boeing and Airbus or estimated by United.
The aircraft listed in the table above are scheduled for delivery through 2034. The amount and timing of the Company's future capital 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.
See Note 12 to the financial statements included in Part II, Item 8 of this report for additional information.
Facilities. United has major terminal facility leases at SFO, IAD, ORD, LAX, DEN, EWR, IAH and GUM. United leases gates, hangar sites, terminal buildings and other airport facilities in the municipalities it serves with lease expiration dates ranging from 2026 through 2057. Substantially all of these facilities are leased on a net-rental basis, resulting in the Company having financial responsibility for maintenance, insurance and other facility-related expenses and services.
United also maintains administrative, catering, cargo, training, maintenance and other facilities to support its operations in the cities it serves. United's leases for its principal executive office and operations center in downtown Chicago and administrative offices in downtown Houston expire from 2029 through 2033.
ITEM 3. LEGAL PROCEEDINGS.
The Company is involved, both as a plaintiff and a defendant, in various legal proceedings, including, without limitation, litigation, arbitration and other claims, and investigations, inspections, subpoenas, audits, inquiries and similar actions involving its passengers, customers, suppliers, employees and stockholders, as well as government agencies, among others, arising in the ordinary course of business and that have not been fully resolved. Legal proceedings, in general, and securities, class action and multi-district litigation, in particular, can be expensive and disruptive. Some of these suits may purport or may be determined to be class actions and/or involve parties seeking large and/or indeterminate amounts, including punitive or exemplary damages, and may remain unresolved for several years. Additionally, from time to time, the Company becomes aware of potential non-compliance with applicable environmental regulations, which have either been identified by the Company (through internal compliance programs such as its environmental compliance audits) or through notice from a governmental entity. In some instances, these matters could potentially become the subject of an administrative or judicial proceeding and could potentially involve monetary sanctions.
Management believes, after considering a number of factors, including (but not limited to) the information currently available, the views of legal counsel, the nature of contingencies to which the Company is subject and prior experience, that its defenses and assertions in pending legal proceedings have merit and, except as otherwise specifically noted below, the ultimate disposition of any pending matter will not materially affect the Company's financial position, results of operations or cash flows . However, the ultimate resolutions of the Company's legal proceedings and other contingencies are inherently unpredictable and subject to significant uncertainties. There can be no assurance that there will not be an increase in the scope of one or more of these pending matters or any other or future lawsuits, claims, government investigations or other legal proceedings will not be material to the Company's financial position, results of operations or cash flows for a particular period. As such, the Company's financial condition and results of operations could be adversely affected in any particular period by the unfavorable resolution of one or more of these matters.
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Antitrust Litigation
On June 30, 2015, UAL received a Civil Investigative Demand ("CID") from the Antitrust Division of the DOJ seeking documents and information from the Company in connection with a DOJ investigation related to statements and decisions about airline capacity. The Company has completed its response to the CID. Beginning on July 1, 2015, subsequent to the announcement of the CID, UAL and United were named as defendants in multiple class action lawsuits that asserted claims under the Sherman Antitrust Act, which have been consolidated in the United States District Court for the District of Columbia. The complaints generally allege collusion among U.S. airlines on capacity impacting airfares and seek treble damages. The Company is vigorously defending against the class action lawsuits.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information for Common Stock
UAL's common stock is listed on the Nasdaq Global Select Market ("Nasdaq") under the symbol "UAL."
Holders of Common Stock
As of February 5, 2026, there were 4,218 holders of record of UAL common stock.
The number of record holders is based upon the actual number of holders registered on our books at such date based on information provided by Computershare Investor Services, our transfer agent, and does not include holders of shares in "street name" or other holders identified in security position listings maintained by depository trust companies.
Dividend Policy
There were no cash dividend payments during the year ended December 31, 2025 and we do not expect to pay cash dividends in the foreseeable future. Future decisions to pay cash dividends continue to be at the discretion of the Board and will be dependent on our profitability expectations, net income, operating performance, financial condition, capital expenditure requirements and other factors that the Board considers relevant.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The following table presents information with respect to the Company's repurchases of UAL common stock during the quarter ended December 31, 2025:
Period (a)
Total number of shares (or units) purchased (b)
Average price paid per share (or unit) Total number of shares (or units) purchased as part of publicly announced plans or programs
(a)
Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
(in millions)
October 1 - 31 75,844 $ 96.89 75,844 $ 803
November 1 - 30 149,835 94.91 149,835 789
December 1 - 31 58,919 107.61 58,919 782
Total 284,598 284,598
(a) On October 15, 2024, the Company announced that its Board authorized a new share repurchase program with no stated expiration, allowing for purchases of up to $1.5 billion in the aggregate of outstanding UAL common stock and Warrants, subject to a limit of $500 million in the aggregate through 2024. As of February 5, 2026, the dollar value of the shares that may yet be purchased under the program is approximately $0.8 billion. See Note 3 to the financial statements included in Part II, Item 8 of this report for additional information on the share repurchase program.
(b) Average price paid per share is calculated on a settlement basis and excludes commission and taxes.
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Recent Sale of Unregistered Securities and Use of Proceeds
The Company did not sell any securities that were not registered under the Securities Act during the period covered by this report that have not been previously disclosed on a Form 10-Q or Form 8-K.
Stock Performance Graph
The following graph compares the cumulative total stockholder return during the period from December 31, 2020 to December 31, 2025 of UAL common stock to the Standard and Poor's 500 Index ("SPX") and the NYSE Arca Airline Index ("XAL"). The comparison assumes $100 was invested on December 31, 2020 in UAL common stock and in each of the foregoing indices and assumes that all dividends were reinvested.
Note: The stock price performance shown in the graph above should not be considered indicative of potential future stock price performance. The foregoing performance graph is being furnished as part of this report solely in accordance with the requirement under Rule 14a-3(b)(9) to furnish our stockholders with such information, and therefore, shall not be deemed to be filed or incorporated by reference into any filings by the Company under the Securities Act or the Exchange Act.
ITEM 6. [RESERVED]
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Management's discussion and analysis of financial condition and results of operations is provided as a supplement to and should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Form 10-K and the description of our business and reportable segments in Part I, Item 1. Business of this Form 10-K to enhance the understanding of our results of operations, financial condition and cash flows.
This section generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included in this Form 10-K and can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's 2024 Annual Report.
Executive Summary
Overview
United Airlines Holdings, Inc. (together with its consolidated subsidiaries, "UAL" or the "Company") is a holding company and its wholly-owned subsidiary is United Airlines, Inc. (together with its consolidated subsidiaries, "United").
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As UAL consolidates United for financial statement purposes, disclosures that relate to activities of United also apply to UAL, unless otherwise noted. United's operating revenues and operating expenses comprise nearly 100% of UAL's revenues and operating expenses. In addition, United comprises approximately the entire balance of UAL's assets, liabilities and operating cash flows. When appropriate, UAL and United are named specifically for their individual contractual obligations and related disclosures and any significant differences between the operations and results of UAL and United are separately disclosed and explained. We sometimes use the words "we," "our," "us," and the "Company" in this report for disclosures that relate to all of UAL and United.
Our current expectations described below are forward-looking statements and our actual results and timing may vary materially based on various factors that include, but are not limited to, those discussed below under "Strategy," "Economic and Market Factors," "Governmental Actions," "Cautionary Statement Regarding Forward-Looking Statements" and in Part I, Item 1A. Risk Factors, of this Form 10-K . The results presented in this report are not necessarily indicative of future operating results.
Strategy
Our shared purpose is "Connecting People. Uniting the World." We have the most comprehensive route network among North American carriers, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C.
We are the largest airline measured by available seat miles in the world, helping to connect around 181 million passengers to more than 380 destinations across six continents. The Company remains focused on delivering on four strategic pillars, which it believes has helped, and will continue, to differentiate United from the rest of the industry:
• United Next: In 2025 we continued to make progress with our United Next plan to align our network and product with the potential of our hubs while remaining focused on protecting the safety of our employees and customers and providing a superior customer experience. United Next aims to increase customer choice and win brand-loyal customers by offering a diversity of products ranging from Basic Economy to Polaris and growing our leading global network, which the Company expects will lead to diverse revenue streams for the Company. As part of our United Next growth plan, we expect to take delivery of over 630 new narrow- and widebody aircraft by the end of 2034. The new aircraft that the Company has taken delivery of to date have increased our gauge, scale, and connectivity, as well as improved the Company's fuel efficiency. Other key highlights of our United Next plan include:
– increasing our employee headcount by more than 38,000 employees since 2020;
– surpassing 530 new and retrofit aircraft featuring our signature interior with bigger bins, seatback screens at every seat and Bluetooth connectivity;
– expanding our leading global network to destinations like Nuuk, Greenland; Ulaanbaatar, Mongolia; Faro, Portugal; Puerto Escondido, Mexico; Palermo, Italy; Bilbao, Spain; and Madeira Island, Portugal;
– launching Kinective Media SM (the first media network that uses insights from travel behaviors to connect customers to personalized advertising, experiences and offers from leading brands);
– bringing Starlink's Wi-Fi service (the world's fastest, most reliable Wi-Fi in the sky) to our United Express regional aircraft and beginning installation on our mainline aircraft; and
– making significant technology changes that empower our employees and improve the customer experience.
• Operational excellence: The most important factor for customer satisfaction is on-time flights. We face some unique challenges in this respect because we operate hubs in the most congested and constrained airports in the country. That backdrop means that United needs to be a leader at using technology to overcome these challenges. We have been working strategically to overcome operational challenges and continue to innovate in order to make advancements in this area.
• Pre-tax margin: We believe that best-in-class margin performance will provide the cash flow needed to support our planned investments in growth.
• Customer service: We believe that excellent customer service is part of de-commoditizing air travel. Our people are our greatest asset and they are by far the most important part of our product. Ultimately our people provide customers with the service they expect.
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Economic and Market Factors
We remain vulnerable to a number of industry-specific and global macroeconomic factors that may cause our actual results of operations to differ from our historical results of operations or current expectations. The economic and market factors and trends that we currently believe are or will be most impactful to our results of operations and financial condition include the following: the execution and effect of our business strategies, including our United Next plan; supply chain constraints and related costs affecting us and our partners; volatile fuel prices; increasing maintenance expenses; and an economic downturn leading to a decrease in demand for air travel or fluctuations in foreign currency exchange rates that may impact international travel demand. We continue to monitor the potential favorable or unfavorable impacts of these and other factors on our business, operations, financial condition, future results of operations, liquidity and financial flexibility, which are dependent on future developments, including as a result of those factors discussed in Part I, Item 1A. Risk Factors.
Governmental Actions
We operate in complex, highly regulated environments in the U.S., the European Union, the United Kingdom and other regions around the world. Legal requirements that we currently believe are or will be most impactful to our results of operations and financial condition include the following: the closure of our flying airspace and termination of other operations due to regional conflicts; delays in aircraft certification (especially relating to the 737 MAX 10 aircraft); an extended federal government shutdown as well as any other budgetary decisions limiting or delaying government spending or reducing staffing of government agencies with which we interact routinely; any legal requirement that would result in a reshaping of the benefits that we provide to our consumers through our loyalty program or the co-branded credit cards issued by our partner; the effect of any potential changes in trade tariffs that we are unable to mitigate; and certain rules and regulations proposed by the DOT that would impose additional costs and operational restrictions on airlines. The impact of changing and new legal requirements generally cannot be reasonably predicted and those requirements may ultimately require extensive system and operational changes, be difficult to implement, increase our operating costs and require significant capital expenditures.
