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Item 8. Financial Statements and Supplementary Data

2025-02-27 compared with 2024-02-29 · 471 added, 587 removed, 881 unchanged (55% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID:

United Airlines Holdings, Inc.:

Statements of Consolidated Operations

Statements of Consolidated Comprehensive Income (Loss)

Consolidated Balance Sheets

Statements of Consolidated Cash Flows

Statement of Consolidated Stockholders' Equity

United Airlines, Inc.:

Statements of Consolidated Operations

Statements of Consolidated Comprehensive Income (Loss)

Consolidated Balance Sheets

Statements of Consolidated Cash Flows

Statement of Consolidated Stockholder's Equity

Combined Notes to Consolidated Financial Statements

Note 1 - Basis of Presentation and Significant Accounting Policies

Note 2 - Revenue Recognition

Note 3 - Common Stockholders' Equity and Preferred Securities

Note 4 - Earnings Per Share

Note 5 - Share-Based Compensation Plans

Note 6 - Accumulated Other Comprehensive Income (Loss) ("AOCI")

Note 7 - Income Taxes

Note 8 - Pension, Postretirement and Other Employee Benefit Plans

Note 9 - Fair Value Measurements, Investments and Notes Receivable

Note 10 - Debt

Note 11 - Leases

Note 12 - Commitments, Contingencies and Guarantees

Note 13 - Special Charges

Report of Independent Registered Public Accounting Firm

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We have audited the accompanying consolidated balance sheets of United Airlines Holdings, Inc.

(the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the "consolidated financial statements").

(the "Company") as of December 31, 2024 and 2023, 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, 2024, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S.

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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.

Indefinite-lived Intangible Asset (China Route Authorities) Impairment Analysis

Indefinite-lived Intangible Asset (China Route Authority) Impairment Analysis

Description of the Matter

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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, fuel costs, other operating costs, margin and an overall discount rate, each of which is affected by expectations about future market or economic conditions.

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.

1 unchanged sentence

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, fuel costs, other operating costs, margin and the overall discount rate.

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.

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We have audited the accompanying consolidated balance sheets of United Airlines, Inc.

(the "Company") as of December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive income (loss), stockholder's equity and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the "consolidated financial statements").

(the "Company") as of December 31, 2024 and 2023, 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, 2024, and the related notes (collectively referred to as the "consolidated financial statements").

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Indefinite-lived Intangible Asset (China Route Authorities) Impairment Analysis

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.

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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.

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.

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Total operating expense 51,967 49,506 42,618

Operating income (loss) 4,211 2,337 ( 1,022 )

Operating income 5,096 4,211 2,337

Nonoperating income (expense):

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Total nonoperating expense, net ( 928 ) ( 824 ) ( 1,347 )

Income (loss) before income taxes 3,387 990 ( 2,557 )

Income tax expense (benefit) 769 253 ( 593 )

Net income (loss) $ 2,618 $ 737 $ ( 1,964 )

Earnings (loss) per share, basic $ 7.98 $ 2.26 $ ( 6.10 )

Earnings (loss) per share, diluted $ 7.89 $ 2.23 $ ( 6.10 )

Income before income taxes 4,168 3,387 990

Income tax expense 1,019 769 253

Net income $ 3,149 $ 2,618 $ 737

Earnings per share, basic $ 9.58 $ 7.98 $ 2.26

Earnings per share, diluted $ 9.45 $ 7.89 $ 2.23

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

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2024 2023 2022

Net income (loss) $ 2,618 $ 737 $ ( 1,964 )

Net income $ 3,149 $ 2,618 $ 737

Other comprehensive income (loss), net of tax:

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Total other comprehensive income (loss), net of tax 250 ( 237 ) 1,117

Total comprehensive income (loss), net $ 2,381 $ 1,854 $ ( 1,767 )

Total comprehensive income, net $ 3,399 $ 2,381 $ 1,854

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

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ASSETS 2024 2023

Current assets:

Cash and cash equivalents $ 8,769 $ 6,058

Short-term investments 5,706 8,330

Restricted cash 31 45

Receivables, less allowance for credit losses (2023—$ 18 ;

Aircraft fuel, spare parts and supplies, less obsolescence allowance (2023—$ 689 ;

Receivables, net 2,163 1,898

Aircraft fuel, spare parts and supplies, net 1,572 1,561

Prepaid expenses and other 673 640

Total current assets 18,883 18,487

Operating property and equipment:

Flight equipment 48,448 42,775

Other property and equipment 10,527 9,334

Purchase deposits for flight equipment 3,550 2,820

Total operating property and equipment 62,525 54,929

Less—Accumulated depreciation and amortization ( 22,710 ) ( 20,481 )

Total operating property and equipment, net 39,815 34,448

Operating property and equipment, net 42,908 39,815

Operating lease right-of-use assets 3,815 3,914

Other assets:

Goodwill 4,527 4,527

Intangibles, less accumulated amortization (2023—$ 1,495 ;

2022—$ 1,472 )

Restricted cash 245 210

Deferred income taxes — 91

Investments in affiliates and other, less allowance for credit losses (2023—$ 38 ;

Total other assets 8,888 8,963

Intangible assets, net 2,683 2,725

Investments in affiliates and other, net 1,267 1,636

Total noncurrent assets 55,200 52,617

Total assets $ 74,083 $ 71,104

(continued on next page)

UNITED AIRLINES HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except shares)

At December 31,

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 4,193 $ 3,835

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Frequent flyer deferred revenue 3,403 3,095

Current maturities of long-term debt 4,018 2,911

Current maturities of other financial liabilities 57 23

Current maturities of long-term debt, finance leases, and other financial liabilities 3,453 4,247

Current maturities of operating leases 467 576

Current maturities of finance leases 172 104

Other 948 806

Total current liabilities 23,314 22,203

Long-term debt 25,057 28,283

Long-term debt, finance leases, and other financial liabilities 25,203 27,413

Long-term obligations under operating leases 4,510 4,503

Long-term obligations under finance leases 91 115

Other liabilities and deferred credits:

Frequent flyer deferred revenue 4,038 4,048

Pension liability 968 747

Postretirement benefit liability 637 671

Pension and postretirement benefit liability 1,233 1,605

Deferred income taxes 1,580 594

Other financial liabilities 2,265 844

Other 1,530 1,414

Total other liabilities and deferred credits 9,926 7,613

Total noncurrent liabilities 38,094 39,577

Commitments and Contingencies

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Retained earnings 6,880 3,831

Accumulated other comprehensive income ( 62 ) 175

Accumulated other comprehensive income (loss) 188 ( 62 )

Total stockholders' equity 12,675 9,324

Total liabilities and stockholders' equity $ 74,083 $ 71,104

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

UNITED AIRLINES HOLDINGS, INC.

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Operating Activities:

Net income (loss) $ 2,618 $ 737 $ ( 1,964 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities -

Deferred income tax (benefit) 756 248 ( 583 )

Net income $ 3,149 $ 2,618 $ 737

Adjustments to reconcile net income to net cash provided by (used in) operating activities -

Deferred income tax 935 756 248

Depreciation and amortization 2,928 2,671 2,456

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Changes in operating assets and liabilities -

Increase in receivables ( 100 ) ( 158 ) ( 448 )

(Increase) decrease in receivables 280 ( 100 ) ( 158 )

Increase in prepaids and other assets ( 166 ) ( 463 ) ( 86 )

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Increase in accounts payable 178 572 796

Increase (decrease) in other liabilities 1,038 110 ( 403 )

Increase in other liabilities 454 1,038 110

Net cash provided by operating activities 9,445 6,911 6,066

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Payments of long-term debt, finance leases and other financial liabilities ( 10,138 ) ( 4,248 ) ( 4,011 )

Proceeds from equity issuance — — 532

Repurchases of common stock ( 162 ) — —

Other, net ( 21 ) ( 32 ) ( 74 )

Net cash provided by (used in) financing activities ( 1,892 ) ( 3,349 ) 6,396

Net cash used in financing activities ( 4,182 ) ( 1,892 ) ( 3,349 )

Net increase (decrease) in cash, cash equivalents and restricted cash 2,612 ( 1,087 ) ( 11,112 )

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Balance at December 31, 2021 323.8 $ 4 $ 9,156 $ ( 3,814 ) $ 625 $ ( 942 ) $ 5,029

Net loss — — — — ( 1,964 ) — ( 1,964 )

Net income — — — — 737 — 737

Other comprehensive income — — — — — 1,117 1,117

Stock-settled share-based compensation — — 86 — — — 86

Warrants issued — — 99 — — — 99

Issuance of common stock 11.0 — 532 — — — 532

Stock issued for share-based awards, net of shares withheld for tax 3.1 — ( 256 ) 280 ( 97 ) — ( 73 )

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Net income — — — — 2,618 — 2,618

Other comprehensive income — — — — — 1,117 1,117

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 )

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Net income — — — — 3,149 — 3,149

Other comprehensive loss — — — — — ( 237 ) ( 237 )

Other comprehensive income — — — — — 250 250

Stock-settled share-based compensation — — 135 — — — 135

Proceeds from exercise of stock options 1 1

Repurchases 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 )

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Aircraft rent 193 197 252

Special charges (credits) 949 140 ( 3,367 )

Special charges 112 949 140

Other operating expenses 9,050 8,059 6,626

Total operating expense 51,964 49,503 42,616

Operating income (loss) 4,214 2,339 ( 1,020 )

Operating income 5,099 4,214 2,339

Nonoperating income (expense):

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Total nonoperating expense, net ( 928 ) ( 824 ) ( 1,347 )

Income (loss) before income taxes 3,390 992 ( 2,555 )

Income tax expense (benefit) 770 253 ( 593 )

Net income (loss) $ 2,620 $ 739 $ ( 1,962 )

Income before income taxes 4,171 3,390 992

Income tax expense 1,020 770 253

Net income $ 3,151 $ 2,620 $ 739

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

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2024 2023 2022

Net income (loss) $ 2,620 $ 739 $ ( 1,962 )

Net income $ 3,151 $ 2,620 $ 739

Other comprehensive income (loss), net of tax:

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Investments and other 3 24 ( 28 )

Total other comprehensive income, net of tax ( 237 ) 1,117 197

Total comprehensive income (loss), net $ 2,383 $ 1,856 $ ( 1,765 )

Total other comprehensive income (loss), net of tax 250 ( 237 ) 1,117

Total comprehensive income, net $ 3,401 $ 2,383 $ 1,856

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

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ASSETS 2024 2023

Current assets:

Cash and cash equivalents $ 8,769 $ 6,058

Short-term investments 5,706 8,330

Restricted cash 31 45

Receivables, less allowance for credit losses (2023—$ 18 ;

Aircraft fuel, spare parts and supplies, less obsolescence allowance (2023—$ 689 ;

Receivables, net 2,163 1,898

Aircraft fuel, spare parts and supplies, net 1,572 1,561

Prepaid expenses and other 673 640

Total current assets 18,883 18,487

Operating property and equipment:

Flight equipment 48,448 42,775

Other property and equipment 10,527 9,334

Purchase deposits for flight equipment 3,550 2,820

Total operating property and equipment 62,525 54,929

Less—Accumulated depreciation and amortization ( 22,710 ) ( 20,481 )

Total operating property and equipment, net 39,815 34,448

Operating property and equipment, net 42,908 39,815

Operating lease right-of-use assets 3,815 3,914

Other assets:

Goodwill 4,527 4,527

Intangibles, less accumulated amortization (2023—$ 1,495 ;

2022—$ 1,472 )

