I've discovered Netjets 10 year plan!

[hangarrat]

2011 Second Quarter Report (PDF file)

2011 Second Quarter Report (PDF file)

2010 Second Quarter Report (PDF file)


This years report says profits are $65M less than last year. Last y
ear profit was $114M ...

Our other service businesses include NetJets, the world’s leading provider of fractional ownership programs for general aviation aircraft and FlightSafety (“FSI”), a provider of high technology training to operators of aircraft. Among the other businesses included in this group are: TTI, a leading electronic components distributor; Business Wire, a leading distributor of corporate news, multimedia and regulatory filings; The Pampered Chef, a direct seller of high quality kitchen tools; International Dairy Queen, a licensor and service provider to about 5,900 stores that offer prepared dairy treats and food; The Buffalo News, a publisher of a daily and Sunday newspaper; and businesses that provide management and other services to insurance companies. In 2011, revenues of our other service businesses increased $210 million in the second quarter (11%) and $404 million (11%) in the first six months compared to 2010. In each period, the revenue increases were primarily attributable to stronger demand for electronic components (TTI) and pilot training (FSI) and from higher revenues at NetJets. The comparative revenue increases of NetJets reflected increases in revenues related to cost increases that are passed through to customers (with little or no margin), and modest increases in fractional interests sold and revenue hours flown.


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Manufacturing, Service and Retailing (Continued) Other service (Continued) Pre-tax earnings in the second quarter of 2011 of $287 million were unchanged from 2010 and for the first six months declined $19 million (4%) from 2010. In 2011, earnings increased at TTI and FSI, which were offset by lower earnings of NetJets and several of our other smaller services businesses. NetJets’ earnings in 2011 declined $11 million for the second quarter and $65 million for the first six months. NetJets’ earnings in 2011 reflected negative foreign currency exchange rate movements affecting operations outside of the United States, as well as impairment charges recorded during the first quarter related to the planned disposition of aircraft later in 2011 and fees incurred to cancel certain aircraft purchase commitments.

 

[hangarrat]

What did they say?

 

[hangarrat]

And in 2010 they said this:

Our other service businesses include NetJets, the world’s leading provider of fractional ownership programs for general aviation aircraft and FlightSafety, a provider of high technology training to operators of aircraft. Among the other businesses included in this group are: TTI, a leading electronic components distributor; Business Wire, a leading distributor of corporate news, multimedia and regulatory filings; The Pampered Chef, a direct seller of high quality kitchen tools; International Dairy Queen, a licensor and service provider to about 5,800 stores that offer prepared dairy treats and food; The Buffalo News, a publisher of a daily and Sunday newspaper; and businesses that provide management and other services to insurance companies. In 2010, revenues of our other service businesses were $1,871 million in the second quarter and $3,645 million in the first six months, increases of $299 million (19%) and $567 million (18%), respectively, compared to 2009. Pre-tax earnings in the second quarter of 2010 increased $363 million over 2009 and in the first six months of 2010 increased $568 million compared with 2009. The increases in revenues and earnings were driven by significantly improved operating results of NetJets and TTI. For the second quarter and first half of 2010, NetJets’ revenues increased 16% and 17%, respectively, over 2009 which was primarily attributable to an increase in worldwide flight revenue hours, partially offset by lower management fees due to fewer aircraft in the NetJets program. NetJets generated pre-tax earnings of $114 million in the first six months of 2010 compared to a pre-tax loss of $349 million in 2009, which included $255 million of asset writedowns and other downsizing costs. Such costs in the first half of 2010 were relatively minor. On January 1, 2010, Berkshire began charging NetJets a guarantee fee related to the level of its outstanding commercial paper and other borrowings. For the first six months of 2010, the guarantee fee was $18.7 million and was charged against NetJets’ earnings. A corresponding credit was included as a component of “Other” earnings in the table on page 22. Had a similar fee been charged in 2009, NetJets’ pre-tax loss of $349 million would have increased by $38.2 million. The improvement in earnings was attributed to the increase in revenues and to an overall reduction in flight operations and administrative costs, partially offset by higher fuel costs. NetJets continues to own more aircraft than is required for present operations and we expect to continue to dispose selected aircraft over time. NetJets’ operating cost structure has been reduced to better match customer demand, and we believe that NetJets will continue to operate profitably in the future. For the first half of 2010, revenues of TTI increased by approximately 50% over 2009 which was driven by very strong worldwide demand. We primarily attribute the revenue increase to recovering consumer demand for electronic products, as well as to manufacturers replenishing depleted raw material inventories. We believe that the current strong market conditions will eventually slow to more normalized levels. As a result of the increase in revenues, pre-tax earnings of TTI were significantly higher in 2010 compared to 2009. Retailing

 

[hangarrat]

So lost $350 million in '09 made $114 million in 2010 and made $65 million less than $114 million in '11.

