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Item 7. Management’s Discussion and Analysis

2026-02-12 compared with 2025-02-27 · 105 added, 108 removed, 302 unchanged (41% of the section changed)

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This section generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.

Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 are not included in this Form 10-K and can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 29, 2024 (the "2023 Annual Report").

Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included in this Form 10-K and can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's 2024 Annual Report.

Executive Summary

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– surpassing 530 new and retrofit aircraft featuring our signature interior with bigger bins, seatback screens at every seat and Bluetooth connectivity;

– expanding our leading global network to destinations like Ulaanbaatar, Mongolia;

Nuuk, Greenland;

Kaohsiung, Taiwan;

Palermo, Italy;

Bilbao, Spain;

– expanding our leading global network to destinations like Nuuk, Greenland;

Ulaanbaatar, Mongolia;

Faro, Portugal;

Madeira Island, Portugal;

Puerto Escondido, Mexico;

and Dakar, Senegal;

Palermo, Italy;

Bilbao, Spain;

and Madeira Island, Portugal;

– launching Kinective Media SM (the first media network that uses insights from travel behaviors to connect customers to personalized advertising, experiences and offers from leading brands);

– announcing an industry-leading agreement with SpaceX to bring Starlink's Wi-Fi service (the world's fastest, most reliable Wi-Fi in the sky) to the Company's aircraft;

– bringing Starlink's Wi-Fi service (the world's fastest, most reliable Wi-Fi in the sky) to our United Express regional aircraft and beginning installation on our mainline aircraft;

– making significant technology changes that empower our employees and improve the customer experience.

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Economic and Market Factors

The airline industry is highly competitive, marked by significant competition with respect to routes, fares, airline capacity, schedules (both timing and frequency), services, products, customer service and frequent flyer programs.

We, like other companies in our industry, have been subject to these and other industry-specific competitive dynamics.

In addition, our operations, supply chain, partners and suppliers have been subject to various global macroeconomic factors.

We expect to continue to remain vulnerable to a number of industry-specific and global macroeconomic factors that may cause our actual results of operations to differ from our historical results of operations or current expectations.

We remain vulnerable to a number of industry-specific and global macroeconomic factors that may cause our actual results of operations to differ from our historical results of operations or current expectations.

The economic and market factors and trends that we currently believe are or will be most impactful to our results of operations and financial condition include the following:

the execution and effect of our business strategies, including our United Next plan, especially relating to our focus on expanding market and product opportunities and the growth in the scale of our operations;

the impact on the Company of significant operational challenges by third parties on which we rely;

aircraft delivery delays;

rising inflationary pressures;

labor market and supply chain constraints and related costs affecting us and our partners;

the execution and effect of our business strategies, including our United Next plan;

supply chain constraints and related costs affecting us and our partners;

volatile fuel prices;

increasing maintenance expenses;

changes in interest rates;

and changes in general economic conditions in the markets in which the Company operates, including an economic downturn leading to a decrease in demand for air travel or fluctuations in foreign currency exchange rates that may impact international travel demand.

and an economic downturn leading to a decrease in demand for air travel or fluctuations in foreign currency exchange rates that may impact international travel demand.

We continue to monitor the potential favorable or unfavorable impacts of these and other factors on our business, operations, financial condition, future results of operations, liquidity and financial flexibility, which are dependent on future developments, including as a result of those factors discussed in Part I, Item 1A.

Risk Factors.

Our future results of operations may be subject to volatility and our growth plans may be delayed, particularly in the short term, due to the impact of the above factors and trends.

Governmental Actions

We operate in complex, highly regulated environments in the U.S., the European Union, the United Kingdom and other regions around the world.

Compliance with laws, regulations, administrative practices and other restrictions or legal requirements in the countries in which we do business is onerous and expensive.

In addition, changes to existing legal requirements or the implementation of new legal requirements and any failure to comply with such legal requirements could negatively impact our business, operations, financial condition, future results of operations, liquidity and financial flexibility by increasing the Company's costs, limiting the Company's ability to offer a product, service or feature to customers, impacting customer demand for the Company's products and services and requiring changes to the Company's supply chain and its business.

