12.00%
CAPITAL ASSET PRICING MODEL PAGE
CAPM Ex Ante 8.10% 6
DIVIDEND GROWTH MODELS
Value Line, based on Dividends Growth 7.50% 7
Value Line, based on Earnings Growth 15.00% 8
Value Line, based on Return on Equity 12.00% 9
RANGE 7.5% - 15%
5.50%
10
3.25%
10
MARKET CAPITAL STRUCTURE
Tax Shield
Equity 55% x 12.00% = 6.60% 3
Operating Leases 20% x 3.25% x 76.00% = 0.49% 3
Debt 25% x 5.50% x 76.00% = 1.05% 3
Marginal Tax Rate 24%
WEIGHTED AVERAGE COST OF CAPITAL 8.14%
COST OF SECURED DEBT (LEASE) RATE
DEBT RATE
COST OF CAPITAL STUDY
2020 ASSESSMENT YEAR
APPENDIX C
EQUITY RATE
YIELD CAPITALIZATION
PASSENGER AIRLINES
1
Company
Ticker Beta P/E Ratio
Div'd
Yield
Common Stock %
Preferr
ed
Stock
% Long Term Debt % Total Debt & Equity %
Alaska Air Group, Inc.
ALK
1.05
9.7
2.17%
4,340,615,246
77.4%
-
0.0%
1,264,000,000
22.6%
5,604,615,246
100.0%
Allegiant Travel Co
ALGT
0.90
9.8
1.59%
894,773,750
41.7%
-
0.0%
1,248,579,000
58.3%
2,143,352,750
100.0%
American Airlines Group
AAL
1.40
5.4
1.40%
(108,914,750)
-0.5%
-
0.0%
21,454,000,000
100.5%
21,345,085,250
100.0%
Delta Air Lines, Inc.
DAL
1.15
7.8
2.94%
15,375,057,760
63.4%
-
0.0%
8,873,000,000
36.6%
24,248,057,760
100.0%
Hawaiian Holdings, Inc.
HA
1.30
8.1
1.57%
1,082,138,833
66.4%
-
0.0%
547,254,000
33.6%
1,629,392,833
100.0%
JetBlue Airways Corp.
JBLU
1.20
8.0
0.00%
4,852,800,000
70.9%
-
0.0%
1,990,000,000
29.1%
6,842,800,000
100.0%
SkyWest, Inc.
SKYW
1.35
10.3
0.86%
2,196,320,133
7.6%
-
0.0%
26,628,989,000
92.4%
28,825,309,133
100.0%
Southwest Airlines Co.
LUV
1.15
10.7
1.46%
9,959,100,000
84.4%
-
0.0%
1,846,000,000
15.6%
11,805,100,000
100.0%
Spirit Airlines
SAVE
1.15
7.5
0.00%
2,261,069,013
53.6%
-
0.0%
1,960,453,000
46.4%
4,221,522,013
100.0%
United Continental Holding, Inc
UAL
1.25
7.1
0.00%
11,665,358,365
47.0%
-
0.0%
13,145,000,000
53.0%
24,810,358,365
100.0%
Mean
1.19
8.4
1.20%
5,251,831,835
51.2%
0.0%
7,895,727,500
48.8%
Weighted Mean
52,518,318,350
39.9%
0.0%
78,957,275,000
60.1%
131,475,593,350
Harmonic Mean
1.17
8.1
NMF
NMF
0.0%
1,905,994,174.83
35.95%
5,292,334,479.98
Median
1.18
8.1
1.43%
3300842130
58.5%
0.0%
1,975,226,500.00
41.5%
Max
1.40
10.7
2.94%
15375057760
84.4%
0.0%
26628989000
100.5%
Min
0.90
5.4
0.00%
-108914750
-0.5%
0.0%
547254000
15.6%
Say 1.20 50% 0.0% 50% 100%
Capital Structure at Book Value
SUPPORT FOR GUIDELINE COMPANIES
WASHINGTON STATE DEPARTMENT OF REVENUE
2020 ASSESSMENT YEAR
PASSENGER AIRLINES
2
Company Ticker Stock Price
Common
Shares
Common Stock % Preferred Stock % Operating Lease % Long Term Debt % Total Debt & Equity Sum
Alaska Air Group, Inc. ALK 69.02 123,277,911 8,508,641,417 59.2% - 0.0% 4,549,991,826 31.7% 1,314,000,000 9.1% 14,372,633,243 100%
Allegiant Travel Co ALGT 176.18 16,195,000 2,853,235,100 71.4% - 0.0% - 0.0% 1,140,238,000 28.6% 3,993,473,100 100%
American Airlines Group AAL 28.57 435,659,000 12,446,777,630 22.7% - 0.0% 17,774,911,441 32.5% 24,508,000,000 44.8% 54,729,689,071 100%
Delta Air Lines, Inc. DAL 58.58 640,093,995 37,496,706,227 70.6% - 0.0% 5,238,844,841 9.9% 10,400,000,000 19.6% 53,135,551,068 100%
Hawaiian Holdings, Inc. HA 30.56 46,744,658 1,428,516,748 41.0% - 0.0% 1,449,675,953 41.6% 605,286,000 17.4% 3,483,478,701 100%
JetBlue Airways Corp. JBLU 18.79 288,000,000 5,411,520,000 60.2% - 0.0% 1,218,174,285 13.5% 2,367,000,000 26.3% 8,996,694,285 100%
SkyWest, Inc. SKYW 64.96 50,490,118 3,279,838,065 45.5% - 0.0% 874,933,444 12.1% 3,049,100,000 42.3% 7,203,871,510 100%
Southwest Airlines Co. LUV 53.60 534,000,000 28,622,400,000 87.1% - 0.0% 2,117,815,659 6.4% 2,122,000,000 6.5% 32,862,215,659 100%
Spirit Airlines SAVE 40.42 68,455,011 2,766,951,545 38.8% - 0.0% 2,063,432,920 28.9% 2,303,000,000 32.3% 7,133,384,465 100%
United Continental Holding, Inc UAL 88.84 253,044,650 22,480,486,706 54.5% - 0.0% 3,579,846,670 8.7% 15,203,000,000 36.8% 41,263,333,376 100%
Mean 55.1% 0.0% 18.5% 26.4%
Weighted Mean 125,295,073,439 55.2% - 0.0% 38,867,627,039 17.11% 63,011,624,000 27.7% 227,174,324,477
Median 56.8% 0.0% 12.84% 27.4%
Harmonic Mean 48.2% 0.0% #NUM! 18.2%
Max 87.1% 0.0% 41.6% 44.8%
Min 22.7% 0.0% 0.0% 6.5%
Std Dev 18.8% 0.0% 13.9% 13.2%
Coefficient of Variation 0.34 0.0% 0.75 0.50
Source: Target 55% 0% 20% 25% 100%
Stock Price: Yahoo
Market Value Debt: 10-k Reported Fair Value
Capital Structure at Market Value
SUPPORT FOR CAPITAL STRUCTURE
MARKET VALUE
2020 ASSESSMENT YEAR
PASSENGER AIRLINES
WASHINGTON STATE DEPARTMENT OF REVENUE
3
Company Ticker
Stock
Price
Revenues Multiple
Cash
Flow
Multiple Earnings Multiple
Divds
Decld
Multiple
Book
Value
Multiple
Alaska Air Group, Inc.
