Merger may lead to double wedding---WSJ

[General Lee]

Airline Merger Talks May Lead to Double Wedding


By Susan Carey in Chicago, Dennis K. Berman in New York and Paulo Prada in Atlanta
Word Count: 775 | Companies Featured in This Article: Delta Air Lines, Northwest Airlines, UAL, Continental Airlines, US Airways Group
Merger discussions between Delta Air Lines Inc. and Northwest Airlines Corp. have picked up steam, and a deal could be announced in the next two weeks, according to people who have been briefed on the negotiations.
At the same time, preliminary talks between United Airlines parent UAL Corp. and Continental Airlines Inc. have grown more serious, according to a person familiar with the situation.
Key details of these agreements haven't been hammered out, and both negotiations could still fall apart, say people close to the talks. But major snags over how management of the combined Delta-Northwest would be structured were ...




End of article not available since I do not subscribe to the WSJ.....


Bye Bye--General Lee

 

[The Prussian]

And this article on Drudge seems to indicate a deal may be near....
Delta and Northwest close to merger

By Justin Baer in New York
Published: February 6 2008 22:14 | Last updated: February 7 2008 01:19

The airlines may clinch the landmark accord as early as the middle of this month, the people said, though they cautioned that negotiations could still stall or even collapse.
EDITOR’S CHOICE


Delta and Northwest have made some progress in selecting the combined company’s top managers. Richard Anderson, Delta chief executive, would keep that title following the proposed merger, while Doug Steenland, Northwest chief executive, would remain part of a senior team that would include executives from both airlines, the people said.
A deal between Delta and Northwest, two of the world’s largest carriers, would help squeeze excess capacity from an industry beset by record fuel costs and intense competition for passengers.
It could also spark a wave of consolidation throughout the industry, as rivals scramble to strike deals that help them eliminate unprofitable routes and weather a looming economic downturn.
The two airlines and their advisers still need to find common ground on the deal’s terms, including the ratio at which Northwest investors will exchange their shares for those in the new company.
There are also no assurances that any of the concessions either side have made will be part of a final agreement, should there be one, one person said.
Mindful of the scrutiny any airline merger will receive from regulators, politicians, organised labour and consumer advocates, both carriers are striving to structure a deal that would minimise job losses while still delivering the cost savings its shareholders crave.
It is a delicate balance and any agreement would merely mark the start of a lengthy process of winning the necessary approvals and then integrating complex operations into one company.
Northwest declined to comment on Wednesday. A Delta spokeswoman said: “Delta’s board is working with management to analyse strategic options, including potential consolidation transactions, to ensure Delta maintains its leadership position.”
Delta executives received approval from their board last month to pursue a merger with either Northwest or United Airlines, another legacy carrier. As January ended, and Delta’s talks with Northwest gained momentum, United in turn weighed reigniting negotiations with yet another airline, Continental.


Copyright The Financial Times Limited 2008

 

[Flying the Line]

DL/NW placed on Titanic Watch

NW assets 13,215,000

DL assets 19,622,000

NW liabilities 20,929,000

DL liabilities 33,215,000

combined liabilities - assets = (21,307,000)

That's negative 21 Billion. Wow.

 

[123]

You really need more information to determine if those numbers are bad, good or run of the mill. Are they from the balance sheet? Just as an FYI, assets don't equal liabilities.

 

[General Lee]

NW assets 13,215,000

DL assets 19,622,000

NW liabilities 20,929,000

DL liabilities 33,215,000

combined liabilities - assets = (21,307,000)

That's negative 21 Billion. Wow.

It must have been a lot worse, we both just ejected a lot of debt in BK, along with expensive leases etc.

Any idea how much debt Southwest has?


Bye Bye--General Lee

 

[SWAdude]

I

Any idea how much debt Southwest has?


Bye Bye--General Lee

Not that much. Wow!

 

[General Lee]

Not that much. Wow!

CNBC.com says LUV has $16.7 B in assets and $9.8B in liabilities. What will happen if you buy someone else? Will you do it in cash? You just bought back $500 million in stock. Gary Kelly said you won't be left behind..... It will get worse if you do buy someone else.

Bye Bye--General Lee

 

[General Lee]

NW assets 13,215,000

DL assets 19,622,000

NW liabilities 20,929,000

DL liabilities 33,215,000

combined liabilities - assets = (21,307,000)

That's negative 21 Billion. Wow.

I think you have those wrong. Look at CNBC.com and put in LUV and hit financials.


Here is Southwest's:

2007
LIABILITIESAccounts Payable--643524420405Short Term Debt & Current Portion of Long Term Debt41122601146206Accrued Payroll--316277209235Income Taxes Payable--7848921838Dividends Payable----------Other Current Liabilities4,7971,7281,9571,149839Current Liabilities - Total4,8382,8873,8482,1421,723Long Term Debt2,0501,5671,3941,7001,332Provision for Risks and Charges--$0$0$0--Deferred Taxes2,5352,1041,6811,6101,420Deferred Income--120405152168Deferred Tax Liability in Untaxed Reserves----------Other Liabilities408333$0209183Total Liabilities$9,831$7,011$7,328$5,813$4,826



Here is Delta's:


LIABILITIESAccounts Payable--9361,4071,5601,759Short Term Debt & Current Portion of Long Term Debt--1,5031,1868931,021Accrued Payroll--4054351,1511,285Income Taxes Payable--500525499915Dividends Payable----------Other Current Liabilities--2,4251,7121,8381,644Current Liabilities - Total--5,7695,2655,9416,624Long Term Debt9,0006,5096,55713,00511,538Provision for Risks and Charges------6,8707,139Deferred Taxes--406$0$0(869)Deferred Income--346186531534Deferred Tax Liability in Untaxed Reserves----------Other Liabilities13,33920,18517,679973905
Total Liabilities$22,339$33,215$29,687$27,320$25,871

Where do you get $33 B for Delta's liabilities?


Bye Bye--General Lee

 

[General Lee]

Here are the assets for Delta on that CNBC.com page (financials after you put in DAL)

ASSETSCash & ST Investments2,7863,3982,8782,1472,917Receivables (Net)--915819696662Total Inventories--181172203202Raw Materials--181172203202Work in Progress--$0$0$0$0Finished Goods--$0$0$0$0Progress Payments & Other--$0$0$0$0Prepaid Expenses----------Other Current Assets--8916115601,186Current Assets - Total--5,3854,4803,6064,967Long Term Receivables--$0$0$0$0Investment in Unconsolidated Subsidiaries--33292621Other Investments--72104129286Property, Plant & Equipment - Net--12,97314,28016,55616,752Property, Plant & Equipment - Gross--22,74723,96126,23826,010Accumulated Depreciation--9,7749,6819,6829,258Other Assets--1,1591,1461,4843,461Deferred Charges----------Tangible Other Assets--8438451,1781,274Intangible Other Assets--3163013062,187Total Assets$32,421


And for Southwest (LUV)

2007
ASSETSCash & ST Investments2,7792,1282,5311,3051,865Receivables (Net)--241258248132Total Inventories--18115013793Raw Materials--18115013793Work in Progress--$0$0$0$0Finished Goods--$0$0$0$0Progress Payments & Other--$0$0$0$0Prepaid Expenses----------Other Current Assets1,66451681482223Current Assets - Total4,4432,6013,6202,1722,313Long Term Receivables--$0$0$0$0Investment in Unconsolidated Subsidiaries--$0$0$0$0Other Investments--630$0$0$0Property, Plant & Equipment - Net10,87410,0949,2128,7237,443Property, Plant & Equipment - Gross--13,85912,50811,92110,550Accumulated Depreciation--3,7653,2963,1983,107Other Assets1,4551351,171442122Deferred Charges----------Tangible Other Assets--1351,171402122Intangible Other Assets----2040--Total Assets$16,772



Bye Bye--General Lee

 

[PeanuckleCRJ]

General Lee is right... 2007 assets are around 32 billion and liabilities are around 22 billion.

 

[DOVPILOT]

NW assets 13,215,000

DL assets 19,622,000

NW liabilities 20,929,000

DL liabilities 33,215,000

combined liabilities - assets = (21,307,000)

That's negative 21 Billion. Wow.

figures don't lie, but liars can figure.

 

[AA717driver]

Anyone get the fact that one of the selling points is that it will "squeeze excess capacity out" of the system?

No job cuts my a$$! We're heading into a slowdown. If you're in the bottom 10% at either carrier, you'd better be considering your options. And if you believe anyone's warm fuzzies on this board, you deserve to be caught flat-footed. TC

 

[Flying the Line]

My apologies, my figures were pre-bankrupcy for both airlines, and were therfore misguided.

the numbers I used were the end of CY 2006.

http://finance.yahoo.com/q/bs?s=DAL&annual

http://finance.yahoo.com/q/bs?s=NWA&annual

Good luck to the pilots during this merger.

 

[Ben Dover]

Just as an FYI, assets don't equal liabilities.

Let's all backup and review Accounting 101:

Assets = Liabilities + Owner's Equity

OK, continue....