Legal requirements that we currently believe are or will be most impactful to our results of operations and financial condition include the following:

the closure of our flying airspace and termination of other operations due to regional conflicts, including the suspension of our overflying in Russian airspace as a result of the Russia-Ukraine military conflict and interruptions of our flying as a result of the military conflict in the Middle East, as well as any escalation of the broader economic consequences of these conflicts beyond their current scope;

the closure of our flying airspace and termination of other operations due to regional conflicts;

delays in aircraft certification (especially relating to the 737 MAX 10 aircraft);

increased FAA oversight of the aircraft production process;

any legal requirement that would result in a reshaping of the

benefits that we provide to our consumers through our loyalty program or the co-branded credit cards issued by our partner;

an extended federal government shutdown as well as any other budgetary decisions limiting or delaying government spending or reducing staffing of government agencies with which we interact routinely;

any legal requirement that would result in a reshaping of the benefits that we provide to our consumers through our loyalty program or the co-branded credit cards issued by our partner;

the effect of any potential changes in trade tariffs that we are unable to mitigate;

and certain rules and regulations proposed by the DOT that would impose additional costs and operational restrictions on airlines.

Changes in existing applicable legal requirements or new applicable legal requirements as well as the related interpretations and enforcement practices regarding them, create uncertainty about how such laws and regulations will be understood and applied.

As a result, the impact of changing and new legal requirements generally cannot be reasonably predicted and those requirements may ultimately require extensive system and operational changes, be difficult to implement, increase our operating costs and require significant capital expenditures.

The impact of changing and new legal requirements generally cannot be reasonably predicted and those requirements may ultimately require extensive system and operational changes, be difficult to implement, increase our operating costs and require significant capital expenditures.

Results of Operations

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Revenue passenger miles ("RPMs") (millions) (b) 271,619 258,503 244,435

Available seat miles ("ASMs") (millions) (c)

311,185 291,333 247,858

Available seat miles ("ASMs"or "capacity") (millions) (c) 330,284 311,185 291,333

Cargo revenue ton miles (millions) (d) 3,626 3,604 3,159

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(f) The average passenger revenue received for each revenue passenger mile flown.

(g) Average stage length equals the average distance a flight travels weighted for size of aircraft.

(g) The average distance a flight travels weighted for size of aircraft.

Operating Revenue.

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Passenger revenue increased $1.6 billion, or 3.1%, in 2025 as compared to 2024, primarily due to a 6.1% increase in capacity as well as a 4.3% increase in passengers.

Cargo revenue increased $248 million, or 16.6%, in 2024 as compared to 2023, primarily due to higher tonnage, partially offset by lower yields.

Other operating revenue increased $315 million, or 9.9%, in 2024 as compared to 2023, primarily due to an increase in mileage revenue from non-airline partners, including credit card spending with our co-branded credit card partner, JPMorgan Chase Bank, N.A., as well as increases in the purchases of United Club memberships, visitor volume and purchases of one-time United Club passes primarily due to a 5.3% increase in passengers.

Other operating revenue increased $362 million, or 10.4%, in 2025 as compared to 2024, primarily due to an increase in mileage revenue from non-airline partners, including credit card spending with our co-branded credit card partner, JPMorgan Chase Bank, N.A., as well as increases in the purchases of United Club memberships.

Operating Expense.

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(a) NM - Greater than 100% change or otherwise not meaningful.

Salaries and related costs increased $1.9 billion, or 12.8%, in 2024 as compared to 2023, primarily due to annual wage rate increases across certain employee groups and a nearly 4% increase in headcount largely due to increased flight activity.

Aircraft fuel expense decreased $895 million, or 7.1%, in 2024 as compared to 2023, primarily due to a lower average price per gallon of fuel, partially offset by increased consumption from higher flight activity.

Landing fees and other rent increased $361 million, or 11.7%, in 2024 as compared to 2023, primarily due to rate increases at various airports, terminal expansions and other increases in the number of airport gates as well as higher landed weight volume due to increased flight activity.

Aircraft maintenance materials and outside repairs increased $327 million, or 12.0%, in 2024 as compared to 2023, primarily due to increased volumes of engine overhauls, airframe maintenance, materials use and component repair costs mainly as a result of increased flight activity and fleet growth.

Depreciation and amortization expense increased $257 million, or 9.6%, in 2024 as compared to 2023, primarily due to the induction of new aircraft and related spare parts, as well as certain aircraft improvements.

Regional capacity purchase costs increased $116 million, or 4.8%, in 2024 as compared to 2023, primarily due to an 8% increase in regional capacity as well as increases in contractual rates.

Distribution expenses increased $254 million, or 12.8%, in 2024 as compared to 2023, primarily due to higher credit card fees, travel agency commissions and global distribution fees driven by the overall increase in passenger revenue.

