4th qtr earnings
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Worldflyboy
Newbie
How can you expect a profit for the 4th Qtr when according to the Financial Times, US Airways paid $ 59.4 Million for two gates at LHR that they bought from Alitalia. See the link http://www.msnbc.msn.com/id/22401252/
Hopefully, that extra cost will be passed on to our passengers. No reason why this hasn't been done already.
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That's a ton of money for the right to land there. But I don't think that is included in the operating profit/loss report.
CynicalResAgent
Veteran
I guess it depends on how they do the books as to how the money they paid for the LHR slots affects q4.
I know for assets they have an amortization schedule when doing accounting. Do they do the same thing for slots?
You are completely correct. Asset purchases don't reduce profit in that quarter.
Squonk
Senior
There goes the profit sharing check in March. So much for US employees helping to stimulate the economy.JayBrian
Senior
There will probably be a one time gain taken for the sale of USAirways piece of ARINC.
No it won't. Profit sharing is 10% of full year profit. I think the profit so far is around 550 million, so if the 4th quarter loss comes in at 67 million the profit sharing will be 10% of 483 million or $48.3 million. Last years was $58.7 million
BoeingBoy
Veteran
- Nov 9, 2003
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I haven't verified it, but I think they took that gain in 2006.
As someone else said, there should still be a profit sharing check - a 4th quarter loss shouldn't wipe out all profits from the other 3 quarters. It'll just be smaller than it would have been without a 4Q loss.
Jim
A very simple answer to this accounting question...and I mean simple too.....is the purchase of slots in this case would be: credit the cash account and debit some sort of facilities account. It would have no effect on profit/loss since your only transfering $$$ between to asset accounts. As far as an amortization schedule, my guess would be slots are treated like real estate. They probably would appreciate in value over time....yes I know not always.
Squonk
Senior
Hey Jim,
I haven't been able to verify, but I was told that we have to have 4 profitable quarters in order for the company to fullfill their promise. It doesn't make sense to me, but thats the way I heard it.
Squonk