Results of Operations
Select financial data and operating statistics are provided in the tables below:
(in millions) 2025 2024 2023
Operating revenue $ 59,070 $ 57,063 $ 53,717
Operating expense 54,356 51,967 49,506
Operating income 4,713 5,096 4,211
Nonoperating expense, net (408) (928) (824)
Income before income taxes 4,306 4,168 3,387
Income tax expense 953 1,019 769
Net income $ 3,353 $ 3,149 $ 2,618
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2025 2024 2023
Passengers (thousands) (a) 181,053 173,603 164,927
Revenue passenger miles ("RPMs") (millions) (b) 271,619 258,503 244,435
Available seat miles ("ASMs"or "capacity") (millions) (c) 330,284 311,185 291,333
Cargo revenue ton miles (millions) (d) 3,626 3,604 3,159
Passenger load factor (e) 82.2 % 83.1 % 83.9 %
Passenger revenue per available seat mile ("PRASM") (cents) 16.18 16.66 16.84
Total revenue per available seat mile ("TRASM") (cents) 17.88 18.34 18.44
Average yield per revenue passenger mile ("Yield") (cents) (f) 19.67 20.05 20.07
Cost per available seat mile ("CASM") (cents)
16.46 16.70 16.99
Average price per gallon of fuel, including fuel taxes $ 2.44 $ 2.65 $ 3.01
Fuel gallons consumed (millions) 4,663 4,444 4,205
Average stage length (miles) (g) 1,488 1,490 1,479
Employee headcount, as of December 31 113,200 107,300 103,300
(a) The number of revenue passengers measured by each flight segment flown.
(b) The number of scheduled miles flown by revenue passengers.
(c) The number of seats available for passengers multiplied by the number of scheduled miles those seats are flown.
(d) The number of cargo revenue tons transported multiplied by the number of miles flown.
(e) RPMs divided by ASMs.
(f) The average passenger revenue received for each revenue passenger mile flown.
(g) The average distance a flight travels weighted for size of aircraft.
Operating Revenue. The table below illustrates the year-over-year percentage change in the Company's operating revenues for the years ended December 31 (in millions, except percentage changes):
2025 2024 Increase (Decrease) % Change
Passenger revenue $ 53,438 $ 51,829 $ 1,609 3.1
Cargo 1,779 1,743 36 2.1
Other operating revenue 3,853 3,491 362 10.4
Total operating revenue $ 59,070 $ 57,063 $ 2,007 3.5
The table below presents passenger revenue and select operating data of the Company, broken out by geographic region, expressed as year-over-year changes:
Increase (decrease) from 2024:
Domestic Atlantic Pacific Latin
Total
Passenger revenue (in millions) $ 610 $ 510 $ 417 $ 71 $ 1,609
Passenger revenue 2.0 % 4.9 % 7.5 % 1.4 % 3.1 %
Average fare per passenger (1.9) % (0.8) % (3.5) % (2.1) % (1.1) %
Yield (1.8) % (0.8) % (1.8) % (3.2) % (1.9) %
PRASM (4.1) % (1.6) % 3.0 % (5.2) % (2.9) %
Passengers 3.9 % 5.8 % 11.3 % 3.6 % 4.3 %
RPMs 3.9 % 5.7 % 9.4 % 4.8 % 5.1 %
ASMs 6.3 % 6.6 % 4.3 % 7.0 % 6.1 %
Passenger load factor (points) (1.9) (0.7) 3.7 (1.7) (0.9)
Passenger revenue increased $1.6 billion, or 3.1%, in 2025 as compared to 2024, primarily due to a 6.1% increase in capacity as well as a 4.3% increase in passengers.
Other operating revenue increased $362 million, or 10.4%, in 2025 as compared to 2024, primarily due to an increase in mileage revenue from non-airline partners, including credit card spending with our co-branded credit card partner, JPMorgan Chase Bank, N.A., as well as increases in the purchases of United Club memberships.
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Operating Expense. The table below includes data related to the Company's operating expense for the years ended December 31 (in millions, except percentage changes):
2025 2024 Increase (Decrease) % Change (a)
Salaries and related costs $ 17,647 $ 16,678 $ 969 5.8
Aircraft fuel 11,396 11,756 (360) (3.1)
Landing fees and other rent 3,849 3,437 412 12.0
Aircraft maintenance materials and outside repairs 3,294 3,063 231 7.5
Depreciation and amortization 2,939 2,928 11 0.4
Regional capacity purchase 2,693 2,516 177 7.0
Distribution expenses 2,109 2,231 (122) (5.5)
Aircraft rent 252 193 59 30.4
Special charges 259 112 147 NM
Other operating expenses 9,919 9,053 866 9.6
Total operating expenses $ 54,356 $ 51,967 $ 2,389 4.6
(a) NM - Greater than 100% change or otherwise not meaningful.
Salaries and related costs increased $969 million, or 5.8%, in 2025 as compared to 2024, primarily due to increased pay as a result of the increase in flight activity, an increase in headcount of approximately 5.5%, and an increase in pay rates and benefits for eligible employee groups.
Aircraft fuel expense decreased $360 million, or 3.1%, in 2025 as compared to 2024, primarily due to a lower average price per gallon of fuel, partially offset by increased consumption from increased flight activity.
Landing fees and other rent increased $412 million, or 12.0%, in 2025 as compared to 2024, primarily due to rate increases at various airports, terminal expansions and other increases in the number of airport gates, and higher landed weight volume due to increased flight activity.
Aircraft maintenance materials and outside repairs costs increased $231 million, or 7.5%, in 2025 as compared to 2024, primarily due to higher volumes of engine overhauls and component part repairs as well as increased cost of materials due to increased flight activity.
Regional capacity purchase costs increased $177 million, or 7.0%, in 2025 as compared to 2024, primarily due to an approximately 9% increase in regional flight activity as well as increases in contractual rates.
Distribution expenses decreased $122 million, or 5.5%, in 2025 as compared to 2024, primarily due to a change in the mix of sales channels as well as the refinement of assumptions used in determining our credit card fees expense.
Aircraft rent increased $59 million, or 30.4%, in 2025 as compared to 2024, primarily due to an increase in new aircraft leases compared to the prior year.
For details on the Company's Special Charges, see Note 13 to the financial statements included in Part II, Item 8 of this report for additional information.
Other operating expenses increased $866 million, or 9.6%, in 2025 as compared to 2024, primarily due to an increase in flight activity and on-board passengers, including increased costs for on-board catering, ground handling and passenger services, crew-related expenses, as well as expenditures related to information technology projects and services.
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Nonoperating Income (Expense). The following table illustrates the year-over-year dollar and percentage changes in the Company's nonoperating income (expense) for the years ended December 31 (in millions, except percentage changes):
2025 2024 Increase (Decrease) % Change
Interest expense $ (1,373) $ (1,629) $ (256) (15.7)
Interest income 611 726 (115) (15.9)
Interest capitalized 206 227 (21) (9.3)
Unrealized gains (losses) on investments, net 4 (199) 203 NM
Miscellaneous, net 144 (53) 197 NM
Total nonoperating expense, net $ (408) $ (928) $ (520) (56.1)
Interest expense decreased $256 million, or 15.7%, in 2025 as compared to 2024, primarily due to lower debt balances as a result of various debt prepayments and scheduled amortization and a reduction in the average cost of debt.
Interest income decreased $115 million, or 15.9%, in 2025 as compared to 2024, primarily due to lower interest rates and lower levels of cash and short-term investments. See Note 9 to the financial statements included in Part II, Item 8 of this report for additional information.
Unrealized gains (losses) on investments, net was $4 million in unrealized gains, net in 2025 as compared to $199 million in unrealized losses, net in 2024, primarily due to the change in the fair value of the Company's investments in equity securities. See Notes 9 and 13 to the financial statements included in Part II, Item 8 of this report for additional information.
Miscellaneous, net changed by $197 million in 2025 as compared to 2024, primarily due to $128 million of debt extinguishment and modification fees in the year-ago period as compared to $20 million in 2025, foreign exchange gains recorded in the current period as compared to losses in the year-ago-period and an increase in the benefit from the Company's net periodic benefit cost of its pensions and postretirement benefit plans. See Notes 10 and 13 to the financial statements included in Part II, Item 8 of this report for additional information on the debt prepayments and refinancing.
Income Taxes. See Note 7 to the financial statements included in Part II, Item 8 of this report for information related to income taxes.
Liquidity and Capital Resources
We deploy a disciplined and balanced approach to capital allocation, including returns to stockholders through potential share repurchases. As of December 31, 2025, the Company had $12.2 billion in unrestricted cash, cash equivalents and short-term investments as compared to approximately $14.5 billion as of December 31, 2024. We believe that our existing cash, cash equivalents and short-term investments, together with cash generated from operations, will be sufficient to satisfy our anticipated liquidity needs for the next 12 months, and we expect to meet our long-term liquidity needs with our anticipated access to the capital markets and projected cash from operations. We regularly assess our anticipated working capital needs, debt and leverage levels, debt maturities, capital expenditure requirements (including in connection with our capital commitments for our firm order aircraft and any changes to such commitments), planned UAL common stock or Warrant purchases under our share repurchase program and future investments or acquisitions in order to maximize stockholder return, efficiently finance our ongoing operations and maintain flexibility for future strategic transactions. We also regularly evaluate our liquidity and capital structure to efficiently manage financial risks, liquidity access and cost of capital.
The Company has a $3.0 billion revolving credit facility as of December 31, 2025. The revolving credit facility is secured by certain route authorities and airport slots and gates. No borrowings were outstanding under the revolving credit facility as of December 31, 2025.
On July 7, 2025, Mileage Plus Holdings, LLC ("MPH"), a direct wholly owned subsidiary of United, and Mileage Plus Intellectual Property Assets, Ltd., an indirect wholly owned subsidiary of MPH ("MIPA" and, together with MPH, the "Issuers"), redeemed in full (the "Redemption") all $1.52 billion aggregate principal amount of the Issuers' outstanding MileagePlus 6.5% senior secured notes due 2027 (the "MileagePlus Notes"), which were secured by substantially all of the assets of the Issuers and their subsidiaries. As a result of the Redemption and the July 2024 voluntarily prepayment in full of the $1.80 billion outstanding principal balance of the secured term loan facility, which was secured ratably with the MileagePlus Notes, all indebtedness secured by the MileagePlus assets have been fully repaid.
We have a significant amount of fixed obligations, including debt, leases of aircraft, airport and other facilities, and pension funding obligations. As of December 31, 2025, the Company had approximately $31.0 billion of debt, finance lease, operating
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lease and other financial liabilities, including $5.1 billion that will become due in the next 12 months. In addition, we have substantial noncancelable commitments for capital expenditures, including the acquisition of certain new aircraft and related spare engines. Our debt agreements contain customary terms and conditions as well as various affirmative, negative and financial covenants that, among other things, limit our ability under certain circumstances to create liens on collateral, make certain dividends, stock repurchases, restricted investments and other restricted payments, and consolidate, merge, sell, or otherwise dispose of all or substantially all of our assets. Our debt agreements also contain events of default customary for similar financings including, in certain cases, cross-payment default and cross-acceleration to other material indebtedness. Certain of our debt agreements contain financial covenants that require the Company to maintain at least $2.0 billion of unrestricted liquidity at all times, which includes unrestricted cash, certain liquid and short-term investments and any undrawn amounts under any revolving credit facility, and to maintain a minimum ratio of appraised value of collateral to the outstanding debt secured by such collateral on a senior basis of 1.6 to 1.0, tested semi-annually. As of December 31, 2025, UAL and United were in compliance with their respective debt covenants under these agreements. As of December 31, 2025, a substantial portion of the Company's assets, principally aircraft and certain related assets, certain route authorities and airport slots and gates, was pledged under various loan and other agreements. See Note 10 to the financial statements included in Part II, Item 8 of this report for additional information on aircraft financing and other debt instruments.
On February 2, 2026, UAL issued, in a public offering, $1,000,000,000 principal amount of its 5.375% Senior Notes due 2031 (the "2031 Notes"), which are guaranteed by United. The 2031 Notes, issued at a price of 100% of their principal amount, bear interest at a rate of 5.375% per annum, payable semi-annually on March 1 and September 1 of each year, beginning September 1, 2026 and maturing on March 1, 2031. UAL, at its option, may redeem the 2031 Notes at any time prior to September 1, 2030, in whole or in part, at a redemption price equal to the greater of (1) 100% of the principal amount of the 2031 Notes to be redeemed and (2) a make-whole amount, if any, plus accrued and unpaid interest on the principal amount being redeemed to the redemption date. At any time on or after September 1, 2030, UAL may redeem the 2031 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the 2031 Notes to be redeemed, plus accrued and unpaid interest on the principal amount being redeemed to the redemption date.
On February 3, 2026, the Company entered into Amendment No. 4 to Term Loan Credit and Guaranty Agreement that lowered the margin on its interest rate from 2.00% to 1.75%, in the case of Term SOFR Rate (as such term is defined in the Term Loan Credit and Guaranty Agreement, dated as of April 21, 2021, as amended) loans, and from 1.00% to 0.75%, in the case of loans at other market rates.