Restricted cash 245 210

Deferred income taxes — 62

Investments in affiliates and other, less allowance for credit losses (2023—$ 38 ;

Total other assets 8,888 8,934

Intangible assets, net 2,683 2,725

Investments in affiliates and other, net 1,267 1,636

Total noncurrent assets 55,200 52,617

Total assets $ 74,083 $ 71,104

(continued on next page)

UNITED AIRLINES, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except shares)

At December 31,

LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities:

Accounts payable $ 4,193 $ 3,835

2 unchanged sentences

Frequent flyer deferred revenue 3,403 3,095

Current maturities of long-term debt 4,018 2,911

Current maturities of other financial liabilities 57 23

Current maturities of long-term debt, finance leases, and other financial liabilities 3,453 4,247

Current maturities of operating leases 467 576

Current maturities of finance leases 172 104

Other 949 808

Total current liabilities 23,315 22,205

Long-term debt 25,057 28,283

Long-term debt, finance leases, and other financial liabilities 25,203 27,413

Long-term obligations under operating leases 4,510 4,503

Long-term obligations under finance leases 91 115

Other liabilities and deferred credits:

Frequent flyer deferred revenue 4,038 4,048

Pension liability 968 747

Postretirement benefit liability 637 671

Pension and postretirement benefit liability 1,233 1,605

Deferred income taxes 1,610 622

Other financial liabilities 2,265 844

Other 1,530 1,414

Total other liabilities and deferred credits 9,954 7,613

Total noncurrent liabilities 38,124 39,605

Commitments and Contingencies

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Retained earnings 9,487 6,336

Accumulated other comprehensive income ( 62 ) 175

Accumulated other comprehensive income (loss) 188 ( 62 )

Payable to parent 2,352 2,538

1 unchanged sentence

Total liabilities and stockholder's equity $ 74,083 $ 71,104

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

UNITED AIRLINES, INC.

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Operating Activities:

Net income (loss) $ 2,620 $ 739 $ ( 1,962 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities -

Deferred income tax (benefit) 757 248 ( 583 )

Net income $ 3,151 $ 2,620 $ 739

Adjustments to reconcile net income to net cash provided by (used in) operating activities -

Deferred income tax 937 757 248

Depreciation and amortization 2,928 2,671 2,456

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Changes in operating assets and liabilities -

Increase in receivables ( 100 ) ( 158 ) ( 448 )

(Increase) decrease in receivables 280 ( 100 ) ( 158 )

Increase in intercompany receivables ( 186 ) ( 33 ) ( 76 )

3 unchanged sentences

Increase in accounts payable 178 572 796

Increase (decrease) in other liabilities 1,035 110 ( 403 )

Increase in other liabilities 453 1,035 110

Net cash provided by operating activities 9,262 6,879 5,992

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Payments of long-term debt, finance leases and other financial liabilities ( 10,138 ) ( 4,248 ) ( 4,011 )

Proceeds from issuance of parent company stock — — 532

Net cash provided by (used in) financing activities ( 1,860 ) ( 3,275 ) 6,423

Net cash used in financing activities ( 3,999 ) ( 1,860 ) ( 3,275 )

Net increase (decrease) in cash, cash equivalents and restricted cash 2,612 ( 1,087 ) ( 11,112 )

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Balance at December 31, 2021 $ 317 $ 2,977 $ ( 942 ) $ 2,646 $ 4,998

Net loss — ( 1,962 ) — — ( 1,962 )

Net income — 739 — — 739

Other comprehensive income — — 1,117 — 1,117

Stock-settled share-based compensation 86 — — — 86

Impact of UAL common stock issuance — — — 532 532

Other — — — ( 75 ) ( 75 )

1 unchanged sentence

Net income — 2,620 — — 2,620

Other comprehensive income — — 1,117 — 1,117

Other comprehensive loss — — ( 237 ) — ( 237 )

Stock-settled share-based compensation 77 — — — 77

2 unchanged sentences

Net income — 3,151 — — 3,151

Other comprehensive loss — — ( 237 ) — ( 237 )

Other comprehensive income — — 250 — 250

Stock-settled share-based compensation 135 — — — 135

Impact of UAL share repurchase — — — ( 162 ) ( 162 )

Other — — — ( 24 ) ( 24 )

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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 and its wholly-owned subsidiary is United Airlines, 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'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.

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.

We sometimes use the words "we," "our," "us," and the "Company" in this report for disclosures that relate to all of UAL and United.

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

(a) Use of Estimates— The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes.

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 where it has been determined that the Company is the primary beneficiary of those entities' operations.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Certain prior period amounts have been reclassified to conform to the current period presentation.

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.

(b) Revenue Recognitio n— Passenger revenue is recognized when transportation is provided and Cargo revenue is recognized when shipments arrive at their destination.

Other operating revenue is recognized as the related performance obligations are satisfied.

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 in resource allocation and performance assessments.

T he Company manages it 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.

The measure of segment assets is reported on the consolidated balance sheet as Total assets.

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.

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 associated with the senior secured notes (the "MileagePlus Senior Secured Notes") secured by substantially all of the assets of Mileage Plus Holdings, LLC ("MPH"), a direct wholly-owned subsidiary of United, 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):

At December 31,

2024 2023 2022

Current assets:

Cash and cash equivalents $ 8,769 $ 6,058 $ 7,166

Restricted cash in Prepaid expenses and other 11 31 45

Noncurrent assets:

Restricted cash in Investments in affiliates and other, net 166 245 210

Total cash, cash equivalents and restricted cash $ 8,946 $ 6,334 $ 7,421

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 our short-term liquidity needs.

Our 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.

Accounts Receivable.

Accounts receivable 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 trade receivables were not material for the years ended December 31, 2024, 2023 and 2022.

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 $ 739 million and $ 689 million at December 31, 2024 and 2023, respectively.

Obsolescence expense was $ 175 million, $ 102 million, and $ 73 million for the years ended December 31, 2024, 2023 and 2022, 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 15

Computer software 5 to 15

Building improvements 1 to 40

Operating property and equipment, net at December 31 was as follows (in millions):

Flight equipment $ 52,696 $ 48,448

Other property and equipment 11,908 10,527

Purchase deposits for flight equipment 3,427 3,550

Total operating property and equipment 68,031 62,525

Less—Accumulated depreciation and amortization ( 25,123 ) ( 22,710 )

Total operating property and equipment, net $ 42,908 $ 39,815

As of December 31, 2024 and 2023, the Company had a carrying value of computer software of $ 456 million and $ 453 million, respectively.

For the years ended December 31, 2024, 2023 and 2022, the Company's amortization expense related to computer software was $ 155 million, $ 168 million and $ 166 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.

The Company enters into various leases as a lessee for assets including, but not limited to, airport facilities, airport gates, hanger 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 right-of-use ("ROU") 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 ROU 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 market 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 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):

Amount Accumulated

Amortization Gross

Amount Accumulated

Goodwill $ 4,527 $ 4,527

Indefinite-lived intangible assets

China route authority $ 1,020 $ 1,020

Airport slots 564 574

Tradenames and logos 593 593

Alliances 404 404

Total $ 2,581 $ 2,591

Finite-lived intangible assets

Frequent flyer database $ 1,177 $ 1,092 $ 1,177 $ 1,068

Hubs 145 138 145 131

Other 143 133 307 296

Total $ 1,465 $ 1,363 $ 1,629 $ 1,495

Amortization expense in 2024, 2023 and 2022 was $ 32 million, $ 37 million and $ 41 million, respectively.

Projected amortization expense in 2025, 2026, 2027, 2028 and 2029 is $ 28 million, $ 18 million, $ 11 million, $ 10 million and $ 8 million, respectively.

The Company records expenses associated with new or amendable labor agreements when the amounts are probable and estimable.

These 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.

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 our 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 costs, which are included in Other operating expenses, are expensed as incurred.

Advertising expenses were $ 235 million, $ 221 million and $ 165 million for the years ended December 31, 2024, 2023 and 2022, 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 redemption.

Non-travel mileage redemption expenses 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 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.

This ASU becomes effective for us on January 1, 2025.

We are assessing the impact of this ASU and upon adoption may be required to include certain additional disclosures.

Expense Disaggregation.

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 annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027;

early adoption is permitted.

We are 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.

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The Company defers amounts related to future travel in its Advance ticket sales liability account.

The Company estimates the value of Advance ticket sales that will expire unused ("breakage") and recognizes revenue and any changes in estimates in proportion to the usage of the related tickets.

To determine breakage, the Company uses its historical experience with expired tickets and certificates and other facts, such as recent aging trends, program changes and modifications that could affect the ultimate expiration patterns.

Estimate of tickets not expected to be used ("ticket breakage").

The Company estimates the value of Advance ticket sales that will expire unused and recognizes revenue and any changes in estimates in proportion to the usage of the related tickets.

To determine ticket breakage, the Company uses its historical experience with expired tickets and certificates and other facts, such as recent aging trends, program changes and modifications that could affect the ultimate expiration patterns.

In the years ended December 31, 2024, 2023 and 2022, the Company recognized approximately $ 5.3 billion, $ 5.7 billion and $ 3.3 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 revenue by geographic regions.

The Company deploys its aircraft across its route network through a single route scheduling system to maximize its value.

When making resource allocation decisions, the Company's chief operating decision maker evaluates flight profitability data, which considers aircraft type and route economics.

The Company's chief operating decision maker makes resource allocation decisions to maximize the Company's consolidated financial results.

Operating segments are defined as components of an enterprise with separate financial information, which are evaluated regularly by the chief operating decision maker and are used in resource allocation and performance assessments.

Managing the Company as one segment allows management the opportunity to maximize the value of its route network.

The Company's operating revenue by principal geographic region (as defined by the U.S.

Department of Transportation) for the years ended December 31 is presented in the table below (in millions):

The Company further disaggregates its operating revenue by principal geographic region for the years ended December 31 is presented in the table below (in millions):

2024 2023 2022

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registered aircraft) can be deployed in any of its geographic regions.

Ancillary Fees.

Ancillary services.

The Company charges fees, separately from ticket sales, for certain ancillary services that are directly related to passengers' travel, such as baggage fees, premium seat fees, inflight amenity fees, and other ticket-related fees.

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The Company recorded $ 4.5 billion, $ 4.1 billion and $ 3.4 billion of ancillary fees within passenger revenue in the years ended December 31, 2024, 2023 and 2022, respectively.

(c) Ticket Taxes— Certain governmental taxes are imposed on the Company's ticket sales through a fee included in ticket prices.

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 recorded on a net basis and, as a result, are excluded from revenue.

(d) Frequent Flyer Accounting— United's MileagePlus loyalty program builds customer loyalty by offering awards, benefits and services to program participants.

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 one to six years .

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.

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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-air travel awards.

Estimate of miles not expected to be redeemed ("breakage") .

The Company's 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 breakage estimates annually.

The Company's estimate of the expected breakage of miles requires management judgment.

Changes to 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 breakage proportionally as the remaining miles are redeemed.

Estimated selling price of miles .

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The estimated selling price of miles is adjusted by breakage that considers a number of factors, including redemption patterns of various customer groups.

Estimate of Miles Not Expected to be Redeemed ("Breakage") .

The Company's 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 logit regression model to estimate the probability that an account will redeem its current miles balance.

The Company reviews its breakage estimates annually based upon the latest available information.

The Company's estimate of the expected breakage of miles requires management judgment and current and future changes to 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.

For the portion of the outstanding miles that we estimate will not be redeemed, we recognize the associated value proportionally as the remaining miles are redeemed.

Co-Brand agreement .

