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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (1210767)

3/19/2020 4:09:03 PM

From: sylvester80

1 Recommendation

Recommended By
rdkflorida2

Read Replies (2) | Respond to of 1578926

Airlines & Boeing want SOCIALIST BAILOUT; but look how much they’ve WASTED on stock buybacks
Published: March 19, 2020 at 11:02 a.m. ET
By
Philip van Doorn
marketwatch.com
Building up cash for a rainy day hasn’t been part of the plan for airlines despite their propensity for going bankrupt in hard times

American Airlines spent $13 billion on share buybacks for 10 years through 2019, even though its free cash flow for that period was negative. Bloomberg

Many investors didn’t trust airline stocks through the bull market. Their valuation to earnings ratios were low, even as profits rose dramatically.

But despite a history of rough patches during unforeseen events, such as the Sept. 11, 2001, attacks and the volcanic eruption in Iceland in 2010 that disrupted air travel, large U.S. airline companies spent most of their free cash flow over the past 10 years on share buybacks, propping up their quarterly earnings-per-share results.

So did aerospace giant Boeing US:BA, but to a lesser extent.

Free-cash-flow and stock-buyback data for six large airline companies and Boeing are shown below.

Bailouts expectedAirlines have a long history of bankruptcies, and there is a very long of list of Chapter 7 and Chapter 11 filings, including TWA in 2001 and Eastern in 1991.

Now, large U.S. airlines and Boeing have requested massive aid from the federal government. Talks are ongoing, but President Trump said Tuesday that “ we have to protect Boeing,” which is the largest U.S. exporter.

Boeing said March 17 that “ a minimum of $60 billion in access to public and private liquidity, including loan guarantees” was appropriate for the aerospace-manufacturing industry.

Trump has been meeting with airline executives, who are seeking $50 billion in government money, according to The Wall Street Journal.

Bailouts may be necessary, and it remains to be seen what form they may take.

Read: Here are the industries that could get coronavirus aid from the U.S. government

Free cash flow and buybacksMost investors know that cash flow is more important than earnings, because revenue can be booked, and profits shown, before a company actually receives payment. A company’s free cash flow is its remaining cash flow after planned capital expenditures. Free cash flow can be used to pay for dividends, buy back shares, expand operations or invest in other improvements for the business.

Companies that built up hoards of cash, such as Berkshire Hathaway US:BRK, have been criticized for doing so, because it lowers a company’s return on invested capital.

Then again, Berkshire CEO Warren Buffett has shown during down markets that the extra cash can be put to work by scooping up other companies’ shares at low prices, or making special, lucrative preferred-stock deals, such as the one Berkshire did with Goldman Sachs US:GS during the 2008 financial crisis. Berkshire had $125 billion in cash and short-term investments in U.S. Treasury bills as of Dec. 31.

Nobody could have predicted the coronavirus outbreak, but it is having a tremendous effect on Apple US:AAPL, not only because most of its stores are closed, but because iPhones are assembled at Foxconn’s TW:2354 factories in China. But Apple has also been criticized for holding too much cash. It had $39.7 billion in cash, plus $67.4 billion in “marketable securities” as of Dec. 28. The extra cash will serve the company well during a massive decline in sales.

Companies use free cash flow to repurchase shares for several reasons. If the share count is reduced, it boosts earnings per share. If a company is issuing a significant number of new shares as part of its executive-compensation packages, buybacks mitigate the dilution of other shareholders’ ownership percentages.

A company may buy back shares because its executives cannot think of any better use for the money (such as expansion, equipment replacement, new product or service development, etc.), or maybe because the executives and board members are overly fixated on quarterly earnings results and boosting the share price, rather than the long-term health of the business and its ability to navigate storms.

Analysts, investors and corporate executives often call buybacks a “return of capital” to shareholders. This isn’t necessarily the case if the share price declines, despite the buybacks, or it eventually becomes clear the company was underinvesting in its ability to deliver competitive products and services.

The dataFactSet provided 10 years of free-cash-flow data, through the end of 2019 for the five airlines in the S&P 500 Index US:SPX plus JetBlue Airways US:JBLU and, separately, for Boeing.

Here is combined data for the six airlines:

S&P 500 AIRLINES + JETBLUE	TICKER	FREE CASH FLOW, PAST 10 YEARS ($ MILLIONS)	DOLLARS SPENT ON COMMON-STOCK BUYBACKS - PAST 10 YEARS ($ MILLIONS)	BUYBACKS/FCF
Southwest Airlines Co.	US:LUV	$15,103	$10,650	71%
Alaska Air Group, Inc.	US:ALK	$4,948	$1,590	32%
Delta Air Lines, Inc.	US:DAL	$23,186	$11,430	49%
United Airlines Holdings, Inc.	US:UAL	$11,526	$8,883	77%
American Airlines Group, Inc.	US:AAL	-$7,935	$12,957	N/A
JetBlue Airways Corporation	US:JBLU	$2,347	$1,771	75%

Totals		$49,175	$47,281	96%
Source: FactSet

You can click on the tickers for more about each company.