Also, starting in the fourth quarter of 2023, the Company reclassified certain commissions from contra-revenue to distribution expense as an immaterial reclassification correction, which increased distribution expense by $187 million compared to the prior year.

The table below presents special charges recorded by the Company during the years ended December 31 (in millions):

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

Labor contract ratification bonuses — 814

Total special charges $ 112 $ 949

See Note 13 to the financial statements included in Part II, Item 8 of this report for additional information.

Other operating expenses increased $1.0 billion, or 12.3%, in 2024 as compared to 2023, primarily due to increased flight activity and onboard passengers, as well as the impacts of inflationary pressures.

Other operating expenses include expenditures related to information technology projects and services, food and beverage offerings, passenger services, personnel-related costs and ground handling.

Salaries and related costs increased $969 million, or 5.8%, in 2025 as compared to 2024, primarily due to increased pay as a result of the increase in flight activity, an increase in headcount of approximately 5.5%, and an increase in pay rates and benefits for eligible employee groups.

Aircraft fuel expense decreased $360 million, or 3.1%, in 2025 as compared to 2024, primarily due to a lower average price per gallon of fuel, partially offset by increased consumption from increased flight activity.

Landing fees and other rent increased $412 million, or 12.0%, in 2025 as compared to 2024, primarily due to rate increases at various airports, terminal expansions and other increases in the number of airport gates, and higher landed weight volume due to increased flight activity.

Aircraft maintenance materials and outside repairs costs increased $231 million, or 7.5%, in 2025 as compared to 2024, primarily due to higher volumes of engine overhauls and component part repairs as well as increased cost of materials due to increased flight activity.

Regional capacity purchase costs increased $177 million, or 7.0%, in 2025 as compared to 2024, primarily due to an approximately 9% increase in regional flight activity as well as increases in contractual rates.

Distribution expenses decreased $122 million, or 5.5%, in 2025 as compared to 2024, primarily due to a change in the mix of sales channels as well as the refinement of assumptions used in determining our credit card fees expense.

Aircraft rent increased $59 million, or 30.4%, in 2025 as compared to 2024, primarily due to an increase in new aircraft leases compared to the prior year.

For details on the Company's Special Charges, see Note 13 to the financial statements included in Part II, Item 8 of this report for additional information.

Other operating expenses increased $866 million, or 9.6%, in 2025 as compared to 2024, primarily due to an increase in flight activity and on-board passengers, including increased costs for on-board catering, ground handling and passenger services, crew-related expenses, as well as expenditures related to information technology projects and services.

Nonoperating Income (Expense).

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Total nonoperating expense, net $ (408) $ (928) $ (520) (56.1)

Interest expense decreased $327 million, or 16.7%, in 2024 as compared to 2023, primarily due to lower debt balances as a result of various debt prepayments and scheduled amortization combined with lower interest rates on refinanced debt.

Interest income decreased $101 million, or 12.2%, in 2024 as compared to 2023, primarily due to lower balances in our short-term investment portfolio, which were partially offset by higher interest rates.

Interest expense decreased $256 million, or 15.7%, in 2025 as compared to 2024, primarily due to lower debt balances as a result of various debt prepayments and scheduled amortization and a reduction in the average cost of debt.

Interest income decreased $115 million, or 15.9%, in 2025 as compared to 2024, primarily due to lower interest rates and lower levels of cash and short-term investments.

See Note 9 to the financial statements included in Part II, Item 8 of this report for additional information.

Interest capitalized increased $45 million in 2024 as compared to 2023, primarily due to an increase in accumulated spend on capital projects.

Unrealized losses on investments, net was $199 million in 2024 as compared to $27 million in unrealized gains, net in 2023, primarily due to the change in the market value of the Company's investments in equity securities.

Unrealized gains (losses) on investments, net was $4 million in unrealized gains, net in 2025 as compared to $199 million in unrealized losses, net in 2024, primarily due to the change in the fair value of the Company's investments in equity securities.

See Notes 9 and 13 to the financial statements included in Part II, Item 8 of this report for additional information.

Miscellaneous, net changed by $149 million in 2024 as compared to 2023, primarily due to debt extinguishment and modification fees related to debt prepayments and refinancing, higher foreign exchange losses and a decrease in the benefit from the Company's net periodic benefit cost of its pension and postretirement benefit plans.