United has a contract (the "Co-Brand Agreement") to sell MileagePlus miles to its co-branded credit card partner JPMorgan Chase Bank USA, N.A.

United's most significant contract to sell MileagePlus miles is with its co-branded credit card partner JPMorgan Chase Bank USA, N.A.

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:

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 revenue related to the non-travel awards when the goods or services are delivered.

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.

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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.

We also evaluate volumes on an annual basis, which may result in a change in the allocation of the estimated consideration from the Co-Brand Agreement on a prospective basis.

Frequent flyer deferred revenue.

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The table below presents a roll forward of Frequent flyer deferred revenue (in millions):

Total Frequent flyer deferred revenue - beginning balance $ 6,675 $ 6,282

Total miles awarded 3,297 2,558

Balance at January 1 $ 7,143 $ 6,675

Miles earned 3,563 3,297

Travel miles redeemed ( 3,150 ) ( 2,723 )

Non-travel miles redeemed ( 115 ) ( 106 )

Total Frequent flyer deferred revenue - ending balance $ 7,143 $ 6,675

Balance at December 31 $ 7,441 $ 7,143

In the years ended December 31, 2024, 2023 and 2022, the Company recognized, in Other operating revenue, $ 2.9 billion, $ 2.7 billion and $ 2.4 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.

The portion related to the MileagePlus miles awarded of the total amounts received from our various partner agreements is deferred and presented in the table above as an increase to Total Frequent flyer deferred revenue.

(e) 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 short-term or long-term in the consolidated balance sheets based on the expected timing of return of the assets to the Company or payment to an outside party.

Restricted cash-current— The December 31, 2023 balance includes amounts to be used for the payment of principal, interest and fees on the $ 4.8 billion of senior secured notes and a secured term loan facility (the "MileagePlus Financing") secured by substantially all of the assets of Mileage Plus Holdings, LLC ("MPH"), a direct wholly-owned subsidiary of United.

Restricted cash-non-current— The December 31, 2023 balance primarily includes collateral associated with the MileagePlus Financing, collateral for letters of credit and collateral associated with facility leases and other insurance-related obligations.

At December 31,

2023 2022 2021

Current assets:

Cash and cash equivalents $ 6,058 $ 7,166 $ 18,283

Restricted cash 31 45 37

Other assets:

Restricted cash 245 210 213

Total cash, cash equivalents and restricted cash shown in the statement of consolidated cash flows $ 6,334 $ 7,421 $ 18,533

(f) Investments— Highly liquid investments with maturities of greater than three months to a 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 our short-term liquidity needs.

Our 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 Miscellaneous, net in the consolidated statements of 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 an investee.

Changes in fair value are recorded in Unrealized gains (losses) on investments, net in the consolidated statements of operations.

See Note 8 of this report for additional information related to investments.

(g) Compensation received in connection with purchase agreements— The Company accounts for compensation received from vendors as deferred credits that will generally be recognized as a reduction to the cost of the asset received in future periods.

(h) Accounts Receivable— Accounts receivable 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 trade receivables were not material for the years ended December 31, 2023 and 2022.

(i) 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.

(j) Property and Equipment— The Company records additions to owned operating property and equipment at cost when acquired.

Property under finance leases and the related obligation for future lease payments are recorded at an amount equal to the initial present value of those lease payments.

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 including those related to contractual damages related to delays in delivery.

These credits are deferred until the aircraft and engines are delivered and then applied as a reduction to the cost of the related equipment.

Depreciation and amortization of owned depreciable assets is based on the straight-line method over the assets' estimated useful lives.

Leasehold improvements are amortized over the remaining term of the lease, including estimated facility renewal options when renewal is reasonably certain at key airports, or the estimated useful life of the related asset, whichever is less.

Properties under finance leases are amortized using the straight-line method over the life of the lease or, in the case of certain aircraft, over their estimated useful lives, whichever is shorter.

Amortization of finance lease assets is included in depreciation and amortization expense.

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 15

Computer software 5 to 15

Building improvements 1 to 40

As of December 31, 2023 and 2022, the Company had a carrying value of computer software of $ 453 million and $ 471 million, respectively.

For the years ended December 31, 2023, 2022 and 2021, the Company's amortization expense related to computer software was $ 168 million, $ 166 million and $ 182 million, respectively.

(k) 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.

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.

The Company recorded impairment charges related to certain of its aircraft of $ 97 million for the year ended December 31, 2021.

See Note 13 of this report for additional information related to impairments .

(l) Intangibles— 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 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.

When there is a triggering event, the Company typically determines fair value using either market or a variation of the income approach valuation techniques.

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.

Because we are required to make estimates and assumptions when evaluating goodwill and indefinite-lived intangible assets for impairment, actual results may differ materially from these estimates.

We recognize an impairment when the fair value of an intangible asset is less than its carrying value.

Every year, the Company evaluates its intangible assets for possible impairments.

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 fair value of the China route authority, the Company used a discounted cash flow method.

Key inputs into the models included forecasted revenues, fuel costs, other operating costs, 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):

Amount Accumulated

Amortization Gross

Amount Accumulated

Goodwill $ 4,527 $ 4,527

Indefinite-lived intangible assets

China route authority $ 1,020 $ 1,020

Airport slots 574 574

Tradenames and logos 593 593

Alliances 404 404

Total $ 2,591 $ 2,591

Finite-lived intangible assets

Frequent flyer database $ 1,177 $ 1,068 $ 1,177 $ 1,040

Hubs 145 131 145 124

Contracts — — 7 7

Other 307 296 314 301

Total $ 1,629 $ 1,495 $ 1,643 $ 1,472

Amortization expense in 2023, 2022 and 2021 was $ 37 million, $ 41 million and $ 49 million, respectively.

Projected amortization expense in 2024, 2025, 2026, 2027 and 2028 is $ 32 million, $ 28 million, $ 18 million, $ 11 million and $ 10 million, respectively.

(m) Labor Costs— The Company records expenses associated with new or amendable labor agreements when the amounts are probable and estimable.

These 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.

(n) 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, 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 4 of this report for additional information on UAL's share-based compensation plans.

(o) 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 our power-by-the-hour ("PBTH") engine maintenance agreements.

(p) Advertising— Advertising costs, which are included in Other operating expenses, are expensed as incurred.

Advertising expenses were $ 221 million, $ 165 million and $ 99 million for the years ended December 31, 2023, 2022 and 2021, respectively.

(q) 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 redemption.

Non-travel mileage redemption expenses are recorded to Other operating revenue.

(r) Uncertain Income Tax Positions— The Company has recorded reserves for income taxes and associated interest that may become payable in future years.

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 consolidated statements of operations.

See Note 6 of this report for additional information on UAL's uncertain tax positions.

(s) Recently Issued Accounting Standards— In June 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.

Under this standard, a contractual restriction on the sale of an equity security is not considered in measuring the security's fair value.

The standard also requires certain disclosures for equity securities that are subject to contractual sale restrictions.

The ASU became effective January 1, 2024.

We do not expect this ASU to have a material impact on the valuation of our equity investments;

however, we may be required to include additional disclosures to the extent we have material equity investments subject to contractual sale restrictions.

Cargo Revenue.

Cargo revenue is recognized when shipments arrive at their destination.

NOTE 3 - COMMON STOCKHOLDERS' EQUITY AND PREFERRED SECURITIES

The Company issued warrants to the U.S.

Treasury Department ("Treasury") pursuant to the payroll support program ("PSP"), including extensions, and the loan program established under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act").

See Note 9 of this report for additional information about the unsecured promissory notes issued by the Company to Treasury under the PSP and related extensions.

As of December 31, 2023 , the Company had the following warrants outstanding:

Warrant Description Number of Shares of UAL Common Stock (in millions) Exercise Price Expiration Dates

PSP1 Warrants 4.8 $ 31.50 4/20/2025 — 9/30/2025

CARES Act Warrants 1.7 31.50 9/28/2025

PSP2 Warrants 2.0 43.26 1/15/2026 — 4/29/2026

PSP3 Warrants 1.5 53.92 4/29/2026 — 6/10/2026

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.

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 program.

As of February 24, 2025, the dollar value of shares that may yet be purchased under the program is approximately $ 1.3 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, 2024, approximately 3.5 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, 2024, 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.

On March 3, 2021, the Company entered into an equity distribution agreement (the "Distribution Agreement") with several financial institutions (collectively, the "Managers"), relating to the issuance and sale from time to time by UAL (the "2021 ATM Offering"), through the Managers, of up to 37 million shares of UAL common stock (the "2021 ATM Shares").

Sales of the 2021 ATM Shares under the Distribution Agreement were allowed to be made in any transactions that were deemed to be "at the market offerings" as defined in Rule 415 under the Securities Act of 1933, as amended.

During 2021, approximately 4 million shares were sold in the 2021 ATM Offering at an average price of $ 57.50 per share, with net proceeds to the Company totaling approximately $ 250 million.

No shares were sold in 2022 or 2023 under the 2021 ATM Offering, which expired in March 2023.

NOTE 3 - EARNINGS (LOSS) PER SHARE

The computations of UAL's basic and diluted earnings (loss) per share are set forth below for the years ended December 31 (in millions, except per share amounts):

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 , or 65 %, of the Warrants, with an exercise price of $ 31.50 , in a net share settlement for 2,043,906 shares of UAL common stock.

As of December 31, 2024, the Company had the below Warrants outstanding:

Warrant Description Number of Shares of UAL Common Stock Exercise Price Expiration Dates

PSP2 Warrants 2,011,924 $ 43.26 1/15/2026 — 4/29/2026

PSP3 Warrants 1,501,790 53.92 4/29/2026 — 6/10/2026

Total 3,513,714

NOTE 4 - EARNINGS PER SHARE

The computations of UAL's basic and diluted earnings per share are set forth below for the years ended December 31 (in millions, except per share amounts):

2024 2023 2022

Earnings (loss) available to common stockholders $ 2,618 $ 737 $ ( 1,964 )

Earnings available to common stockholders $ 3,149 $ 2,618 $ 737

Basic weighted-average shares outstanding 328.6 327.8 326.4

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Diluted weighted-average shares outstanding 333.2 331.9 330.1

Earnings (loss) per share, basic $ 7.98 $ 2.26 $ ( 6.10 )

Earnings (loss) per share, diluted $ 7.89 $ 2.23 $ ( 6.10 )

Earnings per share, basic $ 9.58 $ 7.98 $ 2.26

Earnings per share, diluted $ 9.45 $ 7.89 $ 2.23

Potentially dilutive securities (b)

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Employee stock awards 0.3 0.6 0.7

(a) Represent warrants issued to Treasury pursuant to the payroll support program, including extensions, and the loan program established under the CARES Act.

See Note 2 of this report for additional information about these warrants.

(a) See Note 3 of this report for additional information about these Warrants.

(b) Weighted-average potentially dilutive securities outstanding excluded from the computation of diluted earnings per share because the securities would have had an antidilutive effect.

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All awards are recorded as either equity or a liability in the Company's consolidated balance sheets.

The share-based compensation expense is recorded in salaries and related costs.

Share-based compensation expense is recorded in Salaries and related costs.

During 2024, UAL granted share-based compensation awards pursuant to the United Airlines Holdings, Inc.

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The time-vested RSUs vest pro-rata, a majority of which vest on February 28th of each year, over a three-year period from the date of grant.

The performance-based RSUs vest upon continuous employment with the Company through December 31, 2025 and the achievement of certain financial, operational and diversity goals.

Performance-based awards vest either pro-rata, one-third each year, over a three-year period from the date of grant or all at once upon continuous employment with the Company over a three-year period.

