Stock Analysis on Net

United Airlines Holdings Inc. (NASDAQ:UAL)

$24.99

Economic Value Added (EVA)

Microsoft Excel

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.

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Economic Profit

United Airlines Holdings Inc., economic profit calculation

US$ in millions

Microsoft Excel
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 demonstrates a significant upward trend from 2020 through 2024. Initially, in 2020, the value was deeply negative at -7,141 million US dollars, indicating substantial operating losses after taxes. By 2021, this loss decreased markedly to -797 million US dollars, reflecting an improvement in operational efficiency or market conditions. From 2022 onward, NOPAT turned positive, reaching 2,682 million in 2022, continuing to increase to 4,823 million in 2023, and further to 5,148 million in 2024. This progression indicates a recovery and subsequent growth in profitable operations over the five-year period.
Cost of Capital
The cost of capital fluctuated over the analyzed period. It started at 9.83% in 2020, decreased to 8.17% in 2021, suggesting a reduction in the company's risk profile or financing costs. However, it rose slightly to 9.15% in 2022 and remained relatively stable at 9.08% in 2023. In 2024, there was a noticeable increase to 11.18%, which might reflect increased market risks, changes in the company’s capital structure, or higher interest rates impacting financing costs.
Invested Capital
Invested capital showed variability, starting at 46,438 million US dollars in 2020 and increasing to a peak of 52,534 million in 2021. This was followed by a considerable decline to 41,357 million in 2022, possibly indicating divestitures, asset sales, or operational restructuring. After 2022, invested capital increased again to 45,532 million in 2023 and further to 49,435 million in 2024, suggesting reinvestment or expansion activities resumed gradually.
Economic Profit
Economic profit, reflecting the value created beyond the cost of capital, exhibited a persistent negative trend initially but with notable improvement over time. It was significantly negative at -11,707 million US dollars in 2020, improving to -5,088 million in 2021 and further narrowing to -1,102 million in 2022. In 2023, economic profit turned positive at 689 million, signaling that the company began generating returns exceeding its cost of capital. However, in 2024, economic profit reverted to a negative value of -379 million, which might be related to the increase in the cost of capital or other operational factors affecting value creation.

Net Operating Profit after Taxes (NOPAT)

United Airlines Holdings Inc., NOPAT calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income (loss)
Deferred income tax expense (benefit)1
Increase (decrease) in frequent flyer deferred revenue2
Increase (decrease) in equity equivalents3
Interest expense, net of interest capitalized
Interest expense, operating lease liability4
Adjusted interest expense, net of interest capitalized
Tax benefit of interest expense, net of interest capitalized5
Adjusted interest expense, net of interest capitalized, after taxes6
Interest income
Investment income, before taxes
Tax expense (benefit) of investment income7
Investment income, after taxes8
Net operating profit after taxes (NOPAT)

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

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Income tax expense (benefit)
Less: Deferred income tax expense (benefit)
Add: Tax savings from interest expense, net of interest capitalized
Less: Tax imposed on investment income
Cash operating taxes

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

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Current maturities of long-term debt, finance leases, and other financial liabilities
Long-term debt, finance leases, and other financial liabilities, less current portion
Operating lease liability1
Total reported debt & leases
Stockholders’ equity
Net deferred tax (assets) liabilities2
Frequent flyer deferred revenue3
Equity equivalents4
Accumulated other comprehensive (income) loss, net of tax5
Adjusted stockholders’ equity
Short-term investments6
Invested capital

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

Microsoft Excel
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
The economic profit exhibited a marked improvement from 2020 through 2023, moving from a substantial loss of $11,707 million in 2020 to a positive figure of $689 million in 2023. However, there was a reversal in 2024, with economic profit turning negative again at -$379 million. This trend suggests a recovery phase culminating in profitability during 2023 before facing challenges that impacted profitability in the following year.
Invested Capital
Invested capital increased from $46,438 million in 2020 to a peak of $52,534 million in 2021, followed by a significant decline to $41,357 million in 2022. Subsequently, the invested capital gradually rose again, reaching $49,435 million by 2024. These fluctuations may reflect varying investment strategies, asset acquisitions or disposals, and capital management decisions over the period examined.
Economic Spread Ratio
The economic spread ratio showed consistent improvement from a deeply negative -25.21% in 2020 to a positive 1.51% in 2023. This improvement aligns with the economic profit trend, indicating enhanced returns on invested capital over these years. Nevertheless, in 2024, the ratio declined to -0.77%, indicating diminished efficiency in generating returns relative to the capital invested and suggesting some operational or market challenges impacting profitability.

Economic Profit Margin

United Airlines Holdings Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
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 shows a significant improvement from a substantial loss of 11,707 million USD in 2020 to a near break-even positive figure of 689 million USD in 2023. However, in 2024, there is a reversal back to a negative economic profit of 379 million USD, although the loss is considerably smaller than in earlier years. The trend indicates considerable recovery efforts between 2020 and 2023, with a slight setback in the following year.
Adjusted Operating Revenue
The adjusted operating revenue exhibits steady and strong growth throughout the period. It rises from 16,054 million USD in 2020 to 57,361 million USD in 2024. The increase represents more than a threefold growth over five years, suggesting notable expansion or increased operational activity driving revenue generation.
Economic Profit Margin
The economic profit margin mirrors the pattern observed in economic profit, improving dramatically from a negative margin of -72.92% in 2020 to a positive margin of 1.27% in 2023. However, this margin declines again to -0.66% in 2024. This indicator reflects improving operational efficiency and profitability until 2023, followed by a marginal contraction in the profitability margin the next year.