01 Mar ACG 6026 Group Assignment-Liabilities
use the Annual Report for their assigned company and answer the questions in the blue cells in the excel template attached below. The blue link on the attached file is the Annual report necessary.
AA
| Group # | ||||
| For AMERICAN AIRLINES GROUP do the following: | ||||
| Obtain the fiscal 2019 annual report at: | https://americanairlines.gcs-web.com/static-files/d46a00e3-db05-4a91-af7a-fbe0fc2a7f08 | |||
| Amounts reported below should be IN MILLIONS $$ | ||||
| I. FINANCIAL STATEMENT REVIEW | ||||
| Provide the following for the December 31, 2019 from the Financial Statements (Item 8 of the Annual Report) in the blue box provided. Answers may be found on face of the financial statements or on footnotes. | ||||
| – | How much was Revenues? (from Statement of Operations) | $$ million | ||
| Passenger revenue | ||||
| Cargo | ||||
| What % of Sales was from International? | Other | |||
| Total | $ – 0 | |||
| How much was Operating Income? (from Statement of Operations) | ||||
| What is the percentage of Operating Income to Revenues | ERROR:#DIV/0! | |||
| – | Detail the Liability balance (from Balance Sheet) | |||
| Categories | December 31, 2019 | December 31, 2018 | ||
| Accounts payable | ||||
| Accrued salaries and wages | ||||
| Air traffic liability | ||||
| Other accrued liabilities | ||||
| Operating lease liabilities (add current and noncurrent portion) | ||||
| Loyalty program liability (add current and noncurrent portion) | ||||
| Pension and postretirement benefits | ||||
| Long-term debt and finance leases (add current and noncurrent portion) | ||||
| Other liabilities | ||||
| Total Liabilities | 60,113 | 60,749 | ||
| Total of current and noncurrent liabilities | ||||
| – | How does AA record revenue from "Mileage credits earned through travel"? (Note 1 –> Loyalty Revenue) | |||
| II. FINANCIAL RATIOS (2019) | ||||
| – | Calculate Debt Ratio | |||
| Formula | Amounts | Answer | ||
| E.g. A – B = C | 100 – 70 | 30.0 | ||
| – | Calculate Times-Interest-Eearned Ratio | |||
| Formula | Amounts | Answer | ||
| E.g. A – B = C | 100 – 70 | 30.0 | ||
| – | Calculate Return on Debt (see formula below) | |||
| Formula | Amounts | Answer | ||
| Net Income | ||||
| average Long-Term Debt * | ||||
| * Use simple average (beg + end / 2) | ||||
| "Long-Term Debt" includes Long-Term Debt & Finance Leases plus Operating Lease Liabilities above | ||||
| III. NON-GAAP FINANCIAL MEASURES (Pgs 45-47, Reconciliation of GAAP to Non-GAAP Financial Measures) | ||||
| – | List the items included in the "Operating special items, net" line for 2019 | Year-ended Dec 31, 2019 | ||
| Total | 641 | |||
| – | Reconciliation of Pre-Tax Income (Loss) Excluding Net Special Items: | Year-ended Dec 31, 2019 | ||
| Pre-tax income (loss) – GAAP | ||||
| Adjusted for: Pre-tax special items, net | ||||
| Pre-tax income (loss) excluding net special items | 2,900 | |||
| – | Refer to the following article about non-GAAP financial measures: | |||
| https://www.cov.com/en/news-and-insights/insights/2022/12/updated-sec-guidance-on-non-gaap-measures#:~:text=Non%2DGAAP%20measures%20are%20numerical,principles%20(%E2%80%9CGAAP%E2%80%9D). | ||||
| Under "Update to Question 100.01", in what way has the staff clarified the treatment of an operating expense that occurs repeatedly or occasionally? Do you think this would apply to any of the special items noted above? | ||||
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