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NetJets--Earnings Release

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gret

Well-known member
Joined
Nov 14, 2007
Posts
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"In 2009, NetJets' revenues declined $550 million (43%) for the second quarter and $1,024 million (42%) for the first six months as compared to 2008. The declines reflected an 81% decline in aircraft sales as well as a 22% decline in flight operations revenues primarily due to lower flight revenue hours. NetJets produced pre-tax losses in 2009 of $253 million for the second quarter and $349 million for the first six months. The pre-tax losses included asset writedowns and other downsizing costs of $192 million for the second quarter and $255 million for the first six months. NetJets owns more planes than is required for its present level of operations and further downsizing will be required unless demand rebounds."
 
gret said:
"In 2009, NetJets' revenues declined $550 million (43%) for the second quarter and $1,024 million (42%) for the first six months as compared to 2008. The declines reflected an 81% decline in aircraft sales as well as a 22% decline in flight operations revenues primarily due to lower flight revenue hours. NetJets produced pre-tax losses in 2009 of $253 million for the second quarter and $349 million for the first six months. The pre-tax losses included asset writedowns and other downsizing costs of $192 million for the second quarter and $255 million for the first six months. NetJets owns more planes than is required for its present level of operations and further downsizing will be required unless demand rebounds."
Click to expand...


Ouch, Good Luck.
 
If I understand correctly, the numbers-people took the hit for the buyouts all in June so they wouldn't have to fight those losses over the next 3 years. If I am correct, a large portion of that loss was a one time hit. And for what it's worth, it appears the revenue numbers are creeping up a little bit.

SG
 
HMMM Let's see--I think if you look back at my earlier threads (about 2 weeks ago)I said Netjets was bleeding out at a rate 2 mil a day for the first half of the year and was thoroughly brow beaten and told how wrong and screwed up I was by several on here. (you know who you are) But I think these numbers pretty much vindicate my statement. I also mentioned which entities were making money and which were not--take my word for it guys, I got that right too. I also made a few more statements about furloughs. They are coming guys! If you know anything about the psychological approach to an HR department you will know that they advocate lay-offs and furloughs during peak emotional highs---think holiday season! The rationale is that people are way up so when you take them down the low isn't AS low as it would normally be. Watch between Thanksgiving and the first 2 weeks in Jan for 300-500 pilots to go out the door. The dust doesn't need to settle on the early out and LOA packages, they already have a good idea what those numbers are and they aren't good enough. Read WBs biography Snowball if you want a little insight. He isn't that grandfatherly image you see on TV. RS was too compassionate in his "right sizing" efforts for the BH boys. I've seen it at other companies that are BH owned or where WB is on the board and carries the big stick. The blood letting is coming---operationally it will come relatively fast---from the HR perspective on the time table I predicted above unless the economy makes a miraculous recovery. There aren't going to be anymore compassionate "please leave" programs. Here is your 2 months furlough pay--cya! FOR WHAT IT IS WORTH DEPARTMENT: THIS IS ENTIRELY SPECULATION ON MY PART. But I have a pretty good track record so far!

Now I have a question for the "in the know" union bretheren. If BH wanted to sell off assets from NETJETS---hypothetically let's say NJI (Okatie, SAV maintenance, etc.) to an outside buyer (think one that is no longer employed by Netjets or say General Dynamics or Gulfstream) could they? What are the limitations imposed by the CBA or LOAs that would prevent this type action? I also understand that multiple owners have the airplanes---could they not transfer the management of these aircraft if they so desired? I don't know the answers to these questions--just asking!

The conspiracy grows!
 
harley30344 said:
HMMM Let's see--I think if you look back at my earlier threads (about 2 weeks ago)I said Netjets was bleeding out at a rate 2 mil a day for the first half of the year and was thoroughly brow beaten and told how wrong and screwed up I was by several on here. (you know who you are) But I think these numbers pretty much vindicate my statement. I also mentioned which entities were making money and which were not--take my word for it guys, I got that right too. I also made a few more statements about furloughs. They are coming guys! If you know anything about the psychological approach to an HR department you will know that they advocate lay-offs and furloughs during peak emotional highs---think holiday season! The rationale is that people are way up so when you take them down the low isn't AS low as it would normally be. Watch between Thanksgiving and the first 2 weeks in Jan for 300-500 pilots to go out the door. The dust doesn't need to settle on the early out and LOA packages, they already have a good idea what those numbers are and they aren't good enough. Read WBs biography Snowball if you want a little insight. He isn't that grandfatherly image you see on TV. RS was too compassionate in his "right sizing" efforts for the BH boys. I've seen it at other companies that are BH owned or where WB is on the board and carries the big stick. The blood letting is coming---operationally it will come relatively fast---from the HR perspective on the time table I predicted above unless the economy makes a miraculous recovery. There aren't going to be anymore compassionate "please leave" programs. Here is your 2 months furlough pay--cya! FOR WHAT IT IS WORTH DEPARTMENT: THIS IS ENTIRELY SPECULATION ON MY PART. But I have a pretty good track record so far!

Now I have a question for the "in the know" union bretheren. If BH wanted to sell off assets from NETJETS---hypothetically let's say NJI (Okatie, SAV maintenance, etc.) to an outside buyer (think one that is no longer employed by Netjets or say General Dynamics or Gulfstream) could they? What are the limitations imposed by the CBA or LOAs that would prevent this type action? I also understand that multiple owners have the airplanes---could they not transfer the management of these aircraft if they so desired? I don't know the answers to these questions--just asking!

The conspiracy grows!
Click to expand...

yawn.
 
In other news, a large comet is heading towards planet earth and we will all be dead soon. Good to know ya.
 
brokeflyer said:
i guess harley, you should be more worried about your job than rubbing everyone elses's noses in sh1t
Click to expand...

YO Broke--why so defensive? Not worried about mine at all. As for the nose rubbing? Well--if the nose fits! Come on man, don't take this stuff so serious. Whatever is going to happen will happen (brilliant statement) All of this stuff is just page after page of speculation and opinion. Mine included!
 
harley30344 said:
HMMM Let's see--I think if you look back at my earlier threads (about 2 weeks ago)I said Netjets was bleeding out at a rate 2 mil a day for the first half of the year and was thoroughly brow beaten and told how wrong and screwed up I was by several on here. (you know who you are) But I think these numbers pretty much vindicate my statement. I also mentioned which entities were making money and which were not--take my word for it guys, I got that right too. I also made a few more statements about furloughs. They are coming guys! If you know anything about the psychological approach to an HR department you will know that they advocate lay-offs and furloughs during peak emotional highs---think holiday season! The rationale is that people are way up so when you take them down the low isn't AS low as it would normally be. Watch between Thanksgiving and the first 2 weeks in Jan for 300-500 pilots to go out the door. The dust doesn't need to settle on the early out and LOA packages, they already have a good idea what those numbers are and they aren't good enough. Read WBs biography Snowball if you want a little insight. He isn't that grandfatherly image you see on TV. RS was too compassionate in his "right sizing" efforts for the BH boys. I've seen it at other companies that are BH owned or where WB is on the board and carries the big stick. The blood letting is coming---operationally it will come relatively fast---from the HR perspective on the time table I predicted above unless the economy makes a miraculous recovery. There aren't going to be anymore compassionate "please leave" programs. Here is your 2 months furlough pay--cya! FOR WHAT IT IS WORTH DEPARTMENT: THIS IS ENTIRELY SPECULATION ON MY PART. But I have a pretty good track record so far!

Now I have a question for the "in the know" union bretheren. If BH wanted to sell off assets from NETJETS---hypothetically let's say NJI (Okatie, SAV maintenance, etc.) to an outside buyer (think one that is no longer employed by Netjets or say General Dynamics or Gulfstream) could they? What are the limitations imposed by the CBA or LOAs that would prevent this type action? I also understand that multiple owners have the airplanes---could they not transfer the management of these aircraft if they so desired? I don't know the answers to these questions--just asking!

The conspiracy grows!
Click to expand...

GD has been playing for us for awhile. Good guess.
 
Harley,

If all the pilots worked for NO PAY in the first half of this year ... or if we refunded to the company all of our pay .... Would NJ have shown a profit or loss in this BRK release?

My back of an envelope calculation is that losses in this report were about twice the payroll.
 
Last edited:
gunfyter said:
Harley,

If all the pilots worked for NO PAY in the first half of this year ... or if we refunded to the company all of our pay .... Would NJ have shown a profit or loss in this BRK release?
Click to expand...

Seems pretty clear to me--there would have still been major losses. Is there a point other than the obvious?
 
harley30344 said:
Are you saying there is nothing in the CBA or LOAs that would prevent that? I honestly don't know.
Click to expand...


Yea, In section 1105 it states every flight dept. Must operate under NJASAP LOA forever No exceptions. Even in the event the world ends all matters will be brought up for review. OK I am being silly. :nuts:
 
harley30344 said:
Seems pretty clear to me--there would have still been major losses. Is there a point other than the obvious?
Click to expand...
Yes. Just addressing some comments on a previous page referring to unions damaging a company....

What is happening to us now doesn't have anything to do with the pilots at NJ (union or nonunion)....
 
I am really sorry guys I hope things work out. It is not good for the entire industry when the big dog is falling apart like this. Lets all hope things turn around soon
 
gunfyter said:
Yes. Just addressing some comments on a previous page referring to unions damaging a company....

What is happening to us now doesn't have anything to do with the pilots at NJ (union or nonunion)....
Click to expand...


Your right gun--that is not the driving factor in this case.

Rotor--you so funnie!
 
I believe the losses are due in large part to the aircraft buybacks and inability to sell them again. They are largely paper losses until the aircraft is actually sold. If and when they sell the aircraft for less then they paid to buy out the owner, there is a loss. Basically if there is a change in the airplane market and prices go back up and Netjets is able to sell them, they will be taking the losses back in the form of extraordinary gains down the road. Of course there are holding costs to those airplanes as well.
 
Financially speaking that is a huge hit. Granted numbers are manipulated in every direction - but that is a huge drop across the board.

Hope things improve for us all - but I think it will be a loooooong time.
 
I love all the replies about how guys like harley are just throwing out unfounded crap to scare people, etc, etc. They are obviously written by guys that are comfortably senior while the junior guys are crapping their pants.....
 
harley30344 said:
I also mentioned which entities were making money and which were not--take my word for it guys, I got that right too. I wouldn't count on it. Because of the management and support structure, what is more important than individual entities is the overall picture.

I also made a few more statements about furloughs. They are coming guys!.... Watch between Thanksgiving and the first 2 weeks in Jan for 300-500 pilots to go out the door. .... The blood letting is coming---operationally it will come relatively fast.... We'll see.

But I have a pretty good track record so far! :rolleyes:

Now I have a question for the "in the know" union bretheren. If BH wanted to sell off assets from NETJETS---hypothetically let's say NJI (Okatie, SAV maintenance, etc.) to an outside buyer (think one that is no longer employed by Netjets or say General Dynamics or Gulfstream) could they? What are the limitations imposed by the CBA or LOAs that would prevent this type action? I also understand that multiple owners have the airplanes---could they not transfer the management of these aircraft if they so desired? I don't know the answers to these questions--just asking!

The conspiracy grows!
Click to expand...

Could they sell NJI. Sure. If they fly NetJets fractional owners, by Section 1 of the agreement, the new company would become a charter provider and limited by CBA. Additionally, in times of furloughs, sell-offs are further limited. In other words, they would have to be a wholly separate entity. But there is nothing stopping them from selling the assets (for those assets they own) to someone else who could create a whole new competitor. I also see this scenario as highly unlikely. A single-type, large-cabin fractional? Considering that larger aircraft are having a tougher time in this market than smaller ones, I cannot envision anyone investing in that.
 
I'll offer $50 for NJI. One time offer. Take it or leave it.
 
When things are bad you write off everything you can, who gives a crap if its 1 mill or 2 mill loss. But when things return to normal you are at an advantage at least in the numbers to show better performance and get the bounus. Lets say, you write off 2 mil this quarter, so you dont get your bonus and then next quarter your department breaks even, you just improved by 2 mil. Bonus time, or you could spread the loss out over a few quarters, only if you know you will be in the bonus each of those q's. You can't, so you slush it once, and collect later.
 
Some of the losses reltaed to used a/c are on paper and may not be realized ever (at which point profits will be inflated) and the tranactions are a wash.

Generally, when you are holding th investory of jets for sale, the accounting rules will require write downs in the following situation. Let's say you bought back 20 Excel shares form owners at an average price of $500,000. Your cost is $10 million. If the market craters like it has, and you then resell 1 of the used shares at $300,000, you need to value the remaining 19 sahres ar $300k each, or $5.7MM. You will then be required to take a write down of $200k per remaining share (or $3.8MM) even if you continue to hold an ddo not sell the other 19 shares.

Also, while NJ has losses, BH may want to have more losses at NJ to offset gains elsewhere. It doesn't justify the losses, but may very well magnify them.

Fly safe.
 

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