On February 6, 2026, UAL issued, in a public offering, $1,000,000,000 principal amount of its 4.875% Senior Notes due 2029 (the "2029 Notes"), which are guaranteed by United. The 2029 Notes, issued at a price of 100% of their principal amount, bear interest at a rate of 4.875% per annum, payable semi-annually on March 1 and September 1 of each year, beginning September 1, 2026 and maturing on March 1, 2029. UAL, at its option, may redeem the 2029 Notes at any time prior to December 1, 2028, in whole or in part, at a redemption price equal to the greater of (1) 100% of the principal amount of the 2029 Notes to be redeemed and (2) a make-whole amount, if any, plus accrued and unpaid interest on the principal amount being redeemed to the redemption date. At any time on or after December 1, 2028, UAL may redeem the 2029 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest on the principal amount being redeemed to the redemption date.
For 2026, the Company expects less than $8.0 billion of adjusted capital expenditures, in light of certain aircraft delivery delays. Adjusted capital expenditures is a financial measure not calculated in accordance with generally accepted accounting principles ("GAAP"). It is calculated as capital expenditures, net of flight equipment purchase deposit returns, plus property and equipment acquired through the issuance or modification of debt, finance leases and other financial liabilities and operating leases converted to finance leases. We are not providing a target for or a reconciliation to capital expenditures, net of flight equipment purchase deposit returns, the most directly comparable GAAP measure, because we are not able to predict non-cash capital expenditures without unreasonable efforts, and therefore we also are not able to determine the probable significance of such items. We believe that adjusting capital expenditures for assets acquired through the issuance or modification of debt, finance leases and other financial liabilities as well as operating to finance lease conversions is useful to investors in order to appropriately reflect the total amounts spent on capital expenditures. The Company's estimate for aircraft expenditures reflects its current assumptions regarding delayed aircraft deliveries. See Item 2. Properties in Part I of this report and Note 12 to the financial statements included in Part II, Item 8 of this report for additional information on commitments, including aircraft expenditures reflecting contractual delivery dates without adjustment for expected delays. The Company has backstop financing commitments available from certain of its aircraft manufacturers for a limited number of its future aircraft deliveries, subject to certain customary conditions.
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Sources and Uses of Cash
The following table summarizes our cash flow for the years ended December 31 (in millions):
2025 2024 2023
Total cash provided by (used in):
Operating activities $ 8,431 $ 9,445 $ 6,911
Investing activities (6,350) (2,651) (6,106)
Financing activities (4,945) (4,182) (1,892)
Net increase (decrease) in cash, cash equivalents and restricted cash $ (2,865) $ 2,612 $ (1,087)
See the Statements of Consolidated Cash Flows included in Part II, Item 8 of this report for additional information.
Operating Activities. Cash flows provided by operating activities for 2025 were $1.0 billion lower than 2024 primarily due to operating income decrease period-over-period and a net change in various working capital items, most notably $0.3 billion related to pension contributions in 2025.
Investing Activities. Cash flows used in investing activities increased $3.7 billion in 2025 as compared to the year-ago period mainly related to approximately $3.3 billion higher net activity in purchases and sales of short-term and other investments, as well as a $0.3 billion increase in capital expenditures.
Financing Activities. Significant financing events in 2025 were as follows:
Debt, Finance Lease and Other Financial Liability Principal Payments . During 2025, the Company made payments for debt, finance leases, and other financial liabilities of $4.8 billion, including the $1.52 billion prepayment of the outstanding principal balance of its MileagePlus senior secured notes.
Debt Issuances. In 2025, the Company raised:
• $539 million through the issuance of debt for new aircraft financings
• $258 million of debt to finance the construction of a maintenance, repair and overhaul complex at Orlando International Airport.
See Note 10 and Note 11 to the financial statements included in Part II, Item 8 of this report for additional information on aircraft financing.
Share Repurchases. On October 15, 2024, the Company's Board authorized a new share repurchase program, allowing for purchases of up to $1.5 billion in the aggregate of outstanding UAL common stock. In 2025, the Company repurchased 8.1 million shares of UAL common stock at an average price of $78.75 for a total investment of approximately $640 million as part of the share repurchase program. As of February 5, 2026, the dollar value of shares that may yet be purchased under the program is approximately $0.8 billion. See Note 3 to the financial statements included in Part II, Item 8 of this report for additional information on the share repurchase program.
Significant financing events in 2024 were as follows:
Debt, Finance Lease and Other Financial Liability Principal Payments. During 2024, the Company made payments for debt, finance leases, and other financial liabilities of $10.1 billion, including the $3.9 billion prepayment of its 2021 term loan, $1.8 billion prepayment of the outstanding principal balance of its MileagePlus term loan, and a $0.4 billion prepayment of its 2024 term loan.
Debt Issuances. In 2024, the Company raised:
• $2.5 billion under the new term loan facility;
• $1.4 billion through the issuance of equipment notes (the "2024 Equipment Notes") secured by 48 Boeing aircraft delivered new from the manufacturer from October 2010 to December 2023; and
• $2.2 billion through the issuance of debt, not including the 2024 Equipment Notes, and other financial liabilities on aircraft.
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Share Repurchases . During the quarter ended December 31, 2024, the Company repurchased 997,076 shares of UAL common stock at an average price of $81.26 for a total investment of approximately $81 million as part of the share repurchase program.
For additional information regarding these Liquidity and Capital Resource matters, see Notes 10, 11 and 12 to the financial statements included in Part II, Item 8 of this report. For information regarding non-cash investing and financing activities, see the Company's statements of consolidated cash flows. For a discussion of the Company's sources and uses of cash in 2024 as compared to 2023, see "Liquidity and Capital Resources" in Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in the 2024 Annual Report.
Credit Ratings. As of the filing date of this report, UAL and United had the following corporate credit ratings:
S&P Moody's Fitch
UAL BB+ Ba1 BB+
United BB+ * BB+
*The credit agency does not issue corporate credit ratings for subsidiary entities.
The Company has been able to secure financing with investment grade credit ratings for certain enhanced equipment trust certificates ("EETCs"), term loans and secured bond financings. Downgrades from these rating levels, among other things, could restrict the availability, or increase the cost, of future financing for the Company as well as affect the fair market value of existing debt. A rating reflects only the view of a rating agency and is not a recommendation to buy, sell or hold securities. Ratings can be revised upward or downward at any time by a rating agency if such rating agency decides that circumstances warrant such a change. Currently Moody's and Fitch have assigned the Company a stable outlook and S&P a positive outlook.
Other Liquidity Matters
Below is a summary of additional liquidity matters. See the indicated notes to our consolidated financial statements included in Part II, Item 8 of this report for additional details related to these and other matters affecting our liquidity and commitments.
Pension and other postretirement plans Note 8
Long-term debt and debt covenants Note 10
Leases Note 11
Commitments, contingencies and capacity purchase agreements Note 12
The Company's business is capital intensive, requiring significant amounts of capital to fund the acquisition of assets, particularly aircraft. In the past, the Company has funded the acquisition of aircraft with cash, by using EETC financing, by entering into finance or operating leases, or through other financings. The Company also often enters into long-term lease commitments with airports to ensure access to terminal, cargo, maintenance and other required facilities.
The table below provides a summary of the Company's current and long-term material cash requirements as of December 31, 2025 (in billions):
2026 2027 2028 2029 2030 After 2030
Long-term debt and related interest (a) $ 5.0 $ 2.8 $ 2.6 $ 3.6 $ 3.0 $ 9.0
Finance leases 0.1 0.2 0.1 — — —
Operating leases (b) 0.9 1.1 0.9 0.7 0.8 3.6
Leases not yet commenced (c) 0.2 0.3 0.5 0.5 0.5 4.6
Other financial liabilities 0.4 0.6 0.2 0.2 0.2 2.7
Regional CPAs (d) 2.9 2.9 2.8 2.3 1.9 6.2
Postretirement benefit payments and pension funding (e) 0.3 0.3 0.2 0.2 0.2 0.3
Capital and other purchases (f) 12.6 5.6 7.4 9.0 8.7 13.8
Total $ 22.4 $ 14.0 $ 14.7 $ 16.5 $ 15.2 $ 40.2
(a) Long-term debt presented in the Company's financial statements is net of $117 million of debt discount, premiums and debt issuance costs which are being amortized over the debt terms. Cash requirements do not include the debt discount, premiums and debt issuance costs. Future interest payments on variable rate debt were computed using the rates as of December 31, 2025.
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(b) Represents future payments under fixed rate operating lease obligations. See Note 11 to the financial statements included in Part II, Item 8 of this report for information on variable rate and short-term operating leases.
(c) Represents future payments under leases that have not yet commenced and are not included in the consolidated balance sheet. See Note 11 to the financial statements included in Part II, Item 8 of this report for information on these leases.
(d) Represents our estimates of future minimum noncancelable commitments under our CPAs and does not include the portion of the underlying obligations for aircraft and facility rent that is disclosed as part of operating lease obligations. Amounts also exclude a portion of United's finance lease obligations recorded for certain of its CPAs. See Note 12 to the financial statements included in Part II, Item 8 of this report for the significant assumptions used to estimate the payments.
(e) Amounts represent postretirement benefit payments and an estimate of the minimum funding requirements as determined by government regulations for United's U.S. pension plans through 2035. Amounts are subject to change based on numerous assumptions, including the performance of assets in the plans and bond rates. Postretirement benefit payments approximate plan contributions as plans are substantially unfunded. See Note 8 to the financial statements included in Part II, Item 8 of this report for additional information on these benefit plans.
(f) Represents contractual commitments for firm order aircraft, spare engines and other purchase commitments. See Note 12 to the financial statements included in Part II, Item 8 of this report for a discussion of our purchase commitments.
The Company has significant financial obligations and guarantees that could impact its future cash flow. As of December 31, 2025, the Company has $502 million in letters of credit and surety bonds with expiration dates through 2036, some of which are cash collateralized. Additionally, United is involved in fuel consortia at major airports, which help reduce fuel distribution and storage costs. The consortia (and in limited cases, the participating carriers) have entered into long-term agreements to lease certain airport fuel storage and distribution facilities that are typically financed through various debt obligations. The Company has indirect guarantees for approximately $2.9 billion in loans secured by fuel facility leases in which United participates, with a contingent exposure of about $513 million. These indirect guarantees are set to expire between 2027 and 2056. The Company's contingent exposure could increase in the future if the participation of other air carriers in such fuel consortia decreases. See Note 12 to the financial statements included in Part II, Item 8 of this report for more information related to these guarantees and increased cost provisions.
Critical Accounting Policies
Critical accounting policies are defined as those that are affected by significant judgments and uncertainties which potentially could result in materially different accounting under different assumptions and conditions. The Company has prepared the financial statements in conformity with GAAP, which requires management to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ from those estimates. See Note 1 and Note 2 to the financial statements included in Part II, Item 8 of this report for additional discussion of these estimates and other significant accounting policies. The Company has identified the following critical accounting policies that impact the preparation of the financial statements.
Frequent Flyer Accounting. As discussed in Note 2 to the financial statements included in Part II, Item 8 of this report, MileagePlus members earn miles through various travel and non-travel activities and those miles can be redeemed for free (other than taxes and government-imposed fees), discounted or upgraded air travel and non-travel awards.
Co-Brand Agreement . United has a contract (the "Co-Brand Agreement") to sell MileagePlus miles to its co-branded credit card partner Chase. Chase awards miles to MileagePlus members based on their credit card activity. United identified the following significant separately identifiable performance obligations in the Co-Brand Agreement:
• MileagePlus miles awarded – United has a performance obligation to provide MileagePlus cardholders with miles to be used for air travel and non-travel award redemptions. The Company records Passenger revenue related to the travel awards when the transportation is provided and records Other operating revenue related to the non-travel awards when the goods or services are delivered. The Company records the cost associated with non-travel awards in Other operating revenue, as an agent.
• Marketing – United has a performance obligation to provide Chase access to United's customer list and the use of United's brand. Marketing revenue is recorded to Other operating revenue as miles are delivered to Chase.
