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 – 13.27% × 50,212 = -1,325
The financial trajectory from 2021 through 2025 reflects a significant recovery in operational profitability that has been offset by rising capital costs and increased investment, leading to an overall volatility in economic value creation.
- Net Operating Profit After Taxes (NOPAT)
- A consistent upward trend is observed in NOPAT, which transitioned from a deficit of 797 million USD in 2021 to a peak of 5,340 million USD by 2025. This indicates a strong recovery in core operational efficiency and a sustained increase in the company's ability to generate profit from its operations.
- Cost of Capital
- The cost of capital remained relatively stable between 8.75% and 9.83% from 2021 to 2023. However, a sharp increase occurred in the subsequent years, rising to 12.22% in 2024 and reaching 13.27% by 2025. This escalation suggests a higher hurdle rate for investments and an increase in the cost of financing.
- Invested Capital
- Invested capital experienced a contraction in 2022, dropping to 41,357 million USD from 52,534 million USD in 2021. Following this dip, a steady expansion is noted, with the capital base growing to 50,212 million USD by 2025, indicating a period of reinvestment into the business infrastructure.
- Economic Profit
- Economic profit exhibited a non-linear recovery. After a significant deficit of 5,396 million USD in 2021, the figure improved to a positive value of 396 million USD in 2023, marking a period of actual value creation. However, this trend reversed in 2024 and 2025, with economic profit falling back into negative territory to -894 million USD and -1,325 million USD, respectively. This downturn occurs despite the growth in NOPAT, demonstrating that the increase in the cost of capital and the expansion of the invested capital base have outpaced operational gains, resulting in value destruction in the final two years of the period.
AI Ask an analyst for more
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.
AI Ask an analyst for more
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$221 million. This indicates a reduction in actual cash outflows related to operations-based taxes.
The divergence between income tax expense and cash operating taxes is substantial. While income tax expense increased significantly from 2021 to 2024, cash operating taxes generally decreased. This discrepancy could be attributed to several factors, including deferred tax assets/liabilities, changes in tax credits utilized, or differences between accounting and tax depreciation methods. The reduction in cash operating taxes, despite rising income tax expense, may positively impact free cash flow.
- Relationship between Metrics
- In 2021, the income tax benefit significantly exceeded cash operating taxes. As income tax expense became positive, the difference between the two metrics narrowed. By 2025, income tax expense remained considerably higher than cash operating taxes, suggesting a growing reliance on non-cash tax benefits or timing differences in tax payments.
Further investigation into the components of income tax expense and the nature of the differences between income tax expense and cash operating taxes is recommended to fully understand the underlying drivers of these trends.
AI Ask an analyst for more
Invested Capital
United Airlines Holdings Inc., invested capital calculation (financing approach)
US$ 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$777 million.
The interplay between decreasing debt and increasing equity suggests a strengthening financial position. While the initial decrease in invested capital might have raised concerns, the subsequent stabilization and modest growth indicate a more balanced and potentially sustainable capital structure.
AI Ask an analyst for more
Cost of Capital
United Airlines Holdings Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 35,351) | 35,351) | ÷ | 66,611) | = | 0.53 | 0.53 | × | 20.92% | = | 11.10% | ||
| Long-term debt, finance leases, and other financial liabilities3 | 25,212) | 25,212) | ÷ | 66,611) | = | 0.38 | 0.38 | × | 5.82% × (1 – 21.00%) | = | 1.74% | ||
| Operating lease liability4 | 6,048) | 6,048) | ÷ | 66,611) | = | 0.09 | 0.09 | × | 6.00% × (1 – 21.00%) | = | 0.43% | ||
| Total: | 66,611) | 1.00 | 13.27% | ||||||||||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ 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 | × | 20.92% | = | 9.93% | ||
| 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 | 12.22% | ||||||||||
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 | × | 20.92% | = | 6.14% | ||
| 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 | × | 20.92% | = | 6.51% | ||
| 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 | × | 20.92% | = | 5.59% | ||
| 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 | (1,325) | (894) | 396) | (1,385) | (5,396) | |
| Invested capital2 | 50,212) | 49,435) | 45,532) | 41,357) | 52,534) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | -2.64% | -1.81% | 0.87% | -3.35% | -10.27% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| FedEx Corp. | -6.85% | -8.06% | -6.57% | -6.21% | -3.67% | |
