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How Much Debt Does UAL Have....?  
User currently offlinelucky777 From United States of America, joined Oct 2008, 534 posts, RR: 0
Posted (2 years 8 months 2 weeks 1 day 12 hours ago) and read 5907 times:

I know Delta has around $14 billion and AMR is somewhere around $20 if i'm not mistaken but i can't seem to find out what type of debt UA is carrying around. Thanks in advance....

15 replies: All unread, jump to last
 
User currently offlineEricR From United States of America, joined Jul 2010, 1802 posts, RR: 1
Reply 1, posted (2 years 8 months 2 weeks 1 day 12 hours ago) and read 5844 times:

For the most recently reported quarters, the total debt of the majors are:

DAL: $14.6 Billion
UAL: $13.6 Billion
AMR: $11.8 Billion
LCC: $4.3 Billion
LUV: $4.2 Billion

Two items to keep in mind:
1.) This is the debt of the airline holding companies and may not be 100% representative of the individual airline (but will be directionally accurate).
2.) It is important to look at the total financial picture of each company. For example, AA has less total debt than UA, but AA has a more difficult time servicing its debt due to their higher cost structure, lower credit rating, etc.

Nevertheless, it still baffles me that anyone would want to be an equity holder in any airline.


User currently offlineORDBOSEWR From United States of America, joined Jun 2011, 399 posts, RR: 0
Reply 2, posted (2 years 8 months 2 weeks 1 day 12 hours ago) and read 5844 times:

http://finance.yahoo.com/q/ks?s=UAL+Key+Statistics

User currently offlinelucky777 From United States of America, joined Oct 2008, 534 posts, RR: 0
Reply 3, posted (2 years 8 months 2 weeks 1 day 12 hours ago) and read 5806 times:

Quoting EricR (Reply 1):
AMR: $11.8 Billion

Can that be right? I was certain AMR was somewhere north of $18?


User currently offlineSTT757 From United States of America, joined Mar 2000, 16691 posts, RR: 51
Reply 4, posted (2 years 8 months 2 weeks 1 day 12 hours ago) and read 5800 times:

You should also take into account their cash positions;

UAL: $8.58B
AMR: $5.18B
DAL: $3.82B
LUV: $4.46B
LCC: $2.25B



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlineEricR From United States of America, joined Jul 2010, 1802 posts, RR: 1
Reply 5, posted (2 years 8 months 2 weeks 1 day 11 hours ago) and read 5723 times:

Quoting lucky777 (Reply 3):
Can that be right? I was certain AMR was somewhere north of $18?

I looked at a couple sources and both show the same results of $11.8 billion. Below is the link to one source (the other link requires a password).

FYI....You will need to click on the balance sheet tab.

http://www.google.com/finance?q=NYSE:AMR&fstype=ii



[Edited 2011-08-06 10:23:55]

User currently offlineLAXtoATL From United States of America, joined Oct 2009, 1590 posts, RR: 2
Reply 6, posted (2 years 8 months 2 weeks 1 day 11 hours ago) and read 5661 times:

Quoting lucky777 (Reply 3):

Can that be right? I was certain AMR was somewhere north of $18?

You are correct. AMR reported its Total Debt as of 6/30/2011 to be $17.1 billion.

The poster that poster that number doesn't understand the difference between Total Debt and Net Debt.

Net debt is what businesses report as their Total Debt less Cash and other short-term securities, in other words how much debt would be left if they used all their liquid assets to pay down debt (which of course no ongoing business is going to do).


User currently offlinebmacleod From Canada, joined Aug 2001, 2195 posts, RR: 0
Reply 7, posted (2 years 8 months 2 weeks 1 day 11 hours ago) and read 5638 times:

By itself, probably at least double of what CO had before the merger. CO must have seen an opportunity there otherwise why would they have agreed to merger?


The engine is the heart of an airplane, but the pilot is its soul.
User currently offlineUnited1 From United States of America, joined Oct 2003, 5815 posts, RR: 9
Reply 8, posted (2 years 8 months 2 weeks 1 day 11 hours ago) and read 5625 times:

Quoting bmacleod (Reply 7):
By itself, probably at least double of what CO had before the merger. CO must have seen an opportunity there otherwise why would they have agreed to merger?

IIRC UA and CO had roughly the same amount of debt prior to the merger...UA may have been slightly higher but not by much.

The reasoning behind the merger with UA had nothing to do with debt levels.



Semper Fi - PowerPoint makes us stupid.
User currently offlineEricR From United States of America, joined Jul 2010, 1802 posts, RR: 1
Reply 9, posted (2 years 8 months 2 weeks 1 day 11 hours ago) and read 5583 times:

Quoting LAXtoATL (Reply 6):
The poster that poster that number doesn't understand the difference between Total Debt and Net Debt.

The poster who posted that comment does understand the difference so watch your sarcastic, "you think you it all" tone.

Debt on a balance sheet is always netted out, so what you are saying is NOT accurate and the public filings support this fact - not your biased viewpoint of how YOU want to present something contrary to the rules GAAP. In fact, it is quit laughable that you are even going down this route.

