Originally Posted by
Carl Spackler
Your deflection notwithstanding, the currency of purchase does matter. Here's the initial question posed:
Originally Posted by
newKnow
After reading this, I have to ask. When Delta purchased 49% of VA, did that money come out of our yearly profits, and thus our profit sharing?
If our 49% purchase was a stock swap, then you'd have a marginal point. But that's not what happened. Our 49% purchase of the VA stake included an actual cash infusion. That cash outlay reduced the PTIX profit in that year's accounting. And as such, reduced our profit sharing.
So again the answer to NewK's question is: Yes.
Carl
Carl, I'm not convinced (yet) that what you are stating is correct. The PTIX definition sounds like it would exclude a one time event like the purchase of 49% of VA. I could be wrong though as accounting is certainly not my forte. PTIX is defined as (
bold is my emphasis):
“Pre-tax income” (PTIX) means, for any calendar year, the Company’s consolidated pre-tax income calculated in accordance with Generally Accepted Accounting Principles in the United States and as reported in the Company’s public securities filings but
excluding: a) all asset write downs related to long term assets, b) gains or losses with respect to employee equity securities, c)
gains or losses with respect to extraordinary, one-time or non-recurring events (including without limitation one-time transition or integration costs incurred in connection with the merger of the Company and Northwest Airlines Corporation during the two year period following the merger), and d) expense accrued with respect to the profit sharing plan.
There seems to be a difference of opinion regarding the correct answer to the question. I just want to know the accurate answer and right now I do not.