ALK
69.02
71.39
1.0
9.93
7.0
6.42
10.8
1.40
49.3
35.21
2.0
Allegiant Travel Co
ALGT
176.18
115.05
1.5
24.25
7.3
14.26
12.4
2.80
62.9
55.25
3.2
American Airlines Group
AAL
28.57
105.20
0.3
9.55
3.0
4.90
5.8
0.40
71.4
(0.25)
Delta Air Lines, Inc.
DAL
58.58
73.13
0.8
11.44
5.1
7.31
8.0
1.51
38.8
24.02
2.44
Hawaiian Holdings, Inc.
HA
30.56
61.55
0.5
8.30
3.7
4.71
6.5
0.48
63.7
23.15
1.3
JetBlue Airways Corp.
JBLU
18.79
28.00
0.7
3.85
4.9
1.90
9.9
-
16.85
1.1
SkyWest, Inc.
SKYW
64.96
59.45
1.1
13.80
4.7
6.25
10.4
0.48
135.3
43.50
1.5
Southwest Airlines Co.
LUV
53.60
42.55
1.3
6.85
7.8
4.45
12.0
0.70
76.6
18.65
2.9
Spirit Airlines
SAVE
40.42
55.95
0.7
8.39
4.8
5.09
7.9
-
33.03
1.2
United Continental Holding, Inc
UAL
88.84
173.05
0.5
21.60
4.1
12.05
7.4
-
46.10
1.9
Mean
0.8
5.2
9.1
71.1
1.9
Median
0.8
4.8
9.0
63.7
1.9
Harmonic Mean
0.7
4.8
8.6
62.4
1.7
Max
1.5
7.8
12.4
135.3
3.2
Min
0.27
3.0
5.8
38.8
1.12
Std Dev
0.4
1.6
2.3
31.1
0.7
Coefficient of Variation
0.46
0.31
0.25
0.44
0.38
Say 1.00 5.00 9.00 NMF 2.00
SUPPORT FOR MARKET MULTIPLES
WASHINGTON STATE DEPARTMENT OF REVENUE
2020 ASSESSMENT YEAR
PASSENGER AIRLINES
4
Guideline Companies Ticker EV+OL
EBITDA + OL
EV / EBITDA
Annual
Change Rate
EBITDA
EV / EBITDA
Revenue
EV / Sales CF
Debt Service
EV / CF
historic
historic
(Growth)
forecast
forecast
forecast
Alaska Air Group, Inc. ALK 14,372,633,243$ 1,817,000,000 7.91 3.6% 1,882,447,762 7.64 9,123,400,000 1.58 1,224,149,656 72,270,000 11.09
Allegiant Travel Co ALGT 3,993,473,100$ 519,802,000 7.68 6.2% 552,095,667 7.23 20,504,000,000 0.19 392,728,750 62,713,090 8.77
American Airlines Group AAL 52,513,689,071$ 6,709,000,000 7.83 6.1% 7,117,246,917 7.38 47,990,500,000 1.09 4,160,543,450 1,347,940,000 9.53
Delta Air Lines, Inc. DAL 53,135,551,068$ 9,622,000,000 5.52 2.5% 9,863,433,195 5.39 49,108,500,000 1.08 7,322,675,303 572,000,000 6.73
Hawaiian Holdings, Inc. HA 3,483,478,701$ 605,095,000 5.76 3.7% 627,267,462 5.55 2,909,250,000 1.20 387,980,661 33,290,730 8.27
JetBlue Airways Corp. JBLU 8,996,694,285$ 1,424,000,000 6.32 6.0% 1,509,767,483 5.96 8,648,750,000 1.04 1,108,800,000 130,185,000 7.26
SkyWest, Inc. SKYW 7,203,871,510$ 952,354,000 7.56 3.0% 980,650,339 7.35 3,050,250,000 2.36 696,763,628 167,700,500 8.33
Southwest Airlines Co. LUV 32,862,215,659$ 4,337,000,000 7.58 6.2% 4,605,572,966 7.14 23,500,000,000 1.40 3,657,900,000 116,710,000 8.71
Spirit Airlines SAVE 6,859,995,465$ 908,920,000 7.55 3.5% 940,794,475 7.29 4,420,000,000 1.55 574,337,542 126,665,000 9.79
United Continental Holding, Inc UAL 41,263,333,376$ 6,879,000,000 6.00 5.0% 7,226,352,930 5.71 45,346,800,000 0.91 5,465,764,440 836,165,000 6.55
Mean 6.97 4.58% 6.66 1.24 8.50
Median 7.56 4.36% 7.18 1.15 8.52
Harmonic Mean 6.85 4.13% 6.55 0.81 8.29
Max 7.91 6.21% 7.64 2.36 11.09
Min 5.52 2.51% 5.39 0.19 6.55
Std Dev 0.95 1.5% 0.89 0.56 1.42
Coefficient of Variation 0.14 0.32 0.13 0.45 0.17
Say 7.00 4.50% 6.50 1.20 8.00
Forecast EV/EBITDA By Rank
Guideline Companies
EV/EBITDA
forecast
Delta Air Lines, Inc.
5.39
5.95
Low Average
Hawaiian Holdings, Inc.
5.55
5.7
Low Median
United Continental Holding, Inc
5.71
5.50
Say
JetBlue Airways Corp.
5.96
Southwest Airlines Co.
7.14
Allegiant Travel Co
7.23
Spirit Airlines
7.29
7.38
High Average
SkyWest, Inc.
7.35
7.3
High Median
American Airlines Group
7.38
7.25
Say
Alaska Air Group, Inc.
