UAL Q4 2020 Earnings

Call Details

• Call Title: United Airlines Holdings, Inc. Q4 2020 Earnings Call
• Date: January 21, 2021 at 3:30 PM UTC
• Management Team:
  • Kristina Munoz (Director of Investor Relations)
  • Scott Kirby (Chief Executive Officer)
  • Brett Hart (President)
  • Andrew Nasilla (Executive Vice President and Chief Commercial Officer)
  • Jerry Laderman (Executive Vice President and Chief Financial Officer)

Call Summary

Financial Performance

• For the fourth quarter of 2020, United reported a pre-tax loss of $2.4B and an adjusted pre-tax loss of $2.6B.
• Full year 2020 pre-tax loss was $8.8B and adjusted pre-tax loss was $9.9B.
• Fourth quarter total operating expenses excluding special charges were down 42% year over year.
• United ended 2020 with approximately $19.7B of available liquidity, including $1.0B of undrawn revolver capacity and $7.0B available under the CARES Act loan.
• Including debt and severance payments, average daily cash burn was $33M in the fourth quarter.
• Core cash burn improved from $38M per day in Q2 to $19M per day in Q4, and core cash burn was expected to remain flat in Q1 versus Q4.

Guidance

• United expects first quarter total revenue to remain down 65% to 70% versus 2019 with capacity down at least 51%.
• The company committed to achieving permanent structural cost reductions of $2.0B per year and to keeping CASM-X flat in 2023 versus 2019.
• United expects 2023 EBITDA margins to exceed 2019 levels, contingent on the pace of demand recovery.
• Core cash burn is expected to continue improving after Q1, and the company expects to end Q1 with roughly the same liquidity as year-end 2020 due largely to at least $2.6B expected from the payroll support program extension.
• Non-aircraft capital expenditures for 2021 are expected to be about $1.4B with an off-ramp to reduce that amount by half if necessary.
• Aircraft capital expenditures for 2021 are expected to be about $2.5B, including planned deliveries of 24 737 MAXs, 11 787s, and four Embraer 175s.