Analysis of Debt
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- Common-Size Income Statement
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Total Asset Turnover since 2005
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Total Debt (Carrying Amount)
United Airlines Holdings Inc., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Current maturities of long-term debt, finance leases, and other financial liabilities
-
The current portion of long-term obligations exhibited notable fluctuations over the observed periods. Starting at 2,111 million US dollars at the end of 2020, this figure increased sharply in 2021 to 3,912 million, reflecting a substantial rise in short-term debt obligations due within the subsequent fiscal year.
In 2022, the current maturities decreased to 3,038 million, suggesting some repayment or refinancing activity that eased near-term liabilities. However, the value surged again to 4,247 million in 2023, the highest level recorded in the period, before declining to 3,453 million by the end of 2024. This pattern indicates volatility in the short-term debt profile, possibly due to timing differences in debt maturity or restructuring efforts.
- Long-term debt, finance leases, and other financial liabilities, less current portion
-
The amount of long-term liabilities excluding current maturities showed a generally decreasing trend after peaking mid-period. Beginning at 26,200 million US dollars in 2020, the balance increased to a high of 31,443 million in 2021, suggesting new long-term borrowings or lease agreements initiated that year.
Subsequently, there was a continuous decline from 29,242 million in 2022 to 25,203 million by 2024. This reduction could be indicative of scheduled repayments, refinancing to shorter tenors, or debt reduction strategies, indicating a gradual deleveraging on the longer-term liability front over the recent years.
- Total long-term debt, finance leases, and other financial liabilities (carrying amount)
-
The aggregate carrying amount of all long-term debt and related liabilities followed a pattern combining the movements of both current and non-current portions. The total balance rose from 28,311 million in 2020 to a peak of 35,355 million in 2021, reflecting the combined impact of increased current maturities and long-term debt issuance or reassessment.
After this peak, there was a gradual decrease over the following three years, with total debt declining to 28,656 million by the end of 2024. This suggests an overall reduction in total obligations, driven by repayments or refinancing activities. The trend implies efforts to manage and possibly reduce overall financial leverage post-2021.
- Summary Insights
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The data reveals a period of increased debt levels culminating in 2021, followed by a phase of deleveraging and debt management through repayments or refinancing. The significant volatility in current maturities indicates fluctuating near-term refinancing needs or debt maturity structuring, while the longer-term liabilities show a gradual downward adjustment after reaching their highest point in 2021.
Overall, the company appears to have managed its debt profile actively, balancing near-term liquidity requirements with longer-term debt reduction strategies over the reported periods.
Total Debt (Fair Value)
| Dec 31, 2024 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Long-term debt, including current portion | |
| Finance leases | |
| Other financial liabilities | |
| Total long-term debt, finance leases, and other financial liabilities (fair value) | |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | |
Based on: 10-K (reporting date: 2024-12-31).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on long-term debt, finance leases, and other financial liabilities:
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| Total | |||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × ÷ =
Interest Costs Incurred
United Airlines Holdings Inc., interest costs incurred
US$ in millions
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest expense, net of interest capitalized | |||||||||||
| Interest capitalized | |||||||||||
| Interest expense |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Interest Expense, Net of Interest Capitalized
- The net interest expense shows a significant upward trend from 2020 to 2023, rising from 992 million US dollars in 2020 to 1,774 million US dollars in 2023. This represents an overall increase of approximately 79% over the four-year period. However, a decline is observed in 2024, where net interest expense decreases to 1,402 million US dollars, indicating a reduction of about 21% compared to the previous year.
- Interest Capitalized
- Interest capitalized demonstrates a consistent increase throughout the reported periods, starting from 71 million US dollars in 2020 and reaching 227 million US dollars in 2024. This steady growth suggests a rising level of interest costs being capitalized, more than tripling over the five-year span. The increment is particularly notable between 2022 and 2024, where capitalized interest increased by over 116 million US dollars.
- Interest Expense
- The total interest expense follows a pattern similar to net interest expense, with an overall increase from 1,063 million US dollars in 2020 to a peak of 1,956 million US dollars in 2023. This represents an approximate 84% increase within the period. In 2024, the total interest expense declines to 1,629 million US dollars, which is a decrease of about 17% relative to 2023.
- Summary of Trends and Insights
- Both the net interest expense and the total interest expense exhibit an upward trend from 2020 through 2023, indicating increasing borrowing costs or greater debt levels. The subsequent decrease in 2024 for both items may reflect improved financing conditions, debt reduction, or changes in interest rates. The persistent rise in interest capitalized suggests an expanding capital investment or project activity, as more interest costs are being added to asset values rather than expensed immediately. This capitalization trend could indicate ongoing growth initiatives or significant capital expenditures during the period.
Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense, net of interest capitalized
= ÷ =
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest expense
= ÷ =
- Interest Coverage Ratio (without capitalized interest)
- The interest coverage ratio demonstrates a significant upward trend over the five-year period. Initially, in 2020, the company experienced a highly negative ratio of -7.89, indicating substantial difficulties in covering interest expenses from operating earnings. This negative position improved considerably by 2021, though the ratio remained below zero at -0.62. By 2022, the company shifted to a positive interest coverage of 1.59, reflecting an ability to cover interest expenses with operating income. Subsequent years show a continued positive trajectory, with the ratio increasing to 2.91 in 2023 and further to 3.97 in 2024, signifying enhanced financial stability and improved earnings relative to interest obligations.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- The adjusted interest coverage ratio, which includes capitalized interest, follows a pattern similar to the unadjusted ratio but with slightly less pronounced values. Starting at -7.37 in 2020, the ratio remains negative in 2021 at -0.59, indicating persistent challenges in interest coverage. Improvement is evident from 2022 onwards, where the ratio becomes positive at 1.50 and then rises to 2.64 in 2023. The upward trend continues to 3.42 in 2024, denoting a steady recovery and an increasing capability to meet interest obligations once capitalized interest is accounted for.
- Overall Analysis
- Both ratios show a clear recovery trajectory from a deeply negative financial position in 2020 toward a positive and improving interest coverage status by 2024. The improvement suggests that the company has strengthened its operating performance and/or reduced interest burdens over time. The slightly higher ratios without capitalized interest compared to the adjusted ratios imply that capitalized interest does have a modest dampening effect on coverage but does not alter the general positive trend. This consistent improvement over the period can be interpreted as indicative of enhanced financial health and an improved ability to service debt.