7.64
ENTERPRISE VALUE MULTIPLES
WASHINGTON STATE DEPARTMENT OF REVENUE
2020 ASSESSMENT YEAR
PASSENGER AIRLINES
y = 5.8297x + 2E+09
R² = 0.9576
$-
$10,000,000,000
$20,000,000,000
$30,000,000,000
$40,000,000,000
$50,000,000,000
$60,000,000,000
$70,000,000,000
- 2,000,000,000 4,000,000,000 6,000,000,000 8,000,000,000 10,000,000,000 12,000,000,000
Enterprise Value
EBITDA (Forecast)
EV/EBITDA Correlation
Enterprise Value / EBITDA
5
Ke =
Cost of Equity 8.10%
to page 1
Rm =
rate of return
7.15%
Rf =
risk free rate
2.40%
Rp =
risk premium
4.75%
B =
Beta
1.20
page 2
Rp = Risk Premium 4.75%
to above
Shannon Pratt and Roger Grabowski
3.50% - 6.00%
Dr. Aswath Damodaran
5.20%
chart page 14
4.72%
adjusted for Rf
John Graham and Campbell Harvey
6.81%
10 year expected return
6.30%-7.32%
95% Interval 10 year expected
4th Qtr Dec 2019
6.23%
adjusted for Rf
1.82%
Rf rate used in survey
Rf = Risk Free Rate 2.40%
to above
Value Line Investment Survey, Selected Yields January 4, 2019, page 1949
as of 12-31-19
US Treasury Securities year end data
5 year
1.69%
10 year
1.92%
30 year
2.39%
30 year Zero
2.42%
Federal Reserve Statistical Release (http://www.federalreserve.gov/Releases/H15/Current/)
January 2, 2020 as of 12-31-19
Treasury Constant Maturities
5 year
1.69%
10 year
1.92%
20 year
2.25%
30 year
2.39%
20 year TIPS
0.39%
1.86%
30 year TIPS
0.58%
1.81%
TIPS inflation indication
Inflation 2.00%
to appraisal template
Value Line Investment Survey, Economic Series January 3, 2020, page 1500
Consumer Price Index Annual Rate of Change 2021-2023
2.50%
Federal Reserve Bank of Philadelphia
The Livingston Survey, December 13, 2019, page 4, 10
Inflation median (measured by the CPI) over next 10 years 2.22%
https://www.philadelphiafed.org/research-and-data/real-time-center/livingston-survey
Gross Domestic Product (GDP) 3.90%
real GDP + inflation est
Federal Reserve Projected Long Run Real GDP Growth
Median Projection Value From Dec 11, 2019 Report
1.90%
Congressional Budget Office Real GDP Economic Projections
The Budget and Economic Outlook 2020-2030 Table B-1, pg 75
Average Percentage Change From Year To Year 2020-2024 1.80%
http://www.cbo.gov/publication/56020
2025-2035
1.65%
Federal Reserve Bank of Philadelphia
The Livingston Survey, December 13, 2019, page 4, 10
Average Annual Real GDP Growth Rate for Next Ten Years
2.00%
https://www.philadelphiafed.org/research-and-data/real-time-center/livingston-survey
https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20181219.pdf
Ke = Rf + β (Rp)
2019 Implied Premium
http://pages.stern.nyu.edu/~adamodar/
Cost of Capital, Applications and Examples, Fifth
Edition, 2014
Duke CFO magazine Global Business Outlook
Ex Ante
SUPPORT FOR YIELD CAPITALIZATION EQUITY COMPONENT
CAPITAL ASSET PRICING MODEL
PASSENGER AIRLINES
2020 ASSESSMENT YEAR
WASHINGTON STATE DEPARTMENT OF REVENUE
6
Ke =
Cost of Equity
D1 =
Expected Dividends
P0 =
Current Stock Price
GD =
Sustainable Growth -- Dividend
Sustainable growth can not exceed inflation plus real GDP
Company Ticker
Stock
Price
(Po)
Expected
Dividend
(D1)
Dividend
Yield
(D1/Po)
Dividend
Growth (G)
K
e One Year Value
Line
Forecast
Dividend
Growth
K
e
Five year
Value Line
Sustainable
Dividend
Growth
K
e
Five Year
Sustainable
Growth
Alaska Air Group, Inc.
ALK
69.02
1.50
2.17%
7.14%
9.32%
3.50%
5.67%
3.50%
5.67%
Allegiant Travel Co
ALGT
176.18
2.80
1.59%
0.00%
3.34%
4.93%
3.34%
4.93%
American Airlines Group
AAL
28.57
0.40
1.40%
0.00%
6.96%
8.36%
3.90%
5.30%
Delta Air Lines, Inc.
DAL
58.58
1.72
2.94%
13.91%
16.84%
7.89%
10.82%
3.90%
6.84%
Hawaiian Holdings, Inc.
HA
30.56
0.48
1.57%
0.00%
4.56%
6.13%
3.90%
5.47%
JetBlue Airways Corp.
JBLU
18.79
0.00
SkyWest, Inc.
SKYW
64.96
0.56
0.86%
16.67%
17.53%
6.58%
7.44%
3.90%
4.76%
Southwest Airlines Co.
LUV
53.60
0.78
1.46%
11.43%
12.88%
8.61%
10.07%
3.90%
5.36%
Spirit Airlines
SAVE
40.42
0.00
United Continental Holding, Inc
UAL
88.84
0.00
Mean
1.71%
14.14%
7.63%
5.47%
Median
1.57%
14.86%
7.44%
5.36%
Harmonic Mean
1.51%
13.27%
7.09%
5.41%
Max
2.94%
17.53%
10.82%
6.84%
Min 0.86% 9.32% 4.93% 4.76%
Std Dev 0.7% 3.8% 2.2% 0.7%
Coeficient of Variation
0.39
0.27
0.29
0.12
Source: Value Line Projections 12-16 to 18-22
to page 1
Say
7.50%
assumption:
K
e
= (D
1
/ P
o
) + G
D
SUPPORT FOR YIELD CAPITALIZATION EQUITY COMPONENT
WASHINGTON STATE DEPARTMENT OF REVENUE
2020 ASSESSMENT YEAR
Based on Dividend Growth
PASSENGER AIRLINES
DIVIDEND GROWTH MODEL
7
Ke =
Cost of Equity
E1 =
Expected Dividends
P0 =
Current Stock Price
G =
Growth -- Earnings
assume:
Sustainable growth can not exceed inflation plus real GDP
Company Ticker
Stock
Price
(Po)
Expected
Earnings
(E1)
Earnings
Yield
(E1/Po)
Earnings
Growth (G)
K
e One Year Value
Line
Forecast
Earnings
Growth
K
e Five Year
Value Line
Sustainable
Earnings
Growth
K
e Five Year
Sustainable Growth
K
e Multi Stage
Earnings Growth
Alaska Air Group, Inc.
ALK
69.02
7.10
10.29%
10.59%
20.88%
4.56%
14.85%
3.90%
14.19%
11.91%
Allegiant Travel Co
ALGT
176.18
18.00
10.22%
26.23%
36.44%
3.25%
13.47%
3.25%
13.47%
11.94%
American Airlines Group
AAL
28.57
5.25
18.38%
7.14%
25.52%
3.86%
22.24%
3.86%
22.24%
Delta Air Lines, Inc.
DAL
58.58
7.55
12.89%
3.28%
16.17%
4.05%
16.94%
3.90%
16.79%
16.24%
Hawaiian Holdings, Inc.
HA
30.56
3.75
12.27%
-20.38%
4.05%
16.32%
3.90%
16.17%
13.46%
JetBlue Airways Corp.
JBLU
18.79
2.35
12.51%
23.68%
36.19%
3.84%
16.35%
3.84%
16.35%
13.49%
SkyWest, Inc.
SKYW
64.96
6.30
9.70%
0.80%
10.50%
5.04%
14.74%
3.90%
13.60%
10.38%
Southwest Airlines Co.
