Finance project needed
anirudhlihala
2020FallRockyMountainRegionalAirlinesexhibitsStudents1.xlsxExhibit 1
| Rocky Mountain Regional Airlines case | ||
| Exhibit 1 | ||
| Rocky Mountain Regional Airlines | ||
| Balance Sheet | ||
| As of December 31 | ||
| ('$ in millions) | 2018 | 2017 |
| Assets | ||
| Current assets | ||
| Cash and equivalents | $603.3 | $562.2 |
| Accounts receivable | $147.0 | $147.9 |
| Inventories and supplies | $96.3 | $89.1 |
| Prepaid expenses | $133.2 | $107.7 |
| Total current assets | $979.8 | $906.9 |
| Property and equipment at cost | $11,785.8 | $9,994.5 |
| Less accumulated depreciation | $3,237.9 | $2,724.0 |
| Net property and equipment | $8,547.9 | $7,270.5 |
| Total assets | $9,527.7 | $8,177.4 |
| Liabilities and owners' equity | ||
| Current liabilities | ||
| Accounts payable | $262.5 | $260.7 |
| Air traffic liability | $876.3 | $799.2 |
| Accrued liabilities | $406.8 | $320.4 |
| Other current liabilities | $20.1 | $27.0 |
| Total current liabilities | $1,565.7 | $1,407.3 |
| Long-term debt | $1,712.7 | $1,238.1 |
| Deferred liabilities | $1,473.0 | $1,338.3 |
| Owners' equity | ||
| Common stock | $60.6 | $60.6 |
| Paid in capital in excess of par | $636.3 | $636.3 |
| Retained earnings | $4,079.4 | $3,496.8 |
| Total owners' equity | $4,776.3 | $4,193.7 |
| Total Liabilities and owners' equity | $9,527.7 | $8,177.4 |
| Rocky Mountain Regional Airlines case | ||
| Exhibit 1 - Continued | ||
| Rocky Mountain Regional Airlines | ||
| Income Statement | ||
| For the year ended December 31 | ||
| ('$ in millions) | 2018 | 2017 |
| Total revenue | $7,202.7 | $6,333.6 |
| Operating expenses | ||
| Salaries, wages and benefits | $2,973.9 | $2,706.9 |
| Fuel | $886.2 | $707.4 |
| Maintenance and repairs | $597.3 | $494.4 |
| Airport landing fees | $534.0 | $476.1 |
| Other operating expenses | $578.7 | $505.8 |
| Depreciation expense | $513.9 | $452.1 |
| Total operating expenses | $6,084.0 | $5,342.7 |
| Operating income | $1,118.7 | $990.9 |
| Interest expense | $82.2 | $61.8 |
| Income before income taxes | $1,036.5 | $929.1 |
| Income tax expense | $255.9 | $245.4 |
| Net income | $780.6 | $683.7 |
| Dividends paid | $198.0 | $172.5 |
Exhibit 2
| Rocky Mountain Regional Airlines case | ||||||||
| Exhibit 2 | ||||||||
| Airline Industry Information - Year Ended December 31, 2018 for all Companies | ||||||||
| ($ in millions except for per | Alaska | American | Delta | Hawaiian | Southwest | Spirit | United | |
| share information) | Airlines | Airlines | Airlines | Airlines | JetBlue | Airlines | Airlines | Airlines |
| Total revenue | $8,264 | $44,541 | $44,438 | $2,837 | $7,658 | $21,965 | $3,323 | $41,303 |
| Operating income | $643 | $2,656 | $5,264 | $314 | $288 | $3,206 | $351 | $3,294 |
| Net income | $437 | $1,412 | $3,935 | $233 | $188 | $2,465 | $156 | $2,131 |
| Long-term debt | $2,103 | $24,473 | $9,771 | $710 | $1,670 | $3,377 | $2,188 | $14,728 |
