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.
Economic Profit
United Airlines Holdings Inc., economic profit calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 5,340 – 13.26% × 50,212 = -1,318
The financial trajectory from 2021 to 2025 reflects a period of significant operational recovery that is ultimately offset by rising capital costs, resulting in a failure to sustain positive economic value creation.
- Net Operating Profit After Taxes (NOPAT)
- A strong upward trend is evident, with NOPAT recovering from a deficit of 797 million US$ in 2021 to a projected 5,340 million US$ by 2025. The most substantial growth occurred between 2021 and 2023, indicating a successful return to operational profitability.
- Cost of Capital
- The cost of capital exhibits a consistent increase over the analyzed period. Starting at 8.75% in 2021, the rate climbed to 13.26% by 2025. A notable acceleration in this cost is observed between 2023 and 2024, where the rate rose from 9.72% to 12.21%.
- Invested Capital
- Invested capital experienced a contraction in 2022, dropping to 41,357 million US$ from 52,534 million US$ in 2021. Subsequently, a steady expansion occurred, with capital reaching 50,212 million US$ by 2025, suggesting a phase of reinvestment into the business infrastructure.
- Economic Profit
- Economic profit demonstrates a volatile pattern. After a severe deficit of 5,392 million US$ in 2021, the figure improved to a positive 399 million US$ in 2023. However, this value creation was short-lived; economic profit returned to negative territory in 2024 and is projected to reach negative 1,318 million US$ by 2025. This reversal indicates that the growth in NOPAT is insufficient to cover the increasing charge of capital on the expanded invested capital base.
In summary, while operational efficiency has improved significantly, the rising cost of capital has eroded the company's ability to generate economic value. The trend suggests that the business is currently operating below its cost of capital, destroying shareholder value despite reporting positive accounting profits.
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Net Operating Profit after Taxes (NOPAT)
United Airlines Holdings Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
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 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 6,048 × 6.00% = 363
5 2025 Calculation
Tax benefit of interest expense, net of interest capitalized = Adjusted interest expense, net of interest capitalized × Statutory income tax rate
= 1,530 × 21.00% = 321
6 Addition of after taxes interest expense to net income (loss).
7 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 611 × 21.00% = 128
8 Elimination of after taxes investment income.
Net operating profit after taxes (NOPAT) demonstrates a significant improvement over the observed period. Beginning with a negative value in 2021, NOPAT exhibits consistent growth through 2025. This positive trajectory contrasts with the initial net income performance, indicating a strengthening of core operational profitability relative to tax obligations.
- NOPAT Trend
- In 2021, NOPAT registered at -797 US$ millions, representing a loss. A substantial increase is then observed in 2022, with NOPAT reaching 2,682 US$ millions. This positive trend continues into 2023, where NOPAT further increases to 4,823 US$ millions. The growth rate moderates slightly in 2024, with NOPAT reaching 5,148 US$ millions, and continues at a similar pace in 2025, reaching 5,340 US$ millions.
The magnitude of the increase in NOPAT from 2021 to 2022 is particularly noteworthy. While net income also improved during this period, the NOPAT increase suggests improvements in operational efficiency and profitability beyond simply accounting for tax effects. The consistent positive NOPAT values from 2022 onwards indicate a sustained ability to generate profit from core operations after accounting for taxes.
- Relationship to Net Income
- While both net income and NOPAT show improvement over the period, NOPAT consistently exceeds net income in 2022, 2023, 2024, and 2025. This difference suggests the presence of significant non-operating items or accounting adjustments impacting net income. The divergence between the two metrics warrants further investigation to understand the underlying drivers of these differences.
The sustained growth in NOPAT from 2022 to 2025 suggests effective management of operational costs and revenue generation. The incremental increases in NOPAT in the later years, while positive, indicate a potential slowing of growth momentum, which may require further analysis to determine its sustainability.