LUV
53.60
5.00
9.33%
12.36%
21.69%
5.83%
15.15%
3.90%
13.23%
11.96%
Spirit Airlines
SAVE
40.42
5.40
13.36%
6.09%
19.45%
3.42%
16.78%
3.42%
16.78%
14.98%
United Continental Holding, Inc
UAL
88.84
12.60
14.18%
4.56%
18.75%
2.13%
16.31%
2.13%
16.31%
16.95%
Mean
12.31%
22.84%
16.32%
15.91%
13.48%
Median
12.39%
20.88%
16.32%
16.24%
13.46%
Harmonic Mean
11.85%
20.00%
16.06%
15.57%
13.17%
Max
18.38%
36.44%
22.24%
22.24%
16.95%
Min
9.33%
10.50%
13.47%
13.23%
10.38%
Std Dev
0.03
8.7%
2.4%
2.7%
2.2%
Coefficient of Variation
0.22
0.38
0.14
0.17
0.16
Source: Value Line Projections 12-16 to 18-22 Say 15.00%
to page 1
K
e
= (E
1
/ P
o
) + G
SUPPORT FOR YIELD CAPITALIZATION EQUITY COMPONENT
DIVIDEND GROWTH MODEL
WASHINGTON STATE DEPARTMENT OF REVENUE
2020 ASSESSMENT YEAR
PASSENGER AIRLINES
Based on Earnings Growth
8
Ke =
Cost of Equity
D1 =
Expected Dividends
E1 =
Expected Earnings
Po =
Current Price
G =
Growth
b =
Retained Earnings % = (EPS - DPS) / EPS
ROE =
Return on Equity = (E1 / Po)
Company Ticker
Stock
Price
(Po)
Expected
Dividend
(D1)
Expected
Earnings
(E1)
Dividend
Yield
(D1/Po)
Retained
Earnings
(b)
ROE
(E1/Po)
Growth
(b*ROE)
K
e
Dividends
K
e
Earnings
Alaska Air Group, Inc.
ALK
69.02
1.50
7.10
2.17%
78.9%
10.29%
8.11%
10.29%
18.40%
Allegiant Travel Co
ALGT
176.18
2.80
18.00
1.59%
84.4%
10.22%
8.63%
10.22%
18.84%
American Airlines Group
AAL
28.57
0.40
5.25
1.40%
92.4%
18.38%
16.98%
18.38%
35.35%
Delta Air Lines, Inc.
DAL
58.58
1.72
7.55
2.94%
77.2%
12.89%
9.95%
12.89%
22.84%
Hawaiian Holdings, Inc.
HA
30.56
0.48
3.75
1.57%
87.2%
12.27%
10.70%
12.27%
22.97%
JetBlue Airways Corp.
JBLU
18.79
0.00
2.35
100.0%
12.51%
12.51%
25.01%
SkyWest, Inc.
SKYW
64.96
0.56
6.30
0.86%
91.1%
9.70%
8.84%
9.70%
18.53%
Southwest Airlines Co.
LUV
53.60
0.78
5.00
1.46%
84.4%
9.33%
7.87%
9.33%
17.20%
Spirit Airlines
SAVE
40.42
0.00
5.40
100.0%
13.36%
13.36%
26.72%
United Continental Holding, Inc
UAL
88.84
0.00
12.60
100.0%
14.18%
14.18%
28.37%
Mean
11.87%
23.42%
Median
10.29%
22.91%
Harmonic Mean
11.31%
22.33%
Max
18.38%
35.35%
Min
9.33%
17.20%
Std Dev
3.2%
5.7%
Coefficient of Variation
0.27
0.24
12.00%
to page 1
Based on Return on Equity
Ke = (D1 / Po) + G
SUPPORT FOR YIELD CAPITALIZATION EQUITY COMPONENT
PASSENGER AIRLINES
2020 ASSESSMENT YEAR
DIVIDEND GROWTH MODEL
WASHINGTON STATE DEPARTMENT OF REVENUE
9
Standard's and Poor's Website
Company Ticker
Mergent's
Ratings
S&P Ratings
Alaska Air Group, Inc.
ALK
BB+
Allegiant Travel Co
ALGT
Ba3
BB-
American Airlines Group
AAL
Ba1
BB-
Delta Air Lines, Inc.
DAL
Ba2
BBB-
Hawaiian Holdings, Inc.
HA
Ba3
BB-
JetBlue Airways Corp.
JBLU
Ba1
BB
SkyWest, Inc.
SKYW
-
Southwest Airlines Co.
LUV
A3
BBB+
Spirit Airlines
SAVE
BB-
United Continental Holding, Inc
UAL
Ba2
BB
Overall Average Debt Rating Ba2 BB
All issues
Bond Yields for Guideline Companies, All Ratings
3.97%
Corporate Aaa Aa A Baa
October
3.01% 3.13% 3.37% 3.93%
November
3.06%
3.16%
3.40%
3.94%
December 3.01% 3.11% 3.36% 3.88%
4th Qtr Average 3.03% 3.13% 3.38% 3.92%
Public Utilities Aa A Baa
October 3.24% 3.39% 3.72%
November 3.25% 3.43% 3.76%
December 3.22% 3.40% 3.73%
4th Qtr Average 3.24% 3.41% 3.74%
Industrials Aaa Aa A Baa
October 3.01% 3.01% 3.35% 4.12%
November
3.06%
3.06%
3.37%
4.12%
December 3.01% 3.00% 3.32% 4.03%
4th Qtr Average 3.03% 3.02% 3.35% 4.09%
Standard & Poor's Long Term Bond Yields (%) 4th Qtr
S&P Avg YTM Med YTM
BB+ 5.20% 5.25%
BB 7.71% 7.56%
BB- 7.19% 7.14%
Source: Bloomberg Bond Yields, January 2019.