If the OP wanted debt presented in a manner other than commonly reported financial information, then they should have requested so.


User currently offlineLAXtoATL From United States of America, joined Oct 2009, 1590 posts, RR: 2
Reply 10, posted (2 years 8 months 2 weeks 1 day 10 hours ago) and read 5468 times:

Quoting EricR (Reply 9):
The poster who posted that comment does understand the difference so watch your sarcastic, "you think you it all" tone.

If you understand the difference why would say...

Quoting EricR (Reply 1):
For the most recently reported quarters, the total debt of the majors are:

You clearly stated you were giving Total Debt numbers, which you were not. If you understand the difference then you probably should have said here is the Net Debt reported by so and so, but considering the number the OP used I thought it was evident he was asking for Total Debt. If you truly knew they difference how do you look at the number he used and not understand what he was asking for? And then to provide different numbers and not explain the difference?

Quoting EricR (Reply 9):
Debt on a balance sheet is always netted out, so what you are saying is NOT accurate and the public filings support this fact - not your biased viewpoint of how YOU want to present something contrary to the rules GAAP. In fact, it is quit laughable that you are even going down this route.

If the OP wanted debt presented in a manner other than commonly reported financial information, then they should have requested so.

What are you talking about?

I'm biased? Is AMR biased?

How about we use AMR as the source...

"Balance Sheet Update
AMR ended the second quarter with approximately $5.6 billion in cash and short-term investments, including a restricted balance of approximately $457 million. This compares to a balance of $5.5 billion in cash and short-term investments, including a restricted balance of $461 million, at the end of the second quarter 2010.
AMR‟s Total Debt, which it defines as the aggregate of its long-term debt, capital lease obligations, the principal amount of airport facility tax-exempt bonds, and the present value of aircraft operating lease obligations, was $17.1 billion at the end of the second quarter 2011, compared to $16.1 billion a year earlier.
AMR‟s Net Debt, which it defines as Total Debt less unrestricted cash and short-term investments, was $11.9 billion at the end of the second quarter, compared to $11.0 billion in the second quarter 2010."

That is straight from AMR's press release for 2011 second earnings and can be found on their website at...
http://phx.corporate-ir.net/External...NoaWxkSUQ9NDUxNzI5fFR5cGU9MQ==&t=1

Is it laughable that AMR went down that route? Or just when I say it? Because all I ever did was repeat the facts as presented by AMR. Now if they aren't reporting according to GAAP, then I think that is an issue for you to take up with them or the SEC.

[Edited 2011-08-06 11:45:15]

[Edited 2011-08-06 12:04:15]

User currently offlineEricR From United States of America, joined Jul 2010, 1802 posts, RR: 1
Reply 11, posted (2 years 8 months 2 weeks 1 day 8 hours ago) and read 5256 times:

Quoting LAXtoATL (Reply 10):
Quoting EricR (Reply 9):
The poster who posted that comment does understand the difference so watch your sarcastic, "you think you it all" tone.

If you understand the difference why would say...

Quoting EricR (Reply 1):
For the most recently reported quarters, the total debt of the majors are:

You clearly stated you were giving Total Debt numbers, which you were not. If you understand the difference then you probably should have said here is the Net Debt reported by so and so, but considering the number the OP used I thought it was evident he was asking for Total Debt.

Because debt on financial statements is broken out between short term debt, long term debt and the total of both equals TOTAL debt. If you do not know this, then look at a financial statement before making such inaccurate comments.

If you want to present some side analysis, then do so, but to say those numbers are not accurate is comical.

Quoting LAXtoATL (Reply 10):
What are you talking about?

I'm biased? Is AMR biased?

How about we use AMR as the source...
Quoting LAXtoATL (Reply 10):
Quoting LAXtoATL (Reply 10):
AMR‟s Total Debt, which it defines as the aggregate of its long-term debt, capital lease obligations, the principal amount of airport facility tax-exempt bonds, and the present value of aircraft operating lease obligations, was $17.1 billion at the end of the second quarter 2011,

LOL......You are missing some very obvious words. The statement says AMR's total debt "which IT defines as"......AMR is using its definition when communicating the total debt number to the street. However, commonly used financial statements (which are standard across all companies to eliminate these type of issues), do NOT illustrate debt this way, regardless of what you believe should be the case.

[Edited 2011-08-06 14:11:48]

User currently offlinegigneil From United States of America, joined Nov 2002, 16345 posts, RR: 86
Reply 12, posted (2 years 8 months 2 weeks 1 day 7 hours ago) and read 5186 times:

Its also useful to point out that UA is paying it's debt down - over a billion year over year, and it's profits are double it's nearest competitor.

