Hawker Beechcraft’s 2011 operating losses reflects its lack of confidence in Hawker sales
[nonmember]Hawker Beechcraft made a $307.9 million operating loss mainly because it expects to sell fewer Hawker aircraft in the future. The company had a $633 million net loss for 2011.::join::[/nonmember][ismember]Hawker Beechcraft made a $307.9 million operating loss mainly
because it expects to sell fewer Hawker aircraft in the future. The company had
a $633 million net loss for 2011.
Most of the company’s operating loss was due to asset
impairment charges of $292.6 million. Some $226.6 million of these charges were
related to the Hawker programme.
Asset impairment charges happen when the value of an asset,
suddenly declines forcing a company to adjust its depreciation and amortization
expenses. In this case, Hawker Beechcraft has lowered the value of its Hawker
business jet and technology as it believes it will now sell less Hawker aircraft than it originally forecast.
In its 10K Annual Filing the company said: “The impairment
was caused by a decrease in the expected cashflows from the underlying Hawker
business jet products as a result of the depressed business and general
aviation and resulting reduced production volumes and downwards pricing
Hawker Beechcraft says the tests were performed in the fourth quarter of 2011. Under
US accounting standards an asset cannot be re-valued for a higher amount once it
been impaired. The company also impaired
$32.9 million of inventory
In 2010 Hawker Beechcraft has asset impairments of $12.6
million. In 2011 they accounted for $74.5 million.
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The company’s selling costs rose to $270 million (11% of
sales) from $257 (9%) after it spent $18.8 million expanding its international