Debt Yield Rate 5.50%
Cost of Secured Debt (Lease)
Based on 4th Quarter Aa rate
3.25%
to page 1
Add'l Bond Data Pg 15
SUPPORT FOR DEBT RATING AND DEBT YIELD RATE
2020 ASSESSMENT YEAR
PASSENGER AIRLINES
WASHINGTON STATE DEPARTMENT OF REVENUE
Mergent's Bond Record January 2020, page 234
10
12/31/2019
Passenger Airlines Bond Analysis
2018.5
Formulas
Company
Type/Symbol
Call
coupon
maturity
Price/Sal
Issued / Book
current yield
yield to
Weighted Average
Rating Moody's
Mkt Val
Mkt :
Embedded Rate
Debt Service
Industry
Company
FINRA
American Airlines
AAL 3707053 FINRA
N
7.100
2022
102
44,147,000
6.96%
6.44%
0.01%
Baa3
45,029,940
$
102.00%
3,134,437
0.009%
0.025%
American Airlines
AAL 3707048
N
8.057
2022
101.75
36,733,000
7.92%
7.47%
0.01%
Baa2
37,375,828
$
101.75%
2,959,578
0.008%
0.024%
American Airlines
Corp Bond AAL4577142
Y
3.700
2027
100.1
220,723,000
3.70%
3.69%
0.02%
Baa3
220,943,723
$
100.10%
8,166,751
0.025%
0.071%
American Airlines
Corp Bond AAL4151941
Y
5.600
2022
100.75
182,766,000
5.56%
5.36%
0.03%
BBB-
184,136,745
$
100.75%
10,234,896
0.030%
0.085%
American Airlines
Corp Bond AAL3978262
Y
4.000
2027
108.261
285,504,000
3.69%
2.89%
0.02%
A+
309,089,485
$
108.26%
11,420,160
0.025%
0.072%
American Airlines
Corp Bond AAL4218569
Y
3.375
2028
99.707
947,778,000
3.38%
3.41%
0.10%
A+
945,001,010
$
99.71%
31,987,508
0.098%
0.281%
American Airlines
Corp Bond AAL4218570
Y
3.700
2024
102.263
266,046,000
3.62%
3.24%
0.03%
BBB
272,066,621
$
102.26%
9,843,702
0.026%
0.075%
American Airlines
Corp Bond AAL4442279
Y
3.650
2030
106.189
536,811,000
3.44%
3.01%
0.05%
Aa3
570,034,233
$
106.19%
19,593,602
0.049%
0.140%
American Airlines
Corp Bond AAL4442280
Y
4.000
2030
109.2
248,627,000
3.66%
3.04%
0.02%
A2
271,500,684
$
109.20%
9,945,080
0.023%
0.066%
American Airlines
Corp Bond AAL4867589
Y
3.150
2033
100.66
578,712,000
3.13%
3.09%
0.05%
Aa3
582,531,499
$
100.66%
18,229,428
0.054%
0.155%
American Airlines
Corp Bond AAL4867590
Y
3.500
2033
97.02
289,358,000
3.61%
3.77%
0.03%
A2
280,735,132
$
97.02%
10,127,530
0.033%
0.095%
American Airlines
Corp Bond AAL4867591
Y
3.850
2029
103.986
228,438,000
3.70%
3.39%
0.02%
A2
237,543,539
$
103.99%
8,794,863
0.023%
0.067%
American Airlines
Corp Bond AAL4190717
Y
3.700
2028
103.12
538,692,000
3.59%
3.31%
0.05%
A+
555,499,190
$
103.12%
19,931,604
0.054%
0.155%
American Airlines
Corp Bond AAL4160720
Y
4.375
2024
102.39
120,137,000
4.27%
3.88%
0.01%
BBB
123,008,274
$
102.39%
5,255,994
0.014%
0.040%
American Airlines
Corp Bond DAAL4360356
Y
3.200
2029
107.19
567,360,000
2.99%
2.42%
0.04%
AA+
608,153,184
$
107.19%
18,155,520
0.041%
0.119%
American Airlines
Corp Bond AAL4360357
Y
3.650
2029
108.403
261,284,000
3.37%
2.72%
0.02%
A
283,239,695
$
108.40%
9,536,866
0.021%
0.062%
American Airlines
Corp Bond AAL4442554
Y
4.950
2026
108.365
197,777,000
4.57%
3.65%
0.02%
Baa3
214,321,046
$
108.37%
9,789,962
0.022%
0.063%
American Airlines
Corp Bond AAL4327176
Y
3.575
2029
104.268
584,374,000
3.43%
3.09%
0.05%
Aa3
609,315,082
$
104.27%
20,891,371
0.055%
0.157%
American Airlines
Corp Bond AAL4327177
Y
4.100
2029
110.965
262,218,000
3.69%
2.88%
0.02%
A2
290,970,204
$
110.97%
10,750,938
0.023%
0.065%
American Airlines
Corp Bond AAL4327179
Y
5.250
2025
105.268
227,758,000
4.99%
4.30%
0.03%
Baa3
239,756,291
$
105.27%
11,957,295
0.030%
0.085%
American Airlines
Corp Bond AAL4150076
Y
4.950
2024
105.504
664,369,000
4.69%
3.82%
0.08%
A-
700,935,870
$
105.50%
32,886,266
0.077%
0.220%
American Airlines
Corp Bond AAL4288271
Y
3.600
2029
107.76
583,226,000
3.34%
2.74%
0.05%
Aa3
628,484,338
$
107.76%
20,996,136
0.048%
0.139%
American Airlines
Corp Bond AAL4288272
Y
4.000
2029
107.625
239,271,000
3.72%
3.14%
0.02%
A2
257,515,414
$
107.63%
9,570,840
0.023%
0.065%
American Airlines
Corp Bond AAL4288273
Y
4.400
2025
103.5
239,271,000
4.25%
3.78%
0.03%
Baa3
247,645,485
$
103.50%
10,527,924
0.027%
0.079%
American Airlines
Copr Bond AAL4526208
Y
3.600
2031
107.124
231,775,000
3.36%
2.91%
0.02%
A2
248,286,651
$
107.12%
8,343,900
0.020%
0.059%
American Airlines
Corp Bond AAL4526209
Y
3.350
2031
107.032
500,427,000
3.13%
2.68%
0.04%
Aa3
535,617,027
$
107.03%
16,764,305
0.040%
0.116%
American Airlines
Corp Bond AAL4955090
Y
3.750
2025
84
500,000,000
4.46%
6.89%
0.10%
420,000,000
$
84.00%
18,750,000
0.104%
0.299%
American Airlines
Corp Bond AAL4835666
Y
5.000
2022
89
750,000,000
5.62%
8.79%
0.20%
B1
667,500,000
$
89.00%
37,500,000
0.199%
0.572%
American Airlines
Corp Bond AAL4405825
Y
3.000
2030
94.428
557,654,000
3.18%
3.60%
0.06%
AA+
526,581,519
$
94.43%
16,729,620
0.061%
0.174%
American Airlines
Corp Bond AAL4408527
Y
3.250
2030
104.13
256,143,000
3.12%
2.82%
0.02%
A+
266,721,706
$
104.13%
8,324,648
0.022%
0.063%
American Airlines
Corp Bond AAL4544076
Y
3.750
2027
90.82
176,343,000
4.13%
5.11%
0.03%
BBB
160,154,713
$
90.82%
