United Airlines Holdings, Inc.UAL
United Airlines Holdings, Inc. Commitments Disclosure
COMMITMENTS, CONTINGENCIES, AND GUARANTEES
Purchase Commitments. The table below summarizes United's firm commitments as of December 31, 2025, which include aircraft and related spare engines, aircraft improvements and non-aircraft commitments (in billions):
| 2026 | 2027 | 2028 | 2029 | 2030 | After 2030 | Total | ||||||||||||||||||||||||||||||||||||||
| Purchase commitments | $ | 12.6 | $ | 5.6 | $ | 7.4 | $ | 9.0 | $ | 8.7 | $ | 13.8 | $ | 57.0 | ||||||||||||||||||||||||||||||
Aircraft commitments included in the table above are based on contractual scheduled aircraft deliveries. The amount and timing of these commitments could change to the extent that: (i) the Company and the aircraft manufacturers, with whom the Company has existing orders for new aircraft, agree to modify (or further modify) the contracts governing those orders, (ii) rights are exercised pursuant to the relevant agreements to cancel deliveries or modify the timing of deliveries, or (iii) the aircraft manufacturers are unable to deliver in accordance with the terms of those orders.
Regional CPAs. United has contractual relationships with various regional carriers to provide regional aircraft service branded as United Express. Under these CPAs, the Company pays the regional carriers contractually agreed fees (carrier costs) for operating these flights plus a variable rate adjustment based on agreed performance metrics, subject to annual adjustments. The fees are based on rates multiplied by specific operating statistics (e.g., block hours, departures), as well as fixed monthly amounts. Under these CPAs, the Company is also responsible for all fuel costs incurred, as well as landing fees and other costs, which are either passed through by the regional carrier to the Company without any markup or directly incurred by the Company. In some cases, the Company owns some or all of the aircraft subject to the CPA and leases such aircraft to the regional carrier. United's CPAs are for 424 regional aircraft as of December 31, 2025, and the CPAs have terms expiring through 2037. Aircraft operated under CPAs include aircraft leased directly from the regional carriers and those owned by United and operated by the regional carriers. In 2025, United amended several of its CPAs with certain of its regional carriers to amend the contractually agreed fees (carrier costs) paid to those carriers, modify the terms for certain aircraft, and modify service entry dates for certain new aircraft.
United recorded approximately $1.1 billion, $1.1 billion and $1.1 billion in expenses related to its CPAs with its regional carriers in which United is a minority shareholder, for the years ended December 31, 2025, 2024 and 2023, respectively. United had prepaid assets and accounts and notes receivables with combined carrying values of $82 million and $52 million with these companies, as of December 31, 2025 and 2024, respectively. There were $165 million and $110 million of liabilities due to these companies as of December 31, 2025 and 2024, respectively. The CPAs with these related parties were executed in the ordinary course of business.
Our future commitments under our CPAs are dependent on numerous variables, and are, therefore, difficult to predict. The most important of these variables is the number of scheduled block hours. Although we are not required to purchase a minimum number of block hours under certain of our CPAs, we have set forth below estimates of our future payments under the CPAs based on our assumptions. 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 in Note 11. 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. These amounts exclude certain variable pass-through costs such as fuel and landing fees, among others. Based on these assumptions as of December 31, 2025, our estimated future payments through the end of the terms of our CPAs are presented in the table below (in billions):
| 2026 | 2027 | 2028 | 2029 | 2030 | After 2030 | Total | ||||||||||||||||||||||||||||||||||||||
| Future commitments under CPAs | $ | 2.9 | $ | 2.9 | $ | 2.8 | $ | 2.3 | $ | 1.9 | $ | 6.2 | $ | 18.9 | ||||||||||||||||||||||||||||||
As of December 31, 2025, United had 194 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.
Legal and Environmental. The Company has certain contingencies resulting from litigation and claims incident to the ordinary course of business. The Company records liabilities for legal and environmental claims when it is probable that a loss has been incurred and the amount is reasonably estimable. These amounts are recorded based on the Company's assessments of the
likelihood of their eventual disposition. As of December 31, 2025, management believes, after considering a number of factors, including (but not limited to) the information currently available, the views of legal counsel, the nature of contingencies to which the Company is subject and prior experience, that its defenses and assertions in pending legal proceedings have merit and the ultimate disposition of any pending matter will not materially affect the Company's financial position, results of operations or cash flows, except as described below.
