Tue, Jul 15, 2008
Will Post Loss To Deliberately Devalue Company
There's a lack of "goodwill" lately at United Airlines... and
we're not talking about the contentious relationship between
management and employees. Parent company UAL announced Monday it
might record a $2.7 billion hit for the second quarter of 2008,
slashing any "goodwill" it's had for the past two years.
In this context, "goodwill" represents the excess value United
carried above the estimated fair market value of its assets, when
it left bankruptcy protection in February 2006.
Bloomberg reports United will dump some $2.3 billion of that
"goodwill" value, to deliberately devalue the airline in the face
of soaring fuel prices. The airline will also post $82 million in
losses related to cuts in payroll, while another $246 million is
tied to retiring United's 737 fleet. Some $60 million will be lost
due to unspecified projects that have either been terminated, or
"Given current market conditions with the price of fuel and the
significant drop in the company's market capitalization, the
intrinsic value that existed at bankruptcy is significantly
reduced," said United spokeswoman Jean Medina.
That's an understatement. With the devaluation, United's value
is only about 24% of the book value of its assets... meaning United
as an airline is worth much, much less than the sum of its
United isn't the first carrier to cut its "goodwill." Northwest
slashed its $2.2 billion goodwill value earlier this year,
following the steps of a similar writedown by merger partner Delta
While almost all US airlines have seen their stock values drop
this year, prices for shares in United have plummeted 90 percent...
by far the sharpest dropoff.
AD NUMBER: 2013-25-01 PRODUCT: All DASSAULT AVIATION Model Falcon 10 airplanes.>[...]
Curtiss Jenny Restoration A blog following the restoration of a 1918 Curtiss JN4D Jenny. Once completed, the airplane will be flown and displayed at the Candler Field Museum in Wil>[...]
A horizontal, tail-shaped cloud (not a funnel cloud) at low levels extending from the precipitation cascade region of a supercell toward the wall cloud (i.e., it usually is observe>[...]
"Today's announcement signals that Louisiana is ready to further expand its presence and leadership in the aerospace industry, creating quality career opportunities for our people >[...]
Choose How YOU Want To View Your Aero News: Headlines And Teasers We're all pretty excited about the new website design here at ANN, but we HAVE heard from some of you that you lik>[...]