6,612,863
0.027%
0.078%
American Airlines
Corp Bond AAL3707307
Y
6.977
2021
103.468
37,016,000
6.74%
5.46%
0.01%
BB-
38,299,715
$
103.47%
2,582,606
0.006%
0.018%
American Airlines
Corp Bond AAL3688628
Y
5.250
2022
102.875
163,772,000
5.10%
4.35%
0.02%
A
168,480,445
$
102.88%
8,598,030
0.021%
0.062%
2
Book Val
200
sum
3389.121
11,524,510,000
$
Percent of book
1694.56%
1.34%
11,746,474,287
$
101.93%
3.90%
448,894,219
$
3.842%
FINRA
Delta Airlines
Corp Bond DAL 3872807
Y
4.750
2021
99.030
120,415,000
4.80%
5.17%
0.02%
A
119,246,975
$
99.03%
5,719,713
$
0.019%
0.054%
Delta Airlines
Corp Bond DAL 4277694
Y
3.625
2029
106.196
251,540,000
3.41%
2.93%
0.02%
AA
267,125,418
$
106.20%
9,118,325
$
0.022%
0.064%
Delta Airlines
Corp Bond DAL 4277695
Y
3.875
2029
108.16
55,897,000
3.58%
2.96%
0.00%
A1
60,458,195
$
108.16%
2,166,009
$
0.005%
0.014%
Delta Airlines
Corp Bond DAL 4277696
Y
4.250
2025
101.9
82,590,000
4.17%
3.91%
0.01%
Baa1
84,159,210
$
101.90%
3,510,075
$
0.010%
0.028%
Delta Airlines
Corp Bond DAL 4465817
Y
2.875
2020
100
1,000,000,000
2.88%
2.88%
0.09%
Baa3
1,000,000,000
$
100.00%
28,750,000
$
0.087%
0.249%
Delta Airlines
Corp Bond DAL 4465624
Y
3.625
2022
99.269
1,000,000,000
3.65%
3.85%
0.12%
Baa3
992,690,000
$
99.27%
36,250,000
$
0.116%
0.334%
Delta Airlines
Corp Bond DAL 4571567
Y
2.600
2020
99.89
450,000,000
2.60%
2.68%
0.04%
Baa3
449,505,000
$
99.89%
11,700,000
$
0.036%
0.104%
Delta Airlines
Corp Bond Dal 4622967
Y
3.400
2021
98.187
600,000,000
3.46%
4.18%
0.08%
BB+
589,122,000
$
98.19%
20,400,000
$
0.076%
0.218%
Delta Airlines
Corp Bond Dal 4622968
Y
3.800
2023
99.047
500,000,000
3.84%
4.04%
0.06%
BB+
495,235,000
$
99.05%
19,000,000
$
0.061%
0.175%
Delta Airlines
Corp Bond Dal 4622961
Y
4.375
2028
97.807
500,000,000
4.47%
4.67%
0.07%
BB+
489,035,000
$
97.81%
21,875,000
$
0.070%
0.202%
Delta Airlines
Corp Bond DAL 4900853
Y
2.900
2024
93
900,000,000
3.12%
4.36%
0.12%
Baa3
837,000,000
$
93.00%
26,100,000
$
0.118%
0.340%
Delta Airlines
Corp Bond DAL 4900990
Y
3.750
2029
86.410
600,000,000
4.34%
5.49%
0.10%
Baa3
518,460,000
$
86.41%
22,500,000
$
0.099%
0.286%
Delta Airlines
Corp Bond DAL RV
Y
6.718
2024
103.101
143,707,000
6.52%
6.04%
0.03%
Baa1
148,163,354
$
103.10%
9,654,236
$
0.026%
0.075%
Delta Airlines
Corp Bond DAL RY
Y
6.821
2024
105.846
391,595,000
6.44%
5.56%
0.07%
A3
414,487,644
$
105.85%
26,710,695
$
0.066%
0.189%
Delta Airlines
Corp Bond DAL RZ
Y
8.021
2024
109.114
67,089,000
7.35%
6.03%
0.01%
Baa2
73,203,491
$
109.11%
5,381,209
$
0.012%
0.035%
Delta Airlines
Corp Bond DAL 4806640
Y
3.204
2024
103.484
425,000,000
3.10%
2.52%
0.03%
Aa3
439,807,000
$
103.48%
13,617,000
$
0.032%
0.093%
Delta Airlines
Corp Bond DAL 4806641
Y
3.404
2024
105.855
75,000,000
3.22%
2.26%
0.01%
A3
79,391,250
$
105.86%
2,553,000
$
0.005%
0.015%
Delta Airlines
Corp Bond DAL 3702189
N
7.150
2021
100.000
411,187,000
7.15%
7.15%
0.09%
BBB
411,187,000
$
100.00%
29,399,871
$
0.089%
0.255%
Delta Airlines
Corp Bond DAL 3702264
N
6.264
2023
103.250
109,116,000
6.07%
5.43%
0.02%
Baa1
112,662,270
$
103.25%
6,835,026
$
0.018%
0.051%
13
Book Val
1300
sum
1919.546
7,683,136,000
% of book
82.09%
0.97%
7,580,938,807
$
98.67%
3.92%
301,240,158
$
2.783%
FINRA
Hawwaiian Airlines
Corp Bond HA 4007036
N
3.900
2027
99.538
222,268,000
$
3.92%
3.97%
0.03%
Baa1
221241121.8
99.54%
8,668,452
0.027%
0.076%
Hawwaiian Airlines
Corp Bond HA 4007037
N
4.950
2023
100.500
78,933,000
$
4.93%
4.82%
0.01%
BB+
79327665
100.50%
3,907,184
0.011%
0.033%
2
Book Val
200
sum
200.038
301,201,000
$
% of book
100.02%
0.04%
300,568,787
99.79%
12,575,636
0.110%
South West Airlines
Dep
7.375
2027
125.310
100,000,000
5.89%
3.83%
0.01%
BBB+
125,310,000
$
125.31%
7,375,000
0.012%
0.169%
South West Airlines
LUV HH
Y
6.150
2024
106.000
141,058,000
5.80%
4.88%
0.02%
A1
149,521,480
$
106.00%
8,675,067
0.021%
0.303%
South West Airlines
LUV HI
Y
6.650
2022
96.000
29,956,000
6.93%
8.01%
0.01%
Baa1
28,757,760
$
96.00%
1,992,074
0.007%
0.106%
South West Airlines
LUV GG
Y
7.375
2027
125.745
100,000,000
5.87%
3.78%
0.01%
BBB+
125,745,000
$
125.75%
7,375,000
0.011%
0.166%
South West Airlines
LUV4307713
Y
2.650
2020
98.296
500,000,000
2.70%
3.84%
0.06%
BBB+
491,480,000
$
98.30%
13,250,000
0.058%
0.846%
South West Airlines
LUV4422286
Y
3.000
2026
101.015
300,000,000
2.97%
2.85%
0.03%
A3
303,045,000
$
101.02%
9,000,000
0.026%
0.376%
South West Airlines
LUV4565969
Y
2.750
2022
100.387
300,000,000
2.74%
2.63%
0.02%
A3
301,161,000
$
100.39%
8,250,000
0.024%
0.348%
South West Airlines
LUV4565970
Y
3.450
2027
105.672
300,000,000
3.26%
2.69%
0.02%
A3
317,016,000
$
105.67%
10,350,000
0.024%
0.356%
South West Airlines
LUV4947535
Y
2.625
2030
96.405
500,000,000
2.72%
3.00%
0.05%
A3
482,025,000
$
96.41%
13,125,000
0.045%
0.660%
1
Book Val
100
sum
954.83
2,271,014,000
$
% of book
954.83%
0.23%
2,324,061,240
