Uber's financial statements for the year ended Dec 31 2020 showed a net loss of $6.788 billion on sales of 11.139 billion. Some analysts are quick to blame Covid-19 for this loss, but others pointed to bigger long-term issues and reminded investors that in 2019 (before Covid-19) Uber showed a loss of $8.512 billion on sales of 13.000 billion.

Assume the following cost structure:

Cost of Sales and Operations and support are all variable, and all of the other costs (Sales and Marketing , R+D all fixed, General and admin, Depreciation and Amortization) are all fixed.

For simplicity purposes, ignore items such as interest expense, other income/expenses, income taxes, gains/losses on equity method investments, and issues related to minority interests. This means that in 2018, 2019 and 2020 net income (loss) were (3,033), (8,596) and (4,863) respectively.

1. Redo the income statement for 2018, 2019 and 2020 in a format that shows variable costs, contribution margin and fixed costs.

2. Based on 2020 information on page 87 of the financial statements (provided with this assignment), how big would revenues have to have been in 2020 in order for Uber to reach the break-even point?

3. How much would sales have to grow (in percentage) in order for Uber to break even?

Please help!

UBER TECHNOLOGIES, INC. CONSOLIDATED BALANCE SHEETS (In millions, except share amounts which are reflected in thousands, and per share amounts) As of December 31, 2019 As of December 31, 2020 Assets $ 10,873 $ 440 99 1.214 1.299 Cash and cash equivalents Short-term investments Restricted cash and cash equivalents Accounts receivable, net of allowance of $34 and $55, respectively Prepaid expenses and other current assets Assets held for sale Total current assets Restricted cash and cash equivalents Collateral held by insurer Investments (including amortized cost of debt securities of $2.279 and $2.281) Equity method investments Property and equipment, net Operating lease right-of-use assets Intangible assets, net Goodwill Other assets Total assets Liabilities, mezzanine equity and equity Accounts payable Short-term insurance reserves Operating lease liabilities, current Accrued and other current liabilities Liabilities held for sale Total current liabilities Long-term insurance reserves Long-term debt, net of current portion Operating lease liabilities, non-current Other long-term liabilities Total liabilities Commitments and contingencies (Note 15) Mezzanine equity Redeemable non-controlling interests 13.925 1.095 1,199 10.527 1,364 1.731 1.594 71 167 88 31.761 5.647 1,180 250 1.073 1.215 517 9.882 1.494 860 9.052 1.079 1.814 1.274 1.564 6.109 124 33.252 $ $ $ 272 $ 1.121 196 4.050 235 1.243 175 5.112 100 6.865 2.223 7,560 1.544 1.306 5.639 2.297 5,707 1.523 1.412 16.578 19.498 311 787 Equity Common stock. $0.00001 par value, 5,000,000 shares authorized for both periods. 1,716,681 and 1,849,794 shares issued and outstanding, respectively Additional paid-in capital 30,739 Accumulated other comprehensive loss (187) Accumulated deficit (16,362) Total Uber Technologies, Inc. stockholders' equity 14.190 Non-redeemable non-controlling interests 682 Total equity 14.872 Total liabilities, mezzanine equity and equity $ 31,761 $ The accompanying notes are an integral part of these consolidated financial statements. 35.931 (535) (23,130) 12.266 701 12.967 33.252 86 2018 (1) 2019 (1) (8.596) UBER TECHNOLOGIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except share amounts which are reflected in thousands, and per share amounts) Year Ended December 31, 2020 Revenue S 10.433 $ 13.000 $ 11.139 Costs and expenses Cost of revenue, exclusive of depreciation and amortization shown separately below 4.786 6.061 5.154 Operations and support 1.516 2.302 1,819 Sales and marketing 3.151 4.626 3.583 Research and development 1,505 4.836 2.205 General and administrative 2.082 3.299 2.666 Depreciation and amortization 472 575 Total costs and expenses 13,466 21,596 16,002 Loss from operations (3.033) (4.863) Interest expense (648) (559) (458) Other income (expense), net 4.993 722 (1.625) Income (loss) before income taxes and loss from equity method investments 1,312 (8,433) (6,946) Provision for benefit from) income taxes 45 (192) Loss from equity method investments (42) (34) (34) Net income (loss) including non-controlling interests (8,512) (6,788) Less: net loss attributable to non-controlling interests, net of tax (10) (6) (20) Net income (loss) attributable to Uber Technologies, Inc. $ (8,506) $ (6,768) Net income (loss) per share attributable to Uber Technologies, Inc. common stockholders: Basic $ (6.81) $ (3.86) Diluted (6.81) $ (3.86) Weighted average shares used to compute net income (loss) per share attributable to common stockholders: Basic 443,368 1.248,353 1,752,960 Diluted 478.999 1.248,353 1,752.960 2009 2008 19:11 0 (1) Our revenue and cost of revenue, exclusive of depreciation and amortization, have been retrospectively adjusted to reflect the implementation of our new accounting policy adopted in the fourth quarter of 2020. Refer to Note 1 - Description of Business and Summary of Significant Accounting Policies for further information on the change in accounting policy. The accompanying notes are an integral part of these consolidated financial statements. 