| Uber Technologies Inc. | 13.99% | 6.14% | -3.69% | -73.68% | -22.85% | |
| Union Pacific Corp. | -2.59% | -3.26% | -3.36% | -1.45% | -2.31% | |
| United Parcel Service Inc. | -2.43% | -1.98% | 0.73% | 11.70% | 17.53% | |
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 × -1,325 ÷ 50,212 = -2.64%
4 Click competitor name to see calculations.
An analysis of economic value metrics reveals a period of significant volatility characterized by a brief window of value creation followed by a subsequent deterioration. The company experienced a sharp recovery in economic performance between 2021 and 2023, although this momentum was not sustained through the 2024 and 2025 periods.
- Economic Profit Trends
- Economic profit demonstrated a substantial upward trajectory from a low of -5,396 million US$ in 2021 to a positive peak of 396 million US$ in 2023. However, this positive trend reversed in 2024, with profit falling to -894 million US$ and further deteriorating to -1,325 million US$ by 2025. This indicates a failure to maintain a return on capital that exceeds the cost of capital after the 2023 peak.
- Invested Capital Dynamics
- The invested capital base underwent a marked reduction in 2022, dropping from 52,534 million US$ to 41,357 million US$. Following this contraction, a consistent growth pattern emerged, with capital increasing annually to reach 50,212 million US$ by 2025. The expansion of the capital base in the final three years of the period occurred alongside a decline in economic profit.
- Economic Spread Ratio Analysis
- The economic spread ratio mirrored the fluctuations of economic profit. A significant improvement is observed from -10.27% in 2021 to a positive 0.87% in 2023, marking the only period in the analyzed timeframe where value was created above the cost of capital. This positive spread was short-lived, as the ratio returned to negative territory, reaching -1.81% in 2024 and -2.64% in 2025, signaling a regression in the efficiency of capital utilization.
AI Ask an analyst for more
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 | (1,325) | (894) | 396) | (1,385) | (5,396) | |
| 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 | -2.23% | -1.56% | 0.73% | -3.05% | -21.63% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| FedEx Corp. | -5.48% | -6.46% | -5.07% | -4.41% | -2.81% | |
| Uber Technologies Inc. | 4.24% | 2.08% | -1.55% | -37.77% | -21.04% | |
| Union Pacific Corp. | -6.72% | -8.34% | -8.56% | -3.47% | -6.17% | |
| United Parcel Service Inc. | -1.39% | -1.05% | 0.36% | 5.22% | 8.00% | |
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 × -1,325 ÷ 59,406 = -2.23%
3 Click competitor name to see calculations.
The financial trajectory from 2021 to 2025 reveals a period of significant recovery followed by a secondary decline in economic value creation, despite a consistent and strong expansion in operating scale.
- Adjusted Operating Revenue Trends
- A sustained upward trend in adjusted operating revenue is evident, growing from 24,941 million US dollars in 2021 to 59,406 million US dollars by 2025. This represents a continuous increase in the company's top-line capacity over the five-year period, indicating a steady expansion of market activity and revenue generation.
- Economic Profit Volatility
- Economic profit exhibited extreme volatility. A substantial deficit of 5,396 million US dollars in 2021 improved sharply over the following two years, reaching a positive peak of 396 million US dollars in 2023. However, this positive momentum was not sustained, as the figures returned to negative territory, reaching 894 million US dollars in 2024 and further declining to 1,325 million US dollars by 2025.
- Economic Profit Margin Analysis
- The economic profit margin mirrored the volatility of the absolute economic profit. There was a rapid recovery from a low of -21.63% in 2021 to a positive 0.73% in 2023. Despite the continued growth in adjusted operating revenue through 2024 and 2025, the margin deteriorated to -1.56% and -2.23%, respectively. This divergence suggests that the increase in revenue was insufficient to offset the cost of capital or the operating expenses required to generate that revenue in the latter years of the period.
In summary, while the entity successfully scaled its operations and improved its economic position between 2021 and 2023, the subsequent years indicate a failure to maintain returns above the cost of capital, leading to a gradual erosion of the economic profit margin despite record-high revenues.
AI Ask an analyst for more