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Cash Operating Taxes
United Airlines Holdings Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
The relationship between income tax expense and cash operating taxes demonstrates notable fluctuations over the five-year period. Income tax expense exhibits a significant swing from a benefit in 2021 to positive expenses in subsequent years, while cash operating taxes show a more moderate, generally decreasing trend.
- Income Tax Expense
- Income tax expense initially registered as a benefit of US$593 million in 2021. This shifted dramatically to an expense of US$253 million in 2022, followed by increases to US$769 million in 2023 and US$1,019 million in 2024. A slight decrease is observed in 2025, with income tax expense reported at US$953 million. This pattern suggests a changing profitability profile and/or tax rate environment.
- Cash Operating Taxes
- Cash operating taxes began at US$374 million in 2021, decreasing to US$352 million in 2022. A more pronounced decline occurred in 2023, falling to US$274 million, before a modest increase to US$288 million in 2024. The trend continues downward in 2025, with cash operating taxes reported at US$221 million. This indicates a reduction in actual cash outflows related to operations-based taxes.
The divergence between income tax expense and cash operating taxes is substantial. While income tax expense increased significantly from 2021 to 2024, cash operating taxes generally decreased. This discrepancy could be attributed to several factors, including deferred tax assets/liabilities, changes in tax credits utilized, or differences between accounting and tax depreciation methods. The reduction in cash operating taxes, despite rising income tax expense, may positively impact free cash flow.
- Relationship between Metrics
- In 2021, the income tax benefit significantly exceeded cash operating taxes. As income tax expense became positive, the difference between the two metrics narrowed. By 2025, income tax expense remained considerably higher than cash operating taxes, suggesting a growing reliance on non-cash tax benefits or timing differences in tax payments.
Further investigation into the components of income tax expense and the nature of the differences between income tax expense and cash operating taxes is recommended to fully understand the underlying drivers of these trends.
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Invested Capital
United Airlines Holdings Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
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.
The composition of invested capital at the company exhibits notable fluctuations over the five-year period. Total reported debt & leases generally decreased, while stockholders’ equity consistently increased. These movements have a combined effect on the overall invested capital, which initially decreased before showing signs of stabilization and modest growth.
- Total Reported Debt & Leases
- A consistent downward trend is observed in total reported debt & leases, decreasing from US$41,063 million in 2021 to US$31,036 million in 2025. The most significant reduction occurred between 2021 and 2022, with a decrease of US$3,763 million. Subsequent annual decreases were more moderate, suggesting a slowing rate of debt reduction.
- Stockholders’ Equity
- Stockholders’ equity demonstrates a clear upward trajectory throughout the period. Beginning at US$5,029 million in 2021, it increased to US$15,282 million by 2025. The rate of growth accelerated over time, with the largest annual increase occurring between 2023 and 2024 (US$3,351 million). This indicates increasing retained earnings and/or capital contributions.
- Invested Capital
- Invested capital initially decreased from US$52,534 million in 2021 to US$41,357 million in 2022, primarily driven by the substantial reduction in debt. It then experienced a moderate increase, reaching US$45,532 million in 2023, before continuing to rise to US$50,212 million in 2025. The stabilization and subsequent growth in invested capital suggest a shift in the company’s capital structure, with equity gains partially offsetting the decline in debt. The increase between 2024 and 2025 was relatively small, at US$777 million.
The interplay between decreasing debt and increasing equity suggests a strengthening financial position. While the initial decrease in invested capital might have raised concerns, the subsequent stabilization and modest growth indicate a more balanced and potentially sustainable capital structure.
