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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
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Delta Air Lines Inc., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net operating profit after taxes (NOPAT)¹	1,932)	(13,902)	6,651)	6,032)	6,446)
Cost of capital²	9.03%	9.34%	12.13%	12.07%	11.43%
Invested capital³	47,166)	44,197)	47,580)	43,326)	44,409)

Economic profit⁴	(2,326)	(18,032)	882)	802)	1,368)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2021 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 1,932 – 9.03% × 47,166 = -2,326

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Delta Air Lines Inc. economic profit decreased from 2019 to 2020 but then increased from 2020 to 2021 not reaching 2019 level.

Delta Air Lines Inc., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net income (loss)	280)	(12,385)	4,767)	3,935)	3,577)
Deferred income tax expense (benefit)¹	114)	(3,110)	1,473)	1,364)	2,071)
Increase (decrease) in allowance for uncollectible accounts²	(39)	76)	1)	—)	(3)
Increase (decrease) in loyalty program deferred revenue³	377)	454)	87)	320)	192)
Increase (decrease) in equity equivalents⁴	452)	(2,580)	1,561)	1,684)	2,260)
Interest expense, net	1,279)	929)	301)	311)	396)
Interest expense, operating lease liability⁵	296)	312)	227)	249)	550)
Adjusted interest expense, net	1,575)	1,241)	528)	560)	946)
Tax benefit of interest expense, net⁶	(331)	(261)	(111)	(118)	(331)
Adjusted interest expense, net, after taxes⁷	1,244)	980)	417)	443)	615)
(Gain) loss on marketable securities	(56)	105)	(119)	(38)	(8)
Investment income, before taxes	(56)	105)	(119)	(38)	(8)
Tax expense (benefit) of investment income⁸	12)	(22)	25)	8)	3)
Investment income, after taxes⁹	(44)	83)	(94)	(30)	(5)
Net operating profit after taxes (NOPAT)	1,932)	(13,902)	6,651)	6,032)	6,446)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for uncollectible accounts.

³ Addition of increase (decrease) in loyalty program deferred revenue.

⁴ Addition of increase (decrease) in equity equivalents to net income (loss).

⁵ 2021 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 7,759 × 3.81% = 296

⁶ 2021 Calculation
Tax benefit of interest expense, net = Adjusted interest expense, net × Statutory income tax rate
= 1,575 × 21.00% = 331

⁷ Addition of after taxes interest expense to net income (loss).

⁸ 2021 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 56 × 21.00% = 12

⁹ Elimination of after taxes investment income.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Delta Air Lines Inc. NOPAT decreased from 2019 to 2020 but then increased from 2020 to 2021 not reaching 2019 level.

Delta Air Lines Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Income tax provision (benefit)	118)	(3,202)	1,431)	1,216)	2,124)
Less: Deferred income tax expense (benefit)	114)	(3,110)	1,473)	1,364)	2,071)
Add: Tax savings from interest expense, net	331)	261)	111)	118)	331)
Less: Tax imposed on investment income	12)	(22)	25)	8)	3)
Cash operating taxes	323)	191)	44)	(38)	381)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Delta Air Lines Inc. cash operating taxes increased from 2019 to 2020 and from 2020 to 2021.

Delta Air Lines Inc., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Current maturities of debt and finance leases	1,782)	1,732)	2,287)	1,518)	2,242)
Debt and finance leases, excluding current maturities	25,138)	27,425)	8,873)	8,253)	6,592)
Operating lease liability¹	7,759)	6,391)	6,095)	6,756)	12,187)
Total reported debt & leases	34,679)	35,548)	17,255)	16,527)	21,021)
Stockholders’ equity	3,887)	1,534)	15,358)	13,687)	13,910)
Net deferred tax (assets) liabilities²	(1,294)	(1,988)	1,336)	(79)	(935)
Allowance for uncollectible accounts³	50)	89)	13)	12)	12)
Loyalty program deferred revenue⁴	7,559)	7,182)	6,728)	6,641)	4,118)
Equity equivalents⁵	6,315)	5,283)	8,077)	6,574)	3,195)
Accumulated other comprehensive (income) loss, net of tax⁶	7,130)	9,038)	7,989)	7,825)	7,621)
Adjusted stockholders’ equity	17,332)	15,855)	31,424)	28,086)	24,726)
Investments⁷	(4,845)	(7,206)	(1,099)	(1,287)	(1,338)
Invested capital	47,166)	44,197)	47,580)	43,326)	44,409)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of loyalty program deferred revenue.

⁵ Addition of equity equivalents to stockholders’ equity.

⁶ Removal of accumulated other comprehensive income.

⁷ Subtraction of investments.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Delta Air Lines Inc. invested capital decreased from 2019 to 2020 but then increased from 2020 to 2021 not reaching 2019 level.

