Delta reports $6.4 BILLION loss for 1st qtr.

[Fly4hire]

(Disclaimer for the humor impaired - this is satire, not a real press release)

However an un-named source close to negotiations was quoted as saying "we have another $3.1 billion cash on hand in the form of NWA asset sales, and most of the company officers are still planning on completing their 5000 sq. ft. slope side homes in Aspen"

"Richard Anderson, Doug Steenland, and a host of top oil industry executives have rented the island of St. Martin for the months of July and August to host their annual Fleecing of America banquet, where President George Bush was scheduled to make a guest appearance....."

The un-named source said they were planning on doing a formation overfly of Wall Street in their fleet of private Gulfstreams, and in tribute of the DAL MEC Chairman, Lee Moak, who made the deal possible, would perform the special "missing man" formation.

Asked why they would not use their own company airplanes, Richard Anderson choked on his Dom Perignon and had to be rushed to an exclusive Beverly Hills spa to recover.

 

[spinproof]

Not unless you are an individual investor who owns stock and lists it as a personal asset.

Really?
market capitalization - an estimation of the value of a business that is obtained by multiplying the number of shares outstanding by the current price of a share.

OK So DAL has been de-valued by $6.1 Billion. No big deal. uke:

 

[BILL LUMBERG]

Hey FI Monkeys.....

The billions lost is market value as a writeoff when they do the merger stock trade.....we posted a billion dollar loss in BK when they did the re-issuance of stock. Nothing shocking here....market value can be written off like depreciation.

The real number is 274 million dollar operating loss (gasp).....better than most other majors. But that's like getting first in the 100 yd dash at the SPecial Olympics, you may be the champ, but you are still a retard.

Everybody chime in until AA717 and his airline posts, then we'll all have something to laugh at!!!

 

[Bavarian Chef]

Hey FI Monkeys.....

The billions lost is market value as a writeoff when they do the merger stock trade.....we posted a billion dollar loss in BK when they did the re-issuance of stock. Nothing shocking here....market value can be written off like depreciation.

The real number is 274 million dollar operating loss (gasp).....better than most other majors. But that's like getting first in the 100 yd dash at the SPecial Olympics, you may be the champ, but you are still a retard.

Everybody chime in until AA717 and his airline posts, then we'll all have something to laugh at!!!

Hello? We all know this, we are just collectively creating negative energy. If we don't, the General will never get to 10,000,000 posts.

 

[Occam's Razor]

(Disclaimer for the humor impaired - this is satire, not a real press release)

However an un-named source close to negotiations was quoted as saying "we have another $3.1 billion cash on hand in the form of NWA asset sales, and most of the company officers are still planning on completing their 5000 sq. ft. slope side homes in Aspen"

"Richard Anderson, Doug Steenland, and a host of top oil industry executives have rented the island of St. Martin for the months of July and August to host their annual Fleecing of America banquet, where President George Bush was scheduled to make a guest appearance....."

The un-named source said they were planning on doing a formation overfly of Wall Street in their fleet of private Gulfstreams, and in tribute of the DAL MEC Chairman, Lee Moak, who made the deal possible, would perform the special "missing man" formation.

Asked why they would not use their own company airplanes, Richard Anderson choked on his Dom Perignon and had to be rushed to an exclusive Beverly Hills spa to recover.

'Kay...that's funny!

Taking a no-cost impairment now is a strategic move to keep it from having to be accounted for during any future stock swap.

it could trigger a couple of loan covenants, and force both airlines to pay higher interest rates (or make "penalty" payments), but those could be "adjusted" if the lender agrees to take stock during the merger transaction.

The key number is the operating loss, since that's the one that will be rolled-up and used to whap us on the head.

 

[WSurf]

Hey Tanker Clown, roll over and wake up the General -- we need his take on this.

While your waiting, I found a video of both of them!


http://www.youtube.com/watch?v=ipZDG6__Zfc&feature=related

 

[clickclickboom]

Let me para-phrase what the general's response will sound like here...