87 2020 (6,788) UBER TECHNOLOGIES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In millions) Year Ended December 31, 2018 2019 Net income (loss) including non-controlling interests $ 987 $ (8,512) $ Other comprehensive income (loss), net of tax: Change in foreign currency translation adjustment (225) (3) Change in unrealized gain on investments in available-for-sale securities 40 4 Other comprehensive income (loss), net of tax (185) 1 Comprehensive income (loss) including non-controlling interests 802 (8,511) Less: comprehensive loss attributable to non-controlling interests (10) (6) Comprehensive income (loss) attributable to Uber Technologies, Inc. $ 812 $ (8,505) $ (350) 2 (348) (7,136) (20) (7,116 The accompanying notes are an integral part of these consolidated financial statements. 88 UBER TECHNOLOGIES, INC. CONSOLIDATED BALANCE SHEETS (In millions, except share amounts which are reflected in thousands, and per share amounts) As of December 31, 2019 As of December 31, 2020 Assets $ 10,873 $ 440 99 1.214 1.299 Cash and cash equivalents Short-term investments Restricted cash and cash equivalents Accounts receivable, net of allowance of $34 and $55, respectively Prepaid expenses and other current assets Assets held for sale Total current assets Restricted cash and cash equivalents Collateral held by insurer Investments (including amortized cost of debt securities of $2.279 and $2.281) Equity method investments Property and equipment, net Operating lease right-of-use assets Intangible assets, net Goodwill Other assets Total assets Liabilities, mezzanine equity and equity Accounts payable Short-term insurance reserves Operating lease liabilities, current Accrued and other current liabilities Liabilities held for sale Total current liabilities Long-term insurance reserves Long-term debt, net of current portion Operating lease liabilities, non-current Other long-term liabilities Total liabilities Commitments and contingencies (Note 15) Mezzanine equity Redeemable non-controlling interests 13.925 1.095 1,199 10.527 1,364 1.731 1.594 71 167 88 31.761 5.647 1,180 250 1.073 1.215 517 9.882 1.494 860 9.052 1.079 1.814 1.274 1.564 6.109 124 33.252 $ $ $ 272 $ 1.121 196 4.050 235 1.243 175 5.112 100 6.865 2.223 7,560 1.544 1.306 5.639 2.297 5,707 1.523 1.412 16.578 19.498 311 787 Equity Common stock. $0.00001 par value, 5,000,000 shares authorized for both periods. 1,716,681 and 1,849,794 shares issued and outstanding, respectively Additional paid-in capital 30,739 Accumulated other comprehensive loss (187) Accumulated deficit (16,362) Total Uber Technologies, Inc. stockholders' equity 14.190 Non-redeemable non-controlling interests 682 Total equity 14.872 Total liabilities, mezzanine equity and equity $ 31,761 $ The accompanying notes are an integral part of these consolidated financial statements. 35.931 (535) (23,130) 12.266 701 12.967 33.252 86 2018 (1) 2019 (1) (8.596) UBER TECHNOLOGIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except share amounts which are reflected in thousands, and per share amounts) Year Ended December 31, 2020 Revenue S 10.433 $ 13.000 $ 11.139 Costs and expenses Cost of revenue, exclusive of depreciation and amortization shown separately below 4.786 6.061 5.154 Operations and support 1.516 2.302 1,819 Sales and marketing 3.151 4.626 3.583 Research and development 1,505 4.836 2.205 General and administrative 2.082 3.299 2.666 Depreciation and amortization 472 575 Total costs and expenses 13,466 21,596 16,002 Loss from operations (3.033) (4.863) Interest expense (648) (559) (458) Other income (expense), net 4.993 722 (1.625) Income (loss) before income taxes and loss from equity method investments 1,312 (8,433) (6,946) Provision for benefit from) income taxes 45 (192) Loss from equity method investments (42) (34) (34) Net income (loss) including non-controlling interests (8,512) (6,788) Less: net loss attributable to non-controlling interests, net of tax (10) (6) (20) Net income (loss) attributable to Uber Technologies, Inc. $ (8,506) $ (6,768) Net income (loss) per share attributable to Uber Technologies, Inc. common stockholders: Basic $ (6.81) $ (3.86) Diluted (6.81) $ (3.86) Weighted average shares used to compute net income (loss) per share attributable to common stockholders: Basic 443,368 1.248,353 1,752,960 Diluted 478.999 1.248,353 1,752.960 2009 2008 19:11 0 (1) Our revenue and cost of revenue, exclusive of depreciation and amortization, have been retrospectively adjusted to reflect the implementation of our new accounting policy adopted in the fourth quarter of 2020. Refer to Note 1 - Description of Business and Summary of Significant Accounting Policies for further information on the change in accounting policy. The accompanying notes are an integral part of these consolidated financial statements. 87 2020 (6,788) UBER TECHNOLOGIES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In millions) Year Ended December 31, 2018 2019 Net income (loss) including non-controlling interests $ 987 $ (8,512) $ Other comprehensive income (loss), net of tax: Change in foreign currency translation adjustment (225) (3) Change in unrealized gain on investments in available-for-sale securities 40 4 Other comprehensive income (loss), net of tax (185) 1 Comprehensive income (loss) including non-controlling interests 802 (8,511) Less: comprehensive loss attributable to non-controlling interests (10) (6) Comprehensive income (loss) attributable to Uber Technologies, Inc. $ 812 $ (8,505) $ (350) 2 (348) (7,136) (20) (7,116 The accompanying notes are an integral part of these consolidated financial statements. 88