{"url_path":"/sec/ual/10-k/2026/item-7a","section_key":"item-7a","section_title":"Item 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-02-12","source_url":"https://www.sec.gov/Archives/edgar/data/100517/0000100517-26-000023-index.html","accession_number":"0000100517-26-000023","cik":"0000100517","ticker":"UAL","issuer_name":"United Airlines Holdings, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/100517/0000100517-26-000023-index.html","primary_entity_key":"0000100517","primary_entity_name":"United Airlines Holdings, Inc."},"word_count":695,"has_tables":true,"body_markdown":"ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.\n\nWe are exposed to market risk resulting from changes in foreign currency exchange rates and interest rates. These risks, along with other business risks, impact our cost of capital. It is our policy to manage our debt structure and foreign exchange exposure in order to manage capital costs, control financial risks and maintain financial flexibility over the long term. In managing market risks, we may employ derivatives according to documented policies and procedures, including interest rate swaps, interest rate locks, foreign currency exchange contracts and combined interest rate foreign currency contracts (cross-currency swaps). We do not use derivatives for trading or speculative purposes. We do not foresee significant changes in the strategies we use to manage market risk in the near future. All of our financial instruments are subject to counterparty credit risk considered as part of the overall fair value measurement.\n\nInterest Rates. Our net income is affected by fluctuations in interest rates (e.g. interest expense on variable rate debt and interest income earned on short-term investments). The Company's policy is to manage interest rate risk through a combination of fixed and variable rate debt. The following table summarizes information related to the Company's interest rate market risk at December 31, 2025 (in millions):\n\nVariable rate debt\n\nCarrying value of variable rate debt$8,528 \n\nImpact of 100 basis point increase on projected interest expense for the following year63 \n\nFixed rate debt\n\nCarrying value of fixed rate debt12,737 \n\nFair value of fixed rate debt12,734 \n\nImpact of 100 basis point increase in market rates on fair value(342)\n\nThe Company has $8.6 billion in variable rate debt which includes increased cost provisions due to any reduced returns with respect to the loans due to any change in capital requirements or increased costs that the lenders incur in carrying these loans as a result of any change in law and $5.4 billion of these loans, from non-U.S. entities, could be affected by changes in tax laws.\n\nA change in market interest rates would also impact interest income earned on our cash, cash equivalents and short-term investments. Assuming our cash, cash equivalents and short-term investments remain at their average 2025 levels, a 100 basis point increase in interest rates would result in a corresponding increase in the Company's interest income of approximately $140 million during 2026.\n\nCommodity Price Risk (Aircraft Fuel). The price of aircraft fuel can significantly affect the Company's operations, results of operations, financial position and liquidity.\n\nOur operational and financial results can be significantly impacted by changes in the price and availability of aircraft fuel. To provide adequate supplies of fuel, the Company routinely enters into purchase contracts that are customarily indexed to market prices for aircraft fuel, and the Company generally has some ability to cover short-term fuel supply and infrastructure disruptions at some major demand locations. The Company's current strategy is to not enter into transactions to hedge fuel price volatility, although the Company regularly reviews its policy based on market conditions and other factors. A one-dollar change in the price of a barrel of aircraft fuel would change the Company's 2026 projected fuel expense by approximately $116 million.\n\nForeign Currency. The Company generates revenues and incurs expenses in numerous foreign currencies. Changes in foreign currency exchange rates impact the Company's results of operations through changes in the dollar value of foreign currency-denominated operating revenues and expenses. Some of the Company's more significant foreign currency exposures include the Canadian dollar, European euro, Japanese yen, Chinese renminbi, Brazilian real and Mexican peso. The Company's current strategy is to not enter into transactions to hedge its foreign currency exposure, although the Company regularly reviews its policy based on market conditions and other factors.\n\nThe result of a uniform 1% strengthening in the value of the U.S. dollar from December 31, 2025 levels relative to each of the currencies in which the Company has foreign currency exposure would result in a decrease in pre-tax income of approximately $12 million for the year ending December 31, 2026. This sensitivity analysis was prepared based upon projected 2026 foreign currency-denominated revenues and expenses as of December 31, 2025.\n\n50\n\n[Table of Contents](#i58162399576e4fb8b3894b993dca610a_7)"}