"DAL has 9.2457 billion in the cash, we have 500 Boeing 777-300ers on firm order, 174 B767's on order. WE are hiring like mad, our stock will go back up to over $100/share once Oil drops back to $50/barrel. DALPA has stated all of this so it is going to happen. The NWA guys bring ZERO to the table and are lucky to have a job. They can continue to fly their POS old DC-9's. Staple them all....DAL is the BEST airline in the universe and we really didn't lose ANY money, it's just strategic accounting practices."


Or something like that....

And dont forget to add::


PS: Hope you have fun on your laredo or jfk overnights bitches because i fly my south america turns

GL

 

[d.fitz]

Excluding special items, primarily a $6.1 billion non-cash charge relating to the decline in Delta's market value due to sustained record fuel prices, the airline lost $274 million, or 69 cents a share, in the first quarter.
Analysts expected a loss of 49 cents a share, excluding one-time items.

So, let me get this straight. They want the merger to seem more 'palatable' - so they CREATE a special $6.1 BILLION dollar charge? Why didn't they make it $20 Billion???

They lost $274 million, but that sure isn't the headline!!

 

[tanker2]

Posted by Tantrum:
"Wait...I think I know what's going on now. The pilot's equity stake in the new company is based on a 3.5% of the value of the new company...DAL and NWA basically just reduced the value of the overall company by about $10 Billion with these moves. So now the equity portion will be based on a $7 Billion company instead of the $17.7 Billion we were hearing before. At least that's my take on it...could be way off, but it does seem odd that only NWA and DAL took this unique writeoff at the exact same time!"

I think Tantrum solved the puzzle. 3.5% of $10B is $350 million in equity that the company no longer passes to the employees. And goodwill is not market cap (although a worse balance sheet will not help the stock), it is basically value placed on the brand name. And with all airlines getting hit hard right now, mgt couldn't have a better time to do a writeoff like this - airline stocks are getting hit anyway so the pain won't be as great for them as it would have been six months ago.

 

[WSurf]

And dont forget to add::


PS: Hope you have fun on your laredo or jfk overnights bitches because i fly my south america turns

GL

Jeez, and to think my buddy was gonna quit JetBlue (He's in the 50% range in Seniority) for a job at Delta. He called 2 days before class to say thanks, but no thanks.

Time to hunker down for the summer ride, its gonna be a wild one!!!!

 

[MALSR]

This just goes to show that bankruptcies don't improve anything. All, and I mean all, of the underlying problems both of these airlines had are still there. Not only that but the two companies are probably going to combine into one giant problem. All the bankruptcy did was reduce payroll while ignoring the true problem areas and improvement potential.

 

[WSurf]

This just goes to show that bankruptcies don't improve anything. All, and I mean all, of the underlying problems both of these airlines had are still there. Not only that but the two companies are probably going to combine into one giant problem. All the bankruptcy did was reduce payroll while ignoring the true problem areas and improvement potential.

I think Bankruptcies can help, we did see a recovery by the airlines. Then then came another wammy! Fuel Prices.

This Sucks

 

[SFR]

How can 2 obviously terrible companies like DAL and NWA possibly merge? It is like the blind leading the blind.

They have no business being in this business.

 

[BILL LUMBERG]

Hello? We all know this, we are just collectively creating negative energy. If we don't, the General will never get to 10,000,000 posts.

Now that's funny!!!

 

[SWA/FO]

Nice loss General Lee, maybe you guys should start flying to LBB and load up on some of that $$$$ that SWA keeps finding.

 

[BILL LUMBERG]

Posted by Tantrum:
"Wait...I think I know what's going on now. The pilot's equity stake in the new company is based on a 3.5% of the value of the new company...DAL and NWA basically just reduced the value of the overall company by about $10 Billion with these moves. So now the equity portion will be based on a $7 Billion company instead of the $17.7 Billion we were hearing before. At least that's my take on it...could be way off, but it does seem odd that only NWA and DAL took this unique writeoff at the exact same time!"