$
102.34%
3.50%
79,392,141
$
3.330%
FINRA
Allegiant Travel Co
ALGT4137543
Y
5.500
2019
101.19
102,075,000
$
5.44%
3.07%
0.01%
B1
103,289,693
$
101.19%
5,614,125
0.009%
3.065%
1
Book Val
100
sum
101.19
102,075,000
$
% of book
101.19%
0.01%
103,289,693
$
101.19%
5.50%
5,614,125
$
3.065%
FINRA
United Continental Holdings
UAL.AE
Yes
5.983
2023
105.646
489,783,000.00
5.66%
4.57%
0.07%
Baa1
517,436,148
$
105.65%
29,303,717
0.067%
0.198%
United Continental Holdings
UAL.CD
Yes
6.636
2024
100.875
186,679,000.00
6.58%
6.44%
0.04%
Ba1
188,312,441
$
100.88%
12,388,018
0.036%
0.107%
United Continental Holdings
UAL4880186
No
3.500
2028
103.513
232,381,000.00
3.38%
3.07%
0.02%
Baa2
240,544,545
$
103.51%
8,133,335
0.022%
0.063%
United Continental Holdings
UAL.AB
No
9.558
2021
100.471
7,647,160.00
9.51%
9.34%
0.00%
BB+
7,683,178
$
100.47%
730,916
0.002%
0.006%
United Continental Holdings
UAL.AJ
Yes
7.250
2021
100.015
527,625,000.00
7.25%
7.24%
0.12%
A
527,704,144
$
100.02%
38,252,813
0.115%
0.339%
United Continental Holdings
UAL4631858
Yes
4.600
2027
105.769
196,644,000.00
4.35%
3.79%
0.02%
Baa2
207,988,392
$
105.77%
9,045,624
0.022%
0.066%
United Continental Holdings
UAL4792620
Yes
4.150
2031
115.309
716,625,000.00
3.60%
2.69%
0.06%
Aa3
826,333,121
$
115.31%
29,739,938
0.058%
0.171%
United Continental Holdings
UAL3829885
Yes
6.250
2021
100.339
47,462,000.00
6.23%
6.10%
0.01%
Baa2
47,622,896
$
100.34%
2,966,375
0.009%
0.026%
United Continental Holdings
UAL.AH
Yes
6.903
2022
100.500
26,277,000.00
6.87%
6.74%
0.01%
Ba1
26,408,385
$
100.50%
1,813,901
0.005%
0.016%
United Continental Holdings
UAL3905011
No
5.500
2022
99.360
60,184,000.00
5.54%
5.71%
0.01%
Baa2
59,798,822
$
99.36%
3,310,120
0.010%
0.030%
United Continental Holdings
UAL4792619
Yes
4.550
2031
113.229
296,445,000.00
4.02%
3.25%
0.03%
A2
335,661,709
$
113.23%
13,488,248
0.029%
0.085%
United Continental Holdings
UAL.AL
Yes
4.750
2022
99.376
147,831,000.00
4.78%
4.95%
0.02%
A2
146,908,535
$
99.38%
7,021,973
0.022%
0.065%
United Continental Holdings
UAL4403826
Yes
3.100
2030
103.620
283,081,000.00
2.99%
2.73%
0.02%
A2
293,328,532
$
103.62%
8,775,511
0.023%
0.069%
United Continental Holdings
UAL4110955
Yes
4.000
2027
109.300
553,217,000.00
3.66%
2.76%
0.05%
A+
604,666,181
$
109.30%
22,128,680
0.046%
0.135%
United Continental Holdings
UAL4110957
Yes
4.750
2023
103.300
125,508,000.00
4.60%
3.94%
0.01%
BBB
129,649,764
$
103.30%
5,961,630
0.015%
0.044%
United Continental Holdings
UAL4149528
Yes
3.750
2028
106.252
620,852,000.00
3.53%
2.98%
0.06%
A+
659,667,667
$
106.25%
23,281,950
0.056%
0.164%
United Continental Holdings
UAL4149543
Yes
4.625
2024
103.294
238,418,000.00
4.48%
3.95%
0.03%
BBB
246,271,489
$
103.29%
11,026,833
0.028%
0.083%
United Continental Holdings
UAL4556769
Yes
3.650
2027
104.320
258,348,000.00
3.50%
3.06%
0.02%
bAA2
269,508,634
$
104.32%
9,429,702
0.024%
0.070%
United Continental Holdings
UAL4447846
Yes
5.000
2024
87.900
300,000,000.00
5.69%
7.79%
0.07%
Ba3
263,700,000
$
87.90%
15,000,000
0.070%
0.207%
United Continental Holdings
UAL4548023
Yes
4.250
2022
91.400
400,000,000.00
4.65%
7.11%
0.09%
Ba3
365,600,000
$
91.40%
17,000,000
0.086%
0.252%
United Continental Holdings
UAL3829884
No
4.150
2025
107.720
512,122,000.00
3.85%
2.83%
0.04%
A3
551,657,818
$
107.72%
21,253,063
0.044%
0.129%
United Continental Holdings
UAL3905010
No
4.000
2026
105.588
497,714,000.00
3.79%
3.15%
0.05%
A3
525,526,258
$
105.59%
19,908,560
0.047%
0.139%
United Continental Holdings
UAL4036436
Yes
4.300
2027
98.838
524,192,000.00
4.35%
4.47%
0.07%
A+
518,100,889
$
98.84%
22,540,256
0.071%
0.208%
United Continental Holdings
UAL4556770
Yes
3.650
2027
95.000
236,173,000.00
3.84%
4.37%
0.03%
Baa2
224,364,350
$
95.00%
8,620,315
0.031%
0.091%
United Continental Holdings
UAL4067249
Yes
6.000
2020
98.400
300,000,000.00
6.10%
7.16%
0.06%
Ba3
295,200,000
$
98.40%
18,000,000
0.065%
0.191%
United Continental Holdings
UAL4831604
Yes
4.875
2025
87.750
350,000,000.00
5.56%
7.31%
0.08%
BB
307,125,000
$
87.75%
17,062,500
0.077%
0.227%
United Continental Holdings
UAL4307722
Yes
3.700
2024
104.488
100,000,000.00
3.54%
2.81%
0.01%
A2
104,488,000
$
104.49%
3,700,000
0.008%
0.025%
United Continental Holdings
UAL4307724
Yes
3.450
2029
107.673
333,652,000.00
3.20%
2.61%
0.03%
Aa3
359,253,118
$
107.67%
11,510,994
0.026%
0.077%
United Continental Holdings
UAL4880185
Yes
2.900
2028
99.910
286,718,000.00
2.90%
2.91%
0.03%
A2
286,459,954
$
99.91%
8,314,822
0.025%
0.074%
United Continental Holdings
UAL4036435
Yes
5.375
2023
100.370
103,422,000.00
5.36%
5.28%
0.02%
BBB
103,804,661
$
100.37%
5,558,933
0.016%
0.048%
United Continental Holdings
UAL4371219
Yes
3.450
2030
105.927
324,090,000.00
3.26%
2.84%
0.03%
A2
343,298,814
$
105.93%
11,181,105
0.028%
0.082%
United Continental Holdings
UAL4371220
Yes
3.100
2030
105.772