Miscellaneous, net changed by $197 million in 2025 as compared to 2024, primarily due to $128 million of debt extinguishment and modification fees in the year-ago period as compared to $20 million in 2025, foreign exchange gains recorded in the current period as compared to losses in the year-ago-period and an increase in the benefit from the Company's net periodic benefit cost of its pensions and postretirement benefit plans.

See Notes 10 and 13 to the financial statements included in Part II, Item 8 of this report for additional information on the debt prepayments and refinancing.

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We also regularly evaluate our liquidity and capital structure to efficiently manage financial risks, liquidity access and cost of capital.

On February 15, 2024, the Company entered into an Amended and Restated Revolving Credit and Guaranty Agreement (the "Revolving Credit Facility"), increasing its borrowing capacity by $1.115 billion, bringing the total amount available under the Revolving Credit Facility to $2.865 billion.

On April 16, 2024, the Company further increased its revolving loan commitments by $100 million for a total amount of $2.965 billion as of December 31, 2024.

Of this total, $2.95 billion expires February 15, 2029 and $15 million expires April 21, 2025, after the extension of the maturity of $150 million from April 21, 2025 to February 15, 2029.

The Company has a $3.0 billion revolving credit facility as of December 31, 2025.

The revolving credit facility is secured by certain route authorities and airport slots and gates.

No borrowings were outstanding under the Revolving Credit Facility at December 31, 2024.

See Note 10 to the financial statements included in Part II, Item 8 of this report for additional information on these financing transactions.

No borrowings were outstanding under the revolving credit facility as of December 31, 2025.

On July 7, 2025, Mileage Plus Holdings, LLC ("MPH"), a direct wholly owned subsidiary of United, and Mileage Plus Intellectual Property Assets, Ltd., an indirect wholly owned subsidiary of MPH ("MIPA" and, together with MPH, the "Issuers"), redeemed in full (the "Redemption") all $1.52 billion aggregate principal amount of the Issuers' outstanding MileagePlus 6.5% senior secured notes due 2027 (the "MileagePlus Notes"), which were secured by substantially all of the assets of the Issuers and their subsidiaries.

As a result of the Redemption and the July 2024 voluntarily prepayment in full of the $1.80 billion outstanding principal balance of the secured term loan facility, which was secured ratably with the MileagePlus Notes, all indebtedness secured by the MileagePlus assets have been fully repaid.

We have a significant amount of fixed obligations, including debt, leases of aircraft, airport and other facilities, and pension funding obligations.

As of December 31, 2024, the Company had approximately $33.6 billion of debt, finance lease, operating lease and other financial liabilities, including $3.9 billion that will become due in the next 12 months.

As of December 31, 2025, the Company had approximately $31.0 billion of debt, finance lease, operating

lease and other financial liabilities, including $5.1 billion that will become due in the next 12 months.

In addition, we have substantial noncancelable commitments for capital expenditures, including the acquisition of certain new aircraft and related spare engines.

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As of December 31, 2025, UAL and United were in compliance with their respective debt covenants under these agreements.

As of December 31, 2024, a substantial portion of the Company's assets, principally aircraft and certain related assets, its loyalty program, certain route authorities and airport slots and gates, was pledged under various loan and other agreements.

As of December 31, 2025, a substantial portion of the Company's assets, principally aircraft and certain related assets, certain route authorities and airport slots and gates, was pledged under various loan and other agreements.

See Note 10 to the financial statements included in Part II, Item 8 of this report for additional information on aircraft financing and other debt instruments.

On February 2, 2026, UAL issued, in a public offering, $1,000,000,000 principal amount of its 5.375% Senior Notes due 2031 (the "2031 Notes"), which are guaranteed by United.

The 2031 Notes, issued at a price of 100% of their principal amount, bear interest at a rate of 5.375% per annum, payable semi-annually on March 1 and September 1 of each year, beginning September 1, 2026 and maturing on March 1, 2031.

UAL, at its option, may redeem the 2031 Notes at any time prior to September 1, 2030, in whole or in part, at a redemption price equal to the greater of (1) 100% of the principal amount of the 2031 Notes to be redeemed and (2) a make-whole amount, if any, plus accrued and unpaid interest on the principal amount being redeemed to the redemption date.

At any time on or after September 1, 2030, UAL may redeem the 2031 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the 2031 Notes to be redeemed, plus accrued and unpaid interest on the principal amount being redeemed to the redemption date.

On February 3, 2026, the Company entered into Amendment No.

