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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

United Airlines Holdings Inc., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net operating profit after taxes (NOPAT)¹	4,830)	2,665)	(847)	(7,072)	4,800)
Cost of capital²	9.53%	9.45%	8.48%	10.16%	10.71%
Invested capital³	43,228)	40,501)	50,865)	45,358)	37,538)

Economic profit⁴	710)	(1,161)	(5,158)	(11,681)	780)

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

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 4,830 – 9.53% × 43,228 = 710

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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.	United Airlines Holdings Inc. economic profit increased from 2021 to 2022 and from 2022 to 2023.

United Airlines Holdings Inc., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income (loss)	2,618)	737)	(1,964)	(7,069)	3,009)
Deferred income tax expense (benefit)¹	756)	248)	(583)	(1,741)	882)
Increase (decrease) in allowance for credit losses²	7)	(17)	(50)	69)	1)
Increase (decrease) in frequent flyer deferred revenue³	468)	393)	307)	699)	271)
Increase (decrease) in equity equivalents⁴	1,231)	624)	(326)	(973)	1,154)
Interest expense, net of interest capitalized	1,774)	1,673)	1,577)	992)	646)
Interest expense, operating lease liability⁵	295)	276)	285)	285)	293)
Adjusted interest expense, net of interest capitalized	2,069)	1,949)	1,862)	1,277)	939)
Tax benefit of interest expense, net of interest capitalized⁶	(434)	(409)	(391)	(268)	(197)
Adjusted interest expense, net of interest capitalized, after taxes⁷	1,634)	1,540)	1,471)	1,009)	742)
Interest income	(827)	(298)	(36)	(50)	(133)
Investment income, before taxes	(827)	(298)	(36)	(50)	(133)
Tax expense (benefit) of investment income⁸	174)	63)	8)	11)	28)
Investment income, after taxes⁹	(653)	(235)	(28)	(40)	(105)
Net operating profit after taxes (NOPAT)	4,830)	2,665)	(847)	(7,072)	4,800)

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

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for credit losses.

³ Addition of increase (decrease) in frequent flyer deferred revenue.

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

⁵ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 5,079 × 5.80% = 295

⁶ 2023 Calculation
Tax benefit of interest expense, net of interest capitalized = Adjusted interest expense, net of interest capitalized × Statutory income tax rate
= 2,069 × 21.00% = 434

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

⁸ 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 827 × 21.00% = 174

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.	United Airlines Holdings Inc. NOPAT increased from 2021 to 2022 and from 2022 to 2023.

United Airlines Holdings Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Income tax expense (benefit)	769)	253)	(593)	(1,753)	905)
Less: Deferred income tax expense (benefit)	756)	248)	(583)	(1,741)	882)
Add: Tax savings from interest expense, net of interest capitalized	434)	409)	391)	268)	197)
Less: Tax imposed on investment income	174)	63)	8)	11)	28)
Cash operating taxes	274)	352)	374)	246)	192)

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

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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.	United Airlines Holdings Inc. cash operating taxes decreased from 2021 to 2022 and from 2022 to 2023.

United Airlines Holdings Inc., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Current maturities of long-term debt	4,018)	2,911)	3,002)	1,911)	1,407)
Current maturities of finance leases	172)	104)	76)	182)	46)
Long-term debt, less current portion	25,057)	28,283)	30,361)	24,836)	13,145)
Long-term obligations under finance leases	91)	115)	219)	224)	220)
Operating lease liability¹	5,079)	5,020)	5,708)	5,598)	5,632)
Total reported debt & leases	34,417)	36,433)	39,366)	32,751)	20,450)
Stockholders’ equity	9,324)	6,896)	5,029)	5,960)	11,531)
Net deferred tax (assets) liabilities²	594)	(91)	(659)	(131)	1,736)
Allowance for credit losses³	18)	11)	28)	78)	9)
Frequent flyer deferred revenue⁴	7,143)	6,675)	6,282)	5,975)	5,276)
Equity equivalents⁵	7,755)	6,595)	5,651)	5,922)	7,021)
Accumulated other comprehensive (income) loss, net of tax⁶	62)	(175)	942)	1,139)	718)
Adjusted stockholders’ equity	17,141)	13,316)	11,622)	13,021)	19,270)
Short-term investments⁷	(8,330)	(9,248)	(123)	(414)	(2,182)
Invested capital	43,228)	40,501)	50,865)	45,358)	37,538)

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

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 frequent flyer deferred revenue.

⁵ Addition of equity equivalents to stockholders’ equity.

⁶ Removal of accumulated other comprehensive income.

⁷ Subtraction of short-term 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.	United Airlines Holdings Inc. invested capital decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.