• Advertising – United has a performance obligation to provide advertising in support of the MileagePlus card in various customer contact points such as United's website, email promotions, direct mail campaigns, airport advertising and in-flight advertising. Advertising revenue is recorded to Other operating revenue as miles are delivered to Chase.
• Other travel-related benefits – United's performance obligations are comprised of various items such as waived bag fees, seat upgrades and lounge passes. Lounge passes are recorded to Other operating revenue as customers use the lounge passes. Bag fees and seat upgrades are recorded to Passenger revenue at the time of the associated travel.
United accounts for payments received under the Co-Brand Agreement by allocating them to the separately identifiable performance obligations based on management's estimated selling price of each component. The objective of using the estimated selling price based methodology is to determine the price at which United would transact a sale if the product or
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service were sold on a stand-alone basis. Accordingly, United determines the estimated selling price by considering multiple inputs and methods including, but not limited to, discounted cash flows, brand value, volume discounts, published selling prices, number of miles awarded and number of miles redeemed. The Company estimated the selling prices and volumes over the term of the Co-Brand Agreement, at the inception of the contract, in order to determine the allocation of proceeds to each of the components to be delivered.
Pension plans. As discussed in Note 8 to the financial statements included in Part II, Item 8 of this report, United maintains various defined benefit pension plans for certain employees. The most critical assumptions impacting our defined benefit pension plan obligation and expenses are the weighted average discount rate and the expected long-term rate of return on the plan assets.
As of January 1, 2026, the Company assumed that its plans' assets would generate a long-term rate of return of 8.07%. We develop our expected long-term rate of return assumption based on historical experience and by evaluating input from the trustee managing the plans' assets. Our expected long-term rate of return on plan assets for these plans is based on a target allocation of assets, which is based on our goal of earning the highest rate of return while maintaining risk at acceptable levels.
The Company's weighted average discount rate to determine its benefit obligations as of December 31, 2025 was 5.62%. The Company selected the 2025 discount rate for substantially all of its plans by using a hypothetical portfolio of high-quality bonds that would provide the necessary cash flows to match projected benefit payments.
The table below shows the 2026 net periodic benefit cost and the impacts of a change in certain assumptions on 2026 net periodic benefit cost and the benefit obligations at December 31, 2025 (in millions):
Pension Benefits
2026 Net Periodic Benefit Cost $ 67
Impact on Benefit Obligation at December 31, 2025
100 basis points decrease in the weighted average discount rate
$ 796
Impact on 2026 Net Periodic Benefit Cost
100 basis points decrease in the weighted average discount rate (a)
$ 87
100 basis points decrease in the expected long-term rate of return on plan assets
40
(a) In general, as discount rates increase, the impact of changes in discount rates decreases. Therefore, these sensitivities cannot be extrapolated for larger increases or decreases in the discount rate. In addition, benefit cost is affected by other factors including, but not limited to, investment performance, contributions, demographic experience and other assumption changes.
Indefinite-lived intangible assets. As discussed in Note 1 to the financial statements, goodwill and indefinite-lived intangible assets are assessed for impairment on an annual basis as of October 1, or more frequently if events or circumstances indicate that the asset may be impaired. For the Company's China route authority, the Company performed a quantitative assessment which involved determining the fair value of the asset and comparing that amount to the asset's carrying value. To determine the fair value of the China route authority, the Company used a discounted cash flow method. Key assumptions used in the valuation model included forecasted revenues, margin and an overall discount rate. These assumptions are inherently uncertain as they relate to future events and circumstances.
See Note 1 to the financial statements included in Part II, Item 8 of this report for additional information.
Cautionary Statement Regarding Forward-Looking Statements
This report contains certain "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including in Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere, relating to, among other things, goals, plans and projections regarding the Company's financial position, results of operations, capital allocation and investments, market position, airline capacity, fleet plan strategy, fares, booking trends, product development, corporate citizenship-related strategy initiatives and business strategy. Such forward-looking statements are based on historical performance and current expectations, estimates, forecasts and projections about the Company's future financial results, goals, plans, commitments, strategies and objectives and involve inherent risks, assumptions and uncertainties, known or unknown, including internal or external factors that could delay, divert or change any of them, that are difficult to predict, may be beyond the Company's control and could cause the Company's future financial results, goals, plans, commitments, strategies and
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objectives to differ materially from those expressed in, or implied by, the statements. Words such as "should," "could," "would," "will," "may," "expects," "plans," "intends," "anticipates," "indicates," "remains," "believes," "estimates," "projects," "forecast," "guidance," "outlook," "goals," "targets," "pledge," "confident," "optimistic," "dedicated," "positioned," "on track" and other words and terms of similar meaning and expression are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. All statements, other than those that relate solely to historical facts, are forward-looking statements.
Additionally, forward-looking statements include conditional statements and statements that identify uncertainties or trends, discuss the possible future effects of known trends or uncertainties, or that 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 us on the date of this report. We undertake 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 or regulation.
Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: execution risks associated with our strategic operating plan; changes in our fleet and network strategy or other factors outside our control resulting in less economic aircraft orders, costs related to modification or termination of aircraft orders or entry into aircraft orders on less favorable terms, as well as any inability to accept or integrate new aircraft into our fleet as planned, including as a result of any mandatory groundings of aircraft; any failure to effectively manage, and receive anticipated benefits and returns from, acquisitions, divestitures, investments, joint ventures and other portfolio actions, or related exposures to unknown liabilities or other issues or underperformance as compared to our expectations; adverse publicity, increased regulatory scrutiny, harm to our brand, reduced travel demand, potential tort liability and operational restrictions as a result of an accident, catastrophe or incident involving us, our regional carriers, our codeshare partners or another airline; the highly competitive nature of the global airline industry and susceptibility of the industry to price discounting and changes in capacity, including as a result of alliances, joint business arrangements or other consolidations; unfavorable developments affecting our MileagePlus loyalty program; our reliance on a limited number of suppliers to source a majority of our aircraft, engines and certain parts, and the impact of any failure to obtain timely deliveries, additional equipment or support from any of these suppliers; disruptions to our regional network and United Express flights provided by third-party regional carriers; unfavorable economic and political conditions in the United States and globally; reliance on third-party service providers and the impact of any significant failure of these parties to perform as expected, or interruptions in our relationships with these providers or their provision of services; extended interruptions or disruptions in service at major airports where we operate and space, facility and infrastructure constraints at our hubs or other airports (including as a result of government shutdowns); geopolitical conflict, terrorist attacks or security events (including the suspension of our overflying in Russian airspace as a result of the Russia-Ukraine military conflict and interruptions of our flying as a result of military conflicts across the globe, as well as any escalation of the broader economic consequences of any conflicts beyond their current scope or a delay in any planned resumption of service to an area impacted by conflict); any damage to our reputation or brand image; our reliance on technology and automated systems to operate our business and the impact of any significant failure or disruption of, or failure to effectively integrate and implement, these technologies or systems; increasing privacy, data security and cybersecurity obligations or a significant data breach; increased use of social media platforms by us, our employees and others; the impacts of union disputes, employee strikes or slowdowns, and other costs related to employee and retiree health, pension, labor or regulatory compliance costs on our operations or financial performance; any failure to recruit, hire, develop or train skilled personnel, including our senior management team or other key employees; the monetary and operational costs of compliance with extensive government regulation of the airline industry; current or future litigation and regulatory actions, or failure to comply with the terms of any settlement, order or agreement relating to these actions; costs, liabilities and risks associated with environmental regulation and climate change; high and/or volatile fuel prices or significant disruptions in the supply of aircraft fuel; the impacts of our significant amount of financial leverage from fixed obligations and the impacts of insufficient liquidity on our financial condition and business; failure to comply with financial and other covenants governing our debt; limitations on our ability to use our net operating loss carryforwards and certain other tax attributes to offset future taxable income for U.S. federal income tax purposes; our failure to realize the full value of our intangible assets or our long-lived assets, causing us to record impairments; fluctuations in the price of our common stock; the impacts of seasonality and other factors associated with the airline industry; increases in insurance costs or inadequate insurance coverage; risks relating to our repurchase program for UAL common stock and warrants; and other risks and uncertainties set forth under Part I, Item 1A. Risk Factors, and under "Economic and Market Factors" and "Governmental Actions" in Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, of this report, as well as other risks and uncertainties set forth from time to time in the reports we file with the SEC.
The foregoing list sets forth many, but not all, of the factors that could impact our ability to achieve results described in any forward-looking statements. Investors should understand that it is not possible to predict or identify all such factors and should not consider this list to be a complete statement of all potential risks and uncertainties. It is routine for our internal projections
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and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections, beliefs and assumptions upon which we base our expectations may change. For instance, we regularly monitor future demand and booking trends and adjust capacity, as needed. As such, our actual flown capacity may differ materially from currently published flight schedules or current estimations.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are exposed to market risk resulting from changes in foreign currency exchange rates and interest rates. These risks, along with other business risks, impact our cost of capital. It is our policy to manage our debt structure and foreign exchange exposure in order to manage capital costs, control financial risks and maintain financial flexibility over the long term. In managing market risks, we may employ derivatives according to documented policies and procedures, including interest rate swaps, interest rate locks, foreign currency exchange contracts and combined interest rate foreign currency contracts (cross-currency swaps). We do not use derivatives for trading or speculative purposes. We do not foresee significant changes in the strategies we use to manage market risk in the near future. All of our financial instruments are subject to counterparty credit risk considered as part of the overall fair value measurement.
Interest Rates. Our net income is affected by fluctuations in interest rates (e.g. interest expense on variable rate debt and interest income earned on short-term investments). The Company's policy is to manage interest rate risk through a combination of fixed and variable rate debt. The following table summarizes information related to the Company's interest rate market risk at December 31, 2025 (in millions):
Variable rate debt
Carrying value of variable rate debt $ 8,528
Impact of 100 basis point increase on projected interest expense for the following year 63
Fixed rate debt
Carrying value of fixed rate debt 12,737
Fair value of fixed rate debt 12,734
Impact of 100 basis point increase in market rates on fair value (342)
The Company has $8.6 billion in variable rate debt which includes increased cost provisions due to any reduced returns with respect to the loans due to any change in capital requirements or increased costs that the lenders incur in carrying these loans as a result of any change in law and $5.4 billion of these loans, from non-U.S. entities, could be affected by changes in tax laws.
A change in market interest rates would also impact interest income earned on our cash, cash equivalents and short-term investments. Assuming our cash, cash equivalents and short-term investments remain at their average 2025 levels, a 100 basis point increase in interest rates would result in a corresponding increase in the Company's interest income of approximately $140 million during 2026.
Commodity Price Risk (Aircraft Fuel). The price of aircraft fuel can significantly affect the Company's operations, results of operations, financial position and liquidity.
Our operational and financial results can be significantly impacted by changes in the price and availability of aircraft fuel. To provide adequate supplies of fuel, the Company routinely enters into purchase contracts that are customarily indexed to market prices for aircraft fuel, and the Company generally has some ability to cover short-term fuel supply and infrastructure disruptions at some major demand locations. The Company's current strategy is to not enter into transactions to hedge fuel price volatility, although the Company regularly reviews its policy based on market conditions and other factors. A one-dollar change in the price of a barrel of aircraft fuel would change the Company's 2026 projected fuel expense by approximately $116 million.
Foreign Currency. The Company generates revenues and incurs expenses in numerous foreign currencies. Changes in foreign currency exchange rates impact the Company's results of operations through changes in the dollar value of foreign currency-denominated operating revenues and expenses. Some of the Company's more significant foreign currency exposures include the Canadian dollar, European euro, Japanese yen, Chinese renminbi, Brazilian real and Mexican peso. The Company's current strategy is to not enter into transactions to hedge its foreign currency exposure, although the Company regularly reviews its policy based on market conditions and other factors.