Dispute with Rolls-Royce
In 2010, the Company entered into agreements with Rolls-Royce for engine purchases and related maintenance services for certain widebody aircraft. In 2017, the Company paid Rolls-Royce a $175 million commitment payment under those agreements. In December 2025, following a breach by Rolls-Royce, the Company issued a demand for payment representing the commitment payment plus contractual escalation. Rolls-Royce did not make the demanded payment. Rolls-Royce subsequently terminated the referenced agreements with the Company and asserted that the Company breached the agreements. The Company has disputed that Rolls-Royce properly terminated the agreements. Each of the parties contends that the other owes it damages.
The Company has taken steps to recover the amounts it believes Rolls-Royce owes the Company, along with other damages to which the Company believes it is entitled. No assurance can be given that the Company will recover the funds it believes it is owed, or to the ultimate outcome of this matter. The Company is also considering further implications of this dispute with respect to other parties. At this time, the Company has determined that a loss is neither probable nor reasonably estimable due to the preliminary nature of this matter. Additionally, the Company has not recognized any gains for this matter as of December 31, 2025. To the extent to which such amounts are determined to be realizable in the future, those gains would be recorded in the period such determination is made.
Guarantees and Indemnifications. In the normal course of business, the Company enters into numerous real estate leasing and aircraft financing arrangements that have various guarantees included in the contracts. These guarantees are primarily in the form of indemnities under which the Company typically indemnifies the lessors and any tax/financing parties against liabilities that arise out of or relate to the use, operation or maintenance of the leased premises or financed aircraft. 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, 2025, United is the guarantor of approximately $2.8 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 2026 and 2041.
As of December 31, 2025, United had $395 million of surety bonds securing various insurance-related obligations with expiration dates through 2029.
Increased Cost Provisions. 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. At December 31, 2025, the Company had $8.6 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 with remaining terms of up to approximately 12 years and an aggregate balance of $5.4 billion, the Company bears the risk of any change in tax laws that would subject loan payments thereunder to withholding taxes, subject to customary exclusions.
Fuel Consortia. United participates in numerous fuel consortia with other air carriers at major airports to reduce the costs of fuel distribution and storage. Interline agreements govern the rights and responsibilities of the consortia members and provide for the allocation of the overall costs to operate the consortia based on usage. The consortia (and in limited cases, the participating carriers) have entered into long-term agreements to lease certain airport fuel storage and distribution facilities that are typically financed through various debt obligations. In general, each consortium lease agreement requires the consortium to make lease payments in amounts sufficient to pay the maturing principal and interest payments on these debt obligations. As of December 31, 2025, approximately $2.9 billion principal amount of such loans was secured by significant fuel facility leases in which United participates, as to which United and each of the signatory airlines has provided indirect guarantees of the debt. As of December 31, 2025, the Company's contingent exposure was approximately $513 million principal amount of such obligations based on its recent consortia participation. The Company's contingent exposure could increase if the participation of
other air carriers decreases. The guarantees will expire when these obligations are paid in full, which ranges from 2027 to 2056. The Company concluded it was not necessary to record a liability for these indirect guarantees.
Credit Card Processing Agreements. The Company has agreements with financial institutions that process customer credit card transactions for the sale of air travel and other services. Under certain of the Company's credit card processing agreements, the financial institutions in certain circumstances have the right to require that the Company maintain a reserve equal to a portion of advance ticket sales that has been processed by that financial institution, but for which the Company has not yet provided the air transportation. Such financial institutions may require additional cash or other collateral reserves to be established or additional withholding of payments related to receivables collected if the Company does not maintain certain minimum levels of unrestricted cash, cash equivalents and short-term investments (collectively, "Unrestricted Liquidity"). The Company's current level of Unrestricted Liquidity is substantially in excess of these minimum levels.
Labor Negotiations. As of December 31, 2025, United, including its subsidiaries, had approximately 113,200 employees. Approximately 83% of United's employees were represented by various U.S. labor organizations.
In May 2025, the Company reached a Tentative Agreement ("TA") with its employees represented by the Association of Flight Attendants ("AFA") regarding an agreement that became amendable in August 2021. The TA included improvements with respect to scheduling, reserve requirements and other quality of life improvements, as well as pay rate increases during its five-year term. The TA also included a provision for a one-time payment to employees represented by the AFA upon ratification. In the second quarter of 2025, the Company recorded, in Special charges, $561 million of expenses related to this ratification payment. On July 29, 2025, the Company's employees represented by the AFA voted against ratification of the TA. As of the date of this report, the Company and the AFA continue their negotiations for a revised TA.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 18, 2016 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.