United Airlines Holdings Inc., cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	14,922)	14,922)	÷	48,566)	=	0.31	0.31	×	19.43%	=	5.97%
Long-term debt and finance leases³	28,565)	28,565)	÷	48,566)	=	0.59	0.59	×	6.63% × (1 – 21.00%)	=	3.08%
Operating lease liability⁴	5,079)	5,079)	÷	48,566)	=	0.10	0.10	×	5.80% × (1 – 21.00%)	=	0.48%
Total:	48,566)					1.00					9.53%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in millions

² Equity. See details »

³ Long-term debt and finance leases. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	16,024)	16,024)	÷	50,634)	=	0.32	0.32	×	19.43%	=	6.15%
Long-term debt and finance leases³	29,590)	29,590)	÷	50,634)	=	0.58	0.58	×	6.21% × (1 – 21.00%)	=	2.87%
Operating lease liability⁴	5,020)	5,020)	÷	50,634)	=	0.10	0.10	×	5.50% × (1 – 21.00%)	=	0.43%
Total:	50,634)					1.00					9.45%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in millions

² Equity. See details »

³ Long-term debt and finance leases. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	15,397)	15,397)	÷	55,950)	=	0.28	0.28	×	19.43%	=	5.35%
Long-term debt and finance leases³	34,845)	34,845)	÷	55,950)	=	0.62	0.62	×	5.54% × (1 – 21.00%)	=	2.73%
Operating lease liability⁴	5,708)	5,708)	÷	55,950)	=	0.10	0.10	×	5.00% × (1 – 21.00%)	=	0.40%
Total:	55,950)					1.00					8.48%

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

¹ US$ in millions

² Equity. See details »

³ Long-term debt and finance leases. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	16,978)	16,978)	÷	50,423)	=	0.34	0.34	×	19.43%	=	6.54%
Long-term debt and finance leases³	27,847)	27,847)	÷	50,423)	=	0.55	0.55	×	7.27% × (1 – 21.00%)	=	3.17%
Operating lease liability⁴	5,598)	5,598)	÷	50,423)	=	0.11	0.11	×	5.10% × (1 – 21.00%)	=	0.45%
Total:	50,423)					1.00					10.16%

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

¹ US$ in millions

² Equity. See details »

³ Long-term debt and finance leases. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	17,498)	17,498)	÷	38,599)	=	0.45	0.45	×	19.43%	=	8.81%
Long-term debt and finance leases³	15,469)	15,469)	÷	38,599)	=	0.40	0.40	×	4.11% × (1 – 21.00%)	=	1.30%
Operating lease liability⁴	5,632)	5,632)	÷	38,599)	=	0.15	0.15	×	5.20% × (1 – 21.00%)	=	0.60%
Total:	38,599)					1.00					10.71%

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

¹ US$ in millions

² Equity. See details »

³ Long-term debt and finance leases. See details »

⁴ Operating lease liability. See details »

United Airlines Holdings Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	710)	(1,161)	(5,158)	(11,681)	780)
Invested capital²	43,228)	40,501)	50,865)	45,358)	37,538)
Performance Ratio
Economic spread ratio³	1.64%	-2.87%	-10.14%	-25.75%	2.08%
Benchmarks
Economic Spread Ratio, Competitors⁴
FedEx Corp.	-4.31%	-4.05%	-1.30%	-6.17%	-8.84%
Uber Technologies Inc.	-1.50%	-71.64%	-20.81%	-47.99%	-56.47%
Union Pacific Corp.	-1.39%	0.46%	-0.39%	-1.96%	-0.57%
United Parcel Service Inc.	3.85%	15.00%	20.78%	-9.28%	2.21%

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

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 710 ÷ 43,228 = 1.64%

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.	United Airlines Holdings Inc. economic spread ratio improved from 2021 to 2022 and from 2022 to 2023.

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

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	710)	(1,161)	(5,158)	(11,681)	780)

Operating revenue	53,717)	44,955)	24,634)	15,355)	43,259)
Add: Increase (decrease) in frequent flyer deferred revenue	468)	393)	307)	699)	271)
Adjusted operating revenue	54,185)	45,348)	24,941)	16,054)	43,530)
Performance Ratio
Economic profit margin²	1.31%	-2.56%	-20.68%	-72.76%	1.79%
Benchmarks
Economic Profit Margin, Competitors³
FedEx Corp.	-3.32%	-2.88%	-1.00%	-5.13%	-6.73%
Uber Technologies Inc.	-0.63%	-36.72%	-19.17%	-90.63%	-81.71%
Union Pacific Corp.	-3.55%	1.11%	-1.03%	-5.85%	-1.50%
United Parcel Service Inc.	1.92%	6.69%	9.48%	-3.64%	1.08%

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

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted operating revenue
= 100 × 710 ÷ 54,185 = 1.31%

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.	United Airlines Holdings Inc. economic profit margin improved from 2021 to 2022 and from 2022 to 2023.

United Airlines Holdings Inc. (NASDAQ:UAL)

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