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Cost of Capital
United Airlines Holdings Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 35,351) | 35,351) | ÷ | 66,611) | = | 0.53 | 0.53 | × | 20.89% | = | 11.09% | ||
| Long-term debt, finance leases, and other financial liabilities3 | 25,212) | 25,212) | ÷ | 66,611) | = | 0.38 | 0.38 | × | 5.82% × (1 – 21.00%) | = | 1.74% | ||
| Operating lease liability4 | 6,048) | 6,048) | ÷ | 66,611) | = | 0.09 | 0.09 | × | 6.00% × (1 – 21.00%) | = | 0.43% | ||
| Total: | 66,611) | 1.00 | 13.26% | ||||||||||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ 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 | 30,171) | 30,171) | ÷ | 63,574) | = | 0.47 | 0.47 | × | 20.89% | = | 9.92% | ||
| Long-term debt, finance leases, and other financial liabilities3 | 28,426) | 28,426) | ÷ | 63,574) | = | 0.45 | 0.45 | × | 5.46% × (1 – 21.00%) | = | 1.93% | ||
| Operating lease liability4 | 4,977) | 4,977) | ÷ | 63,574) | = | 0.08 | 0.08 | × | 5.90% × (1 – 21.00%) | = | 0.36% | ||
| Total: | 63,574) | 1.00 | 12.21% | ||||||||||
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 | 14,922) | 14,922) | ÷ | 50,888) | = | 0.29 | 0.29 | × | 20.89% | = | 6.13% | ||
| Long-term debt, finance leases, and other financial liabilities3 | 30,887) | 30,887) | ÷ | 50,888) | = | 0.61 | 0.61 | × | 6.53% × (1 – 21.00%) | = | 3.13% | ||
| Operating lease liability4 | 5,079) | 5,079) | ÷ | 50,888) | = | 0.10 | 0.10 | × | 5.80% × (1 – 21.00%) | = | 0.46% | ||
| Total: | 50,888) | 1.00 | 9.72% | ||||||||||
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 | 16,024) | 16,024) | ÷ | 51,501) | = | 0.31 | 0.31 | × | 20.89% | = | 6.50% | ||
| Long-term debt, finance leases, and other financial liabilities3 | 30,457) | 30,457) | ÷ | 51,501) | = | 0.59 | 0.59 | × | 6.21% × (1 – 21.00%) | = | 2.90% | ||
| Operating lease liability4 | 5,020) | 5,020) | ÷ | 51,501) | = | 0.10 | 0.10 | × | 5.50% × (1 – 21.00%) | = | 0.42% | ||
| Total: | 51,501) | 1.00 | 9.83% | ||||||||||
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 | 15,397) | 15,397) | ÷ | 57,647) | = | 0.27 | 0.27 | × | 20.89% | = | 5.58% | ||
| Long-term debt, finance leases, and other financial liabilities3 | 36,542) | 36,542) | ÷ | 57,647) | = | 0.63 | 0.63 | × | 5.54% × (1 – 21.00%) | = | 2.77% | ||
| Operating lease liability4 | 5,708) | 5,708) | ÷ | 57,647) | = | 0.10 | 0.10 | × | 5.00% × (1 – 21.00%) | = | 0.39% | ||
| Total: | 57,647) | 1.00 | 8.75% | ||||||||||
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 »
Economic Spread Ratio
United Airlines Holdings Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | (1,318) | (888) | 399) | (1,381) | (5,392) | |
| Invested capital2 | 50,212) | 49,435) | 45,532) | 41,357) | 52,534) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | -2.62% | -1.80% | 0.88% | -3.34% | -10.26% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| FedEx Corp. | -6.83% | -8.04% | -6.56% | -6.19% | -3.65% | |
| Uber Technologies Inc. | 14.01% | 6.16% | -3.67% | -73.67% | -22.83% | |
| Union Pacific Corp. | -2.59% | -3.26% | -3.36% | -1.44% | -2.31% | |
| United Parcel Service Inc. | -2.42% | -1.97% | 0.74% | 11.71% | 17.54% | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -1,318 ÷ 50,212 = -2.62%
4 Click competitor name to see calculations.
The financial performance between 2021 and 2025 reflects a period of significant volatility in value creation, characterized by a recovery peak in 2023 followed by a regression into value destruction. The overall trend indicates an inability to maintain a consistent return on invested capital that exceeds the cost of capital.
