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CORPORATE LIBRARY
AUG2 2 Î983 August 18, 1983
Number 10
PAN AMERICAN WORLD AIRWAYS
AUGUST HIGHLIGHTS: GOOD NEWS FROM FINANCE
Today, Pan Am moved to add another 747SP to its fleet. In his letter of August 4, Chairman Acker announced both a new source of cash to Pan Am, and a reduction in Pan Ann's debt and expenses, which will strengthen Pan Am's financial condition considerably. These three significant happenings are making August a month to remember.
Pan Am To Purchase A 747SP From Braniff
Today, Pan Am announced that it has reached an understanding with Braniff Airways Inc. to purchase a Boeing 747SP (Special Performance) aircraft for $20 million. The sale is subject to the negotiation of a definitive sales agreement and approval of the U.S. Bankruptcy Court in Fort Worth, Texas. This court is overseeing the Braniff bankruptcy. Pan Am expects to take delivery of the plane shortly after the agreement is reached and approval is received.
Pan Am's current fleet of 42 747 passenger aircraft includes 10 Special Performance models. In addition, we operate 11 McDonnell Douglas DC 10-10s, 3 DC10-30s, 12 Lockheed 101 l-500s, 33 727-200s, 15 727-lOOs and 14 737-200s.
Exchange Of Common Stock Results In Improvement Of Pan Am's Debt To Equity Ratio
A few weeks ago, Pan Am exchanged 7,684,000 shares of Common Stock for $46.1 million of debt. This wipes out part of our debt, and eliminates the annual interest Pan Am was required to pay on that debt reducing expenses by approximately $4.6 million. This exchange also helps the Company's "debt to equity ratio."
The "debt to equity ratio" is one good indication of the financial strength of a Company. "Debt" is the amount the Company owes to its creditors in terms of both borrowed money and capitalized leases. "Equity" is the book value of the shareholders' ownership interest in the Company. To get the "debt to equity ratio," you divide the total amount of debt (both long and short term) by the total amount of stockholder equity.
During the last two difficult years, Pan Am's "debt to equity ratio" suffered. Our equity was diminished by our losses and our debt increased to finance those losses. By the end of the second quarter, we began to show improvement. On June 30, our debt totalled $1.48 billion and our equity totalled $291 million, with a resultant "debt to equity ratio" of 5.07 to 1. Measured today, the recent exchange of stock for debt alone would improve thè "debt to equity ratio" to 4.24 to 1.
As the Company continues to report profits, the "debt to equity ratio" will reduce accordingly . . . And that's PROGRESS.
I. 9°/c/3
(over)
Object Description
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| Title | Page 1 |
| Object ID | asm0341006618 |
| Digital ID | asm03410066180001001 |
| Full Text | *) Progress CORPORATE LIBRARY AUG2 2 Î983 August 18, 1983 Number 10 PAN AMERICAN WORLD AIRWAYS AUGUST HIGHLIGHTS: GOOD NEWS FROM FINANCE Today, Pan Am moved to add another 747SP to its fleet. In his letter of August 4, Chairman Acker announced both a new source of cash to Pan Am, and a reduction in Pan Ann's debt and expenses, which will strengthen Pan Am's financial condition considerably. These three significant happenings are making August a month to remember. Pan Am To Purchase A 747SP From Braniff Today, Pan Am announced that it has reached an understanding with Braniff Airways Inc. to purchase a Boeing 747SP (Special Performance) aircraft for $20 million. The sale is subject to the negotiation of a definitive sales agreement and approval of the U.S. Bankruptcy Court in Fort Worth, Texas. This court is overseeing the Braniff bankruptcy. Pan Am expects to take delivery of the plane shortly after the agreement is reached and approval is received. Pan Am's current fleet of 42 747 passenger aircraft includes 10 Special Performance models. In addition, we operate 11 McDonnell Douglas DC 10-10s, 3 DC10-30s, 12 Lockheed 101 l-500s, 33 727-200s, 15 727-lOOs and 14 737-200s. Exchange Of Common Stock Results In Improvement Of Pan Am's Debt To Equity Ratio A few weeks ago, Pan Am exchanged 7,684,000 shares of Common Stock for $46.1 million of debt. This wipes out part of our debt, and eliminates the annual interest Pan Am was required to pay on that debt reducing expenses by approximately $4.6 million. This exchange also helps the Company's "debt to equity ratio." The "debt to equity ratio" is one good indication of the financial strength of a Company. "Debt" is the amount the Company owes to its creditors in terms of both borrowed money and capitalized leases. "Equity" is the book value of the shareholders' ownership interest in the Company. To get the "debt to equity ratio," you divide the total amount of debt (both long and short term) by the total amount of stockholder equity. During the last two difficult years, Pan Am's "debt to equity ratio" suffered. Our equity was diminished by our losses and our debt increased to finance those losses. By the end of the second quarter, we began to show improvement. On June 30, our debt totalled $1.48 billion and our equity totalled $291 million, with a resultant "debt to equity ratio" of 5.07 to 1. Measured today, the recent exchange of stock for debt alone would improve thè "debt to equity ratio" to 4.24 to 1. As the Company continues to report profits, the "debt to equity ratio" will reduce accordingly . . . And that's PROGRESS. I. 9°/c/3 (over) |
| Archive | asm03410066180001001.tif |
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