Originally Posted by
FriendlyPilot
No Spirit didn't "make" $20M. The terminated leases are on the balance sheet and because the accounted for liability of the leases was more than the accounting value of leases terminated, this is an income GAIN under GAAP.
All adjustments to the balance sheet have to show as a gain or loss for income reporting because of tax liability. Spirit lost $96M in operating as an airline in October, but there was a $124 DIFFERENCE between the Asset value and Liability value, it came over as a "gain" for earnings. But it was non cash and only affected possible future tax payments on earnings, which it would have because it has billions in NOL carryforwards.
Another 1/2 truth. Their net income for October was + $20 million and that's the bottom line.
Webster's dictionary defines net income as the balance of gross income left after subtracting all allowable deductions, exemptions, and necessary business expenses (like taxes, operating costs, interest) from total earnings, essentially the "take-home" or profit. It's the money you keep or the true profit a company makes after all costs are covered, often called the "bottom line"