There appears to be conflicting info in the press about last quarters performance. Was it a profit or a loss? Is management gaming their numbers to tilt opinion on the contract integration?

Atlas Air Worldwide Holdings, Inc. (AAWW) Sees Strong Trading Volume on Strong Earnings - Mideast Time

Or

http://finance.yahoo.com/news/atlas-...142552344.html

 

I know "Capital Reinvestment" is a fancy word for debt.

 

The "Yahoo!" report was generated automatically. The discrepancy could be a glitch in the algorithm?

 

Guessing that the official one would be correct.

Atlas Air Worldwide Holdings

 

Corporate accounting is complicated, most pilots have no idea how it works but they all run their mouth constantly about it (not saying that is what you are doing, just that its the norm).

Here is a *very* simplified explanation.

Companies often report 2 different numbers for earnings- one that includes "one time" costs and one that excludes one time costs (excluding the one time costs is meant to show how the underlying business is operating without unusual costs included)

- side note about '1 time costs'. It does not mean things like 'Captain Gary hard landed in Angola and we had to replace the nose gear'- that would be included under expected maintenance costs. What it does include is things like corporate buyouts (you pay for a company, i.e. Southern, once and then the cost does not recur) or litigation settlements (Atlas was accused of price fixing and apparently agreed to pay $100 million to settle, this is what caused the loss)

So Atlas' underlying business (one time costs excluded) operated at a profit in Q4 2015, but one time costs (mostly a litigation settlement) took them into the loss column for the Q. Those are the 2 numbers being reported. Atlas recognized the entire cost of the settlement on their Q4 report, but will actually pay it out over 3 payments by 2018.

And 'capital reinvestment' is not a fancy term for debt, though Atlas has plenty of that.

 

One factor the CEO looks past his stock's analysts are quick to mention; global airfreight traffic grew little more than 1/2 of 1% last year and signals for 2016 are mixed at best. Which suggests their growth strategy is focused on consolidating business in the existing market as well positioning for pallet demand beyond the horizon. IMHO, it's a smart move.

 

Thanks for breaking it down, great explanation. One question though, if Atlas "recognized" the entire cost of the settlement but will not pay it till 2018, why then was there a "one time cost" for litigation recognized on this earning report? Was it a partial payment?

 

For accounting purposes, they debited the entire $100 to 4th quarter 2015. The actual payments are being made from cash on hand, one last month, then 1/17 and 1/18.