So roughly 350 minus 114 minus 49 equals $187 million lost over a three year period.

I must be doing something wrong some one help me out, i ran out of fingers and toes and i must have this wrong.

 

[jonjuan]

After taking another look at the report (and not the 2010 report for the same time frame) I retract my original statement a bit..Gunfyter is right that the way it is written it appears that earnings decreased from last year, but does not mean NJA was unprofitable........ I let a chance to poke management get the best of me

Question: Why would the report be written this way and not written to highlight that NJA made a profit(assuming they made a profit although less than last year)... If they did indeed have a $45million profit the first 6 months wouldn't it be better to mention that rather than show how they weren't as "profitable" as last year?

Also for anyone who may be "in the know"....(term used loosely)....would anyone concur that there have been "modest" increases in fractional sales? I agree that revenue hours are up but that's an easy number to calculate. Sales is the ellusive rabbit in the hat...!

I've been saying it for some time now, and should be confirmed by njaowner-netjets is simply much more expensive than any other offering. Their costs are obviously much higher from the legacy their predecessors left them. There are simply many other providers that provide the same service at a significant discount. In this economic environment, most are looking to save $$$$$$.

 

[CA1900]

So lost $350 million in '09 made $114 million in 2010 and made $65 million less than $114 million in '11.

Keep in mind that David Sokol is behind the 2009 and 2010 numbers. I don't trust any figures or claims created during his tenure.

 

[BentOver]

And in 2010 they said this:

Our other service businesses include NetJets, the world’s leading provider of fractional ownership programs for general aviation aircraft and FlightSafety, a provider of high technology training to operators of aircraft. Among the other businesses included in this group are: TTI, a leading electronic components distributor; Business Wire, a leading distributor of corporate news, multimedia and regulatory filings; The Pampered Chef, a direct seller of high quality kitchen tools; International Dairy Queen, a licensor and service provider to about 5,800 stores that offer prepared dairy treats and food; The Buffalo News, a publisher of a daily and Sunday newspaper; and businesses that provide management and other services to insurance companies. In 2010, revenues of our other service businesses were $1,871 million in the second quarter and $3,645 million in the first six months, increases of $299 million (19%) and $567 million (18%), respectively, compared to 2009. Pre-tax earnings in the second quarter of 2010 increased $363 million over 2009 and in the first six months of 2010 increased $568 million compared with 2009. The increases in revenues and earnings were driven by significantly improved operating results of NetJets and TTI. For the second quarter and first half of 2010, NetJets’ revenues increased 16% and 17%, respectively, over 2009 which was primarily attributable to an increase in worldwide flight revenue hours, partially offset by lower management fees due to fewer aircraft in the NetJets program. NetJets generated pre-tax earnings of $114 million in the first six months of 2010 compared to a pre-tax loss of $349 million in 2009, which included $255 million of asset writedowns and other downsizing costs. Such costs in the first half of 2010 were relatively minor. On January 1, 2010, Berkshire began charging NetJets a guarantee fee related to the level of its outstanding commercial paper and other borrowings. For the first six months of 2010, the guarantee fee was $18.7 million and was charged against NetJets’ earnings. A corresponding credit was included as a component of “Other” earnings in the table on page 22. Had a similar fee been charged in 2009, NetJets’ pre-tax loss of $349 million would have increased by $38.2 million. The improvement in earnings was attributed to the increase in revenues and to an overall reduction in flight operations and administrative costs, partially offset by higher fuel costs. NetJets continues to own more aircraft than is required for present operations and we expect to continue to dispose selected aircraft over time. NetJets’ operating cost structure has been reduced to better match customer demand, and we believe that NetJets will continue to operate profitably in the future. For the first half of 2010, revenues of TTI increased by approximately 50% over 2009 which was driven by very strong worldwide demand. We primarily attribute the revenue increase to recovering consumer demand for electronic products, as well as to manufacturers replenishing depleted raw material inventories. We believe that the current strong market conditions will eventually slow to more normalized levels. As a result of the increase in revenues, pre-tax earnings of TTI were significantly higher in 2010 compared to 2009. Retailing

Although a lot of smoke and mirrors most likely was at play during David "Dookie" Sokol's tenure... for the first time in many quarterly reports, these phrases in red, and most notably the underlined statement, were omitted this time....... could be nothing , but since 2009 this underlined statement has been included...Every report....now it's not included.....Just trying to read the tea leaves..:nuts:

 

[BentOver]

I've been saying it for some time now, and should be confirmed by njaowner-netjets is simply much more expensive than any other offering. Their costs are obviously much higher from the legacy their predecessors left them. There are simply many other providers that provide the same service at a significant discount. In this economic environment, most are looking to save $$$$$$.

More expensive, no doubt. But much more expensive?? I really don't know? In time people should stop worrying as much about the difference in cost. Like they did back a few years ago...

Not sure what the other fractionals charge, (excluding turbo prop companies). But there are statistical advantages with going with NJA..... Better recovery times (from what I understand by far), more a/c options if ya needed a bigger plane, or smaller.. NJA sponsored events for those that like them.. There may be some "once in awhile" lapses in service, which I believe NJAOWNER has experienced...

The expense difference is a matter of how valuable your time may be when things go wrong (mechanical or likewise)....Pilots are obviously the same, and the flight experience is most likely very similar, but it's the behind the scenes activities which somewhat seperates the service each fractional provides.

I still gotta believe that even a beat down Netjets, that is currently in place, still has advantages over the other fractionals.. Not a knock against the others.. It's just the shear volume and scope that Netjets entails... Then again, NJA's size may prove to be a disadvantage, in relation to customer service?

NJAOWNER can chime in, but I believe he has had 1 or 2 rough recoveries in the past year and a half? Still in perspective, given the 2500+ revenue flights NJA does a week, the percentage of quality experiences is still quite high for most customers...

I know he knows people who want to leave the program, and that is very unfortunate. But out of the people he knows, compare that to the total number of owners NJA has... I wish NJA could satisfy them all, but unfortunately there is always bound to be some that have bad experiences..

It really doesn't even have to be a bad experience that makes one leave.. I flew a guy who was obviously wealthy. But he wasn't wealthy to the point that a 6 hr. flight wasn't a huge cost to him. He loved the NJA experience but I got the impression it was more expensive than he originally realized. He was very pleased with our flight, but I still got the impression he was a 1 and done owner. It happens. But would the tens of thousands in savings/year from FLOPS or CS really be that big of a difference for this owner?

 

[BentOver]

Keep in mind that David Sokol is behind the 2009 and 2010 numbers. I don't trust any figures or claims created during his tenure.

Two things:

I don't for one second believe NJA lost that much in '09.. Those writedowns are obviously skewed towards the firing of RTS...

I somewhat believe the 2010/2011 numbers. Not so much the 2010 numbers per say, but this years and last years are not that far off from each other.. Especially if ya don't count the cancellation penalties NJA payed first quarter.... after taking Gunfyters view, I think NJA was/is profitable in both first halves of 2010/2011....who knows by how much???

2009 wasn't that bad (but still awful), so the turnaround in 2010 wasn't that drastic. Now we're in a state of steady, but small, profitable quarters. Need an economic recovery to get the ball rolling again like in '06-'07....If I recall correctly, RTS and Christianson believed the recovery was starting before their abrupt departure? SO the turnaround from the loss in 2009 to the gains in 2010 may be somewhat real. If I remember the loss in 2009 would have been closer to $150 million without the writedowns.

One thing is for sure... NJA is vastly busier now than in 2009/early 2010.... 2009 we could barely get abouve 200 flights a day. A 300 flight day was "good"......(trust me I watched the flights religiously).. Now a slow day is 300, and we're averaging 340-370 flights per day in the summer. Hopefully it can only go up from here!!!

fingers crossed!!!!!

I don't think things were as good as advertised under Sokol. But I also don't think they were as bad as the union portrays either. Politics is a dirty business, even in aviation.

BTW..... I think it was Air and Science who did a recent article on Netjets... In it it is either Eyer or another exec. who states that in 2007 NJA averaged 400 or so flights a day.... If we're at 340+ this summer(370+ a few months ago) it would appear that as it pertains to revenue flights, NJA is really not that far off from 2007. I'd think maybe around 2006 demand. We still need the owners to get the furloughees back unfortunately...The cuts in a/c have been made, we've hit bottom now it's time to re-grow. Thinking positive today!!!

 

[dime line]

At FLOPS were doing a hell of a lot more flying, than last year.