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?

Paying down debt and "returning equity to shareholders", takes a bite don't it!?

I'm not capable of such high mathematics but I just want to chime in with an "atta boy"

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.

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I'm not getting what you are saying about 8% penalty. Howard claimed it saved the company money.

In any case, I guess they could have pre paid or book an additional 1 billion of interest in 2014 and had to pay NO profit sharing.

I'd be interested in the Union's take on this.

Debt is secured and guaranteed a ROI for the purchaser. If you buy it back early, they stop earning interest, so there is a repayment penalty.

Prepayment, or payment of debt, does not affect the amount of our profit sharing.

Our profit sharing is based off of pre tax income, exclusive of any special charges (this year it was early outs for flight attendants, hedging losses etc)

Not certain, but I don't think that is correct, unless profit sharing is not calculated on EBITA.

We earned $1.97 billion for 2014. If they used payment of debt to offset income as you suggest, then our "profit" should have been ~$3.8 billion. No where in our numbers over the year has that been possible. Sorry, it doesn't pass the common sense test.

And for comparison sake, Delta has been paying down debt even more then us. So then add $1.5 + billion to Deltas 2014 profit, as you want to do with UAL's. Are you saying Delta is hiding profit too? The net result is the same, we trail Delta by a large margin when it comes to profitability.

http://ir.delta.com/files/4Q/Earning...001_f67r8q.pdf

The simple fact is Delta made more profit then us, triggering their 20% clause, which resulted in a much larger profit sharing check.