The result of a uniform 1% strengthening in the value of the U.S. dollar from December 31, 2025 levels relative to each of the currencies in which the Company has foreign currency exposure would result in a decrease in pre-tax income of approximately $12 million for the year ending December 31, 2026. This sensitivity analysis was prepared based upon projected 2026 foreign currency-denominated revenues and expenses as of December 31, 2025.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 )
52
United Airlines Holdings, Inc.:
Statements of Consolidated Operations
56
Statements of Consolidated Comprehensive Income (Loss)
57
Consolidated Balance Sheets
58
Statements of Consolidated Cash Flows
59
Statement of Consolidated Stockholders' Equity
60
United Airlines, Inc.:
Statements of Consolidated Operations
61
Statements of Consolidated Comprehensive Income (Loss)
62
Consolidated Balance Sheets
63
Statements of Consolidated Cash Flows
64
Statement of Consolidated Stockholder's Equity
65
Combined Notes to Consolidated Financial Statements
66
Note 1 - Basis of Presentation and Significant Accounting Policies
66
Note 2 - Revenue Recognition
70
Note 3 - Common Stockholders' Equity and Preferred Securities
73
Note 4 - Earnings Per Share
74
Note 5 - Share-Based Compensation Plans
74
Note 6 - Accumulated Other Comprehensive Income (Loss) ("AOCI")
76
Note 7 - Income Taxes
76
Note 8 - Pension, Postretirement and Other Employee Benefit Plans
78
Note 9 - Fair Value Measurements, Investments and Notes Receivable
84
Note 10 - Debt
86
Note 11 - Leases
87
Note 12 - Commitments, Contingencies and Guarantees
90
Note 13 - Special Charges (Credits)
92
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of United Airlines Holdings, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of United Airlines Holdings, Inc. (the "Company") as of December 31, 2025 and 2024, the related statements of consolidated operations, comprehensive income (loss), stockholders' equity and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 12, 2026, expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that is communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
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Indefinite-lived Intangible Asset (China Route Authority) Impairment Analysis
Description of the Matter
As discussed in Note 1 of the consolidated financial statements, indefinite-lived assets are reviewed for impairment on an annual basis as of October 1, or more frequently if events or circumstances indicate that the asset may be impaired. For the Company's China route authority, the Company performed a quantitative assessment which involved determining the fair value of the asset and comparing that amount to the asset’s carrying value. At December 31, 2025, the carrying value of the Company's China route authority indefinite-lived intangible asset (the China intangible asset) was $1.0 billion.
Auditing management's annual China intangible asset impairment test was complex and highly judgmental due to the significant estimation required in determining the fair value of the asset. The fair value estimate was sensitive to significant assumptions such as forecasted revenues, margin and an overall discount rate, each of which is affected by expectations about future market or economic conditions. As a result of the subjectivity of the assumptions, adverse changes to management's estimates could reduce the underlying cash flows used to estimate fair value and trigger impairment charges.
We Addressed the Matter in Our Audit
We tested the Company's design and operating effectiveness of internal controls that address the risk of material misstatement relating to the estimate of fair value of the China intangible asset used in the annual impairment test. This included testing controls over management's review of the significant assumptions used in the discounted cash flow methodology, including forecasted revenues, margin and the overall discount rate.
To test the estimated fair value of the Company's China intangible asset, we performed audit procedures that included, among others, assessing the fair value methodology used by management and evaluating the significant assumptions used in the valuation model. We compared significant assumptions to current industry, market and economic trends, and to the Company's historical results. We assessed the historical accuracy of management's estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the China intangible asset that would result from changes in assumptions. We also involved a valuation specialist to assist in our evaluation of the Company's overall discount rate.
/s/ Ernst & Young LLP
We have served as the Company's auditor since 2009.
Chicago, Illinois
February 12, 2026
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Report of Independent Registered Public Accounting Firm
To the Stockholder and the Board of Directors of United Airlines, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of United Airlines, Inc. (the "Company") as of December 31, 2025 and 2024, the related statements of consolidated operations, comprehensive income (loss), stockholder's equity and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
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Indefinite-lived Intangible Asset (China Route Authority) Impairment Analysis
Description of the Matter As discussed in Note 1 of the consolidated financial statements, indefinite-lived assets are reviewed for impairment on an annual basis as of October 1, or more frequently if events or circumstances indicate that the asset may be impaired. For the Company's China route authority, the Company performed a quantitative assessment which involved determining the fair value of the asset and comparing that amount to the asset's carrying value. At December 31, 2025, the carrying value of the Company's China route authority indefinite-lived intangible asset (the China intangible asset) was $1.0 billion.
Auditing management's annual China intangible asset impairment test was complex and highly judgmental due to the significant estimation required in determining the fair value of the asset. The fair value estimate was sensitive to significant assumptions such as forecasted revenues, margin and an overall discount rate, each of which is affected by expectations about future market or economic conditions. As a result of the subjectivity of the assumptions, adverse changes to management's estimates could reduce the underlying cash flows used to estimate fair value and trigger impairment charges.
We Addressed the Matter in Our Audit We tested the Company's design and operating effectiveness of internal controls that address the risk of material misstatement relating to the estimate of fair value of the China intangible asset used in the annual impairment test. This included testing controls over management's review of the significant assumptions used in the discounted cash flow methodology, including forecasted revenues, margin and the overall discount rate.
To test the estimated fair value of the Company's China intangible asset, we performed audit procedures that included, among others, assessing the fair value methodology used by management and evaluating the significant assumptions used in the valuation model. We compared significant assumptions to current industry, market and economic trends, and to the Company's historical results. We assessed the historical accuracy of management's estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the China intangible asset that would result from changes in assumptions. We also involved a valuation specialist to assist in our evaluation of the Company's overall discount rate.
/s/ Ernst & Young LLP
We have served as the Company's auditor since 2009.
Chicago, Illinois
February 12, 2026
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UNITED AIRLINES HOLDINGS, INC.
STATEMENTS OF CONSOLIDATED OPERATIONS
(In millions, except per share amounts)
Year Ended December 31,
2025 2024 2023
Operating revenue:
Passenger revenue $ 53,438 $ 51,829 $ 49,046
Cargo revenue 1,779 1,743 1,495
Other operating revenue 3,853 3,491 3,176
Total operating revenue 59,070 57,063 53,717
Operating expense:
Salaries and related costs 17,647 16,678 14,787
Aircraft fuel 11,396 11,756 12,651
Landing fees and other rent 3,849 3,437 3,076
Aircraft maintenance materials and outside repairs 3,294 3,063 2,736
Depreciation and amortization 2,939 2,928 2,671
Regional capacity purchase 2,693 2,516 2,400
Distribution expenses 2,109 2,231 1,977
Aircraft rent 252 193 197
Special charges 259 112 949
Other operating expenses 9,919 9,053 8,062
Total operating expense 54,356 51,967 49,506
Operating income 4,713 5,096 4,211
Nonoperating income (expense):
Interest expense ( 1,373 ) ( 1,629 ) ( 1,956 )
Interest income 611 726 827
Interest capitalized 206 227 182
Unrealized gains (losses) on investments, net 4 ( 199 ) 27
Miscellaneous, net 144 ( 53 ) 96
Total nonoperating expense, net ( 408 ) ( 928 ) ( 824 )
Income before income taxes 4,306 4,168 3,387
Income tax expense 953 1,019 769
Net income $ 3,353 $ 3,149 $ 2,618
Earnings per share, basic $ 10.32 $ 9.58 $ 7.98
Earnings per share, diluted $ 10.20 $ 9.45 $ 7.89
The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
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UNITED AIRLINES HOLDINGS, INC.
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
(In millions)
Year Ended December 31,
2025 2024 2023
Net income $ 3,353 $ 3,149 $ 2,618
Other comprehensive income (loss), net of tax:
Employee benefit plans ( 148 ) 247 ( 261 )
Investments and other 8 3 24
Total other comprehensive income (loss), net of tax ( 140 ) 250 ( 237 )
Total comprehensive income, net $ 3,214 $ 3,399 $ 2,381
The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
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UNITED AIRLINES HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except shares)
At December 31,
ASSETS 2025 2024
Cash and cash equivalents $ 5,942 $ 8,769
Short-term investments 6,298 5,706
Receivables, net 2,391 2,163
Aircraft fuel, spare parts and supplies, net 1,556 1,572
Prepaid expenses and other 671 673
Total current assets 16,857 18,883
Operating property and equipment, net 46,121 42,908
Operating lease right-of-use assets 4,958 3,815
Goodwill 4,527 4,527
Intangible assets, net 2,655 2,683
Investments in affiliates and other, net 1,330 1,267
Total noncurrent assets 59,591 55,200
Total assets $ 76,448 $ 74,083
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 4,567 $ 4,193
Accrued salaries and benefits 3,900 3,289
Advance ticket sales 8,131 7,561
Frequent flyer deferred revenue 3,721 3,403
Current maturities of long-term debt, finance leases, and other financial liabilities 4,426 3,453
Current maturities of operating leases 631 467
Other 757 948
Total current liabilities 26,133 23,314
Long-term debt, finance leases, and other financial liabilities 20,562 25,203
Long-term obligations under operating leases 5,417 4,510
Frequent flyer deferred revenue 4,056 4,038
Pension and postretirement benefit liability 1,058 1,233
Deferred income taxes 2,463 1,580
Other 1,478 1,530
Total noncurrent liabilities 35,033 38,094
Commitments and Contingencies
Stockholders' equity:
Preferred stock — —
Common stock at par, $ 0.01 par value; authorized 1,000,000,000 shares; outstanding 323,470,682 and 327,899,771 shares at December 31, 2025 and 2024, respectively
4 4
Additional capital invested 8,911 8,980
Stock held in treasury, at cost ( 3,773 ) ( 3,377 )
Retained earnings 10,092 6,880
Accumulated other comprehensive income 48 188
Total stockholders' equity 15,282 12,675
Total liabilities and stockholders' equity $ 76,448 $ 74,083
The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
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UNITED AIRLINES HOLDINGS, INC.
STATEMENTS OF CONSOLIDATED CASH FLOWS
(In millions)
Year Ended December 31,
2025 2024 2023
Operating Activities:
Net income $ 3,353 $ 3,149 $ 2,618
Adjustments to reconcile net income to net cash provided by (used in) operating activities -
Deferred income tax 925 935 756
Depreciation and amortization 2,939 2,928 2,671
Operating and non-operating special charges, non-cash portion 13 158 84
Unrealized (gains) losses on investments ( 4 ) 199 ( 27 )
Amortization of debt discount and debt issuance costs 77 166 139
Other operating activities ( 62 ) 9 6
Changes in operating assets and liabilities -
(Increase) decrease in receivables ( 297 ) 280 ( 100 )
Increase in prepaids and other assets ( 264 ) ( 166 ) ( 463 )
Increase (decrease) in advance ticket sales 570 857 ( 851 )
Increase in frequent flyer deferred revenue 336 298 468
Increase in accounts payable 674 178 572
Increase in other liabilities 171 454 1,038
Net cash provided by operating activities 8,431 9,445 6,911
Investing Activities:
Capital expenditures, net of flight equipment purchase deposit returns ( 5,874 ) ( 5,615 ) ( 7,171 )
Purchases of short-term and other investments ( 7,763 ) ( 5,809 ) ( 9,470 )
Proceeds from sale of short-term and other investments 7,284 8,661 10,519
Proceeds from sale of property and equipment 98 109 39
Other, net ( 96 ) 3 ( 23 )
Net cash used in investing activities ( 6,350 ) ( 2,651 ) ( 6,106 )
Financing Activities:
Proceeds from issuance of debt and other financial liabilities, net of discounts and fees 578 6,139 2,388
Payments of long-term debt, finance leases and other financial liabilities ( 4,771 ) ( 10,138 ) ( 4,248 )
Repurchases of common stock ( 637 ) ( 162 ) —
Other, net ( 115 ) ( 21 ) ( 32 )
Net cash used in financing activities ( 4,945 ) ( 4,182 ) ( 1,892 )
Net increase (decrease) in cash, cash equivalents and restricted cash ( 2,865 ) 2,612 ( 1,087 )
Cash, cash equivalents and restricted cash at beginning of year 8,946 6,334 7,421
Cash, cash equivalents and restricted cash at end of year $ 6,081 $ 8,946 $ 6,334
Investing and Financing Activities Not Affecting Cash:
Right-of-use assets acquired or modified through operating leases $ 1,901 $ 625 $ 761
Property and equipment acquired through the issuance or modification of debt, finance leases and other financial liabilities ( 25 ) 409 819
Operating leases converted to finance leases 417 239 295
Investment interests received in exchange for loans, goods and services 45 24 33
Cash Paid During the Period for:
Interest $ 1,330 $ 1,494 $ 1,848
Income taxes 62 88 7
The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
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UNITED AIRLINES HOLDINGS, INC.
STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY
(In millions)
Common
Stock Additional
Capital Invested Treasury Stock Retained Earnings Accumulated
Other Comprehensive Income (Loss) Total
Shares Amount
Balance at December 31, 2022 326.9 $ 4 $ 8,986 $ ( 3,534 ) $ 1,265 $ 175 $ 6,896
Net income — — — — 2,618 — 2,618
Other comprehensive loss — — — — — ( 237 ) ( 237 )
Stock-settled share-based compensation — — 77 — — — 77
Proceeds from exercise of stock options — — 1 — — — 1
Stock issued for share-based awards, net of shares withheld for tax 1.1 — ( 72 ) 93 ( 52 ) — ( 31 )
Balance at December 31, 2023 328 4 8,992 ( 3,441 ) 3,831 ( 62 ) 9,324
Net income — — — — 3,149 — 3,149
Other comprehensive income — — — — — 250 250
Stock-settled share-based compensation — — 135 — — — 135
Repurchase of common stock ( 3.0 ) — — ( 162 ) — — ( 162 )
Share issued for settlement of Warrants 2.0 — ( 96 ) 150 ( 54 ) — —
Stock issued for share-based awards, net of shares withheld for tax 0.9 — ( 51 ) 76 ( 46 ) — ( 21 )
Balance at December 31, 2024 327.9 4 8,980 ( 3,377 ) 6,880 188 12,675
Net income — — — — 3,353 — 3,353
Other comprehensive loss — — — — — ( 140 ) ( 140 )
Stock-settled share-based compensation — — 142 — — — 142
Repurchases of common stock ( 8.1 ) — — ( 641 ) — — ( 641 )
Stock issued for settlement of Warrants 1.8 — ( 99 ) 133 ( 34 ) — —
Stock issued for share-based awards, net of shares withheld for tax 1.9 — ( 112 ) 111 ( 107 ) — ( 108 )
Balance at December 31, 2025 323.5 $ 4 $ 8,911 $ ( 3,773 ) $ 10,092 $ 48 $ 15,282
The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
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UNITED AIRLINES, INC.
STATEMENTS OF CONSOLIDATED OPERATIONS
(In millions)
Year Ended December 31,
2025 2024 2023
Operating revenue:
Passenger revenue $ 53,438 $ 51,829 $ 49,046
Cargo revenue 1,779 1,743 1,495
Other operating revenue 3,853 3,491 3,176
Total operating revenue 59,070 57,063 53,717
Operating expense:
Salaries and related costs 17,647 16,678 14,787
Aircraft fuel 11,396 11,756 12,651
Landing fees and other rent 3,849 3,437 3,076
Aircraft maintenance materials and outside repairs 3,294 3,063 2,736
Depreciation and amortization 2,939 2,928 2,671
Regional capacity purchase 2,693 2,516 2,400
Distribution expenses 2,109 2,231 1,977
Aircraft rent 252 193 197
Special charges 259 112 949
Other operating expenses 9,917 9,050 8,059
Total operating expense 54,354 51,964 49,503
Operating income 4,716 5,099 4,214
Nonoperating income (expense):
Interest expense ( 1,373 ) ( 1,629 ) ( 1,956 )
Interest income 611 726 827
Interest capitalized 206 227 182
Unrealized gains (losses) on investments, net 4 ( 199 ) 27
Miscellaneous, net 144 ( 53 ) 96
Total nonoperating expense, net ( 408 ) ( 928 ) ( 824 )
Income before income taxes 4,308 4,171 3,390
Income tax expense 953 1,020 770
Net income $ 3,355 $ 3,151 $ 2,620
The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
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UNITED AIRLINES, INC.
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
(In millions)
Year Ended December 31,
2025 2024 2023
Net income $ 3,355 $ 3,151 $ 2,620
Other comprehensive income (loss), net of tax:
Employee benefit plans ( 148 ) 247 ( 261 )
Investments and other 8 3 24
Total other comprehensive income (loss), net of tax ( 140 ) 250 ( 237 )
Total comprehensive income, net $ 3,215 $ 3,401 $ 2,383
The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
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UNITED AIRLINES, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except shares)
At December 31,
ASSETS 2025 2024
Cash and cash equivalents $ 5,942 $ 8,769
Short-term investments 6,298 5,706
Receivables, net 2,391 2,163
Aircraft fuel, spare parts and supplies, net 1,556 1,572
Prepaid expenses and other 671 673
Total current assets 16,857 18,883
Operating property and equipment, net 46,121 42,908
Operating lease right-of-use assets 4,958 3,815
Goodwill 4,527 4,527
Intangible assets, net 2,655 2,683
Investments in affiliates and other, net 1,330 1,267
Total noncurrent assets 59,591 55,200
Total assets $ 76,448 $ 74,083
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable $ 4,567 $ 4,193
Accrued salaries and benefits 3,900 3,289
Advance ticket sales 8,131 7,561
Frequent flyer deferred revenue 3,721 3,403
Current maturities of long-term debt, finance leases, and other financial liabilities 4,426 3,453
Current maturities of operating leases 631 467
Other 754 949
Total current liabilities 26,130 23,315
Long-term debt, finance leases, and other financial liabilities 20,562 25,203
Long-term obligations under operating leases 5,417 4,510
Frequent flyer deferred revenue 4,056 4,038
Pension and postretirement benefit liability 1,058 1,233
Deferred income taxes 2,493 1,610
Other 1,478 1,530
Total noncurrent liabilities 35,064 38,124
Commitments and Contingencies
Stockholder's equity:
Common stock at par, $ 0.01 par value; authorized 1,000 shares; issued and outstanding 1,000 shares at December 31, 2025 and 2024
— —
Additional capital invested 760 617
Retained earnings 12,842 9,487
Accumulated other comprehensive income 48 188
Payable to parent 1,604 2,352
Total stockholder's equity 15,254 12,644
Total liabilities and stockholder's equity $ 76,448 $ 74,083
The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
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UNITED AIRLINES, INC.
STATEMENTS OF CONSOLIDATED CASH FLOWS
(In millions)
Year Ended December 31,
2025 2024 2023
Operating Activities:
Net income $ 3,355 $ 3,151 $ 2,620
Adjustments to reconcile net income to net cash provided by (used in) operating activities -
Deferred income tax 925 937 757
Depreciation and amortization 2,939 2,928 2,671
Operating and non-operating special charges, non-cash portion 13 158 84
Unrealized (gains) losses on investments ( 4 ) 199 ( 27 )
Amortization of debt discount and debt issuance costs 77 166 139
Other operating activities ( 62 ) 9 7
Changes in operating assets and liabilities -
(Increase) decrease in receivables ( 297 ) 280 ( 100 )
Increase in prepaids and other assets ( 264 ) ( 166 ) ( 463 )
Increase (decrease) in advance ticket sales 570 857 ( 851 )
Increase in frequent flyer deferred revenue 336 298 468
Increase in accounts payable 674 178 572
Decrease in intercompany payable ( 747 ) ( 186 ) ( 33 )
Increase in other liabilities 171 453 1,035
Net cash provided by operating activities 7,685 9,262 6,879
Investing Activities:
Capital expenditures, net of flight equipment purchase deposit returns ( 5,874 ) ( 5,615 ) ( 7,171 )
Purchases of short-term and other investments ( 7,763 ) ( 5,809 ) ( 9,470 )
Proceeds from sale of short-term and other investments 7,284 8,661 10,519
Proceeds from sale of property and equipment 98 109 39
Other, net ( 96 ) 3 ( 23 )
Net cash used in investing activities ( 6,350 ) ( 2,651 ) ( 6,106 )
Financing Activities:
Proceeds from issuance of debt and other financial liabilities, net of discounts and fees 578 6,139 2,388
Payments of long-term debt, finance leases and other financial liabilities ( 4,771 ) ( 10,138 ) ( 4,248 )
Other, net ( 6 ) — —
Net cash used in financing activities ( 4,200 ) ( 3,999 ) ( 1,860 )
Net increase (decrease) in cash, cash equivalents and restricted cash ( 2,865 ) 2,612 ( 1,087 )
Cash, cash equivalents and restricted cash at beginning of year 8,946 6,334 7,421
Cash, cash equivalents and restricted cash at end of year $ 6,081 $ 8,946 $ 6,334
Investing and Financing Activities Not Affecting Cash:
Right-of-use assets acquired or modified through operating leases $ 1,901 $ 625 $ 761
Property and equipment acquired through the issuance or modification of debt, finance leases and other financial liabilities ( 25 ) 409 819
Operating leases converted to finance leases 417 239 295
Investment interests received in exchange for loans, goods and services 45 24 33
Cash Paid During the Period for:
Interest $ 1,330 $ 1,494 $ 1,848
Income taxes 62 88 7
The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
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UNITED AIRLINES, INC.
STATEMENTS OF CONSOLIDATED STOCKHOLDER'S EQUITY
(In millions)
Additional
Capital
Invested Retained Earnings Accumulated
Other
Comprehensive
Income (Loss) (Receivable from) Payable to Related Parties, Net Total
Balance at December 31, 2022 $ 403 $ 3,716 $ 175 $ 2,571 $ 6,865
Net income — 2,620 — — 2,620
Other comprehensive loss — — ( 237 ) — ( 237 )
Stock-settled share-based compensation 77 — — — 77
Other 2 — — ( 33 ) ( 31 )
Balance at December 31, 2023 482 6,336 ( 62 ) 2,538 9,294
Net income — 3,151 — — 3,151
Other comprehensive income — — 250 — 250
Stock-settled share-based compensation 135 — — — 135
Impact of UAL share repurchase — — — ( 162 ) ( 162 )
Other — — — ( 24 ) ( 24 )
Balance at December 31, 2024 617 9,487 188 2,352 12,644
Net income — 3,355 — — 3,355
Other comprehensive loss — — ( 140 ) — ( 140 )
Stock-settled share-based compensation 142 — — — 142
Impact of UAL share repurchase — — — ( 637 ) ( 637 )
Other — — — ( 110 ) ( 110 )
Balance at December 31, 2025 $ 760 $ 12,842 $ 48 $ 1,604 $ 15,254
The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
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UNITED AIRLINES HOLDINGS, INC.
UNITED AIRLINES, INC.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
United Airlines Holdings, Inc. (together with its consolidated subsidiaries, "UAL" or the "Company") is a holding company incorporated in Delaware and its wholly-owned subsidiary is United Airlines, Inc. (together with its consolidated subsidiaries, "United"). As UAL consolidates United for financial statement purposes, disclosures that relate to activities of United also apply to UAL, unless otherwise noted. United comprises substantially all of UAL's operating revenues, operating expenses, assets, liabilities and operating cash flows. When appropriate, UAL and United are named specifically for their individual contractual obligations and related disclosures and any significant differences between the operations and results of UAL and United are separately disclosed and explained.
The Company's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company consolidates variable interest entities when it determines that it is the primary beneficiary of those entities' operations. All material intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation.
In 2025, the Company changed its rounding presentation to the nearest whole number in millions of reported amounts, except per share data or as otherwise designated. As such, certain columns and rows within the financial statements and tables presented may not sum due to rounding. Per unit amounts have been calculated from the underlying whole-dollar amounts. This change is not material and does not impact the comparability of our condensed consolidated financial statements.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates.
Segments
Operating segments are defined as components of an enterprise with separate financial information, which are evaluated regularly by the chief operating decision maker ("CODM") and are used to assess performance and allocate resources. T he Company manages its operations as one segment. Managing the Company as one segment allows management the opportunity to maximize the value of its route network and maximize the Company's consolidated financial results. The Company deploys its aircraft across its route network through a single route scheduling system to maximize its value. The Company's chief executive officer is its CODM. When making resource allocation decisions for the network, the Company's CODM evaluates flight profitability data, which considers aircraft type and route economics. The CODM assesses performance of the Company and makes resource allocation decisions based on net income as reported in the Company's statement of consolidated operations. Within the statement of consolidated operations, Other expenses represent various purchased services related to the operations of the airline such as ground handling, passenger services, food and beverage offerings, navigation fees, personnel-related costs and information technology projects. The measure of segment assets is reported on the consolidated balance sheet as Total assets.