You may have to scroll right to see all the data.

As a group, the six airlines spent 96% of their free cash flow on stock buybacks over the past 10 full years through 2019.

Boeing’s free cash flow for 10 years totaled $58.37 billion, while the company spent $43.44 billion, or 74% of free cash flow, on stock repurchases.

To: RetiredNow who wrote (1210767)	3/19/2020 4:28:53 PM
From: Heywood40	2 Recommendations Recommended By pocotrader sylvester80 Read Replies (1) \| Respond to of 1578926

LOW IQ FatRump tried to dismiss the TrumpVirus as a HOAX.

To: RetiredNow who wrote (1210767)

3/19/2020 4:41:43 PM

From: Sdgla

2 Recommendations

Recommended By
locogringo
RetiredNow

Respond to of 1578926

The lies began with Trump dismantled the pandemic team.

amgreatness.com
Failures of the Administrative State in the Pandemic Crisis By Ned Ryun

Within the next couple of weeks, the American people will have a clearer sense of how great a challenge our nation faces in the months and potentially years ahead. Despite Democrats’ insistent focus on making this pandemic crisis about President Trump and his Administration—and the media happily jumping on that bandwagon—there are facts that cannot be ignored, and many of them are things the Democrat members of Congress (or former members of the Obama Administration) don’t want the American people to know.

Recall that Democrats like David Axelrod and members of the Obama national security team attempted to claim that the Trump Administration had “gutted” or “eliminated” the National Security Council’s “pandemic” desk. That turned out to be a lie. In fact, the Trump White House had reorganized that team to better coordinate with other parts of the federal government.

Then there were Democrat efforts to claim that the Obama Administration’s efforts to address the “swine flu” epidemic in 2009 were peerless. This despite the fact that Obama didn’t move forcefully on the issue until millions of Americans were infected and a thousand dead.

The fact is that the same challenges the Trump Administration has faced over the past month—lack of testing, lack of coordination at the federal level—were endemic a decade ago.

This is the most important point: over the past decade—and actually going back far longer—our federal government has become bloated with bureaucrats and do-nothing Washington desk jockeys who in spite of alleged responsibilities, have done nothing to ensure our society is protected from things like pandemics. Our emergency response apparatus is no better today than it was a decade ago when these same careerists promised to fix the problem.

Why, when a decade ago getting enough tests out to the states and healthcare facilities was a challenge, has there been no change in how the public health system engages with the private? To remind people, H1N1, otherwise known as the swine flu, infected somewhere in the neighborhood of 61 million Americans, hospitalized nearly 300,000 and killed anywhere from 13,000 to 17,000 Americans between 2009 and 2010. So we’ve seen pandemics before, in recent times, yet there is no improved process?

People attempted to ridicule President Trump for telling governors that they should purchase medical equipment like ventilators through state procurement. Why? Because the federal process is too slow. That federal procurement process is the same one that was in place more than a decade ago.

For a long time, I—and many others—believed the key to another term for President Trump was cutting the size of government; you drain the swamp by breaking apart the Administrative State. I still believe that to be the case. But just as important as cutting the size is fixing the government that actually is critical to the American people.

In the coming weeks, when we have a clearer sense of the challenges we face, we also have to know that people in the Trump Administration are thinking about the next wave of challenges we face. President Trump must set up a bipartisan, blue-ribbon panel that gets to the bottom of why the CDC and other federal agencies for more than a decade have not adapted to the needs of our communities and citizens. There are officials who must be held accountable; there are systems and processes that must be fixed immediately.

My concern is that if America ends up dodging a massive tragedy through the fast, backfilled actions now being put in place by the Trump Administration, state and local governments, and private industry we may fall back on the bad habits that our government has practiced for decades.

Most American citizens, who work hard and pay their taxes actually draw very few government resources and expect very little day to day from their governments. They expect that our military and law enforcement is keeping them safe. They expect that our Treasury and some segments of the Commerce Department are keeping our economy chugging along. Perhaps they expect the State Department to ensure their passports and visa requests are dealt with promptly or that their military pension checks or Social Security checks arrive on time. But what most if not all Americans expect, and are entitled to expect, is that when a national emergency hits our government will function well and keep them safe and our infrastructure running smoothly.

But when’s the last time anyone can remember any of that actually occurring? Certainly not in the Obama era. Not in the Bush or Clinton eras. And remember, for all of the remarkable heroism and sacrifice by our Greatest Generation, Pearl Harbor was a surprise attack; our nation’s leaders knew of the threats unfolding in Europe and Asia and still were not prepared for what was to come. After almost a century, isn’t it time that we expected—actually demanded—more from our fundamental government agencies?

At some point in the next few months, politics likely will return to some level of what passes for normal nowadays. We should remember this: Joe Biden and the Democrats have had decades of opportunities to fix these problems and have even claimed to fix them even as they have not. We have a president now who moved as quickly, if not more so than others in his position, only to run up against the same bureaucratic mess that let other presidents—and us—down.

This isn’t the time to change our leadership in the White House. It’s time to change the government the person in the White House oversees. The American people deserve better.