Enterprise Value to FCFF (EV/FCFF)
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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Analysis of Revenues
- Aggregate Accruals
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Free Cash Flow to The Firm (FCFF)
United Airlines Holdings Inc., FCFF 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, 2 See details »
The financial information reveals notable fluctuations in both net cash provided by operating activities and free cash flow to the firm (FCFF) over the five-year period. A significant increase in operating cash flow is observed, while FCFF demonstrates a more volatile pattern.
- Net Cash from Operations
- Net cash provided by operating activities increased substantially from US$2,067 million in 2021 to US$6,066 million in 2022. This growth continued into 2023, reaching US$6,911 million, and peaked in 2024 at US$9,445 million. A slight decrease is then noted in 2025, with operating cash flow reported as US$8,431 million. This indicates a generally positive trend in the company’s core business generating cash, although the rate of increase slowed and a minor decline occurred in the most recent year.
- Free Cash Flow to the Firm (FCFF)
- FCFF experienced considerable variation. It began at US$408 million in 2021, then rose sharply to US$2,684 million in 2022, mirroring the increase in operating cash flow. However, FCFF decreased to US$571 million in 2023, suggesting increased investment or financing activities consumed a larger portion of the operating cash flow. A substantial recovery occurred in 2024, with FCFF reaching US$4,834 million, before declining to US$3,877 million in 2025. This pattern suggests FCFF is sensitive to factors beyond operating performance, such as capital expenditures or debt management.
The divergence between the trends in operating cash flow and FCFF suggests that investment decisions, financing activities, or changes in working capital requirements are significantly impacting the amount of cash available to the firm after covering operating expenses and capital investments. While operating performance improved consistently until 2024, the fluctuations in FCFF indicate a dynamic capital allocation strategy or external factors influencing cash availability.
Interest Paid, Net of Tax
United Airlines Holdings Inc., interest paid, net of tax calculation
US$ 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).
2 2025 Calculation
Cash paid during the period for interest, tax = Cash paid during the period for interest × EITR
= × =
3 2025 Calculation
Interest capitalized, tax = Interest capitalized × EITR
= × =
The period between 2021 and 2025 demonstrates fluctuating trends in interest expense, net of tax, and related factors. Cash paid for interest, net of tax, initially increased before decreasing, while interest capitalized, net of tax, consistently rose and then stabilized. The effective income tax rate exhibited moderate variations throughout the period.
- Cash Paid for Interest, Net of Tax
- Cash paid for interest, net of tax, increased from US$1,094 million in 2021 to US$1,171 million in 2022, representing a 6.98% increase. This was followed by a substantial rise to US$1,429 million in 2023, a 21.94% increase from the prior year. However, a decrease was observed in 2024, with cash paid falling to US$1,129 million, a 20.93% reduction. This downward trend continued into 2025, with cash paid for interest, net of tax, reaching US$1,036 million, a 8.24% decrease from 2024. The fluctuations suggest potential changes in debt levels, interest rates, or tax benefits related to interest expense.
- Interest Capitalized, Net of Tax
- Interest capitalized, net of tax, showed a consistent upward trend from 2021 to 2024. It increased from US$61 million in 2021 to US$78 million in 2022 (a 27.87% increase), then to US$141 million in 2023 (an 80.77% increase), and further to US$172 million in 2024 (a 22.06% increase). In 2025, this figure stabilized at US$160 million, representing a 7.0% decrease. This pattern indicates increasing investment in projects where borrowing costs are being added to the asset's value, followed by a leveling off of such investments.
- Effective Income Tax Rate (EITR)
- The effective income tax rate experienced moderate fluctuations throughout the period. It was 23.19% in 2021, increased to 25.56% in 2022, decreased to 22.70% in 2023, rose again to 24.40% in 2024, and finally decreased to 22.10% in 2025. These changes could be attributed to alterations in tax laws, changes in the mix of income sources, or the utilization of tax credits and deductions. The EITR remained within a relatively narrow range, suggesting no significant shifts in the company’s overall tax position.
The interplay between these three items suggests a dynamic financial landscape. The initial increase in cash paid for interest, coupled with rising interest capitalization, may reflect increased borrowing for capital projects. The subsequent decrease in cash paid for interest could be due to debt repayment, refinancing at lower rates, or changes in tax regulations. The relatively stable effective income tax rate provides a consistent backdrop to these fluctuations.
Enterprise Value to FCFF Ratio, Current
United Airlines Holdings Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| FedEx Corp. | |
| Uber Technologies Inc. | |
| Union Pacific Corp. | |
| United Parcel Service Inc. | |
| EV/FCFF, Sector | |
| Transportation | |
| EV/FCFF, Industry | |
| Industrials | |
Based on: 10-K (reporting date: 2025-12-31).
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, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Parcel Service Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Transportation | ||||||
| EV/FCFF, Industry | ||||||
| Industrials | ||||||
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).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
The Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio exhibits significant fluctuations over the observed period. Initially high, the ratio decreased substantially before increasing again, suggesting shifts in market valuation relative to the company’s cash generation ability.
- Enterprise Value
- Enterprise Value remained relatively stable between 2021 and 2023, fluctuating around the US$32 billion mark. A notable increase is observed in 2024, reaching US$44.352 billion, followed by a further increase to US$48.099 billion in 2025. This indicates growing overall market capitalization and net debt.
- Free Cash Flow to the Firm (FCFF)
- Free Cash Flow to the Firm experienced considerable volatility. It began at US$408 million in 2021, then rose dramatically to US$2.684 billion in 2022. FCFF decreased to US$571 million in 2023 before increasing substantially to US$4.834 billion in 2024. A subsequent decline to US$3.877 billion is noted in 2025. These fluctuations suggest changing operational performance and investment activities impacting cash generation.
- EV/FCFF Ratio
- The EV/FCFF ratio started at a high of 79.24 in 2021. A significant decrease occurred in 2022, with the ratio falling to 11.88, reflecting the substantial increase in FCFF. The ratio increased again in 2023 to 56.36, driven by a decrease in FCFF. A sharp decline to 9.17 is observed in 2024, coinciding with a further increase in FCFF. The ratio then rose to 12.41 in 2025, despite a decrease in FCFF, indicating that the increase in Enterprise Value outpaced the decline in cash flow. The ratio’s movement suggests that the market’s assessment of the company’s value relative to its free cash flow is dynamic and sensitive to changes in both EV and FCFF.
The observed trends indicate a complex relationship between enterprise value and free cash flow. While enterprise value generally increased over the period, the EV/FCFF ratio’s fluctuations are primarily driven by the more volatile FCFF. The ratio’s recent increase in 2025, despite declining FCFF, warrants further investigation to understand the underlying factors influencing market valuation.