Delta Balance Sheet

[Old School]

On Yahoo Finance, Delta's Balance Sheet has some suspicious updates. Last quarter they added 14billion in unknown assets and labeled it Goodwill. Even with this phantom 14billion added to the balance sheet, the company still has negative 6billion in tangible assets. Delta must have some creative financing with Boeing to afford 30-40 more 777's with a negative cash flow and a negative 6billion net worth. Maybe it's like the self financing RJ's they got back in 2001-2005?

 

[400ADude]

Thanks for the Old School. Very suspicious indeed.

 

[Tanker Clown]

This is nothing another trip through Ch 11 can't fix. I've always found that not paying creditors was the path of least resistance.

 

[ACL65PILOT]

Well, some of the guys that I have talked to heard this from out 777 chief LCP. I am guessing that there might be some truth to it.

Do not forget that Air France has a vested interest in DAL succeeding. There is a lot of cheap money from that direction.

 

[Old School]

I think Air France wants the DAL/NWA deal to happen so they can gain access to the Pacific. CAL could be odd man out of the KY TEAM ALLIANCE

 

[737 Pylt]

I think Air France wants the DAL/NWA deal to happen so they can gain access to the Pacific. CAL could be odd man out of the KY TEAM ALLIANCE

I realize that was a typo, but you just got DTW320 all excited.....:laugh:

737

 

[Andy]

Do not forget that Air France has a vested interest in DAL succeeding. There is a lot of cheap money from that direction.

????? WHAT are you smoking? Cheap credit is gone in the world markets. Evaporated. Kaput. History.
There are rumors out there that a couple of French banks are on the verge of imploding. One of them had a trader that got a lot of attention recently.
There are also a couple of German banks and several others across the EU that are holding a lot of US mortgage backed securities.

 

[ACL65PILOT]

True, but this is cash that AF has on hand. It is a lot different. Plus they will be betting that the value of the dollar will go up, which it will. It will be a win-win for AF/KLM

 

[tyuwerty]

I think Air France wants the DAL/NWA deal to happen so they can gain access to the Pacific. CAL could be odd man out of the KY TEAM ALLIANCE

By Pacific did you mean Asia/Oceania? Air France already serves most of the same cities in the Pacific direct out of CDG. Actually, I think they fly to a whole lot more places there than NWA.

 

[~~~^~~~]

On Yahoo Finance, Delta's Balance Sheet has some suspicious updates. Last quarter they added 14billion in unknown assets and labeled it Goodwill. Even with this phantom 14billion added to the balance sheet, the company still has negative 6billion in tangible assets.

I searched and could not find the information you cited. Do you have a link?

A mistake must have been made in Yahoo's data mining program. As you know "goodwill" is a balancing entry, an expectation of a future profit and usually a non performing asset these days. Fourteen Billion is impossible.

 

[On Your Six]

I searched and could not find the information you cited. Do you have a link?

A mistake must have been made in Yahoo's data mining program. As you know "goodwill" is a balancing entry, usually for a non performing asset. Fourteen Billion is impossible.

That is correct. I'd like to see the link as well. Plus, wouldn't the airline analysts be all over this issue if it were a major red flag?????????????????

 

[DTW320]

That is correct. I'd like to see the link as well. Plus, wouldn't the airline analysts be all over this issue if it were a major red flag?????????????????

Not sure if this is what you mean, but this is from the latest 10k:

Goodwill and Other Intangible Assets. Goodwill reflects the excess of the reorganization value of the Successor over the fair value of tangible and identifiable intangible assets, net of liabilities, from the adoption of fresh start reporting. We recorded $12.3 billion of goodwill upon emergence from bankruptcy.

Also This:

To facilitate the calculation of the enterprise value of the Successor, management developed a set of financial projections for the Successor using a number of estimates and assumptions. The enterprise and corresponding reorganization value of the Successor was based on financial projections using various valuation methods, including (1) a comparison of our projected performance to the market values of comparable companies; (2) a review and analysis of several recent transactions in the airline industry; and (3) a calculation of the present value of future cash flows based on our projections. Utilizing these methodologies, the reorganization value of the Successor was estimated to be in the range of $9.4 billion to $12.0 billion. The enterprise value, and corresponding reorganization value, is dependent upon achieving the future financial results set forth in our projections, as well as the realization of certain other assumptions. There can be no assurance that the projections will be achieved or that the assumptions will be realized. The excess reorganization value (using the low end of the range) over the fair value of tangible and identifiable intangible assets, net of liabilities, has been reflected as goodwill in the Fresh Start Consolidated Balance Sheet. The financial projections and estimates of enterprise and reorganization value are not incorporated into this Form 10-K.

 

[Max Powers]

All the CPAs in the room and MBAs get out the popcorn and listen to the comedy. Pilots trying to make sense of a balance sheet and what "goodwill" means. Priceless fun

 

[~~~^~~~]

Not sure if this is what you mean, but this is from the latest 10k:

Goodwill and Other Intangible Assets. Goodwill reflects the excess of the reorganization value of the Successor over the fair value of tangible and identifiable intangible assets, net of liabilities, from the adoption of fresh start reporting. We recorded $12.3 billion of goodwill upon emergence from bankruptcy.

OK, this now makes sense. Coming out of bankruptcy Delta ( as well as NWA and others ) had to assign a value to the Company. The anticipated value of Delta shares had to be balanced with Assets.

Delta's case was a little different because of the inflationary pressure on DAL's value created by the US Air buyout attempt. In their effort to impress the owners of Delta that the stand alone plan was more valuable than US Air's 10.3 Bn offer, they made a case for a stock valuation somewhere around $9.5 to $12 Billion.

IMHO Delta's evaluation was more in line with reality than Doug Parker's, which was funded in part by 2Bn in anticipated savings.

While other airlines might have liked to see US Air take over Delta, it would have been a disaster for Delta employees and the standards of compensation in our profession as a whole.

The Board ultimately chose to put more faith in the aforementioned "goodwill" than Parker's team. Pardus clearly believes the Board made the wrong decision. Folks will have have opinions on that decision for a long, long, time.

However, do not make the mistake of getting confused with "Fresh Start" accounting where the Company's financials get re-booted. Once DAL and NWA go a year past their BK exit you can have real year to year data for comparison & trend analysis.

 

[General Lee]

On Yahoo Finance, Delta's Balance Sheet has some suspicious updates. Last quarter they added 14billion in unknown assets and labeled it Goodwill. Even with this phantom 14billion added to the balance sheet, the company still has negative 6billion in tangible assets. Delta must have some creative financing with Boeing to afford 30-40 more 777's with a negative cash flow and a negative 6billion net worth. Maybe it's like the self financing RJ's they got back in 2001-2005?

Thanks Price Waterhouse. Where were you when Enron was doing all of their financial shinanigans? You let down a whole lotta people.


Bye Bye--General Lee

 

[General Lee]

I think Air France wants the DAL/NWA deal to happen so they can gain access to the Pacific. CAL could be odd man out of the KY TEAM ALLIANCE

Gain access to the Pacific? Huh? Air France has plenty of slots to all of the major Asian cities, from FRANCE.


Bye Bye--General Lee

 

[Fly4hire]

By Pacific did you mean Asia/Oceania? Air France already serves most of the same cities in the Pacific direct out of CDG. Actually, I think they fly to a whole lot more places there than NWA.

And pax in ATL, DTW, LAX, and SEA are going to fly to CDG to get to NRT or HKG?

 

[General Lee]

And pax in ATL, DTW, LAX, and SEA are going to fly to CDG to get to NRT or HKG?

I know why they would WANT to do that? Tailwinds. Just keep flying East. Round the world baby!!

Bye Bye--General Lee

 

[Tanker Clown]

I know why they would WANT to do that? Tailwinds. Just keep flying East. Round the world baby!!

Bye Bye--General Lee

There's not a strong enough tailwind to put Delta in the black for this quarter...or year.

 

[400ADude]

All the CPAs in the room and MBAs get out the popcorn and listen to the comedy. Pilots trying to make sense of a balance sheet and what "goodwill" means. Priceless fun

I think it is refering to one of Delta's sponsors and a place their employees get a huge discount at: "The Goodwill" See link below.

http://www.goodwill.org/page/guest/about