Significant Accounting Policies
Cash and Cash Equivalents and Restricted Cash. Highly liquid investments with a maturity of three months or less on their acquisition date are classified as cash and cash equivalents. Restricted cash is classified as current or noncurrent in the consolidated balance sheets based on the expected timing of return of the assets to the Company or payment to an outside party. The restricted cash balances primarily include collateral for letters of credit and collateral associated with facility leases and certain insurance-related obligations.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the statements of consolidated cash flows (in millions):
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At December 31,
2025 2024 2023
Current assets:
Cash and cash equivalents $ 5,942 $ 8,769 $ 6,058
Restricted cash in Prepaid expenses and other — 11 31
Noncurrent assets:
Restricted cash in Investments in affiliates and other, net 139 166 245
Total cash, cash equivalents and restricted cash $ 6,081 $ 8,946 $ 6,334
Investments. Highly liquid investments with maturities of greater than three months, but not beyond one year, at the time of purchase are classified as short-term investments and are stated at fair value. Investments with maturities beyond one year when purchased are classified as short-term investments if they are expected to be available to support the Company's short-term liquidity needs. Short-term investments in debt securities are classified as available-for-sale and are stated at fair value. Realized gains and losses on sales of these investments are reflected in Interest income in the statements of consolidated operations. Unrealized gains and losses on available-for-sale debt securities are reflected as a component of accumulated other comprehensive income (loss). Equity investments are accounted for under the equity method if we are able to exercise significant influence over the investee. Equity investments for which we do not have significant influence are recorded at fair value or at cost, if fair value is not readily determinable, with adjustments for observable changes in price or impairments (referred to as the measurement alternative). Changes in fair value are recorded in Unrealized gains (losses) on investments, net in the statements of consolidated operations. See Note 9 of this report for additional information related to investments.
Receivables. Receivables primarily consist of amounts due from credit card companies, non-airline partners, and cargo customers. We provide an allowance for credit losses expected to be incurred. We base our allowance on various factors including, but not limited to, aging, payment history, write-offs, macro-economic indicators and other credit monitoring indicators. Credit loss expense and write-offs related to receivables were not material for the years ended December 31, 2025, 2024 and 2023.
Aircraft Fuel, Spare Parts and Supplies. The Company accounts for aircraft fuel, spare parts and supplies at average cost and provides an obsolescence allowance for aircraft spare parts with an assumed residual value of 10% of original cost. Allowance for obsolescence was $ 830 million and $ 739 million at December 31, 2025 and 2024, respectively. Obsolescence expense was $ 119 million, $ 175 million, and $ 102 million for the years ended December 31, 2025, 2024 and 2023, respectively, and is included in Depreciation and amortization expense in the statements of consolidated operations.
Property and Equipment. The Company records additions to owned operating property and equipment at cost when acquired. Costs related to modifications that enhance the operating performance or extend the useful lives of airframes or engines are capitalized as property and equipment. We periodically receive credits in connection with the acquisition of aircraft and engines as well as contractual damages related to delays in delivery or operating performance issues. These credits are generally deferred and are recognized as a reduction to the cost of the related equipment.
Depreciation and amortization is recognized on a straight-line basis over the assets' estimated useful lives. Leasehold improvements are amortized over the shorter of the remaining term of the lease or the estimated useful life of the related asset. The estimated useful lives of property and equipment are as follows:
Estimated Useful Life (in years)
Aircraft, spare engines and related rotable parts 25 to 30
Aircraft seats 10 to 15
Buildings 25 to 45
Other property and equipment 3 to 20
Computer software 5 to 15
Building improvements 1 to 40
Operating property and equipment, net at December 31 was as follows (in millions):
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2025 2024
Flight equipment $ 56,876 $ 52,696
Other property and equipment 13,204 11,908
Purchase deposits for flight equipment 3,506 3,427
Total operating property and equipment 73,586 68,031
Less—Accumulated depreciation and amortization ( 27,466 ) ( 25,123 )
Total operating property and equipment, net $ 46,121 $ 42,908
As of December 31, 2025 and 2024, the Company had a carrying value of computer software of $ 455 million and $ 456 million, respectively. For the years ended December 31, 2025, 2024 and 2023, the Company's amortization expense related to computer software was $ 160 million, $ 155 million and $ 168 million, respectively. Aircraft, spare engines and related rotable parts were assumed to have residual values of approximately 10% of original cost, and other categories of property and equipment were assumed to have no residual value.
Leases. The Company enters into various leases as a lessee for assets including, but not limited to, airport facilities, airport gates, hangar sites, administrative offices, aircraft, and various other facilities and equipment to support its operations. The Company determines if an arrangement contains a lease at inception. A lease exists when the arrangement conveys the right to control the use of an identified asset over the lease term. Upon lease commencement, the Company records a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term in the consolidated balance sheets. The lease liability is measured at the commencement date based on the present value of lease payments not yet paid over the lease term, which includes extension and renewal options that are reasonably certain of being exercised, discounted using an incremental borrowing rate that reflects the term of the lease and the particular economic environment at lease commencement. The right-of-use asset is based on the lease liability, adjusted for lease prepayments, lease incentives received, and the lessee's initial direct costs. The Company does not record a right-of-use asset or lease liability for leases with an initial term of 12 months or less. Lease and non-lease components are combined for all classes of underlying assets, except for capacity purchase agreements ("CPAs") which contain embedded leases for regional aircraft. For these CPAs, the Company allocates consideration to the lease and non-lease components based on their relative standalone values. Many of the Company's leases include variable lease payments, which are not included in the measurement of the right-of-use asset and lease liability. Finance lease right-of-use assets are presented together with Operating property and equipment on the consolidated balance sheets and the related amortization is included in Depreciation and amortization expense.
Long-Lived Asset Impairments. The Company evaluates the carrying value of long-lived assets subject to amortization whenever events or changes in circumstances indicate that an impairment may exist. For purposes of this testing, the Company has generally identified the aircraft fleet type as the lowest level of identifiable cash flows for its mainline fleet and the contract level for its regional fleet under CPAs. An impairment charge is recognized when the asset's carrying value exceeds its net undiscounted future cash flows. The amount of the charge is the difference between the asset's carrying value and fair market value.
Intangible Assets. The Company has finite-lived and indefinite-lived intangible assets, including goodwill. Finite-lived intangible assets are amortized over their estimated useful lives. Goodwill and indefinite-lived intangible assets are not amortized but are assessed for impairment on an annual basis as of October 1, or more frequently if events or circumstances indicate that the asset may be impaired. The Company typically determines fair value using either a market approach or a variation of the income approach valuation techniques. These measurements include the following key assumptions: (1) forecasted revenues, expenses, margin and cash flows, (2) terminal period growth rate, (3) an estimated weighted average cost of capital, (4) asset-specific risk factor and (5) a tax rate. These assumptions are consistent with those that hypothetical market participants would use. We recognize an impairment when the fair value of an intangible asset is less than its carrying value.
For the Company's China route authority, the Company performed a quantitative assessment which involved determining the fair value of the asset and comparing that amount to the asset's carrying value. For all other intangible assets, the Company performed a qualitative assessment of whether it was more likely than not that an impairment had occurred. To determine the fair value of the China route authority, the Company used a discounted cash flow method. Key assumptions used in the valuation model included forecasted revenues, margin and an overall discount rate. These assumptions are inherently uncertain as they relate to future events and circumstances.
The following table presents information about the Company's goodwill and other intangible assets at December 31 (in millions):
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2025 2024
Gross
Carrying
Amount Accumulated
Amortization Gross
Carrying
Amount Accumulated
Amortization
Goodwill $ 4,527 $ 4,527
Indefinite-lived intangible assets
China route authority $ 1,020 $ 1,020
Airport slots 564 564
Tradenames and logos 593 593
Alliances 404 404
Total $ 2,581 $ 2,581
Finite-lived intangible assets
Frequent flyer database $ 1,177 $ 1,112 $ 1,177 $ 1,092
Hubs 145 144 145 138
Other 143 134 143 133
Total $ 1,465 $ 1,391 $ 1,465 $ 1,363
Amortization expense in 2025, 2024 and 2023 was $ 28 million, $ 32 million and $ 37 million, respectively. Projected amortization expense in 2026, 2027, 2028, 2029 and 2030 is $ 18 million, $ 11 million, $ 10 million, $ 8 million and $ 7 million, respectively.
Labor Costs. The Company records expenses associated with new or amendable labor agreements when the amounts are probable and estimable. These expenses could include costs associated with retro-active lump sum cash payments made in conjunction with the ratification of labor agreements. To the extent these upfront costs are in lieu of future pay increases, they would be capitalized and amortized over the term of the labor agreements. If not, these amounts would be expensed. See Notes 12 and 13 of this report for additional information related to labor agreements.
Share-Based Compensation. The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. The resulting cost is recognized over the period during which an employee is required to provide service in exchange for the award, which is usually the vesting period. Obligations for cash-settled restricted stock units ("RSUs") are remeasured at fair value throughout the requisite service period at the close of the reporting period based upon UAL's stock price. In addition to the service requirement, certain RSUs have performance metrics that must be achieved prior to vesting. These awards are accrued based on the expected level of achievement at each reporting period. An adjustment is recorded each reporting period to adjust compensation expense based on the then current level of expected performance achievement for the performance-based awards. See Note 5 of this report for additional information on UAL's share-based compensation plans.
Maintenance and Repairs . The cost of maintenance and repairs, including the cost of minor replacements, is charged to expense as incurred, except for costs incurred under the Company's power-by-the-hour ("PBTH") engine maintenance agreements. PBTH contracts transfer certain risk to third-party service providers and fix the amount we pay per flight hour or per cycle to the service provider in exchange for maintenance and repairs under a predefined maintenance program. Under PBTH agreements, the Company recognizes expense at a level rate per engine hour, unless the level of service effort and the related payments during the period are substantially consistent, in which case the Company recognizes expense based on the amounts paid.
Advertising. Advertising costs, which are included in Other operating expenses, are expensed as incurred. Advertising expenses were $ 250 million, $ 235 million and $ 221 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Third-Party Business. The Company has third-party business activity that includes ground handling, maintenance services, flight academy and frequent flyer award non-travel redemptions. Third-party business revenue is recorded in Other operating revenue. Expenses associated with these third-party business activities are recorded in Other operating expenses, except for non-travel mileage redemptions which are recorded to Other operating revenue.
Uncertain Income Tax Positions. The Company has recorded reserves for income taxes and associated interest that may become payable in future years. Although management believes that its positions taken on income tax matters are reasonable, the Company nevertheless established tax and interest reserves in recognition that various taxing authorities may challenge certain
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of the positions taken by the Company, potentially resulting in additional liabilities for taxes and interest. The Company's uncertain tax position reserves are reviewed periodically and are adjusted as events occur that affect its estimates, such as the availability of new information, the lapsing of applicable statutes of limitation, the conclusion of tax audits, the measurement of additional estimated liability, the identification of new tax matters, the release of administrative tax guidance affecting its estimates of tax liabilities, or the rendering of relevant court decisions. The Company records penalties and interest relating to uncertain tax positions as part of income tax expense in its statements of consolidated operations. See Note 7 of this report for additional information on UAL's uncertain tax positions.
Fair Value Measurements. The Company measures certain financial assets and liabilities at fair value on a recurring basis, and certain non-financial assets and liabilities on a nonrecurring basis. The Company uses valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows:
• Level 1 - Unadjusted quoted prices in active markets for assets or liabilities identical to those to be reported at fair value
• Level 2 - Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputs
• Level 3 - Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants would price the assets or liabilities.
Recently Issued Accounting Standards
Income Taxes. In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." This ASU enhances disclosures related to income taxes, including the rate reconciliation and information on income taxes paid. The Company adopted the standard beginning with our annual reporting for fiscal year 2025. The adoption resulted in incremental disclosures. See Note 7 of this report for these disclosures.
Internal-Use Software. In September 2025, the FASB issued ASU No. 2025-06, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)." The guidance removes all references to project stages throughout ASC 350-40 and clarifies the threshold entities apply to begin capitalizing costs. This guidance requires internal-use software development cost capitalization to begin when both of the following occur: management has authorized and committed to funding the software project and, it is probable the project will be completed and the software will be used to perform its intended function. The guidance is effective for the Company for annual and interim reporting periods beginning January 1, 2028; early adoption is permitted. The Company early adopted this ASU on January 1, 2026, using the prospective transition approach, which applies this guidance to new software costs incurred starting on the adoption date. The adoption will not have a material impact on the Company's consolidated financial statements.