NS


User currently offlineLAXtoATL From United States of America, joined Oct 2009, 1590 posts, RR: 2
Reply 13, posted (2 years 8 months 2 weeks 1 day 6 hours ago) and read 5078 times:

Quoting EricR (Reply 11):
LOL......You are missing some very obvious words. The statement says AMR's total debt "which IT defines as"......AMR is using its definition when communicating the total debt number to the street. However, commonly used financial statements (which are standard across all companies to eliminate these type of issues), do NOT illustrate debt this way, regardless of what you believe should be the case.

You mean the same word "it" that it used to define Net Debt?

Are you seriously suggesting that you know AMR's Total debt better than they do?

AMR reported its Total Debt as $17.1B.
EricR reported AMR's Total Debt as $11.8B.

Everyone can decide whose number is more reliable. I'll stick with AMR since (a) they know what they are talking about and (b) if they were going to fudge the numbers they certainly wouldn't be trying to report a higher number!

Eric, I still haven't forgotten that you believed that ridiculous story that AMR was investing billions in Mexicana a few months ago. So clearly you don't have a firm grasp on AA's financial situation.


User currently offlineAADC10 From United States of America, joined Nov 2004, 2016 posts, RR: 0
Reply 14, posted (2 years 8 months 2 weeks 1 day 6 hours ago) and read 5071 times:

It is not only the amount of debt, there is also the issue of the rate on the notes. AMR has amongst the highest bond rates in the industry, since it is ripe for Ch. 11. Not only does AMR have a lot of debt, they also have to pay more than UAL or DAL to service the debt and far more than LUV.

Many investors are anticipating a high likelihood that AMR will eventually have to file for Ch. 11 hence the high bond rate and slumping share price. Of course, all of the airline shares are slumping, even with dropping oil prices. More capacity needs to be removed from the system so all of the airlines, including LUV, are looking at parking their least fuel efficient aircraft and not immediately replacing them.


User currently offlineEricR From United States of America, joined Jul 2010, 1802 posts, RR: 1
Reply 15, posted (2 years 8 months 2 weeks 1 day 4 hours ago) and read 4863 times:

Quoting LAXtoATL (Reply 13):
EricR reported AMR's Total Debt as $11.8B.

Let me correct another error for you. Below is the link containing AA's debt...it is not a number that I made up. Also, if you need a copy of the 10-K I can point you where you can go to see the same identical number as in the link below.
http://finance.yahoo.com/q/ks?s=AMR+Key+Statistics

Quoting LAXtoATL (Reply 13):

Are you seriously suggesting that you know AMR's Total debt better than they do?

I am saying for purposes of the press release, AMR used a calculation that companies do not use when reporting total debt on their balance sheet. Unfortunately for you, it is not the method that U.S. based corporations use when issuing their financial statements, hence the reason why you will NOT find the $18 billion debt figure next to the TOTAL debt line on their balance sheet.

Quoting LAXtoATL (Reply 13):
I'll stick with AMR since (a) they know what they are talking about and (b) if they were going to fudge the numbers they certainly wouldn't be trying to report a higher number!

LOL....That is part of your problem. You believe everything companies say in press releases and do not look at the details. Press releases are forums companies use to convey information that benefits them. In early 2008, Lehman Brothers, AIG, and Bear Sterns were issuing press releases saying everything was fine so they did not cause panic, but in reality they were in extremely poor financial condition and ultimately collapsed.

Airlines also use press releases in creative ways including conveying information in a manner that benefits them (ie. union negotiations). The $18 billion is not a false number as AMR defined it for purposes of the press release, but that is not the method U.S. based corporations use when reporting a total debt figure on financial statements....and that includes AMR.

Quoting LAXtoATL (Reply 13):
Eric, I still haven't forgotten that you believed that ridiculous story that AMR was investing billions in Mexicana a few months ago. So clearly you don't have a firm grasp on AA's financial situation.


I never said I believed the story. Let me refresh your selective or fading memory.

Quoting AirNZ (Reply 17):
Quoting LAXtoATL (Reply 13):
Assuming my assumption that AMR's involvement doesn't involve any significant capital on their part (which I am certain it doesn't

Based on the story quoted, may I ask on what basis are you 'certain' that significant capital by AMR is not involved? Yes, I suspect it is opinion but how valid is that opinion and what facts is it based on?

She does not know. In fact just last week she mentioned that AA could not afford to spend any money because all capital was spoken for and then news of this potential acquisition comes out.

The fact of the matter is that AA can raise capital by various means, even under their current financial shape. They could even hypothetically pay cash for an acquisition if they so desired. Would it be the best use of funds? - probably not.

However, corporations have significant access to capital - even those who are not in the best financial shape. For example, the airline could issue additional equity, or work with private equity groups, or leverage more assets (the airline has more assets than just airplanes) as a means to fund this acquisition- whether it requires significant capital or not.




LAXtoATL - I still haven't forgotten how you said in that same Mexicana thread that AMR no longer had access to significant amounts of capital (counter to my point), yet several months later they announced a large order for more aircraft.

Quoting EricR (Reply 26):
Corporations have significant access to capital

Yes they do, but AMR has advised that they no longer have significant access to additional capital.


[Edited 2011-08-06 18:40:43]

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