Payout under the performance-based awards can range from 0 % to 300 % depending on the achievement level of certain financial and strategic goals.

RSUs are generally equity awards settled in stock for domestic employees and liability awards settled in cash for international employees.

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The following table provides information related to UAL's share-based compensation plan cost for the years ended December 31 (in millions):

2023 2022 2021

Compensation cost

2024 2023 2022

RSUs $ 141 $ 78 $ 87

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Stock options 2 2.2

Restricted stock units.

The table below summarizes UAL's RSU activity for the years ended December 31 (shares in millions):

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Outstanding at December 31, 2021

0.2 4.4 $ 53.63

Granted 0.1 2.3 31.96

Additional issuance due to achievement of performance metrics — 1.6 58.17

Vested ( 0.2 ) ( 4.8 ) 56.00

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Outstanding at December 31, 2022

0.1 3.3 37.88

Granted 0.1 2.5 43.42

Additional issuance due to achievement of performance metrics — 1.6 58.17

Vested ( 0.1 ) ( 1.6 ) 44.03

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Outstanding at December 31, 2023

0.1 4.1 38.86

Granted 0.1 3.6 46.65

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Outstanding at December 31, 2024

0.1 5.1 43.89

The fair value of RSUs that vested in 2024, 2023 and 2022 was approximately $ 91 million, $ 76 million and $ 274 million, respectively.

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NOTE 6 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ("AOCI")

The tables below present the components of the Company's AOCI, net of tax (in millions):

The table below presents the components of the Company's AOCI, net of tax (in millions):

Postretirement

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Balance at December 31, 2021 $ ( 847 ) $ — $ ( 95 ) $ ( 942 )

Change in value 239 ( 2 ) ( 53 ) 184

Changes in value 1,474 ( 35 ) ( 321 ) 1,118

Amounts reclassified to earnings ( 1 ) (b) — — ( 1 )

Balance at December 31, 2022 626 ( 35 ) ( 416 ) 175

Change in value 1,474 ( 35 ) ( 321 ) 1,118

Changes in value ( 199 ) 31 38 ( 130 )

Amounts reclassified to earnings ( 138 ) (b) — 31 ( 107 )

Balance at December 31, 2023 289 ( 4 ) ( 347 ) ( 62 )

Change in value ( 199 ) 31 38 ( 130 )

Changes in value 417 4 ( 94 ) 327

Amounts reclassified to earnings ( 99 ) (b) — 22 ( 77 )

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NOTE 7 - INCOME TAXES

The income tax provision (benefit) differed from amounts computed at the statutory federal income tax rate and consisted of the following significant components (in millions) :

The income tax provision differed from amounts computed at the statutory federal income tax rate and consisted of the following significant components (in millions) :

2024 2023 2022

Income tax provision (benefit) at statutory rate $ 711 $ 208 $ ( 537 )

State income tax provision (benefit), net of federal income tax benefit 46 13 ( 34 )

Income tax provision at statutory rate $ 875 $ 711 $ 208

State income tax provision, net of federal income tax benefit 56 46 13

Nondeductible employee meals 16 15 12

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Other, net 27 5 20

Income tax expense (benefit) $ 769 $ 253 $ ( 593 )

Income tax expense $ 1,019 $ 769 $ 253

Current $ 84 $ 13 $ 5

Deferred 935 756 248

Income tax expense (benefit) $ 769 $ 253 $ ( 593 )

Income tax expense $ 1,019 $ 769 $ 253

Temporary differences and carryforwards that give rise to deferred tax assets and liabilities at December 31, 2024 and 2023 were as follows (in millions):

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In determining their own tax liabilities, United and each of its subsidiaries take into account all tax credits or benefits generated and utilized as separate companies and they are each compensated for the aforementioned tax benefits on an annual basis.

The Company's federal and state NOL and tax credit carryforwards relate to current and prior years' NOLs and credits, which may be used to reduce tax liabilities in future years.

The Company's federal and state NOL and tax credit carryforwards relate to prior years' NOLs and credits, which may be used to reduce tax liabilities in future years.

These tax benefits are mostly attributable to federal pre-tax NOL carryforwards of $ 9.7 billion ($ 2.0 billion tax effected) for UAL.

If not utilized these federal pre-tax NOLs will expire as follows (in billions):

$ 0.2 in 2029 and $ 0.2 in 2033.

If not utilized, $ 0.1 billion of these federal pre-tax NOLs will expire in 2029.

The remaining $ 9.6 billion of NOLs has no expiration date.

State pre-tax NOLs of $ 3.0 billion ($ 0.2 billion tax effected) expire over a 1 to 20 -year period.

Federal tax credits of $ 50 million will expire over a 1 to 20-year period and state tax credits of $ 56 million will expire over a 1 to 15-year period.

State tax credits of $ 58 million will expire over a 1 to 15-year period.

As of December 31, 2024, the Company has recorded $ 179 million of valuation allowance against its capital loss deferred tax assets.

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There are no material amounts included in the balance at December 31, 2024 for tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

The Company's federal income tax returns for tax years after 2002 remain subject to examination by the Internal Revenue Service (the "IRS") and state taxing jurisdictions.

The Company's federal income tax returns for tax years after 2000 remain subject to examination by the Internal Revenue Service and state taxing jurisdictions.

NOTE 8 - PENSION, POSTRETIREMENT AND OTHER EMPLOYEE BENEFIT PLANS

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non-pilot employees.

Each of these plans provide benefits based on a combination of years of benefit accruals service and an employee's final average compensation.

Each of these plans provides benefits based on a combination of years of benefit

accruals service and an employee's final average compensation.

Additional benefit accruals are frozen under the plan covering certain pilot employees and for management and administrative employees covered under the non-pilot plan.

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Benefits provided are subject to applicable contributions, co-payments, deductibles and other limits as described in the specific plan documentation.

In 2021, the Company offered several voluntary leave programs and voluntary separation programs ("Voluntary Programs") to certain eligible employees, which in some cases included a partially-paid leave of absence with active health benefits and travel privileges.

Under these Voluntary Programs, employees generally separated from employment with certain post-employment health benefits and travel privileges.

Included in the Voluntary Programs offered during the first quarter of 2021, the Company offered special separation benefits in the form of additional subsidies for retiree medical costs for certain U.S.-based front-line employees.

The subsidies were in the form of a one-time contribution to a notional retiree health account of $ 125,000 for full-time employees and $ 75,000 for part-time employees.

As a result, the Company recorded $ 31 million for those additional benefits in 2021.

Actuarial assumption changes are reflected as a component of the net actuarial (gain) loss.

The 2023 actuarial losses were mainly related to a decrease in the discount rate applied at December 31, 2023 compared to December 31, 2022.

The 2024 actuarial gains were mainly related to discount rate changes in 2024.

Actuarial (gains) losses will be amortized over the average remaining service life of the covered active employees.

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Pension Benefits

Year Ended December 31, 2023 Year Ended December 31, 2022

Year Ended December 31, 2024

Year Ended December 31, 2023

Accumulated benefit obligation:

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Fair value of plan assets at beginning of year $ 3,599 $ 3,467

Actual income (loss) on plan assets 281 ( 678 )

Actual income on plan assets 132 281

Employer contributions 5 22

Benefits paid ( 135 ) ( 177 )

Other 6 ( 25 )

Fair value of plan assets at end of year $ 3,601 $ 3,599

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Amounts recognized in accumulated other comprehensive income (loss) consist of:

Net actuarial loss $ ( 242 ) $ ( 77 )

Prior service cost — ( 1 )

Total accumulated other comprehensive loss $ ( 242 ) $ ( 78 )

Net actuarial gain (loss) $ 95 $ ( 242 )

Total accumulated other comprehensive gain (loss) $ 95 $ ( 242 )

Other Postretirement Benefits

Year Ended December 31, 2023 Year Ended December 31, 2022

Year Ended December 31, 2024

Year Ended December 31, 2023

Change in benefit obligation:

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Amortization of unrecognized actuarial (gain) loss 19 ( 26 ) 8 ( 38 ) 120 ( 14 )

Amortization of prior service credits 1 ( 112 ) — ( 112 ) — ( 123 )

Special termination benefits - Voluntary Programs — — — — — 31

Curtailment — — — — ( 8 ) —

Amortization of prior service (credits) cost — ( 93 ) 1 ( 112 ) — ( 112 )

Other 1 — 3 — 5 —

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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 plans strive to have assets sufficiently diversified so that adverse or unexpected results from one security class will not have an unduly detrimental impact on the entire portfolio.

The plans strive to have assets sufficiently diversified so that adverse or unexpected results from one

security class will not have an unduly detrimental impact on the entire portfolio.

Plan fiduciaries regularly review our actual asset allocation and the pension plans' investments are periodically rebalanced to our targeted allocation when considered appropriate.

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Fair Value Information .

Accounting standards require us to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs.

These inputs are 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

Assets and liabilities measured at fair value are based on the valuation techniques identified in the tables below.

The valuation techniques are as follows:

(a) Market approach.

Assets and liabilities measured at fair value are based on the following valuation techniques:

Market approach.

Prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities.

(b) Income approach.

Income approach.

Techniques to convert future amounts to a single current value based on market expectations (including present value techniques, option-pricing and excess earnings models).

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Funding requirements for tax-qualified defined benefit pension plans are determined by government regulations.

The Company does not expect any minimum required contributions for 2024 for its tax-qualified defined benefit pension plans.

The Company expects to make approximately $ 104 million in contributions to its other postretirement benefit plans in 2024.

The Company expects to make required contributions to its tax-qualified defined benefit pension plans in 2025.

In 2025, employer anticipated contributions to all of United's pension and postretirement plans are at least $ 141 million and approximately $ 80 million, respectively.

The estimated future benefit payments, net of expected participant contributions, in United's pension plans and other postretirement benefit plans for the next ten years, as of December 31, 2024, are as follows (in millions):

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United's employer contribution percentages to its primary 401(k) defined contribution plans vary from 1 % to 17 % of eligible earnings depending on the terms of each plan.

United recorded expenses for its primary 401(k) defined contribution plans of $ 960 million, $ 756 million and $ 651 million in the years ended December 31, 2023, 2022 and 2021, respectively.

United recorded expenses for its primary 401(k) defined contribution plans of $ 1.2 billion, $ 960 million and $ 756 million in the years ended December 31, 2024, 2023 and 2022, respectively.

Multi-Employer Plans.

United's participation in the IAM National Pension Plan ("IAM Plan") for the annual period ended December 31, 2024 is outlined in the table below.

The risks of participating in these multi-employer plans are different from single-employer plans, as United may be subject to additional risks that others do not meet their obligations, which in certain circumstances could revert to United.

The IAM Plan reported $ 570 million in employers' contributions for the year ended December 31, 2023.

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Profit Sharing.

Substantially all employees participate in profit sharing based on a percentage of pre-tax earnings, excluding special or non-recurring charges, profit sharing expense and share-based compensation.

Profit sharing percentages range from 5 % to 20 % depending on the work group, and in some cases profit sharing percentages vary above and below certain pre-tax margin thresholds.

As part of the new collective bargaining agreement with the Air Line Pilots Association ("ALPA"), the thresholds were lowered retroactive to January 1, 2023 for the pilot work group.

Eligible U.S.

co-workers in each participating work group receive a profit sharing payout using a formula based on the ratio of each qualified co-worker's annual eligible earnings to the eligible earnings of all qualified co-workers in all domestic work groups.

Eligible non-U.S.

co-workers receive profit sharing based on the calculation under the U.S.

profit sharing plan for management and administrative employees.

