Originally Posted by ChazzMMichaels (Post 3060869)

No worries!

Granted my MBA is about 12 years old, and even then I checked my work with google/investopedia/whatever, but there's a difference between operating cash flow and the cash flow from investments and financing. I was suggesting that the cash flow that mgmt is talking about is specifically operating cash flow, basically the daily revenue/expenses directly tied to flying airplanes. I'm thinking that is typically what execs are referring to when they say "cash flow" in this respect. But I very well could be wrong.

Originally Posted by GogglesPisano (Post 3061143)

That sounds like a good explanation. "Cash Flow," is day-to-day -- or even "flight to flight." Fuel, crews, lease payments, landing fees ... Taken as a microcosm.

Overall corporate profitability takes into account marketing, real estate, taxes, interest and finance stuff. And is measured quarterly.

That about right?

Originally Posted by ERflyer (Post 3061034)

We were throwing off excess cash. Buying back stocks was a not an entirely selfless choice management made because much of their compensation is in stock options. Yes, everyone was doing it. Doesn’t make it right. They could have sunk more money into assets which then could be borrowed against when we needed to raise cash - like now.



Additionally, the dividend could have been raised much higher. The above and below line in return percentage for calculating the dividend-buyback percentage is completely arbitrary. A choice. Shareholders would have been rewarded with a higher dividend and more cash, at least half, sunk into assets. The stock price would have appreciated with both those options although not as much.



$11.5B in buybacks was a mistake. Dividend cash would have been gone but the amount of unencumbered assets would be higher.



Since management is asking us to voluntarily take a $1B annual hit to our contract in the form of a lower ALV it does provide context.

Originally Posted by AUP09 (Post 3060874)

No regrets on buybacks. The cash would not be available to us today even if it was not used to buy back stock. Will there be buy backs in the future? Probably, but it will be long after the company is very profitable again.

Summer schedules are being adjusted every day. Mostly adding capacity but there are cuts too.

If it comes to it, they may let a few.

Originally Posted by notEnuf (Post 3063544)

Buy backs are theoretical returns to share holders. You have to have the assumption that the trading range of $48 - $58 was supported by the reduction in shares. And had they not spent that money on the stock the trading range would have slid lower. It certainly didn't boost share value by eliminating 18% of the ownership. Had that money been spent to secure the retirement fund or pay down other secured debt there would have been less obligation now and more unencumbered assets to secure more loans or at a better rate. The buybacks did do one thing well, secure the performance metrics for management compensation.

Originally Posted by AUP09 (Post 3063557)

The money would not have been spent on other things. Buyback or no buyback the money would have been returned to shareholders one way or another.

Originally Posted by notEnuf (Post 3063561)

What other things? Dividends and buybacks were the vehicles of choice, The theory of stock appreciation with balance sheet improvement is just as valid as the buybacks. We will never know if that money would have served the shareholders better by increasing shareholders equity book value (balance sheet) by reducing debt. That also side steps the real motivation, management compensation.

Originally Posted by AUP09 (Post 3063584)

You (and many others) say the buybacks were a waste and the money should have spent elsewhere (like paying down debt, and securing the retirement fund). I'm saying that would not have happened. Buyback or no buyback the money would have only gone to shareholders through some method.

Originally Posted by AUP09 (Post 3063584)

You (and many others) say the buybacks were a waste and the money should have spent elsewhere (like paying down debt, and securing the retirement fund). I'm saying that would not have happened. Buyback or no buyback the money would have only gone to shareholders through some method.