Delta Air Lines Inc., cost of capital calculations

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	27,088)	27,088)	÷	63,583)	=	0.43	0.43	×	16.04%	=	6.83%
Debt and finance leases³	28,736)	28,736)	÷	63,583)	=	0.45	0.45	×	5.12% × (1 – 21.00%)	=	1.83%
Operating lease liability⁴	7,759)	7,759)	÷	63,583)	=	0.12	0.12	×	3.81% × (1 – 21.00%)	=	0.37%
Total:	63,583)					1.00					9.03%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance leases. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	27,625)	27,625)	÷	64,999)	=	0.43	0.43	×	16.04%	=	6.82%
Debt and finance leases³	30,983)	30,983)	÷	64,999)	=	0.48	0.48	×	5.71% × (1 – 21.00%)	=	2.15%
Operating lease liability⁴	6,391)	6,391)	÷	64,999)	=	0.10	0.10	×	4.88% × (1 – 21.00%)	=	0.38%
Total:	64,999)					1.00					9.34%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance leases. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	37,849)	37,849)	÷	55,398)	=	0.68	0.68	×	16.04%	=	10.96%
Debt and finance leases³	11,454)	11,454)	÷	55,398)	=	0.21	0.21	×	5.18% × (1 – 21.00%)	=	0.85%
Operating lease liability⁴	6,095)	6,095)	÷	55,398)	=	0.11	0.11	×	3.73% × (1 – 21.00%)	=	0.32%
Total:	55,398)					1.00					12.13%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance leases. See details »

⁴ Operating lease liability. See details »

Dec 31, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	34,681)	34,681)	÷	51,240)	=	0.68	0.68	×	16.04%	=	10.85%
Debt and finance leases³	9,803)	9,803)	÷	51,240)	=	0.19	0.19	×	5.51% × (1 – 21.00%)	=	0.83%
Operating lease liability⁴	6,756)	6,756)	÷	51,240)	=	0.13	0.13	×	3.69% × (1 – 21.00%)	=	0.38%
Total:	51,240)					1.00					12.07%

Based on: 10-K (reporting date: 2018-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance leases. See details »

⁴ Operating lease liability. See details »

Dec 31, 2017

	Capital (fair value)¹	Weights					Cost of capital
Equity²	37,792)	37,792)	÷	59,072)	=	0.64	0.64	×	16.04%	=	10.26%
Debt and finance leases³	9,094)	9,094)	÷	59,072)	=	0.15	0.15	×	5.71% × (1 – 35.00%)	=	0.57%
Operating lease liability⁴	12,187)	12,187)	÷	59,072)	=	0.21	0.21	×	4.51% × (1 – 35.00%)	=	0.60%
Total:	59,072)					1.00					11.43%

Based on: 10-K (reporting date: 2017-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance leases. See details »

⁴ Operating lease liability. See details »

Delta Air Lines Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Economic profit¹	(2,326)	(18,032)	882)	802)	1,368)
Invested capital²	47,166)	44,197)	47,580)	43,326)	44,409)
Performance Ratio
Economic spread ratio³	-4.93%	-40.80%	1.85%	1.85%	3.08%
Benchmarks
Economic Spread Ratio, Competitors⁴
FedEx Corp.	-0.56%	-5.57%	-8.20%	-1.83%	—
Uber Technologies Inc.	-19.76%	-46.86%	-55.39%	—	—
Union Pacific Corp.	0.43%	-1.15%	0.25%	—	—
United Parcel Service Inc.	21.62%	-8.49%	2.94%	—	—

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2021 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -2,326 ÷ 47,166 = -4.93%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Delta Air Lines Inc. economic spread ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.

Delta Air Lines Inc., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Economic profit¹	(2,326)	(18,032)	882)	802)	1,368)

Operating revenue	29,899)	17,095)	47,007)	44,438)	41,244)
Add: Increase (decrease) in loyalty program deferred revenue	377)	454)	87)	320)	192)
Adjusted operating revenue	30,276)	17,549)	47,094)	44,758)	41,436)
Performance Ratio
Economic profit margin²	-7.68%	-102.75%	1.87%	1.79%	3.30%
Benchmarks
Economic Profit Margin, Competitors³
FedEx Corp.	-0.43%	-4.63%	-6.24%	-1.49%	—
Uber Technologies Inc.	-18.20%	-88.51%	-80.14%	—	—
Union Pacific Corp.	1.16%	-3.45%	0.65%	—	—
United Parcel Service Inc.	9.87%	-3.33%	1.44%	—	—

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ Economic profit. See details »

² 2021 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted operating revenue
= 100 × -2,326 ÷ 30,276 = -7.68%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Delta Air Lines Inc. economic profit margin deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.

Delta Air Lines Inc. (NYSE:DAL)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin