Economic Value Added (EVA)
EVA is registered trademark of Stern Stewart.
Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.
Paying user area
Try for free
United Airlines Holdings Inc. pages available for free this week:
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to United Airlines Holdings Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Economic Profit
United Airlines Holdings Inc., economic profit calculation
US$ in millions
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
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).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT exhibited a significant improvement over the observed period. Initially, it was deeply negative at -7,141 million USD in 2020 but showed a marked recovery to -797 million USD in 2021. The trend turned positive thereafter, with NOPAT increasing substantially to 2,682 million USD in 2022, 4,823 million USD in 2023, and reaching 5,148 million USD in 2024. This progression indicates a strong operational turnaround and improving profitability over the five-year period.
- Cost of Capital
- The cost of capital fluctuated within a range between 8.29% and 11.4%. It decreased from 9.98% in 2020 to 8.29% in 2021, then slightly rose to 9.29% in 2022 and 9.21% in 2023. A more notable increase occurred by 2024, reaching 11.4%. This rise in 2024 could signal increased perceived risk or changes in financing conditions affecting the company's capital costs.
- Invested Capital
- The invested capital demonstrated variability throughout the period. Beginning at 46,438 million USD in 2020, it increased to 52,534 million USD in 2021, followed by a decline to 41,357 million USD in 2022. Subsequently, it rose again to 45,532 million USD in 2023 and further to 49,435 million USD in 2024. This pattern suggests periods of asset divestiture or reduction followed by reinvestment or growth in capital employed.
- Economic Profit
- The economic profit was negative for most of the timeline except for 2023. The company recorded a substantial loss of -11,777 million USD in 2020, which improved but remained negative at -5,152 million USD in 2021. The loss narrowed significantly in 2022 to -1,162 million USD, and positive economic profit of 627 million USD was achieved in 2023. However, economic profit returned to a negative position of -487 million USD in 2024. This oscillation reflects challenges in consistently generating returns above its cost of capital despite operational improvements.
Net Operating Profit after Taxes (NOPAT)
United Airlines Holdings Inc., NOPAT calculation
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).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in frequent flyer deferred revenue.
3 Addition of increase (decrease) in equity equivalents to net income (loss).
4 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
5 2024 Calculation
Tax benefit of interest expense, net of interest capitalized = Adjusted interest expense, net of interest capitalized × Statutory income tax rate
= × 21.00% =
6 Addition of after taxes interest expense to net income (loss).
7 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
8 Elimination of after taxes investment income.
The financial data reflects a significant recovery and improvement in profitability over the five-year period.
- Net income (loss)
- There is a clear trend of substantial reduction in net losses followed by consistent positive net income. Initially, the company reported a large net loss of $7,069 million in 2020. This loss narrowed considerably to $1,964 million in 2021, marking a notable improvement. In 2022, the company shifted to profitability with a positive net income of $737 million, which further increased to $2,618 million in 2023 and $3,149 million in 2024. This progression indicates a strong turnaround in the company’s bottom line over the period.
- Net operating profit after taxes (NOPAT)
- The NOPAT figures corroborate the improvement observed in net income, displaying a similar trajectory. Starting from a negative $7,141 million in 2020, NOPAT improved substantially to a negative $797 million in 2021. By 2022, it became positive at $2,682 million, followed by consistent growth to $4,823 million in 2023 and $5,148 million in 2024. This upward trend suggests that the company's core operations have become increasingly profitable after accounting for taxes, highlighting enhanced operational efficiency and recovery.
Overall, the data indicates a pronounced recovery from the substantial losses experienced in 2020, transitioning into increasing profitability from 2022 onward. Both net income and NOPAT demonstrate sustained positive momentum, which is indicative of improved financial health and operating performance over the analyzed period.
Cash Operating Taxes
United Airlines Holdings Inc., cash operating taxes calculation
US$ 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).
- Income Tax Expense (Benefit)
- The income tax expense experienced significant fluctuations over the five-year period. In 2020, a substantial tax benefit of -$1,753 million was recorded, indicating a tax credit or loss carryback. This benefit decreased in magnitude in 2021 to -$593 million. Starting in 2022, the expense shifted to a positive figure of $253 million, reflecting a transition from tax benefit to tax expense. This positive expense continued to increase in 2023 and 2024, reaching $769 million and $1,019 million respectively, suggesting a growing tax liability correlating potentially with improved profitability or changed tax circumstances.
- Cash Operating Taxes
- Cash operating taxes demonstrated a generally stable pattern with slight fluctuations. There was an increase from $246 million in 2020 to $374 million in 2021, followed by a slight decrease to $352 million in 2022. The amount further declined to $274 million in 2023 before experiencing a modest rise to $288 million in 2024. Overall, cash operating taxes remained within a relatively narrow range, reflecting consistent operational tax cash outflows despite varying income tax expense trends.
Invested Capital
United Airlines Holdings Inc., invested capital calculation (financing approach)
US$ 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).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of frequent flyer deferred revenue.
4 Addition of equity equivalents to stockholders’ equity.
5 Removal of accumulated other comprehensive income.
6 Subtraction of short-term investments.
- Total reported debt & leases
- The total reported debt and leases increased significantly from 33,909 million USD in 2020 to a peak of 41,063 million USD in 2021. Following this peak, there was a gradual decline over the subsequent years, reaching 33,633 million USD by the end of 2024. This trend indicates a reduction effort in debt and lease obligations after the initial growth, suggesting an improvement in leverage or debt management policy.
- Stockholders’ equity
- Stockholders’ equity showed a decreasing trend from 5,960 million USD in 2020 to 5,029 million USD in 2021, indicating a possible decline in net assets or profitability during that period. However, from 2021 onwards, equity grew strongly, reaching 12,675 million USD in 2024. This consistent increase suggests improved retained earnings, equity financing, or asset revaluation, reflecting a strengthening capital base over time.
- Invested capital
- Invested capital rose from 46,438 million USD in 2020 to a high of 52,534 million USD in 2021, followed by a sharp decrease to 41,357 million USD in 2022. After this decline, there was a recovery trend with invested capital increasing to 49,435 million USD by 2024. This fluctuation may be associated with asset sales, restructuring, or changes in working capital, before stabilizing and growing again in the final years analyzed.
Cost of Capital
United Airlines Holdings Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt, finance leases, and other financial liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt, finance leases, and other financial liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt, finance leases, and other financial liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt, finance leases, and other financial liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt, finance leases, and other financial liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt, finance leases, and other financial liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt, finance leases, and other financial liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt, finance leases, and other financial liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt, finance leases, and other financial liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt, finance leases, and other financial liabilities. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
United Airlines Holdings Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Parcel Service Inc. | ||||||
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).
1 Economic profit. See details »
2 Invested capital. See details »
3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Economic Profit Trend
- The economic profit experienced a notable improvement over the observed period. Starting with a significant negative value of -11,777 million USD in 2020, the loss decreased substantially to -5,152 million USD in 2021 and further improved to -1,162 million USD in 2022. In 2023, the company achieved a positive economic profit of 627 million USD, indicating a temporary reversal to profitability. However, in 2024, economic profit turned negative again, registering a loss of -487 million USD. This pattern suggests fluctuating profit generation with a trend toward recovery that has not been fully sustained.
- Invested Capital
- The invested capital exhibited variability during the period. From 46,438 million USD at the end of 2020, it increased to 52,534 million USD in 2021. Subsequently, there was a sharp decrease to 41,357 million USD in 2022, followed by a moderate recovery to 45,532 million USD in 2023 and further growth to 49,435 million USD in 2024. This indicates a dynamic approach to capital allocation and possible adjustments in the company's asset base or financing structure.
- Economic Spread Ratio
- The economic spread ratio followed a clear trajectory of improvement and subsequent decline. Initially, the ratio was deeply negative at -25.36% in 2020, improving significantly to -9.81% in 2021 and continuing to -2.81% in 2022. In 2023, the ratio turned positive to 1.38%, signaling a period where returns exceeded the cost of capital. However, in 2024, this ratio declined again to -0.99%, suggesting a return to underperformance relative to capital costs. This reinforces the fluctuating financial performance observed in economic profit.
- Overall Analysis
- The data indicates an overall trend of financial recovery from 2020 through 2023, marked by a steady reduction in losses and a brief period of positive economic profit and economic spread. Adjustments in invested capital reflect operational or strategic changes. Despite these improvements, the reversal into negative economic profit and economic spread in 2024 points to persistent challenges in sustaining profitability above the cost of capital. The fluctuations highlight the need for close monitoring and potentially further strategic initiatives to stabilize and enhance economic returns.
Economic Profit Margin
United Airlines Holdings Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Operating revenue | ||||||
| Add: Increase (decrease) in frequent flyer deferred revenue | ||||||
| Adjusted operating revenue | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Parcel Service Inc. | ||||||
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).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted operating revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
- Economic Profit
- The economic profit experienced significant variation over the five-year period. Starting at a substantial loss of -11,777 million USD in 2020, the loss narrowed considerably in 2021 to -5,152 million USD. This improving trend continued in 2022, with the loss further reducing to -1,162 million USD. In 2023, economic profit turned positive, reaching 627 million USD, indicating an operational turnaround. However, in 2024, the economic profit declined again to a slight negative of -487 million USD, suggesting some challenges in maintaining profitability.
- Adjusted Operating Revenue
- Adjusted operating revenue showed a strong and consistent upward trend throughout the period. The revenue increased sharply from 16,054 million USD in 2020 to 24,941 million USD in 2021. This growth accelerated further in 2022, more than doubling to 45,348 million USD. The growth continued but at a slower pace in 2023 and 2024, where revenues reached 54,185 million USD and 57,361 million USD respectively. This indicates a robust recovery and expansion in the company’s revenue-generating capacity.
- Economic Profit Margin
- The economic profit margin mirrored the trajectory of economic profit, starting with a steep negative margin of -73.36% in 2020. This margin improved significantly to -20.66% in 2021 and further to -2.56% in 2022, approaching near breakeven levels. In 2023, the margin reached a positive 1.16%, reinforcing the company's move into profitability. However, a slight regression occurred in 2024 with the margin declining to -0.85%, indicating slight losses relative to revenue despite the overall growth.
- Summary of Trends and Insights
- There is a clear pattern of recovery and growth in revenue from 2020 to 2024. The company substantially reduced its economic losses over the initial years, achieving a brief period of positive economic profit and margin in 2023. Despite this, the figures for 2024 demonstrate a marginal setback with losses reappearing. This suggests that while substantial operational improvements and revenue growth have been achieved, the company still faces challenges in sustaining a consistent profit level. The data highlights the importance of further operational efficiency or cost management to convert the strong revenue base into stable economic profitability.