Joe Sharkey points out that Delta Air Lines seems to have made a $137 million profit, despite its report that it lost $1 billion in the second quarter of this year.
He points to this press release, which said, among many other things:
• Delta’s net income for the June 2008 quarter excluding special charges was $137 million.
• Delta recorded special charges totaling $1.2 billion in the June 2008 quarter, including a $1.1 billion non-cash charge, net of a $119 million tax benefit, related to the impairment of goodwill and other intangibles.
• As of June 30, 2008, Delta had $4.3 billion in unrestricted liquidity.
Impairment of good will? Investopedia defines it as “the value of intangible assets such as a strong brand name, good customer relations, good employee relations and any patents or proprietary technology.”
Wow. Who knew you could redsuce your taxable income by pissing people off? I haven’t mowed the crabgrass for a while, and my neighbors are totally hacked off. I’m going to run that one by the IRS.
[Note 7/18: And good on Terry Maxon at the Dallas Morning News, whose coverage of the aviation business is without peer, for an explanation of these charges.]