4 to Term Loan Credit and Guaranty Agreement that lowered the margin on its interest rate from 2.00% to 1.75%, in the case of Term SOFR Rate (as such term is defined in the Term Loan Credit and Guaranty Agreement, dated as of April 21, 2021, as amended) loans, and from 1.00% to 0.75%, in the case of loans at other market rates.

On February 6, 2026, UAL issued, in a public offering, $1,000,000,000 principal amount of its 4.875% Senior Notes due 2029 (the "2029 Notes"), which are guaranteed by United.

The 2029 Notes, issued at a price of 100% of their principal amount, bear interest at a rate of 4.875% per annum, payable semi-annually on March 1 and September 1 of each year, beginning September 1, 2026 and maturing on March 1, 2029.

UAL, at its option, may redeem the 2029 Notes at any time prior to December 1, 2028, in whole or in part, at a redemption price equal to the greater of (1) 100% of the principal amount of the 2029 Notes to be redeemed and (2) a make-whole amount, if any, plus accrued and unpaid interest on the principal amount being redeemed to the redemption date.

At any time on or after December 1, 2028, UAL may redeem the 2029 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest on the principal amount being redeemed to the redemption date.

For 2026, the Company expects less than $8.0 billion of adjusted capital expenditures, in light of certain aircraft delivery delays.

Adjusted capital expenditures is a financial measure not calculated in accordance with generally accepted accounting principles ("GAAP").

It is calculated as capital expenditures, net of flight equipment purchase deposit returns, plus property and equipment acquired through the issuance of debt, finance leases and other financial liabilities.

It is calculated as capital expenditures, net of flight equipment purchase deposit returns, plus property and equipment acquired through the issuance or modification of debt, finance leases and other financial liabilities and operating leases converted to finance leases.

We are not providing a target for or a reconciliation to capital expenditures, net of flight equipment purchase deposit returns, the most directly comparable GAAP measure, because we are not able to predict non-cash capital expenditures without unreasonable efforts, and therefore we also are not able to determine the probable significance of such items.

We believe that adjusting capital expenditures for assets acquired through the issuance of debt, finance leases and other financial liabilities is useful to investors in order to appropriately reflect the total amounts spent on capital expenditures.

We believe that adjusting capital expenditures for assets acquired through the issuance or modification of debt, finance leases and other financial liabilities as well as operating to finance lease conversions is useful to investors in order to appropriately reflect the total amounts spent on capital expenditures.

The Company's estimate for aircraft expenditures reflects its current assumptions regarding delayed aircraft deliveries.

See Note 12 to the financial statements included in Part II, Item 8 of this report for additional information on commitments, including aircraft expenditures reflecting contractual delivery dates without adjustment for expected delays.

Properties in Part I of this report and Note 12 to the financial statements included in Part II, Item 8 of this report for additional information on commitments, including aircraft expenditures reflecting contractual delivery dates without adjustment for expected delays.

The Company has backstop financing commitments available from certain of its aircraft manufacturers for a limited number of its future aircraft deliveries, subject to certain customary conditions.

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Operating Activities.

Cash flows provided by operating activities for 2024 were $2.5 billion higher than 2023 primarily due to an approximately $0.9 billion increase in operating income and an approximately $0.9 billion increase in advance ticket sales due to capacity growth as demand trends for air travel continued to accelerate.

Cash flows provided by operating activities for 2025 were $1.0 billion lower than 2024 primarily due to operating income decrease period-over-period and a net change in various working capital items, most notably $0.3 billion related to pension contributions in 2025.

Investing Activities.

Cash flows used in investing activities decreased $3.5 billion in 2024 as compared to the year-ago period mainly related to approximately $1.8 billion lower net activity in purchases and sales of short-term and other investments, as well as a $1.6 billion decrease in capital expenditures.

Capital expenditures primarily consisted of the purchase of aircraft, aircraft improvements and advance deposits for future aircraft purchases.

Cash flows used in investing activities increased $3.7 billion in 2025 as compared to the year-ago period mainly related to approximately $3.3 billion higher net activity in purchases and sales of short-term and other investments, as well as a $0.3 billion increase in capital expenditures.

Financing Activities.

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Debt, Finance Lease and Other Financial Liability Principal Payments .

During 2024, the Company made payments for debt, finance leases, and other financial liabilities of $10.1 billion, including the $3.9 billion prepayment of its 2021 term loan, $1.8 billion prepayment of the outstanding principal balance of its MileagePlus term loan, and a $0.4 billion prepayment of its 2024 term loan.