I think Tantrum solved the puzzle. 3.5% of $10B is $350 million in equity that the company no longer passes to the employees. And goodwill is not market cap (although a worse balance sheet will not help the stock), it is basically value placed on the brand name. And with all airlines getting hit hard right now, mgt couldn't have a better time to do a writeoff like this - airline stocks are getting hit anyway so the pain won't be as great for them as it would have been six months ago.

That's a great point..... but isn't the equity share based on the price at the close of the corporate closing?? So the writeoff is for depreciation of assets (i.e. stock) which allows for a favorable tax rate.....just guessing on that one

 

[Jmoney]

General?

General Lee, Paging General Lee!!!

People are bashing you and your airline! Maybe you should step forward to valiantly defend your "inspired managment."

Maybe you, the all-seeing all-knowing poop of the world can enlighten us lesser mortals as to how this can happen to you and your "inspired leaders."

How many billion? No, seriously, General! Billion? Really? "Goodwill write-offs." Yep, if by "goodwill" they mean sucking a shotgun barrel like Kurt Cobain, I guess I could see that point.

Come on, Gen! we are awaiting your inspired response with baited breath!

-Come try and "spin" this one.
-Or just "sit and spin"

-Matters not to me, toobag!

-P.S.- See all my previous posts regarding yourself and "bad ju-ju." Maybe you will get the point

 

[ultrarunner]

BILLION? One time charge? Huh?


here's the spin: excluding special one-time charges they only lost 274 million

NWA release is next ...

Ok, lets give DAL the benefit of no more "one time charges' related to reduced market cap (riiiight).

With that said, has anyone done the math on how many more quarters DAL can tolerate quarter BILLION dollar losses without going out of business or declaring BK?

I can't imagine the General doesn't have those numbers at the ready.

 

[Noserider76]

DL's guidance says + 3-5% operating margin in Q-2. Operating profit should be in that range unless fuel is significantly higher than current price. 49%+ fuel hedged at 2.79/gal.

For the record DL guidance was good for Q-1. Q-1 2008 guidance was for an operating margin of minus 2-4%. Came in at minus 3.3% for an operating loss of 161 mil plus special items (274 mil).

 

[Max Powers]

Well DAL and NWA stock is up on that news so it can't be that bad

 

[DTW320]

Operating loss is the number that matters. DAL and NWA's combined operating loss was still $100Million less than UAL's. Not saying it doesn't suck, but is relatively better than others.

 

[BOX OFFICE]

$3.9 Billion Non-cash, Non-recurring Accounting Charge Taken to Reduce Goodwill
The Company is required for accounting purposes to measure the value of goodwill annually or whenever significant events that could be indicators of a change in value have occurred. In completing our first quarter evaluation, we considered the impact of current high fuel prices, Northwest's recent stock price, other industry trends and the equity value of Northwest implied by the recent merger announcement and have determined that an impairment to goodwill is required. To make this determination, the Company compared the carrying value of its equity to its fair value. For purposes of this evaluation, fair value has been determined based on the implied market value of Northwest's equity in the announced transaction. As a result of this evaluation, the Company recorded a non-cash goodwill impairment charge of $3.9 billion.

In other words, Delta and Northwest are crying poor to facilitate public and regulatory sympathy and facilitate the merger. Report obscene losses on top of mediocre losses to make the merger seem really necessary when John Q Public watches the Evening News.

Did anyone really not see this coming? And do they think everyone is too stupid to see through it? Delta and Northwest are famous for cooking the books up to serve whatever purpose they have in mind. The bankruptcies (ironically on the same day!) were a prime example.

Don't believe the hype. The real losses were the smaller figures. Which are well in line with the other airlines.

 

[taiar]

Wake up in the morning ...HEADLINES and Breaking NEWS DELTA loss = $6.1 BILLION....


Everyone sells stocks.... pre trading Delta stock takes a hit.... just before the opening bell Delta and analysts clarify that its really only a $274 loss.... all of a sudden it don't seem that bad no more, and stock bounces back up and does not Tank... as it would have if they would have just announced from the get go a $274 loss...... $6.1 Billion vs $274 Mill.

UAL stock dropped almost $6 a share when they announced there Q1 results... ..... However DAL has only dropped about a $1.... the $6.1 Billion soften the blow.... smart financial strategy..

my 2 cents... for what ever its worth or not...

 

[Mr.B]

Wake up in the morning ...HEADLINES and Breaking NEWS DELTA loss = $6.1 BILLION....


Everyone sells stocks.... pre trading Delta stock takes a hit.... just before the opening bell Delta and analysts clarify that its really only a $274 loss.... all of a sudden it don't seem that bad no more, and stock bounces back up and does not Tank... as it would have if they would have just announced from the get go a $274 loss...... $6.1 Billion vs $274 Mill.

UAL stock dropped almost $6 a share when they announced there Q1 results... ..... However DAL has only dropped about a $1.... the $6.1 Billion soften the blow.... smart financial strategy..

my 2 cents... for what ever its worth or not...

Subtract the 250M dividend payout UAL robber-barons basically gave themselves, and the UAL/DL loss is basically the same.

 

[General Lee]

Yeah really. After the General gets done playing broke back mountain with the CEO he will chime in with some good BS.

What a complete tool. Hillarious. Anyway, the right down was an accounting tool that both DL and NWA used. Funny how that happens, eh? The actual loss was $274 million, which isn't great, but not as bad as UAL's, and hopefully the busy Summer season will help. Other airlines will start falling by the wayside anyway. A DL/NWA combo will have $7 billion in cash, which will help weather the storm.


Bye Bye--General Lee

 

[Noserider76]

In other words, Delta and Northwest are crying poor to facilitate public and regulatory sympathy and facilitate the merger. Report obscene losses on top of mediocre losses to make the merger seem really necessary when John Q Public watches the Evening News.

Did anyone really not see this coming? And do they think everyone is too stupid to see through it? Delta and Northwest are famous for cooking the books up to serve whatever purpose they have in mind. The bankruptcies (ironically on the same day!) were a prime example.

Don't believe the hype. The real losses were the smaller figures. Which are well in line with the other airlines.

I don't think they need to cook the books to get the merger approved. US carriers are getting killed by the ultra-weak dollar (= record fuel prices in $). Large international carriers are getting stronger as their currency appreciates via the dollar. Consolidation will probably have to happen if we want US airlines to compete in the international market. These large goodwill write downs are just pre-merger house cleaning.

 

[Tanker1497]

Hey SFR, interesting post....

"How can 2 obviously terrible companies like DAL and NWA possibly merge? It is like the blind leading the blind.

They have no business being in this business."

So in your opinion, who exactly does have any business being in this business? It looks as if all pax carriers, save Southwest, will be in the red for this quarter. Just curious, what airline do you work for, because I'm sure they have "business being in this business."?

 

[jehtplane]

What a complete tool. Hillarious. Anyway, the right down was an accounting tool that both DL and NWA used. Funny how that happens, eh? The actual loss was $274 million, which isn't great, but not as bad as UAL's, and hopefully the busy Summer season will help. Other airlines will start falling by the wayside anyway. A DL/NWA combo will have $7 billion in cash, which will help weather the storm.


Bye Bye--General Lee

I rest my case, I'd swear you sit in front of a picture of a Delta Widget and diddle yourself!!!

 

[SWA/FO]

Other airlines will start falling by the wayside anyway. A DL/NWA combo will have $7 billion in cash, which will help weather the storm.

Yeah, that will buy DL/NWA a qtr and a half.

 

[Bake]

General, I'm pretty sure houses in LBB are about 70 dollars a square foot. Just a thought.