Expense Disaggregation Disclosures. In November 2024, the FASB issued ASU No. 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses." This ASU requires disclosing disaggregated information about certain income statement expense captions but does not change the presentation of expense information or expense captions reported on the face of the income statement. This ASU is effective for the Company for annual reporting periods beginning January 1, 2027 and interim reporting periods beginning January 1, 2028; early adoption is permitted. The Company is assessing the impact of this ASU and upon adoption may be required to include certain additional disclosures.
NOTE 2 - REVENUE RECOGNITION
Passenger 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.
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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. The Company defers amounts related to future travel in its Advance ticket sales liability account.
Estimate of tickets not expected to be used ("ticket breakage"). The Company estimates the value of advance ticket sales that will ultimately expire unused based on historical experience and qualitative factors such as recent program changes. The Company recognizes revenue related to these tickets based on the pattern in which concurrently sold tickets are used.
In the years ended December 31, 2025, 2024 and 2023, the Company recognized approximately $ 5.8 billion, $ 5.3 billion and $ 5.7 billion, respectively, of passenger revenue for tickets that were included in Advance ticket sales at the beginning of those periods.
Revenue by geography. The Company further disaggregates its operating revenue by principal geographic region for the years ended December 31 as presented in the table below (in millions):
2025 2024 2023
Domestic (U.S. and Canada) $ 35,017 $ 34,067 $ 32,400
Atlantic 11,647 11,097 10,982
Pacific 6,878 6,462 5,267
Latin America 5,528 5,437 5,068
Total $ 59,070 $ 57,063 $ 53,717
The Company attributes revenue among the geographic regions based upon the origin and destination of each flight segment. The Company's operations involve an insignificant level of revenue-producing assets in geographic regions as the overwhelming majority of the Company's revenue-producing assets (primarily U.S. registered aircraft) can be deployed in any of its geographic regions.
Ancillary services. The Company charges fees, separately from ticket sales, for certain ancillary services that are directly related to passenger travel, such as baggage fees, premium seat fees, inflight amenity fees, and other ticket-related fees. These ancillary fees are part of the travel performance obligation and, as such, are recognized as Passenger revenue when the travel occurs. The Company recorded $ 4.8 billion, $ 4.5 billion and $ 4.1 billion of ancillary fees within Passenger revenue in the years ended December 31, 2025, 2024 and 2023, respectively.
Ticket taxes. Certain governmental taxes are imposed on the Company's ticket sales through a fee included in ticket prices. The Company collects these fees and remits them to the appropriate government agency. These fees are excluded from the contract transaction price and are therefore not included in passenger revenue. We record a liability when amounts are collected and reduce the liability when payments are made to the appropriate taxing authority.
Frequent Flyer Program . United's MileagePlus loyalty program builds customer loyalty by offering awards, benefits and services to program participants. Members in this program earn miles for travel on United, United Express, Star Alliance members and certain other airlines that participate in the program. Members can also earn miles by purchasing goods and services from our network of non-airline partners. We have contracts to sell miles to these partners with the terms extending from approximately one to five years . These partners include domestic and international credit card issuers, retail merchants, hotels, car rental companies and our participating airline partners. Miles can be redeemed for free (other than taxes and government-imposed fees), discounted or upgraded air travel and non-travel awards.
Miles earned in conjunction with travel. When MileagePlus members earn miles for flights, the Company recognizes a portion of the ticket sales as revenue when the travel occurs and defers a portion of the ticket sale representing the value of the related miles as a separate performance obligation. The Company determines the estimated selling price of travel and miles as if each
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performance obligation is sold on a separate basis. The total consideration from each ticket sale is then allocated to each of the performance obligations, individually, on a pro-rata basis. At the time of travel, the Company records the portion allocated to the miles to Frequent flyer deferred revenue on the Company's consolidated balance sheet and subsequently recognizes it into revenue when miles are redeemed for air travel and non-travel awards.
Estimate of miles not expected to be redeemed ("mileage breakage") . The Company's mileage breakage model is based on the assumption that the likelihood that an account will redeem its miles can be estimated based on a consideration of the account's historical behavior. The Company uses a statistical model to estimate the probability that an account will redeem its current miles balance and reviews its mileage breakage estimates annually. The Company's estimate of the expected mileage breakage requires management judgment. Changes to mileage breakage assumptions, or to program rules and program redemption opportunities, may result in material changes to the deferred revenue balance as well as recognized revenues from the program. We recognize mileage breakage proportionally as the remaining miles are redeemed.
Estimated selling price of miles . The Company's estimated selling price of miles is based on an equivalent ticket value, which incorporates the expected redemption of miles, as the best estimate of the selling price for these miles. The equivalent ticket value is based on the prior 12 months' weighted average equivalent ticket value of similar fares as those used to settle award redemptions while taking into consideration such factors as redemption pattern, cabin class, loyalty status and geographic region. The estimated selling price of miles is adjusted by mileage breakage that considers a number of factors, including redemption patterns of various customer groups.
Co-Brand agreement . United's most significant contract to sell MileagePlus miles is with its co-branded credit card partner JPMorgan Chase Bank USA, N.A. ("Chase"). Chase awards miles to MileagePlus members based on their credit card activity. United identified the following significant separately identifiable performance obligations in this contract (the "Co-Brand Agreement"):
• MileagePlus miles awarded – United has a performance obligation to provide MileagePlus cardholders with miles to be used for air travel and non-travel award redemptions. The Company records Passenger revenue related to the travel awards when the transportation is provided and records Other operating revenue related to the non-travel awards when the goods or services are delivered. The Company records the cost associated with non-travel awards in Other operating revenue, as an agent.
• Marketing – United has a performance obligation to provide Chase access to United's customer list and the use of United's brand. Marketing revenue is recorded to Other operating revenue as miles are delivered to Chase.
• Advertising – United has a performance obligation to provide advertising in support of the MileagePlus card in various customer contact points such as United's website, email promotions, direct mail campaigns, airport advertising and in-flight advertising. Advertising revenue is recorded to Other operating revenue as miles are delivered to Chase.
• Other travel-related benefits – United's performance obligations are comprised of various items such as waived bag fees, seat upgrades and lounge passes. Lounge passes are recorded to Other operating revenue as customers use the lounge passes. Bag fees and seat upgrades are recorded to Passenger revenue at the time of the associated travel.
We account for payments received under the Co-Brand Agreement by allocating them to the separately identifiable performance obligations. The fair value of the separately identifiable performance obligations is determined using management's estimated selling price of each component. The objective of using the estimated selling price based methodology is to determine the price at which we would transact a sale if the product or service were sold on a stand-alone basis. Accordingly, we determine our best estimate of selling price by considering multiple inputs and methods including, but not limited to, discounted cash flows, brand value, volume discounts, published selling prices, number of miles awarded and number of miles redeemed. The Company estimated the selling prices and volumes over the term of the Co-Brand Agreement, at the inception of the contract, in order to determine the allocation of proceeds to each of the components to be delivered.
Frequent flyer deferred revenue. Miles in MileagePlus members' accounts are combined into one homogeneous pool and are thus not separately identifiable, for award redemption purposes, between miles earned in the current period and those in their beginning balance. Of the miles expected to be redeemed, the Company expects the majority of these miles to be redeemed within two years . The current portion of the Frequent flyer deferred revenue is based on expected redemptions in the next 12 months. The table below presents a roll forward of Frequent flyer deferred revenue (in millions):
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2025 2024
Balance at January 1 $ 7,441 $ 7,143
Miles earned 3,883 3,563
Travel miles redeemed ( 3,414 ) ( 3,150 )
Non-travel miles redeemed ( 133 ) ( 115 )
Balance at December 31 $ 7,777 $ 7,441
The portion of the total amounts received from our various partner agreements that is related to the MileagePlus miles awarded is deferred and presented in the table above as an increase to Frequent flyer deferred revenue. In the years ended December 31, 2025, 2024 and 2023, the Company recognized, in Other operating revenue, $ 3.2 billion, $ 2.9 billion and $ 2.7 billion, respectively, related to the marketing, advertising, non-travel miles redeemed (net of related costs) and other travel-related benefits of the mileage revenue associated with our various partner agreements including, but not limited to, our Co-Brand Agreement.
Cargo Revenue. Cargo revenue is recognized when the related shipment arrives at its destination.
NOTE 3 - COMMON STOCKHOLDERS' EQUITY AND PREFERRED SECURITIES
Common stock. On October 15, 2024, the Company announced that its Board of Directors (the "Board") authorized a new share repurchase program, allowing for purchases of up to $ 1.5 billion in the aggregate of outstanding UAL common stock and certain Warrants (as defined below) issued in connection with the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), subject to a limit of $ 500 million in the aggregate through 2024. In 2025, the Company repurchased 8.1 million shares of UAL common stock at an average price of $ 78.75 for a total investment of approximately $ 640 million, including commissions and taxes, as part of the program. As of February 5, 2026, the dollar value of shares that may yet be purchased under the program is approximately $ 0.8 billion. Unless suspended or terminated earlier by the Board, this program has no set expiration date and will therefore terminate when the Company has completed all purchases authorized under the program. The specific timing and number of shares of UAL common stock or Warrants purchased will be determined by the Company's management at its discretion and will vary based on the capital needs of the business, the market price of UAL common stock, general market conditions, securities law limitations and other factors. The purchases may be effected through a combination of one or more open market and privately negotiated transactions (including under trading plans intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as well as transactions structured through investment banking institutions and other derivative transactions (including through one or more accelerated share repurchase programs).
In August 2024, the Company also repurchased, through open market repurchases, following the exercise of the Warrants described below, 2,043,906 shares of UAL common stock, which was recorded as an approximately $ 82 million increase to Stock held in treasury, at cost. These share repurchases were executed outside of a publicly announced plan or program using cash resources.
As of December 31, 2025, approximately 3.7 million shares of UAL's common stock were reserved for future issuance related to the issuance of equity-based awards under the Company's incentive compensation plans.
Preferred stock. As of December 31, 2025, UAL had two shares of junior preferred stock (par value $ 0.01 per share) outstanding. In addition, UAL is authorized to issue 250 million shares of preferred stock (without par value) under UAL's amended and restated certificate of incorporation.
Warrants. In 2020 and 2021, the Company issued to the United States Department of the Treasury (the "U.S. Treasury") warrants ("Warrants") to purchase 9,928,349 shares of UAL common stock in connection with the Payroll Support Program ("PSP") established under Division A, Title IV, Subtitle B of the CARES Act, the Payroll Support Program Extension established under Division N, Title IV, Subtitle A of the Consolidated Appropriations Act, 2021 ("PSP2"), the Payroll Support Program 3 established under Title VII, Subtitle C of the American Rescue Plan Act of 2021 ("PSP3"), and the Airline Loan Program established under Division A, Title IV, Subtitle A of the CARES Act. In August 2024, the holder of the Warrants exercised 6,414,635 of the Warrants, with an exercise price of $ 31.50 , in a net share settlement for 2,043,906 shares of UAL common stock. In March 2025, the remaining 3,513,714 Warrants were exercised in a net share settlement for 1,801,430 shares of UAL common stock.
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NOTE 4 - EARNINGS PER SHARE
The following table shows the computation of UAL's basic and diluted earnings per share, the latter of which uses the treasury stock method to calculate the dilutive effect of UAL's potential common stock, for the years ended December 31 (in millions, except per share amounts):
2025 2024 2023
Earnings available to common stockholders $ 3,353 $ 3,149 $ 2,618
Basic weighted-average shares outstanding 324.9 328.6 327.8
Dilutive effect of stock Warrants (a) 0.3 1.7 2.2
Dilutive effect of employee stock awards 3.3 2.9 1.9
Diluted weighted-average shares outstanding 328.5 333.2 331.9
Earnings per share, basic $ 10.32 $ 9.58 $ 7.98
Earnings per share, diluted $ 10.20 $ 9.45 $ 7.89
Potentially dilutive securities (b)
Stock Warrants (a) — — 1.5
Employee stock awards 0.3 0.3 0.6
(a) See Note 3 of this report for additional information on these Warrants.
(b) Weighted-average potentially dilutive securities outstanding are excluded from the computation of diluted earnings per share because the securities would have an antidilutive effect.