- Economic Spread Ratio
- A substantial recovery is observed from 2021 to 2023, where the ratio moved from a low of -10.26% to a positive 0.88%. This peak represents the only period in the analyzed timeframe where the entity generated a return above its cost of capital. However, this positive momentum was not sustained, as the ratio declined to -1.80% in 2024 and further to -2.62% in 2025, indicating a return to a state of economic value erosion.
- Economic Profit
- Economic profit mirrors the trajectory of the spread ratio, beginning with a significant deficit of -5,392 million US$ in 2021. Improvement was evident through 2022 and 2023, with the latter year marking a transition to a positive economic profit of 399 million US$. Following this peak, the figures returned to negative territory, reaching -888 million US$ in 2024 and -1,318 million US$ in 2025, suggesting that the operational gains achieved in 2023 were transient.
- Invested Capital
- Invested capital experienced a sharp contraction in 2022, falling from 52,534 million US$ to 41,357 million US$. From 2023 onward, a steady upward trend is observed, with capital increasing to 45,532 million US$ in 2023, 49,435 million US$ in 2024, and peaking at 50,212 million US$ in 2025. The combination of increasing invested capital and declining economic profit after 2023 indicates a diminishing efficiency in the deployment of capital.
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Economic Profit Margin
United Airlines Holdings Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | (1,318) | (888) | 399) | (1,381) | (5,392) | |
| Operating revenue | 59,070) | 57,063) | 53,717) | 44,955) | 24,634) | |
| Add: Increase (decrease) in frequent flyer deferred revenue | 336) | 298) | 468) | 393) | 307) | |
| Adjusted operating revenue | 59,406) | 57,361) | 54,185) | 45,348) | 24,941) | |
| Performance Ratio | ||||||
| Economic profit margin2 | -2.22% | -1.55% | 0.74% | -3.05% | -21.62% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| FedEx Corp. | -5.47% | -6.44% | -5.06% | -4.40% | -2.79% | |
| Uber Technologies Inc. | 4.25% | 2.09% | -1.54% | -37.76% | -21.03% | |
| Union Pacific Corp. | -6.72% | -8.34% | -8.56% | -3.47% | -6.17% | |
| United Parcel Service Inc. | -1.38% | -1.04% | 0.37% | 5.23% | 8.01% | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted operating revenue
= 100 × -1,318 ÷ 59,406 = -2.22%
3 Click competitor name to see calculations.
The financial performance between 2021 and 2025 is characterized by a consistent expansion in operational scale contrasted with volatile economic value creation. While top-line growth remained steady throughout the period, the ability to generate returns exceeding the cost of capital fluctuated, peaking in 2023 before entering a period of decline.
- Adjusted Operating Revenue Trends
- A sustained upward trajectory is observed in adjusted operating revenue, which grew from 24,941 million USD in 2021 to 59,406 million USD by 2025. This represents a consistent increase in the company's revenue-generating capacity over the five-year horizon.
- Economic Profit Fluctuations
- Economic profit experienced significant volatility. A deep deficit of 5,392 million USD in 2021 improved substantially to a positive 399 million USD by 2023. However, this positive inflection was temporary, as economic profit reverted to negative territory in 2024 and further declined to -1,318 million USD in 2025.
- Economic Profit Margin Analysis
- The economic profit margin followed a pattern of rapid recovery followed by gradual deterioration. The margin improved from a low of -21.62% in 2021 to a peak of 0.74% in 2023, indicating that the company briefly achieved a positive spread over its cost of capital. Despite continued revenue growth in 2024 and 2025, the margin compressed to -1.55% and -2.22%, respectively, suggesting that the growth in operating revenue was insufficient to offset the costs of capital or operating expenses during the final two years of the period.
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