Originally Posted by
BMEP100
I read today in Howie's missive how UAL accelerated interest payments last year, by pre-paying 1.8 billion in 2014. As I recall that is more than what we reported in net profits- sooo, according to my napking accounting, we would have received far more than double the profit sharing payout if they had not accelerated those interest payments.
In fact far more than double, if as I recall the profit sharing formula increases our payout once we pass a certain amount in annual profits.
Anyone care to check my figures?
So if 10% of your profits go to profit sharing, and you only have an 8% penalty to pay down debt early, its a better move to pay down that debt and lose the 8% to the creditors than to pay the 10% to employees.
I don't know the exact numbers, but profit sharing is an expense to the company, not a benefit to them.