The Company recorded profit sharing and related payroll tax expense of $ 681 million and $ 133 million in 2023 and 2022, respectively.

As a result of the pre-tax loss in 2021, no profit sharing was recorded.

Substantially all of our employees are eligible to participate in our profit sharing plan.

Under the plan, for each year in which our adjusted pre-tax profit (which is calculated as pre-tax profit, excluding unusual, special or non-recurring charges, profit sharing expense and share-based compensation) exceeds a certain amount, a specified portion of that profit will be distributed to eligible employees.

The Company recorded profit sharing and related payroll tax expense of $ 713 million, $ 681 million and $ 133 million in 2024, 2023 and 2022, respectively.

Profit sharing expense is recorded as a component of Salaries and related costs in the Company's statements of consolidated operations.

NOTE 9 - FAIR VALUE MEASUREMENTS, INVESTMENTS AND NOTES RECEIVABLE

Fair Value Information.

Accounting standards require us to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs.

These inputs are described in Note 7 of this report.

The table below presents disclosures about the fair value of financial assets and liabilities measured at fair value on a recurring basis in the Company's financial statements as of December 31 (in millions):

Fair Value Measurement.

The table below presents the fair value of financial assets and liabilities measured at fair value, based on the inputs described in Note 1, on a recurring basis in the Company's financial statements as of December 31 (in millions):

Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3

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government and agency notes 2,280 — 2,280 — 8,257 — 8,257 —

Asset-backed securities — — — — 325 — 325 —

Certificates of deposit placed through an account registry service ("CDARS") 59 — 59 — 73 — 73 —

Corporate debt 3,127 — 3,127 — — — — —

Other fixed-income securities 240 — 240 — — — — —

Long-term investments:

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

Short-term investments — T he short-term investments shown in the table above are classified as available-for-sale and have remaining maturities of approximately 15 months or less.

Short-term investments — T he short-term investments shown in the table above are classified as available-for-sale and have remaining maturities of less than two years .

Long-term investments:

Equity securities — Represents equity and equity-linked securities (such as vested warrants) that make up United's investments in Azul Linhas Aéreas Brasileiras S.A., Archer Aviation Inc., Eve Holding, Inc., Mesa Air Group, Inc.

("Mesa") and Clear Secure, Inc.

United concluded that Mesa is a variable interest entity as of December 31, 2024.

United holds a variable interest in Mesa in the form of an approximately 10 % equity interest and several loans to Mesa, but United is not the primary beneficiary because it does not have power to direct the activities that most significantly impact Mesa's economic performance.

Other fair value information - The table below presents the carrying values and estimated fair values of financial instruments not presented in the tables above as of December 31 (in millions).

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instruments or (b) broker quotes obtained by third-party valuation services.

Long-term debt Fair values were based on either market prices or the discounted amount of future cash flows using our current incremental rate of borrowing for similar liabilities or assets.

Long-term debt Fair values are based on either market prices or the discounted amount of future cash flows using our current incremental rate of borrowing for similar liabilities.

Equity Method Investments.

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Significant equity method investments are described below:

• CommuteAir LLC.

United owns a 40 % minority ownership stake in CommuteAir LLC.

CommuteAir currently operates 53 regional aircraft under a CPA that has a term through 2026.

• Republic Airways Holdings Inc.

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("Republic").

Republic currently operates 66 regional aircraft under CPAs that have terms through 2035.

Republic currently operates 66 regional aircraft under CPAs with United that have terms through 2036.

• CommuteAir LLC.

United owns a 40 % minority ownership stake in CommuteAir LLC.

CommuteAir currently operates 57 regional aircraft under a CPA that has a term through 2026.

• United Airlines Ventures Sustainable Flight Fund (the "Fund").

During the first quarter of 2023, United launched, through its corporate venture capital arm, United Airlines Ventures, the Fund, an investment vehicle designed to support start-ups focused on decarbonizing air travel by accelerating the research, production and technologies

associated with sustainable aviation fuel.

As of December 31, 2023, the Company indirectly holds a 38 % ownership interest in the Fund.

United holds, through its corporate venture capital arm, United Airlines Ventures, Ltd., a 33 % ownership interest in the Fund.

The Fund is an investment vehicle designed to invest in start-ups developing technologies focused on decarbonizing aviation and its associated energy supply chains, including through research and production, and technologies associated with sustainable aviation fuel (SAF).

Other Investments.

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As of December 31, 2024, the Company has $ 72 million of notes receivable, net of allowance for credit losses, the majority of which is from certain of its regional carriers.

The current portions of the notes receivable are recorded in Receivables, less allowance for credit losses and the long-term portions are recorded in Investments in affiliates and other, less allowance for credit losses on the Company's consolidated balance sheet.

The current portions of the notes receivable are recorded in Receivables, net.

The long-term portions of the notes receivable are recorded in Investments in affiliates and other, net on the Company's consolidated balance sheet.

NOTE 10 - DEBT

(In millions) Maturity Dates Interest Rate(s) at December 31, 2024 At December 31,

Aircraft notes (a) 2024 — 2036 2.70 % — 7.35 % $ 12,508 $ 12,262

Equipment Notes (a) 2025 — 2037 2.70 % — 6.51 % $ 12,983 $ 12,508

MileagePlus Senior Secured Notes

2027 6.50 % 1,900 2,660

MileagePlus Term Loan Faci lity (b)

2027 10.77 % 2,100 2,700

MileagePlus Term Loan Faci lity

n/a n/a — 2,100

2026 and 2029 Notes 2026 — 2029 4.38 % — 4.63 % 4,000 4,000

2021 Term Loan s (b)

2028 9.22 % 3,870 4,913

2021 Term Loan s

n/a n/a — 3,870

2024 Term Loans (b) 2031 6.63 % 2,082 —

Notes 2025 4.88 % 315 596

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(a) Financing includes variable rate debt based on the Secured Overnight Financing Rate ("SOFR") (or another index rate), generally subject to a floor, plus a specified margin of 0.64 % to 2.00 %.

(b) Financing includes variable rate debt based on SOFR (or another index rate), subject to a floor, plus a specified margin of 3.75 % to 5.25 %.

(c) The PSP Notes include $ 1.5 billion of indebtedness evidenced by a 10 -year senior unsecured promissory note with Treasury provided under the PSP of the CARES Act ("PSP1"), $ 0.9 billion of indebtedness evidenced by a 10 -year senior unsecured promissory note issued to Treasury pursuant to Payroll Support Program Extension Agreements under the CARES Act ("PSP2") and $ 0.8 billion of indebtedness evidenced by a 10 -year senior unsecured promissory note issued to Treasury pursuant to the Payroll Support Program established under Section 7301 of the American Rescue Plan Act of 2021 ("PSP3").

(b) Financing includes variable rate debt based on SOFR (or another index rate), subject to a floor, plus a specified margin of 2.00 %.

(c) The PSP Notes include $ 1.50 billion of indebtedness evidenced by a 10 -year senior unsecured promissory note with Treasury provided under PSP, $ 0.9 billion of indebtedness evidenced by a 10 -year senior unsecured promissory note issued to Treasury pursuant to PSP2 and $ 0.8 billion of indebtedness evidenced by a 10 -year senior unsecured promissory note issued to Treasury pursuant to PSP3.

These PSP Notes have a rate of 1.00 % in years 1 through 5, and a rate of the SOFR plus 2.00 % in years 6 through 10.

The table below presents the Company's contractual principal payments (not including debt discount or debt issuance costs) at December 31, 2023 under then-outstanding long-term debt agreements in each of the next five calendar years (in millions):

After 2028 8,856

Equipment Notes .

On June 20, 2023, the Company and Wilmington Trust, National Association, as subordination agent and pass through trustee (the "Trustee") under a certain pass through trust newly formed by the Company, entered into the Note Purchase Agreement, dated as of June 20, 2023 (the "Note Purchase Agreement").

The Note Purchase Agreement provides for the issuance by the Company of equipment notes (the "Equipment Notes") in the aggregate principal amount of $ 1.3 billion to finance 39 Boeing aircraft delivered new to the Company from August 2022 to May 2023.

Pursuant to the Note Purchase Agreement, the Trustee purchased Equipment Notes issued under a trust indenture and mortgage (each, an "Indenture" and, collectively, the "Indentures") with respect to each aircraft entered into by the Company and Wilmington Trust, National Association, as mortgagee.

Each Indenture provides for the issuance of Equipment Notes in a single series, Series A, bearing interest at the rate of 5.80 % per annum.

The Equipment Notes were purchased by the Trustee, using the proceeds from the sale of Pass Through Certificates, Series 2023-1A, issued by a pass through trust newly-formed by the Company to facilitate the financing of the aircraft.

The interest on the Equipment Notes is payable semi-annually on each January 15 and July 15, beginning on January 15, 2024.

The principal payments on the Equipment Notes are scheduled on January 15 and July 15 of each year, beginning on July 15, 2024.

The final payments on the Equipment Notes will be due on January 15, 2036.

These Equipment Notes are reflected as part of Aircraft notes in the table above.

In addition to the Equipment Notes described above, United borrowed $ 0.4 billion aggregate principal amounts from various financial institutions to finance the purchase of aircraft.

The notes evidencing these borrowings, which are secured by the related aircraft, mature in 2035 and have variable interest rates ranging from 7.31 % to 7.35 % at December 31, 2023.

In 2023, United prepaid $ 1.0 billion of the outstanding principal amount under the 2021 Term Loan Facility (as defined below).

See Note 13 for information related to charges recorded as a result of this prepayment.

In 2021, United entered into a new Term Loan Credit and Guaranty Agreement (the "2021 Term Loan Facility") initially providing term loans (the "2021 Term Loans") up to an aggregate amount of $ 5.0 billion and a new Revolving Credit and Guaranty Agreement (the "2021 Revolving Credit Facility" and, together with the 2021 Term Loan Facility, the "2021 Loan Facilities") initially providing revolving loan commitments of up to $ 1.75 billion.

As of December 31, 2023, we had $ 1.75 billion undrawn and available under our revolving credit facility.

On February 15, 2024, the Company entered into an Amended and Restated Revolving Credit and Guaranty Agreement (the "Revolving Credit Facility") amending its 2021 Revolving Credit Facility increasing the borrowing capacity by $ 1.115 billion, which may be drawn upon until February 15, 2029, in the case of any Revolving Loans (as defined in the Revolving Credit Facility) made by the Extending Lenders (as defined in the Revolving Credit Facility), and April 21, 2025, in the case of any Revolving Loans made by the 2024 Non-Extending Lenders (as defined in the Revolving Credit Facility).

The revolving loan commitments of the Extending Lenders equal $ 2.7 billion and the revolving loan commitments of the 2024 Non-Extending Lenders equal $ 165 million.

The Revolving Loans, if any, will bear interest at a variable rate equal to Term SOFR (as defined in the Revolving Credit Facility), generally subject to a floor, plus a credit adjustment spread described in the Revolving Credit Facility, or, at United's election, another rate based on certain market interest rates, also generally subject to a floor, in each case plus a variable margin ranging from 3.00 % to 3.50 %, in the case of Term SOFR loans, and 2.00 % to 2.50 %, in the case of loans at other market rates.

The table below presents the Company's contractual principal payments (not including debt discount or debt issuance costs) as of December 31, 2024 under then-outstanding long-term debt agreements (in millions):

2025 2026 2027 2028 2029 After 2029 Total

Contractual principal payments $ 2,973 $ 4,793 $ 2,326 $ 1,791 $ 2,892 $ 10,062 $ 24,837

On July 2, 2024, the Company voluntarily prepaid in full the $ 1.8 billion outstanding principal balance of the secured term loan facility, secured ratably with the MileagePlus Senior Secured Notes, by substantially all of the assets of MPH (the "MileagePlus Term Loan"), in addition to all accrued and unpaid interest and fees under the term loan facility and terminated all commitments thereunder.

