Market Value Added (MVA)
Market value added (MVA) is the difference between a firm fair value and its invested capital. MVA is a measure of the value a company has created in excess of the resources already committed to the enterprise.
MVA
United Airlines Holdings Inc., MVA 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 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of UAL
- The market value of the company exhibited an overall fluctuating trend over the five-year period. It increased from $51,167 million at the end of 2020 to $57,524 million in 2021, followed by a significant decline in 2022 to $42,253 million. Market value remained relatively stable in 2023 at approximately $42,558 million but experienced a notable rebound in 2024, reaching $57,868 million, the highest value in the observed period.
- Invested capital
- Invested capital demonstrated variability with some recovery after a period of decline. Beginning at $46,438 million in 2020, it rose to $52,534 million in 2021, then decreased sharply to $41,357 million in 2022. Subsequently, it increased to $45,532 million in 2023 and further to $49,435 million in 2024, indicating a trend towards gradual restoration of invested resources after the earlier drop.
- Market value added (MVA)
- MVA showed a volatile pattern with negative growth at some points. Starting at $4,729 million in 2020, MVA slightly increased to $4,990 million in 2021. However, it sharply declined to $896 million in 2022 and turned negative in 2023, registering -$2,974 million. This negative value suggests that the company's market value was below its invested capital during that year. By 2024, MVA rebounded strongly to $8,433 million, surpassing previous highs and indicating significant value creation for shareholders during the most recent period.
- Summary
- The data depicts a cyclical pattern with initial growth, followed by decline and subsequent recovery. Both market value and invested capital decreased markedly in 2022, likely reflecting challenging conditions. The negative MVA in 2023 suggests that the company was undervalued relative to its invested capital during this time. The recovery in 2024 across all metrics, especially the substantial increase in market value added, points to improved market perception and efficient capital deployment, signaling enhanced shareholder value and potentially stronger operational performance.
MVA Spread Ratio
United Airlines Holdings Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 8,433) | (2,974) | 896) | 4,990) | 4,729) | |
| Invested capital2 | 49,435) | 45,532) | 41,357) | 52,534) | 46,438) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 17.06% | -6.53% | 2.17% | 9.50% | 10.18% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| FedEx Corp. | 56.50% | 43.85% | 39.69% | 83.76% | 39.69% | |
| Uber Technologies Inc. | 1,005.70% | 1,007.53% | 372.72% | 331.50% | 420.06% | |
| Union Pacific Corp. | 178.57% | 196.13% | 160.12% | 224.50% | 191.78% | |
| United Parcel Service Inc. | 155.61% | 230.94% | 287.08% | 373.64% | 415.72% | |
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 MVA. See details »
2 Invested capital. See details »
3 2024 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 8,433 ÷ 49,435 = 17.06%
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added exhibited a fluctuating trend over the five-year period. It started relatively high at 4,729 million USD in 2020, experienced a slight increase to 4,990 million USD in 2021, then sharply declined to 896 million USD in 2022. The value turned negative in 2023, reaching -2,974 million USD, indicating a loss in market value. However, the figure rebounded significantly in 2024, reaching 8,433 million USD, the highest point in the observed period.
- Invested Capital
- Invested Capital showed variability but overall an upward trend in recent years. It increased from 46,438 million USD in 2020 to a peak of 52,534 million USD in 2021 before declining sharply to 41,357 million USD in 2022. Following this dip, invested capital rose again to 45,532 million USD in 2023 and further to 49,435 million USD in 2024, suggesting renewed investment or recovery in capital allocation.
- MVA Spread Ratio
- The MVA spread ratio mirrored the fluctuations in market value added but showed greater volatility. It began at a healthy 10.18% in 2020 and declined slightly to 9.5% in 2021. In 2022, the ratio dropped considerably to 2.17%, indicating reduced value generation relative to invested capital. In 2023, the ratio became negative at -6.53%, reflecting negative returns on the invested capital. The ratio then sharply increased to 17.06% in 2024, the highest level in the period, signaling strong value creation relative to invested funds.
- Overall Analysis
- The data indicates a period of significant volatility in both market value added and returns relative to invested capital. The dip in 2022 and the negative results in 2023 suggest a challenging operating environment or adverse events impacting value creation. However, the strong recovery in 2024 across all key indicators demonstrates improved performance and effective capital management.
MVA Margin
United Airlines Holdings Inc., MVA 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) | ||||||
| Market value added (MVA)1 | 8,433) | (2,974) | 896) | 4,990) | 4,729) | |
| Operating revenue | 57,063) | 53,717) | 44,955) | 24,634) | 15,355) | |
| Add: Increase (decrease) in frequent flyer deferred revenue | 298) | 468) | 393) | 307) | 699) | |
| Adjusted operating revenue | 57,361) | 54,185) | 45,348) | 24,941) | 16,054) | |
| Performance Ratio | ||||||
| MVA margin2 | 14.70% | -5.49% | 1.98% | 20.01% | 29.46% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| FedEx Corp. | 45.27% | 33.82% | 28.21% | 64.08% | 33.00% | |
| Uber Technologies Inc. | 341.51% | 423.49% | 191.05% | 305.35% | 793.36% | |
| Union Pacific Corp. | 456.88% | 500.31% | 384.62% | 599.66% | 572.79% | |
| United Parcel Service Inc. | 82.27% | 115.42% | 128.12% | 170.51% | 162.99% | |
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 MVA. See details »
2 2024 Calculation
MVA margin = 100 × MVA ÷ Adjusted operating revenue
= 100 × 8,433 ÷ 57,361 = 14.70%
3 Click competitor name to see calculations.
The financial data indicates several notable trends over the five-year period under review. Key metrics such as Market Value Added (MVA), Adjusted Operating Revenue, and MVA margin exhibit significant fluctuations, reflecting changing business conditions and market perceptions.
- Market Value Added (MVA)
- The MVA started at 4,729 million USD at the end of 2020 and showed a slight increase to 4,990 million USD by the end of 2021. However, there was a dramatic decline in 2022 to just 896 million USD, followed by a further negative MVA of -2,974 million USD in 2023. The trend reversed strongly in 2024, with MVA rebounding sharply to 8,433 million USD, the highest value in the observed period.
- Adjusted Operating Revenue
- Adjusted operating revenue displayed steady growth throughout the period, starting at 16,054 million USD in 2020 and rising sharply every year. By 2021, it increased to 24,941 million USD, followed by substantial rises to 45,348 million USD in 2022, 54,185 million USD in 2023, and reaching 57,361 million USD in 2024. This consistent upward trajectory highlights strong revenue growth.
- MVA Margin
- The MVA margin, expressing MVA as a percentage of adjusted operating revenue, exhibited volatility paralleling the MVA trend. It decreased from 29.46% in 2020 to 20.01% in 2021, then sharply dropped to 1.98% in 2022, reaching negative territory at -5.49% in 2023. This negative margin aligns with the negative MVA in that year. In 2024, the margin improved markedly to 14.7%, indicating a recovery in value creation efficiency relative to operating revenue.
Overall, while adjusted operating revenue showed consistent and strong growth, MVA and MVA margin experienced significant volatility, including a period of negative value added in 2023. The recovery in 2024 suggests an improvement in market value creation relative to the company’s revenue. This pattern may be indicative of external challenges or operational factors impacting profitability and market perception before a positive turnaround.