| Net property & equipment | $6,781 | $34,098 | $28,335 | $2,185 | $7,370 | $19,525 | $3,116 | $28,329 |
| Total assets | $10,912 | $60,580 | $60,266 | $3,197 | $10,426 | $26,243 | $5,166 | $44,786 |
| EBITDA | $1,041 | $4,495 | $7,593 | $454 | $779 | $4,407 | $528 | $5,532 |
| Cash flow from operating activities | $1,195 | $3,533 | $7,014 | $509 | $1,217 | $4,893 | $507 | $6,163 |
| Common shares outstanding (thousands) | 123,230 | 464,236 | 691,564 | 50,338 | 313,351 | 574,509 | 68,270 | 275,615 |
| Earnings per share | $3.55 | $3.04 | $5.69 | $4.63 | $0.60 | $4.29 | $2.28 | $7.73 |
| Stock ticker symbol | ALK | AAL | DAL | HA | JBLU | LUV | SAVE | UAL |
| Stock price on January 15, 2019 | $64.28 | $32.10 | $47.83 | $30.81 | $17.16 | $49.61 | $58.56 | $81.20 |
| Price / Earnings ratio | 18.11 | 10.56 | 8.41 | 6.65 | 28.60 | 11.56 | 25.68 | 10.50 |
| Market value of equity (Jan-15-2019) | $7,921 | $14,902 | $33,078 | $1,551 | $5,377 | $28,501 | $3,998 | $22,380 |
| Enterprise value | $10,024 | $39,375 | $42,849 | $2,261 | $7,047 | $31,878 | $6,186 | $37,108 |
Exhibit 3
| Rocky Mountain Regional Airlines case | ||||||
| Exhibit 3 | ||||||
| Rocky Mountain Regional Airlines | ||||||
| Five-Year Financial Forecasts | ||||||
| ('$ in millions) | Actual 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | Forecast 2023 |
| Total revenue | $7,202.7 | $7,959.0 | $8,715.1 | $9,412.3 | $10,071.2 | $10,700.6 |
| growth rate of revenue | 10.5% | 9.5% | 8.0% | 7.0% | 6.2% | |
| Operating expenses minus depreciation | $5,570.1 | $6,157.2 | $6,736.0 | $7,261.4 | $7,747.9 | $8,196.7 |
| Depreciation expense | $513.9 | $578.7 | $644.4 | $706.4 | $774.8 | $823.5 |
| Operating income | $1,118.7 | $1,223.1 | $1,334.7 | $1,444.6 | $1,548.5 | $1,680.4 |
| Interest expense | $82.2 | $102.6 | $116.4 | $126.8 | $136.9 | $147.3 |
| Income before income taxes | $1,036.5 | $1,120.5 | $1,218.3 | $1,317.8 | $1,411.6 | $1,533.1 |
| Income tax expense | $255.9 | $274.5 | $298.5 | $322.9 | $345.8 | $375.6 |
| Net income | $780.6 | $845.9 | $919.8 | $994.9 | $1,065.8 | $1,157.5 |
| Dividends paid | $198.0 | $203.0 | $221.0 | $239.0 | $256.0 | $275.0 |
| Current assets | $979.8 | $1,074.5 | $1,176.5 | $1,270.7 | $1,359.6 | $1,444.6 |
| Property and equipment at cost | $11,785.8 | $13,153.0 | $14,481.0 | $15,697.0 | $16,843.0 | $17,902.0 |
| Accumulated depreciation | $3,237.9 | $3,816.6 | $4,461.0 | $5,167.4 | $5,942.2 | $6,765.7 |
| Current liabilities | $1,565.7 | $1,735.1 | $1,899.9 | $2,051.9 | $2,195.5 | $2,332.7 |
| Common stock | $60.6 | $60.6 | $60.6 | $60.6 | $60.6 | $60.6 |
| Paid in capital in excess of par | $636.3 | $636.3 | $636.3 | $636.3 | $636.3 | $636.3 |
| Retained earnings | $4,079.4 | $4,722.3 | $5,421.2 | $6,177.1 | $6,986.8 | $7,869.3 |
| Total owners' equity | $4,776.3 | $5,419.2 | $6,118.1 | $6,874.0 | $7,683.7 | $8,566.2 |