In 2023, United prepaid $ 1.0 billion of the outstanding principal amount under the 2021 Term Loans.

See Note 13 for information related to charges recorded as a result of these prepayments.

On February 15, 2024, the Company entered into an Amended and Restated Revolving Credit and Guaranty Agreement (the "Revolving Credit Facility"), increasing the borrowing capacity by $ 1.115 billion, bringing the total amount available under the Revolving Credit Facility to $ 2.865 billion, which may be drawn upon until February 15, 2029, in the case of any Revolving Loans (as defined in the Revolving Credit Facility) made by the Extending Lenders (as defined in the Revolving Credit Facility), and until April 21, 2025, in the case of any Revolving Loans made by the 2024 Non-Extending Lenders (as defined in the Revolving Credit Facility).

On April 16, 2024, the Company further increased the revolving loan commitments of the Extending Lenders by $ 100 million for a total amount available thereunder of $ 2.965 billion.

Following such increase, and after the extension of the maturity of $ 150 million from April 21, 2025 to February 15, 2029, the revolving loan commitments of the Extending Lenders equal $ 2.95 billion and the revolving loan commitments of the 2024 Non-Extending Lenders equal $ 15 million.

As of December 31, 2024, we had $ 2.965 billion undrawn and available under the Revolving Credit Facility.

The Revolving Loans, if any, bear interest at a variable rate equal to Term SOFR (as defined in the Revolving Credit Facility), generally subject to a floor, plus a credit adjustment spread described in the Revolving Credit Facility, or, at United's election, another rate based on certain market interest rates, also generally subject to a floor, in each case plus a variable margin ranging from 3.00 % to 3.50 %, in the case of Term SOFR loans, and 2.00 % to 2.50 %, in the case of loans at other market rates.

On February 22, 2024, the Company also entered into Amendment No.

2 to Term Loan Credit and Guaranty Agreement (as amended, the "Term Loan Facility" and, together with the Revolving Credit Facility, the "Loan Facilities") and (i) used available cash in an amount equal to $ 1.37 billion to partially prepay the term loans under the 2021 Term Loans and (ii) borrowed the entire term loan commitment available under the Term Loan Facility in an amount equal to $ 2.5 billion and used the proceeds of such terms loans (the "Term Loans") to prepay in full the remaining outstanding principal balance under the Existing Term Loan Facility.

The Term Loans will bear interest at a variable rate equal to Term SOFR (subject to a floor of 0.0 %);

2 to Term Loan Credit and Guaranty Agreement (as amended, the "Term Loan Facility" and, together with the Revolving Credit Facility, the "2024 Loan Facilities") and (i) used available cash in an amount equal to $ 1.37 billion to partially prepay the term loans under a 2021 term loan facility and (ii) borrowed the entire term loan commitment available under the Term Loan Facility in an amount equal to $ 2.5 billion and used the proceeds of such terms loans (the "2024 Term Loans") to prepay in full the remaining outstanding principal balance under the existing term loan facility.

The 2024 Term Loans bear interest at a variable rate equal to Term SOFR (subject to a floor of 0.0 %);

or, at United's election, another rate based on certain market interest rates (subject to a floor of 1.0 %), in each case plus a margin of 2.75 %, in the case of Term SOFR loans, and 1.75 %, in the case of loans at other market rates.

The remaining balance of the Term Loans will be due and payable on its maturity date on February 22, 2031.

The remaining balance of the 2024 Term Loans will mature and be due and payable on February 22, 2031.

On November 1, 2024, the Company made an optional prepayment of $ 400 million on its 2024 Term Loans and lowered its margin to 2.00 %, in the case of Term SOFR loans, and 1.00 %, in the case of loans at other market rates.

The 2024 Loan Facilities are secured on a senior basis by continuing security interests granted by United to the Collateral Trustee for the benefit of the lenders under the 2024 Loan Facilities, among other parties, on the following (the "Collateral"), subject to certain exclusions:

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Kennedy International Airport, LaGuardia Airport and Ronald Reagan Washington National Airport, and (iii) United's rights to use or occupy space at airport terminals, each to the extent necessary at the relevant time for servicing scheduled air carrier service authorized by an applicable route authority.

The Collateral securing the Loan Facilities also presently secures on a senior basis the 2026 and 2029 Notes.

Our debt agreements contain customary terms and conditions as well as various affirmative, negative and financial covenants that, among other things, restrict the ability of the Company and its subsidiaries to incur additional indebtedness and pay dividends or repurchase stock.

As of December 31, 2023, the Company was in compliance with its debt covenants.

The collateral, covenants and cross default provisions of the Company's principal debt instruments that contain such provisions are summarized in the table below:

Debt Instrument Collateral, Covenants and Cross Default Provisions

Aircraft notes and other notes payable Secured by certain aircraft, spare engines and spare parts.

The indentures contain events of default that are customary for aircraft financings, including in certain cases cross default to other related aircraft.

2021 Loan Facilities

Secured on a senior basis by security interests granted by the Company to the collateral trustee for the benefit of the lenders under the 2021 Loan Facilities, among other parties, on the following:

(i) all of the Company's route authorities granted by the U.S.

Department of Transportation to operate scheduled service between any international airport located in the United States and any international airport located in any country other than the United States (except Cuba), (ii) the Company's rights to substantially all of its landing and take-off slots at foreign and domestic airports, including at John F.

Kennedy International Airport, LaGuardia Airport and Ronald Reagan Washington National Airport (subject to certain exclusions), and (iii) the Company's rights to use or occupy space at airport terminals, each to the extent necessary at the relevant time for servicing scheduled air carrier service authorized by an applicable route authority.

The 2021 Loan Facilities contain negative covenants that, among other things, limit our ability under certain circumstances to create liens on the collateral, make certain dividends, conduct stock repurchases, make certain restricted investments and other restricted payments, and consolidate, merge, sell, or otherwise dispose of all or substantially all of our assets.

The 2021 Loan Facilities also contain financial covenants that require the Company to maintain at least $ 2.0 billion of unrestricted liquidity at all times, which includes unrestricted cash, 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 (including under the 2021 Loan Facilities) of 1.6 to 1.0, tested semi-annually.

The 2021 Loan Facilities contain events of default customary for similar financings, including a cross-payment default and cross-acceleration to other material indebtedness.

2026 and 2029 Notes The 2026 and 2029 Notes are secured on a senior basis by security interests granted by the Company to the collateral trustee for the benefit of the holders of the 2026 and 2029 Notes, among other parties, on the following:

(i) all of the Company's route authorities granted by the U.S.

The indenture for these 2026 and 2029 Notes contains covenants that, among other things, limit our ability under certain circumstances to create liens on the 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.

The indenture also contains a financial covenant that requires UAL to pay special interest in an additional amount equal to 2.0 % per year of the principal amount of the 2026 and 2029 Notes for so long as it is unable to demonstrate that it maintains a minimum ratio of appraised value of collateral to the outstanding debt secured by such collateral (including the 2026 and 2029 Notes) of 1.6 to 1.0, tested semi-annually.

The indenture contains events of default customary for similar financings, including a cross-payment default and cross-acceleration to other material indebtedness.

MileagePlus Senior Secured Notes and MileagePlus Term Loan Facility

Secured by first-priority security interests in substantially all of the assets of the Issuers, other than excluded property and subject to certain permitted liens, including security interests in specified cash accounts that include the accounts into which MileagePlus revenues are or will be paid by the Company's marketing partners and by the Company.

PSP Notes The PSP Notes represent senior unsecured indebtedness of UAL.

The PSP Notes are guaranteed by United.

If any subsidiary of UAL (other than United) becomes, or is required to become, an obligor on unsecured indebtedness of UAL or any of its subsidiaries with a principal balance in excess of a specified amount, then such subsidiary shall be required to guarantee the obligations of the Company under the PSP Notes.

Pursuant to the PSP Agreements, the Company and its affiliates will be required to comply with certain provisions including, among others, audit and reporting requirements and provisions restricting the payment of certain executive compensation until April 1, 2023.

Unsecured notes The indentures for these notes contain covenants that, among other things, restrict the ability of the Company and its restricted subsidiaries (as defined in the indentures) to incur additional indebtedness and make certain dividends, stock repurchases, restricted investments and other restricted payments.

NOTE 10 - LEASES AND CAPACITY PURCHASE AGREEMENTS

The Collateral securing the 2024 Loan Facilities also presently secures on a senior basis (i) the Company's 4.375 % senior secured notes due 2026, and (ii) the Company's 4.625 % senior secured notes due 2029.

On August 5, 2024, the Company and Wilmington Trust, National Association, as subordination agent and pass through trustee (the "Trustee") under certain pass through trusts newly formed by the Company, entered into the Note Purchase Agreement (the "Note Purchase Agreement").

The Note Purchase Agreement provides for the issuance by the Company of equipment notes (the "Equipment Notes") in the aggregate principal amount of approximately $ 1.4 billion secured by 48 Boeing aircraft delivered new from the manufacturer from October 2010 to December 2023 (collectively, the "Aircraft").

Pursuant to the Note Purchase Agreement, on August 5, 2024, the Trustee purchased Equipment Notes issued under a trust indenture and mortgage (each, an "Indenture" and, collectively, the "Indentures") with respect to each Aircraft entered into by the Company and Wilmington Trust, National Association, as mortgagee.

Each Indenture provides for the issuance of Equipment Notes in two series:

Series AA, bearing interest at the rate of 5.450 % per annum, and Series A, bearing interest at the rate of 5.875 % per annum, in aggregate principal amounts equal to $ 969 million and $ 385 million , respectively.

The Equipment Notes were purchased by the Trustee, using the proceeds from the sale of Pass Through Certificates, Series 2024-1AA, and Pass Through Certificates, Series 2024-1A, issued by two pass through trusts newly-formed by the Company.

The interest on the Equipment Notes is payable semi-annually on each February 15 and August 15, beginning on February 15, 2025.

The principal payments on the Equipment Notes are scheduled on February 15 and August 15 of each year, beginning on February 15, 2025 for certain Equipment Notes and August 15, 2025 for the remaining Equipment Notes.

The final payments on the Equipment Notes will be due on or prior to February 15, 2037.

In addition to the Equipment Notes described above, United borrowed $ 1.4 billion aggregate principal amount from financial institutions to finance the purchase of aircraft.

The notes evidencing these borrowings, which are secured by the related aircraft, mature between 2034 and 2036 and bear interest equal to Term SOFR plus a margin with variable rates ranging from 6.17 % to 6.51 %.

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, 2024, the Company was in compliance with its debt covenants under these agreements.

NOTE 11 - LEASES

United leases aircraft, airport passenger terminal space, aircraft hangars and related maintenance facilities, cargo terminals, other airport facilities, other commercial real estate, office and computer equipment and vehicles, among other items.

Certain of these leases include provisions for variable lease payments which are based on several factors, including, but not limited to, relative leased square footage, available seat miles, enplaned passengers, passenger facility charges, terminal equipment usage fees, departures, and airports' annual operating budgets.

Due to the variable nature of the rates, these leases are not recorded on our balance sheet as a right-of-use asset and lease liability.

For leases with terms greater than 12 months, we record the related right-of-use asset and lease liability at the present value of fixed lease payments over the lease term.

To the extent a lease agreement includes an extension option that is reasonably certain to be exercised, we have recognized those amounts as part of our right-of-use assets and lease liabilities.

