Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
United Airlines Holdings Inc., FCFF 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).
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- Net cash provided by (used in) operating activities
- The net cash flow from operating activities exhibited a significant improvement over the observed period. Initially, there was a negative cash flow of -4,133 million USD in 2020. This position reversed dramatically in 2021, producing positive net cash of 2,067 million USD. The upward trajectory continued with further increases to 6,066 million USD in 2022 and 6,911 million USD in 2023, culminating in the highest level of 9,445 million USD in 2024. This trend indicates a strengthening operational cash generation capability year over year, reflecting improved operational efficiency or increased revenue generation capacity.
- Free cash flow to the firm (FCFF)
- Free cash flow exhibited more variability during the period under review. The firm reported a substantial negative FCFF of -7,065 million USD in 2020, coinciding with the global economic disruptions likely impacting the business. By 2021, free cash flow turned positive, albeit at a modest 408 million USD, followed by a notable increase to 2,684 million USD in 2022. However, FCFF declined sharply to 571 million USD in 2023, suggesting increased capital expenditures, working capital changes, or other uses of cash in that year. In 2024, free cash flow rebounded strongly to 4,833 million USD. Overall, despite fluctuations, the trend points to a recovery and normalization of free cash flows with a potential increase in investment activities in certain years.
Interest Paid, Net of Tax
United Airlines Holdings Inc., interest paid, net of tax 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).
2 2024 Calculation
Cash paid during the period for interest, tax = Cash paid during the period for interest × EITR
= 1,494 × 24.45% = 365
3 2024 Calculation
Interest capitalized, tax = Interest capitalized × EITR
= 227 × 24.45% = 56
- Effective Income Tax Rate (EITR)
- The effective income tax rate exhibited a gradual upward trend over the period analyzed. Starting at 19.87% at the end of 2020, it increased to 23.19% in 2021, followed by a further rise to 25.56% in 2022. A slight decline was observed in 2023, with the rate decreasing to 22.7%, before rising again to 24.45% by the end of 2024. Overall, the tax rate showed moderate fluctuations but maintained an upward trajectory.
- Cash Paid During the Period for Interest, Net of Tax
- The cash paid for interest, net of tax, demonstrated a marked increase from 2020 through 2023, before declining in 2024. The value increased from $700 million in 2020 to $1,094 million in 2021, continuing upward to $1,171 million in 2022 and peaking at $1,429 million in 2023. In 2024, this figure decreased notably to $1,129 million. This pattern suggests rising interest expenses during the early years followed by a reduction in the latest period.
- Interest Capitalized, Net of Tax
- Interest capitalized, net of tax, showed a consistent increase throughout the reported years. Beginning at $57 million in 2020, the amount rose steadily each year to reach $61 million in 2021, $78 million in 2022, $141 million in 2023, and finally $171 million in 2024. This significant rise indicates escalating capitalized interest costs over time, with an acceleration in growth particularly noticeable after 2022.
Enterprise Value to FCFF Ratio, Current
United Airlines Holdings Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 43,527) |
| Free cash flow to the firm (FCFF) | 4,833) |
| Valuation Ratio | |
| EV/FCFF | 9.01 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| FedEx Corp. | 19.37 |
| Uber Technologies Inc. | 25.50 |
| Union Pacific Corp. | 23.74 |
| United Parcel Service Inc. | 13.19 |
| EV/FCFF, Sector | |
| Transportation | 17.92 |
| EV/FCFF, Industry | |
| Industrials | 34.48 |
Based on: 10-K (reporting date: 2024-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
United Airlines Holdings Inc., historical EV/FCFF 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) | ||||||
| Enterprise value (EV)1 | 44,352) | 32,194) | 31,890) | 32,346) | 33,606) | |
| Free cash flow to the firm (FCFF)2 | 4,833) | 571) | 2,684) | 408) | (7,065) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 9.18 | 56.36 | 11.88 | 79.24 | — | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| FedEx Corp. | 23.54 | 23.94 | 19.13 | 18.72 | — | |
| Uber Technologies Inc. | 23.26 | 46.69 | 136.28 | — | — | |
| Union Pacific Corp. | 25.72 | 31.90 | 23.83 | 26.42 | 25.20 | |
| United Parcel Service Inc. | 16.29 | 24.78 | 16.63 | 16.95 | 28.23 | |
| EV/FCFF, Sector | ||||||
| Transportation | 19.18 | 32.04 | 21.76 | 24.81 | 184.17 | |
| EV/FCFF, Industry | ||||||
| Industrials | 31.37 | 25.93 | 24.30 | 28.80 | 189.49 | |
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).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= 44,352 ÷ 4,833 = 9.18
4 Click competitor name to see calculations.
- Enterprise Value Trend
- The enterprise value demonstrated a modest decline from 33,606 million US dollars in 2020 to 31,890 million in 2022, followed by stability in 2023 at 32,194 million. A notable increase occurred in 2024, with enterprise value rising significantly to 44,352 million.
- Free Cash Flow to the Firm (FCFF) Trend
- Free cash flow to the firm showed significant volatility over the period. It started at a considerable negative value of -7,065 million in 2020, then improved dramatically to positive 408 million in 2021 and further increased to 2,684 million in 2022. However, there was a sharp decline in 2023 to 571 million, followed by a substantial rise to 4,833 million in 2024.
- EV/FCFF Ratio Analysis
- The EV/FCFF ratio highlights fluctuating valuation multiples relative to cash flow. The ratio was extremely high at 79.24 in 2021, indicating a low FCFF relative to enterprise value. It decreased considerably to 11.88 in 2022, suggesting improving cash flow generation. The ratio surged again to 56.36 in 2023 due to the FCFF decline but decreased significantly to 9.18 in 2024, reflecting the substantial increase in free cash flow relative to enterprise value.
- Overall Insights
- The data indicates a period of financial recovery and improvement in cash flow generation following substantial negative free cash flow in 2020. Despite fluctuations, the free cash flow showed a positive trend from 2021 onwards, with a remarkable increase in 2024. Enterprise value remained relatively stable for several years before a notable upswing in 2024, which may reflect improved market perceptions or operational performance. The volatility in the EV/FCFF ratio underscores the variability in free cash flow relative to value, with the lowest ratios in years of strong free cash flow performance, suggesting enhanced financial health and valuation appeal in those periods.