UAL Q1 2020 Earnings

Call Details

• Call Title: United Airlines Holdings, Inc. Q1 2020 Earnings Call
• Date: May 1, 2020 at 2:30 PM UTC
• Management Team:
  • Oscar Munoz (Chief Executive Officer)
  • Scott Kirby (President (incoming CEO))
  • Jerry Laderman (Executive Vice President and Chief Financial Officer)
  • Mike Leskinen (Vice President of Corporate Development and Investor Relations)

Call Summary

Financial Performance

• United reported a GAAP net loss of $1.7B for Q1 2020.
• United reported an adjusted net loss of $639M for Q1 2020 on a non-GAAP basis.
• This was the first quarterly loss at United since Q1 2014.
• Revenue was down 95% in April versus the company's expectations at the start of the year.
• Net new bookings are down essentially 100% versus pre-crisis levels.
• United expects over $5.5B of lower operating expenses in Q2 driven by lower flying and cost cuts.
• United entered May with approximately $9.6B in available liquidity and ended Q1 with approximately $7.2B.

Guidance

• United did not provide traditional forward-looking revenue or EPS guidance and explicitly stated the planning scenarios are not forecasts.
• The company is planning for a scenario of essentially zero net passenger revenue for the remainder of 2020 and into 2021 as a stress case.
• United expects to receive most of the remaining $2.5B of payroll support in Q2 and expects to exit Q2 with about the same liquidity as the start of May.
• Under a continued zero-revenue scenario and no additional financing, United expects to end Q3 with approximately $6B of liquidity.
• United expects to have the option to draw a $4.5B government loan which would raise liquidity to over $10B heading into the fall, if drawn.
• United committed to avoid involuntary furloughs or cuts to pay rates for U.S. employees through September 30, 2020 as long as payroll support conditions are met.