Leases with an initial term of 12 months or less with purchase options or extension options that are not reasonably certain to be exercised are not recorded on the balance sheet;

we recognize lease expense for these leases on a straight-line basis over the term of the lease.

We combine lease and non-lease components, such as common area maintenance costs, in calculating the right-of-use assets and lease liabilities for all asset groups except for our CPAs, which contain embedded leases for regional aircraft.

In addition to the lease component cost for regional aircraft, our CPAs also include non-lease components primarily related to the regional carriers' operating costs incurred in providing regional aircraft services.

We allocate consideration for the lease components and non-lease components of each CPA based on their relative standalone values.

Certain of these leases include provisions for variable lease payments which are based on several factors, including, but not limited to,

relative leased square footage, available seat miles, enplaned passengers, passenger facility charges, terminal equipment usage fees, departures, and airports' annual operating budgets.

Due to the variable nature of these payments, they are not included in the calculation of the right-of-use asset and lease liability.

The Company's lease cost for the years ended December 31 included the following components (in millions):

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Under the terms of most aircraft leases, United has the right to purchase the aircraft at the end of the lease term, in some cases at fair market value, and in others, at a percentage of cost.

In addition, United also has 42 leases of Boeing 737 MAX and Boeing 787 aircraft under various sale-leaseback transactions.

These transactions did not qualify as a sale under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers ("ASC Topic 606"), and, as such, the associated aircraft remain on the Company's consolidated balance sheet as part of Flight equipment.

The related obligations are recorded in Current maturities of other financial liabilities and Other financial liabilities.

In addition, United also has 66 leases of Boeing 737 MAX, Boeing 787 and Airbus A321neo aircraft under various sale-leaseback transactions.

These transactions did not qualify as a sale under the applicable accounting guidance, and, as such, the associated aircraft remain on the Company's consolidated balance sheet as part of Operating property and equipment, net.

The related obligations are recorded in Current maturities of long-term debt, finance leases, and other financial liabilities and Long-term debt, finance leases, and other financial liabilities .

These aircraft leases have remaining lease terms of 9 months to 12 years with expiration dates ranging from 2025 through 2037.

Non-aircraft leases have remaining lease terms of 1 month to 32 years.

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Long-term lease obligations $ 4,510 $ 68

As of December 31, 2023, we have additional leases of approximately $ 1.6 billion for several regional aircraft under CPAs, mainline aircraft, airport facility and office space leases, none of which had commenced as of such date.

These leases will commence between 2024 and 2026 with lease terms of up to 12 years.

The table below presents the Company's contractual payments at December 31, 2023 under then-outstanding sale and leaseback agreements, for transactions that did not qualify as a sale under ASC Topic 606, in each of the next five calendar years (in millions):

The table below presents the Company's future contractual lease payments at December 31, 2024 under then-outstanding sale and leaseback agreements that did not qualify as a sale under the applicable accounting guidance (in millions):

Other Financial Liabilities

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Other financial liabilities $ 3,455

In November 2024, at the request of United, the City of Houston, Texas issued special facility revenue bonds in the par amount of approximately $ 1.1 billion (the "IAH SFRBs") to fund a portion of the costs of construction, reconfiguration and redevelopment of portions of Terminal B at George Bush Intercontinental Airport.

The IAH SFRBs have interest rates ranging from 5.25 % to 5.50 % per annum, payable semiannually, commencing in July 2025 through the July 2039 maturity date of the IAH SFRBs.

United will account for the lease payments related to these IAH SFRBs as an operating lease recognized as a right-of-use asset and lease liability on the Company's balance sheet.

As of December 31, 2024, we had entered into leases with rental obligations of approximately $ 5.7 billion for several mainline aircraft, regional aircraft under CPAs, airport facilities, including the lease associated with the IAH SFRBs described above, and office space, none of which had commenced as of such date.

These leases will commence between 2025 and 2027 with lease terms of up to 27 years.

Our lease agreements do not provide a readily determinable implicit rate nor is it available to us from our lessors.

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Financing cash flows for finance leases 269 311 124

NOTE 12 - COMMITMENTS, CONTINGENCIES, AND GUARANTEES

Purchase Commitments.

The table below summarizes United's firm commitments as of December 31, 2024, which include aircraft and related spare engines, aircraft improvements and non-aircraft capital commitments (in billions):

2025 2026 2027 2028 2029 After 2029 Total

Purchase commitments $ 9.6 $ 6.0 $ 4.7 $ 6.5 $ 8.1 $ 19.5 $ 54.4

Aircraft commitments included in the table above are based on contractual scheduled aircraft deliveries.

The amount and timing of these commitments could change to the extent that:

(i) the Company and the aircraft manufacturers, with whom the Company has existing orders for new aircraft, agree to modify (or further modify) the contracts governing those orders, (ii) rights are exercised pursuant to the relevant agreements to cancel deliveries or modify the timing of deliveries, or (iii) the aircraft manufacturers are unable to deliver in accordance with the terms of those orders.

Regional CPAs.

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Aircraft operated under CPAs include aircraft leased directly from the regional carriers and those owned by United and operated by the regional carriers.

See Part I, Item 2.

Properties, of this report for additional information.

United recorded approximately $ 1.1 billion, $ 1.1 billion and $ 0.9 billion in expenses related to its CPAs with its regional carriers in which United is a minority shareholder, for the years ended December 31, 2024, 2023 and 2022, respectively.

United had prepaid balances and notes receivables with combined carrying values of $ 84 million and $ 62 million with these companies, as of December 31, 2023 and 2022, respectively.

United had prepaid assets and accounts and notes receivables with combined carrying values of $ 52 million and $ 84 million with these companies, as of December 31, 2024 and 2023, respectively.

There were $ 110 million and $ 122 million of liabilities due to these companies as of December 31, 2024 and 2023, respectively.

The CPAs with these related parties were executed in the ordinary course of business.

In 2023, United amended several of its CPAs with certain of its regional carriers to increase the contractually agreed fees (carrier costs) paid to those carriers and to add additional aircraft that will replace existing aircraft near the end of their contractual terms.

Separately, the Company terminated its CPA and related regional flight operations with Air Wisconsin in June 2023.

Our future commitments under our CPAs are dependent on numerous variables, and are, therefore, difficult to predict.

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The actual amounts we pay to our regional operators under CPAs could differ materially from these estimates.

United's estimates of its future payments under all of the CPAs do not include the portion of the underlying obligation for any aircraft leased to a regional carrier or deemed to be leased from other regional carriers and facility rent that are disclosed as part of operating leases above.

For purposes of calculating these estimates, we have assumed (1) the number of block hours flown is based on our anticipated level of flight activity or at any contractual minimum utilization levels if applicable, whichever is higher, (2) that we will reduce the fleet as rapidly as contractually allowed under each CPA, (3) that aircraft utilization, stage length and load factors will remain constant, (4) that each carrier's operational performance will remain at recent historic levels and (5) an annual projected inflation rate.

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Based on these assumptions as of December 31, 2024, our estimated future payments through the end of the terms of our CPAs are presented in the table below (in billions):

After 2028 4.1

In January 2024, United amended several of its CPAs with certain of its regional carriers.

These amendments will result in an increase to its future commitments under its CPAs by approximately $ 0.6 billion.

NOTE 11 - VARIABLE INTEREST ENTITIES ("VIE")

Variable interests are contractual, ownership or other monetary interests in an entity that change with fluctuations in the fair value of the entity's net assets exclusive of variable interests.

A VIE can arise from items such as lease agreements, loan arrangements, guarantees or service contracts.

An entity is a VIE if (a) the entity lacks sufficient equity or (b) the entity's equity holders lack power or the obligation and right as equity holders to absorb the entity's expected losses or to receive its expected residual returns.

If an entity is determined to be a VIE, the entity must be consolidated by the primary beneficiary.

The primary beneficiary is the holder of the variable interests that has the power to direct the activities of a VIE that (i) most significantly impact the VIE's economic performance and (ii) has the obligation to absorb losses of or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Therefore, the Company must identify which activities most significantly impact the VIE's economic performance and determine whether it, or another party, has the power to direct those activities.

Airport Leases .

United is the lessee of real property under long-term operating leases at a number of airports where we are also the guarantor of approximately $ 1.9 billion of tax-exempt special facilities revenue bonds and interest thereon as of December 31, 2023.

These leases are typically with municipalities or other governmental entities, which are excluded from the consolidation requirements concerning a VIE.

To the extent United's leases and related guarantees are with a separate legal entity other than a governmental entity, United is not the primary beneficiary because the lease terms are consistent with market terms at the inception of the lease and the lease does not include a residual value guarantee, fixed-price purchase option, or similar feature.

See Note 12 of this report for more information regarding United's guarantee of the tax-exempt special facilities revenue bonds.

United evaluated whether the pass-through trusts formed for its EETC financings, treated as either debt or aircraft operating leases, are VIEs required to be consolidated by United under applicable accounting guidance, and determined that the pass-through trusts are VIEs.

Based on United's analysis as described below, United determined that it does not have a variable interest in the pass-through trusts.

The primary risk of the pass-through trusts is credit risk (i.e.

the risk that United, the issuer of the equipment notes, may be unable to make its principal and interest payments).

The primary purpose of the pass-through trust structure is to enhance the credit worthiness of United's debt obligation through certain bankruptcy protection provisions, a liquidity facility (in certain of the EETC structures) and improved loan-to-value ratios for more senior debt classes.

These credit enhancements lower United's total borrowing cost.

Pass-through trusts are established to receive principal and interest payments on the equipment notes purchased by the pass-through trusts from United and remit these proceeds to the pass-through trusts' certificate holders.

United does not invest in or obtain a financial interest in the pass-through trusts.

Rather, United has an obligation to make interest and principal payments on its equipment notes held by the pass-through trusts.

United does not intend to have any voting or non-voting equity interest in the pass-through trusts or to absorb variability from the pass-through trusts.

Based on this analysis, the Company determined that it is not required to consolidate the pass-through trusts.

United concluded that Mesa is a VIE as of December 31, 2023.

NOTE 12 - COMMITMENTS AND CONTINGENCIES

As of December 31, 2023, United had firm commitments to purchase aircraft from The Boeing Company ("Boeing") and Airbus S.A.S.

("Airbus") presented in the table below:

Contractual Aircraft Deliveries Expected Aircraft Deliveries (b)

Aircraft Type Number of Firm

Commitments (a) 2024 2025 After 2025 2024 2025 After 2025

787 150 8 18 124 7 18 125

737 MAX 8 43 43 — — 37 6 —

737 MAX 9 34 34 — — 19 15 —

737 MAX 10 277 80 71 126 — (c) (c)

A321neo 126 26 38 62 25 24 77

A321XLR 50 — 8 42 — 1 49

A350 45 — — 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.

(c) Due to the delay in the certification of the 737 MAX 10 aircraft, we are unable to accurately forecast the expected delivery period.

The aircraft listed in the table above are scheduled for delivery through 2033.

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 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.

The table below summarizes United's firm commitments as of December 31, 2023, which include aircraft and related spare engines, aircraft improvements and non-aircraft capital commitments.

Aircraft commitments are based on contractual scheduled aircraft deliveries without any adjustments communicated by Boeing and Airbus or estimated by United.

(in billions)

After 2028 23.5

2025 2026 2027 2028 2029 After 2029 Total

Future commitments under CPAs $ 2.7 $ 2.8 $ 2.1 $ 1.8 $ 1.4 $ 4.1 $ 14.9

As of December 31, 2024, United had 207 call options to purchase regional jet aircraft being operated by certain of its regional carriers with contract dates extending until 2036.