During 2025, the Company made payments for debt, finance leases, and other financial liabilities of $4.8 billion, including the $1.52 billion prepayment of the outstanding principal balance of its MileagePlus senior secured notes.

Debt Issuances.

In 2025, the Company raised:

• $2.5 billion under the new term loan facility;

• $1.4 billion through the issuance of equipment notes (the "2024 Equipment Notes") secured by 48 Boeing aircraft delivered new from the manufacturer from October 2010 to December 2023 ;

• $2.2 billion through the issuance of debt, not including the 2024 Equipment Notes, and other financial liabilities on aircraft.

• $539 million through the issuance of debt for new aircraft financings

• $258 million of debt to finance the construction of a maintenance, repair and overhaul complex at Orlando International Airport.

See Note 10 and Note 11 to the financial statements included in Part II, Item 8 of this report for additional information on aircraft financing.

Share Repurchases.

As part of our capital deployment program, the Company announced on October 15, 2024 that its 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 Warrants, 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 share repurchase program.

On October 15, 2024, the Company's Board authorized a new share repurchase program, allowing for purchases of up to $1.5 billion in the aggregate of outstanding UAL common stock.

In 2025, the Company repurchased 8.1 million shares of UAL common stock at an average price of $78.75 for a total investment of approximately $640 million as part of the share repurchase program.

As of February 5, 2026, the dollar value of shares that may yet be purchased under the program is approximately $0.8 billion.

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Debt, Finance Lease and Other Financial Liability Principal Payments.

During 2023, the Company made $4.2 billion of principal payments on debt, finance leases, and other financial liabilities.

The payments in 2023 included a prepayment of $1.0 billion of the outstanding principal amount under a 2021 term loan facility.

Debt Issuances.

In 2023, the Company issued equipment notes (the "2023 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.

Also, during 2023, United borrowed $1.1 billion for aircraft financings.

In 2024, the Company raised:

• $2.5 billion under the new term loan facility;

• $1.4 billion through the issuance of equipment notes (the "2024 Equipment Notes") secured by 48 Boeing aircraft delivered new from the manufacturer from October 2010 to December 2023;

• $2.2 billion through the issuance of debt, not including the 2024 Equipment Notes, and other financial liabilities on aircraft.

Share Repurchases .

For additional information regarding these Liquidity and Capital Resource matters, see Notes 10, 11 and 12 to the financial statements included in Part II, Item 8 of this report.

For information regarding non-cash investing and financing activities, see the Company's statements of consolidated cash flows.

For a discussion of the Company's sources and uses of cash in 2023 as

compared to 2022, see "Liquidity and Capital Resources" in Part II, Item 7.

For a discussion of the Company's sources and uses of cash in 2024 as compared to 2023, see "Liquidity and Capital Resources" in Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations in the 2024 Annual Report.

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Ratings can be revised upward or downward at any time by a rating agency if such rating agency decides that circumstances warrant such a change.

Currently Moody's and Fitch have assigned the Company a positive outlook, while S&P maintains a stable outlook.

Currently Moody's and Fitch have assigned the Company a stable outlook and S&P a positive outlook.

Other Liquidity Matters

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Actual results could differ from those estimates.

See Note 1 and Note 2 to the financial statements included in Part II, Item 8 of this report for additional discussion of these estimates and our other significant accounting policies.

See Note 1 and Note 2 to the financial statements included in Part II, Item 8 of this report for additional discussion of these estimates and other significant accounting policies.

The Company has identified the following critical accounting policies that impact the preparation of the financial statements.

Passenger Revenue Recognition .

As discussed in Note 2 to the financial statements, passenger revenue is recognized when transportation is provided.

Passenger tickets and related ancillary services sold by the Company for flights are purchased primarily via credit card transactions, with payments collected by the Company in advance of the performance of related services.

The Company initially records ticket sales in its Advance ticket sales liability, deferring revenue recognition until the travel occurs.

All tickets sold at any given point in time have travel dates through the next 12 months.

The Company estimates the value of Advance ticket sales that will expire unused ("ticket breakage") 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.

Frequent Flyer Accounting.

United's MileagePlus loyalty program builds customer loyalty by offering awards, benefits and services to program participants.

Members in this program earn miles for travel on United, United Express, Star Alliance members and certain other airlines that participate in the program.