These call options are exercisable upon wrongful termination or breach of contract, among other conditions.

Legal and Environmental.

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These amounts are recorded based on the Company's assessments of the likelihood of their eventual disposition.

During 2022, the Company recorded charges of $ 94 million as a result of a number of recent decisions that appear to impact the Company's ability to successfully assert, in certain cases, that federal law preempts state and local laws that conflict with union contracts and/or federal requirements.

Guarantees and Indemnifications.

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Currently, the Company believes that any future payments required under these guarantees or indemnities would be immaterial, as most liabilities and related indemnities are covered by insurance (subject to deductibles).

Additionally, certain real estate leases

include indemnities for any environmental liability that may arise out of or relate to the use of the leased premises.

As of December 31, 2023, United is the guarantor of approximately $ 1.9 billion in aggregate principal amount of tax-exempt special facilities revenue bonds and interest thereon.

These bonds, issued by various airport municipalities, are payable solely from rentals paid under long-term agreements with the respective governing bodies.

The leasing arrangements associated with these obligations are accounted for as operating leases recognized on the Company's consolidated balance sheet with the associated expense recorded on a straight-line basis over the expected lease term.

The obligations associated with these tax-exempt special facilities revenue bonds are included in our lease commitments disclosed in Note 10 of this report.

All of these bonds are due between 2024 and 2041.

As of December 31, 2023, United is the guarantor of $ 77 million of aircraft mortgage debt issued by one of United's regional carriers.

The aircraft mortgage debt is subject to similar increased cost provisions as described below for the Company's debt, and the Company would potentially be responsible for those costs under the guarantees.

Additionally, certain real estate leases include indemnities for any environmental liability that may arise out of or relate to the use of the leased premises.

As of December 31, 2024, United is the guarantor of approximately $ 2.9 billion in aggregate principal amount of tax-exempt special facility revenue bonds and interest thereon.

These bonds, which in most instances are issued by various airport municipalities, are payable solely from rentals paid under long-term agreements with the respective governing bodies.

The leasing arrangements associated with these obligations are accounted for as operating leases and the related obligations are included in our lease related disclosures in Note 11.

All of these bonds mature between 2027 and 2041.

As of December 31, 2024, United had $ 396 million of surety bonds securing various insurance related obligations with expiration dates through 2028.

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In United's financing transactions that include loans in which United is the borrower, United typically agrees to reimburse lenders for any reduced returns with respect to the loans due to any change in capital requirements and, in the case of loans with respect to which the interest rate is based on SOFR, for certain other increased costs that the lenders incur in carrying these loans as a result of any change in law, subject, in most cases, to obligations of the lenders to take certain limited steps to mitigate the requirement for, or the amount of, such increased costs.

The Company elected to apply the guidance in Accounting Standards Codification 848, Reference Rate Reform , to contracts and transactions that transitioned from the London Interbank Offered Rate (LIBOR) to SOFR.

The application of this guidance did not have any material impact on the Company's financial statements.

At December 31, 2024, the Company had $ 8.5 billion of floating rate debt with remaining terms of up to approximately 12 years that are subject to these increased cost provisions.

In several financing transactions involving loans or leases from non-U.S.

entities, with remaining terms of up to approximately 12 years and an aggregate balance of $ 8.1 billion, the Company bears the risk of any change in tax laws that would subject loan or lease payments thereunder to non-U.S.

In several financing transactions involving loans from non-U.S.

entities, with remaining terms of up to approximately 12 years and an aggregate balance of $ 5.3 billion, the Company bears the risk of any change in tax laws that would subject loan payments thereunder to non-U.S.

entities to withholding taxes, subject to customary exclusions.

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The Company concluded it was not necessary to record a liability for these indirect guarantees.

Regional Capacity Purchase.

As of December 31, 2023, United had 252 call options to purchase regional jet aircraft being operated by certain of its regional carriers with contract dates extending until 2037.

These call options are exercisable upon wrongful termination or breach of contract, among other conditions.

Credit Card Processing Agreements.

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labor organizations.

In January 2023, the Company's more than 8,000 technicians and related employees represented by the International Brotherhood of Teamsters ratified an extension to their labor contract with United.

The agreement becomes amendable in

December 2024.

On February 28, 2024, United and the IBT reached a tentative agreement for an extension to their labor contract.

The agreement, if ratified, becomes amendable in December 2028.

The tentative agreement provides competitive pay increases and improved several work rules.

In May 2023, nearly 30,000 fleet service, passenger service, storekeepers, maintenance instructors and fleet technical instructors and related employees represented by the International Association of Machinists & Aerospace Workers ("IAM") ratified five agreements with United.

The ratified agreements are effective through 2025.

The Company recorded a one-time $ 48 million expense in conjunction with the ratification.

On February 23, 2024, United and the IAM ratified agreements covering the security guards in California and central load planners.

The ratified agreements are effective through 2025.

In September 2023, the Company's pilots represented by ALPA ratified an agreement with United.

The agreement includes numerous work rule changes and pay rate increases during the four-year term.

The agreement also included a provision for a one-time $ 765 million payment upon ratification which was paid by December 31, 2023.

NOTE 13 - SPECIAL CHARGES (CREDITS)

For the years ended December 31, operating and nonoperating special charges (credits) and unrealized (gains) losses on investments in the statements of consolidated operations consisted of the following (in millions):

NOTE 13 - SPECIAL CHARGES

For the years ended December 31, operating and nonoperating special charges and unrealized (gains) losses on investments in the statements of consolidated operations consisted of the following (in millions):

2024 2023 2022

Labor contract ratification bonuses $ 814 $ — $ —

CARES Act grant — — ( 4,021 )

Severance and benefit costs — — 438

Impairment of assets — — 97

(Gains) losses on sale of assets and other special charges $ 112 $ 135 $ 140

Total operating special charges (credits) 949 140 ( 3,367 )

Nonoperating unrealized (gains) losses on investments, net ( 27 ) ( 20 ) 34

Nonoperating debt extinguishment and modification fees 11 7 50

Nonoperating special termination benefits and settlement losses — — 31

Total nonoperating special charges and unrealized (gains) losses on investments, net ( 16 ) ( 13 ) 115

Total operating and nonoperating special charges (credits) and unrealized (gains) losses on investments, net 933 127 ( 3,252 )

Income tax expense (benefit), net of valuation allowance ( 214 ) ( 33 ) 728

Total operating and nonoperating special charges (credits) and unrealized (gains) losses on investments, net of income taxes $ 719 $ 94 $ ( 2,524 )

Labor contract ratification bonuses — 814 —

During 2023, the Company recorded $ 814 million of expense associated with the agreements with ALPA, IAM and other work groups.

See Note 12 for additional information.

(Gains) losses on sale of assets and other special charges.

During 2023, the Company recorded $ 135 million of net charges primarily comprised of accelerated depreciation related to certain of the Company's assets that will be retired early, reserves for various legal matters, a write-down of flight training equipment that is being sold and other gains and losses on the sale of assets.

Nonoperating unrealized (gains) losses on investments, net.

During 2023, the Company recorded gains of $ 27 million, primarily for the change in the market value of its investments in equity securities.

Nonoperating debt extinguishment and modification fees .

During 2023, the Company recorded $ 11 million of charges primarily related to the prepayment of $ 1.0 billion of the outstanding principal amount under a 2021 term loan facility.

(Gains) losses on sale of assets and other special charges.

During 2022, the Company recorded $ 140 million of net charges primarily comprised of $ 94 million for various legal matters and $ 23 million related to certain contract disputes.

Nonoperating unrealized (gains) losses on investments, net.

During 2022, the Company recorded gains of $ 20 million primarily related to the change in the market value of its investments in equity securities.

Nonoperating debt extinguishment and modification fees .

During 2022, the Company recorded $ 7 million of charges primarily related to the early redemption of $ 400 million of the outstanding principal amount of its 4.25 % senior notes due 2022.

CARES Act grant.

During 2021, the Company received approximately $ 5.8 billion in funding pursuant to the Payroll Support Program agreements under the CARES Act (the "PSP2 and PSP3 Agreements"), which included approximately $ 1.7 billion aggregate principal amount of unsecured promissory notes .

The Company recorded $ 4.0 billion as grant income in Special charges (credits).

The Company also recorded $ 99 million for the PSP2 Warrants and PSP3 Warrants issued to Treasury as part of the PSP2 and PSP3 Agreements, within stockholders' equity, as an offset to the grant income.

Severance and benefit costs .

During 2021, the Company recorded $ 438 million of charges related to pay continuation and benefits-related costs provided to employees who chose to voluntarily separate from the Company.

The Company offered, based on employee group, age and completed years of service, pay continuation, health care coverage, and travel privileges.

Approximately 4,500 employees elected to voluntarily separate from the Company.

Impairment of assets .

During 2021, the Company recorded the following impairment charges:

• $ 61 million, primarily comprised of impairment charges for 13 Airbus A319 aircraft and 13 Boeing 737-700 airframes as a result of the then-current market conditions for used aircraft, along with charges for cancelled induction projects related to these aircraft.

• $ 36 million of impairments related to 64 Embraer EMB 145LR aircraft and related spare engines that United retired from its regional fleet.

The decision to retire these aircraft was triggered by the United Next aircraft order.

(Gains) losses on sale of assets and other special charges.

During 2021, the Company recorded net charges of $ 119 million primarily related to a one-time bonus paid to employees for their continued efforts during the COVID-19 pandemic, incentives for its employees to receive a COVID-19 vaccination and the termination of the lease associated with three floors of its headquarters at the Willis Tower in Chicago, partially offset by gains primarily related to the sale of its former headquarters in suburban Chicago, aircraft sale-leaseback transactions and aircraft component manufacturer credits.

Total operating special charges 112 949 140

Nonoperating unrealized (gains) losses on investments, net 199 ( 27 ) ( 20 )

During 2021, the Company recorded losses of $ 34 million primarily for the change in the market value of its investments in equity securities.

Nonoperating debt extinguishment and modification fees 128 11 7

During 2021, the Company recorded $ 50 million of charges for fees and discounts related to the issuance of a new term loan and revolving credit facility and the prepayment of a CARES Act loan and a 2017 term loan and revolving credit facility.

Nonoperating special termination benefits and settlement losses.

During 2021, as part of the first quarter voluntary leave programs, the Company recorded $ 31 million of special termination benefits in the form of additional subsidies for retiree medical costs for certain U.S.-based front-line employees.

The subsidies were in the form of a one-time contribution to a notional retiree health account of $ 125,000 for full-time employees and $ 75,000 for part-time employees.

See Note 7 of this report for additional information.

Total nonoperating special charges and unrealized (gains) losses on investments, net 327 ( 16 ) ( 13 )

Total operating and nonoperating special charges and unrealized (gains) losses on investments, net 439 933 127

Income tax benefit, net of valuation allowance ( 54 ) ( 214 ) ( 33 )

Total operating and nonoperating special charges and unrealized (gains) losses on investments, net of income taxes $ 385 $ 719 $ 94

Operating and nonoperating special charges and unrealized (gains) losses on investments included the following:

During 2024, the Company recorded $ 128 million of charges related to the prepayment in full of the outstanding principal balance of the MileagePlus Term Loan in July 2024, the refinancing of its 2021 term loans in February 2024 and a partial prepayment of the 2024 Term Loans.

During 2023, the Company recorded $ 814 million of expense associated with the agreements with its employees represented by the Air Line Pilots Association, the International Association of Machinists and Aerospace Workers and other labor unions.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data