Members can also earn miles by purchasing goods and services from our network of non-airline partners.

We have contracts to sell miles to these partners with the terms extending from approximately one to five years.

These partners include domestic and international credit card issuers, retail merchants, hotels, car rental companies and our participating airline partners.

Miles can be redeemed for free (other than taxes and government-imposed fees), discounted or upgraded air travel and non-travel awards.

As discussed in Note 2 to the financial statements included in Part II, Item 8 of this report, MileagePlus members earn miles through various travel and non-travel activities and those miles can be redeemed for free (other than taxes and government-imposed fees), discounted or upgraded air travel and non-travel awards.

Co-Brand Agreement .

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Bag fees and seat upgrades are recorded to Passenger revenue at the time of the associated travel.

We account for all the payments received under the Co-Brand Agreement by allocating them to the separately identifiable performance obligations.

The fair value of the separately identifiable performance obligations is determined using management's estimated selling price of each component.

The objective of using the estimated selling price based methodology is to determine the price at which we would transact a sale if the product or service were sold on a stand-alone basis.

Accordingly, we determine our best estimate of selling price by considering multiple inputs and methods including, but not limited to, discounted cash flows, brand value, volume discounts, published selling prices, number of miles awarded and number of miles redeemed.

United accounts for payments received under the Co-Brand Agreement by allocating them to the separately identifiable performance obligations based on management's estimated selling price of each component.

The objective of using the estimated selling price based methodology is to determine the price at which United would transact a sale if the product or

service were sold on a stand-alone basis.

Accordingly, United determines the estimated selling price by considering multiple inputs and methods including, but not limited to, discounted cash flows, brand value, volume discounts, published selling prices, number of miles awarded and number of miles redeemed.

The Company estimated the selling prices and volumes over the term of the Co-Brand Agreement, at the inception of the contract, in order to determine the allocation of proceeds to each of the components to be delivered.

Pension plans.

As discussed in Note 8 to the financial statements included in Part II, Item 8 of this report, United maintains various defined benefit pension plans for certain employees.

The most critical assumptions impacting our defined benefit pension plan obligation and expenses are the weighted average discount rate and the expected long-term rate of return on the plan assets.

As of January 1, 2026, the Company assumed that its plans' assets would generate a long-term rate of return of 8.07%.

We develop our expected long-term rate of return assumption based on historical experience and by evaluating input from the trustee managing the plans' assets.

Our expected long-term rate of return on plan assets for these plans is based on a target allocation of assets, which is based on our goal of earning the highest rate of return while maintaining risk at acceptable levels.

The Company's weighted average discount rate to determine its benefit obligations as of December 31, 2025 was 5.62%.

The Company selected the 2025 discount rate for substantially all of its plans by using a hypothetical portfolio of high-quality bonds that would provide the necessary cash flows to match projected benefit payments.

The table below shows the 2026 net periodic benefit cost and the impacts of a change in certain assumptions on 2026 net periodic benefit cost and the benefit obligations at December 31, 2025 (in millions):

Pension Benefits

2026 Net Periodic Benefit Cost $ 67

Impact on Benefit Obligation at December 31, 2025

100 basis points decrease in the weighted average discount rate

Impact on 2026 Net Periodic Benefit Cost

100 basis points decrease in the weighted average discount rate (a)

100 basis points decrease in the expected long-term rate of return on plan assets

(a) In general, as discount rates increase, the impact of changes in discount rates decreases.

Therefore, these sensitivities cannot be extrapolated for larger increases or decreases in the discount rate.

In addition, benefit cost is affected by other factors including, but not limited to, investment performance, contributions, demographic experience and other assumption changes.

Indefinite-lived intangible assets.

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These assumptions are inherently uncertain as they relate to future events and circumstances.

See Notes 1 and 13 to the financial statements included in Part II, Item 8 of this report for additional information.

See Note 1 to the financial statements included in Part II, Item 8 of this report for additional information.

Cautionary Statement Regarding Forward-Looking Statements

This report contains certain "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including in Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere, relating to, among other things, goals, plans and projections regarding the Company's financial position, results of operations, market position, airline capacity, fleet plan strategy, fares, announced routes (which may be subject to government approval), booking trends, product development, Corporate Citizenship-related strategy initiatives and business strategy.

Such forward-looking statements are based on historical performance and current expectations, estimates, forecasts and projections about the Company's future financial results, goals, plans, commitments, strategies and objectives and involve inherent risks, assumptions and uncertainties, known or unknown, including internal or external factors that could delay, divert or change any of them, that are difficult to predict, may be beyond the Company's control and could cause the Company's future financial results, goals, plans, commitments, strategies and objectives to differ materially from those expressed in, or implied by, the statements.

Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere, relating to, among other things, goals, plans and projections regarding the Company's financial position, results of operations, capital allocation and investments, market position, airline capacity, fleet plan strategy, fares, booking trends, product development, corporate citizenship-related strategy initiatives and business strategy.

objectives to differ materially from those expressed in, or implied by, the statements.

Words such as "should," "could," "would," "will," "may," "expects," "plans," "intends," "anticipates," "indicates," "remains," "believes," "estimates," "projects," "forecast," "guidance," "outlook," "goals," "targets," "pledge," "confident," "optimistic," "dedicated," "positioned," "on track" and other words and terms of similar meaning and expression are intended to identify forward-looking statements, although not all forward-looking statements contain such terms.

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any failure to effectively manage, and receive anticipated benefits and returns from, acquisitions, divestitures, investments, joint ventures and other portfolio actions, or related exposures to unknown liabilities or other issues or underperformance as compared to our expectations;

publicity, increased regulatory scrutiny, harm to our brand, reduced travel demand, potential tort liability and operational restrictions as a result of an accident, catastrophe or incident involving us, our regional carriers, our codeshare partners or another airline;

adverse publicity, increased regulatory scrutiny, harm to our brand, reduced travel demand, potential tort liability and operational restrictions as a result of an accident, catastrophe or incident involving us, our regional carriers, our codeshare partners or another airline;

the highly competitive nature of the global airline industry and susceptibility of the industry to price discounting and changes in capacity, including as a result of alliances, joint business arrangements or other consolidations;

unfavorable developments affecting our MileagePlus loyalty program;

our reliance on a limited number of suppliers to source a majority of our aircraft, engines and certain parts, and the impact of any failure to obtain timely deliveries, additional equipment or support from any of these suppliers;

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reliance on third-party service providers and the impact of any significant failure of these parties to perform as expected, or interruptions in our relationships with these providers or their provision of services;

extended interruptions or disruptions in service at major airports where we operate and space, facility and infrastructure constraints at our hubs or other airports;

geopolitical conflict, terrorist attacks or security events (including the suspension of our overflying in Russian airspace as a result of the Russia-Ukraine military conflict and interruptions of our flying as a result of the military conflict in the Middle East, as well as any escalation of the broader economic consequences of these conflicts beyond their current scope);

extended interruptions or disruptions in service at major airports where we operate and space, facility and infrastructure constraints at our hubs or other airports (including as a result of government shutdowns);

geopolitical conflict, terrorist attacks or security events (including the suspension of our overflying in Russian airspace as a result of the Russia-Ukraine military conflict and interruptions of our flying as a result of military conflicts across the globe, as well as any escalation of the broader economic consequences of any conflicts beyond their current scope or a delay in any planned resumption of service to an area impacted by conflict);

any damage to our reputation or brand image;

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increased use of social media platforms by us, our employees and others;

the impacts of union disputes, employee strikes or slowdowns, and other labor-related disruptions or regulatory compliance costs on our operations or financial performance;

any failure to attract, train or retain skilled personnel, including our senior management team or other key employees;

the impacts of union disputes, employee strikes or slowdowns, and other costs related to employee and retiree health, pension, labor or regulatory compliance costs on our operations or financial performance;

any failure to recruit, hire, develop or train skilled personnel, including our senior management team or other key employees;

the monetary and operational costs of compliance with extensive government regulation of the airline industry;

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the impacts of our significant amount of financial leverage from fixed obligations and the impacts of insufficient liquidity on our financial condition and business;

failure to comply with financial and other covenants governing our debt, including our MileagePlus® senior secured notes;

failure to comply with financial and other covenants governing our debt;

limitations on our ability to use our net operating loss carryforwards and certain other tax attributes to offset future taxable income for U.S.

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Investors should understand that it is not possible to predict or identify all such factors and should not consider this list to be a complete statement of all potential risks and uncertainties.

It is routine for our internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections, beliefs and assumptions upon which we base our expectations may change.

It is routine for our internal projections

and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections, beliefs and assumptions upon which we base our expectations may change.

For instance, we regularly monitor future demand and booking trends and adjust capacity, as needed.

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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 7. Management’s Discussion and Analysis