728,726,000.00
2.93%
2.52%
0.06%
Aa3
770,788,065
$
105.77%
22,590,506
0.055%
0.163%
United Continental Holdings
UAL4594839
No
3.500
2031
108.500
677,175,000.00
3.23%
2.69%
0.05%
Aa3
734,734,875
$
108.50%
23,701,125
0.055%
0.162%
United Continental Holdings
UAL4594838
No
3.700
2031
107.046
257,965,000.00
3.46%
3.02%
0.02%
A2
276,141,214
$
107.05%
9,544,705
0.023%
0.069%
United Continental Holdings
Corp Bond UAL 3816474
No
8.388
2022
102.010
9,908,000.00
8.22%
7.71%
0.00%
Baa2
10,107,151
$
102.01%
831,083
0.002%
0.007%
United Continental Holdings
Corp Bond UAL 3816450
No
9.798
2022
102.514
15,254,000.00
9.56%
8.93%
0.00%
BB
15,637,486
$
102.51%
1,494,587
0.004%
0.012%
United Continental Holdings
Corp Bond UAL 3816457
No
8.048
2022
101.519
48,605,000.00
7.93%
7.54%
0.01%
Baa1
49,343,310
$
101.52%
3,911,730
0.011%
0.032%
United Continental Holdings
Corp Bond UAL 3816447
No
6.703
2022
104.678
20,456,000.00
6.40%
5.21%
0.00%
A3
21,412,932
$
104.68%
1,371,166
0.003%
0.009%
United Continental Holdings
Corp Bond UAL 3816472
No
7.256
2021
99.781
22,262,000.00
7.27%
7.36%
0.00%
A+
22,213,246
$
99.78%
1,615,331
0.005%
0.015%
United Continental Holdings
Corp Bond UAL 3816468
No
7.566
2021
100.000
111,077,000.00
7.57%
7.57%
0.03%
Baa2
111,077,000
$
100.00%
8,404,086
0.025%
0.075%
United Continental Holdings
Corp Bond UAL 3816432
No
7.707
2022
101.878
102,134,000
$
7.56%
7.08%
0.02%
Baa1
104,052,077
$
101.88%
7,871,467
0.022%
0.064%
41
Book Val
4100
sum
4199.15
11,276,652,160
$
% of book
102.42%
1.39%
11,699,580,801
$
103.75%
4.41%
497,785,615
$
4.095%
4.78%
2.871%
Average
Total
33,158,588,160
$
Total
33,754,913,614.18
$
101.80%
4.06%
1,345,501,892.92
$
3.97%
This includes short term.
Source: Mergemt Bond Record, January 2020
Embedded debt rate
4.0578%
Not in bond guide: JetBlue , United Continental Holdings, Allegiant Travel. Delta Air, Data collected from FINRA website.
Weighted average yield to maturity
3.9710%
Debt service / Market value
3.9861%
Stock Price
12/31/2018
Stock Price
12/31/2019
Beta
levered
Revenues
Per Share
Cash
Flow Per
Share
Earnings
Per Share
Gross
Equipment Per
Share
Load
Factor
%Net
Profit
Margin
Long-Term
Debt ($Mil)
Dividends
Per Share
Bk Value
Per Share
Common
Shares
Trailing
P/E Ratio
Relative
P/E Ratio
Net
Operating
Revenues
($Mil)
Name Ticker Yahoo Yahoo VL VL VL VL VL VL VL VL VL VL VL VL VL
VL
Alaska Air Group, Inc. ALK 60.85 69.02 1.05 71.39 9.93 6.42 85.00 84.1% 9.1% 1,264 1.40 35.21 123,277,911 10.00 0.52 8,781
Allegiant Travel Co ALGT 100.22 176.18 0.90 115.05 24.25 14.26 144.10 83.9% 12.6% 1,200 2.80 55.25 16,195,000 11.50 0.52 1,841
American Airlines Group AAL 32.02 28.57 1.40 105.20 9.55 4.90 123.35 85.5% 4.8% 21,454 0.40 (0.25) 435,659,000 6.10 0.33 45,768
Delta Air Lines, Inc. DAL 49.90 58.58 1.15 73.13 11.44 7.31 66.55 86.3% 10.1% 8,873 1.51 24.02 640,093,995 8.00 0.43 47,007
Hawaiian Holdings, Inc. HA 26.41 30.56 1.30 61.55 8.30 4.71 65.65 86.6% 7.9% 700 0.48 23.15 46,744,658 6.00 0.30 2,832
JetBlue Airways Corp. JBLU 16.06 18.79 1.20 28.00 3.85 1.90 41.35 84.0% 7.0% 1,600 - 16.85 288,000,000 10.70 0.52 8,094
SkyWest, Inc. SKYW 44.47 64.96 1.35 59.45 13.80 6.25 138.25 82.3% 10.8% 2,629 0.48 43.50 50,490,118 9.20 0.52 2,972
Southwest Airlines Co. LUV 46.48 53.60 1.15 42.55 6.85 4.45 52.60 83.5% 10.7% 1,846 0.70 18.65 534,000,000 13.50 0.69 22,428
Spirit Airlines SAVE 57.92 40.42 1.15 55.95 8.39 5.09 - 0.0% 9.1% 1,961 - 33.03 68,455,011 8.50 0.46 3,831
United Continental Holding, Inc UAL 83.73 88.84 1.25 173.05 21.60 12.05 150.00 84.0% 7.2% 13,365 - 46.10 253,044,650 6.70 0.37 43,259
Value Line February 2020
The harmonic mean is the preferable method for averaging multiples, such as the price/earning ratio, in which price is in the numerator. If these ratios are averaged using an arithmetic mean (a common error),
high data points are given greater weights than low data points.
The harmonic mean, on the other hand, gives equal weight to each data point
Morning Star Data ending 2019
Historic Figures (2019)
DATA INPUT
Guideline Companies
Instructions: Data entered on this page will flow to the applicable worksheets.
PASSENGER AIRLINES
2020 ASSESSMENT YEAR
WASHINGTON STATE DEPARTMENT OF REVENUE
12
Name
Alaska Air Group, Inc.
Allegiant Travel Co
American Airlines Group
Delta Air Lines, Inc.
Hawaiian Holdings, Inc.
JetBlue Airways Corp.
SkyWest, Inc.
Southwest Airlines Co.
Spirit Airlines
United Continental Holding, Inc
Value Line February 2020
The harmonic mean is the preferable method for averaging multiples, such as the price/earning ratio, in which price is in the numerator. If these ratios are averaged using an arithmetic mean (a common error),
high data points are given greater weights than low data points.
The harmonic mean, on the other hand, gives equal weight to each data point
Morning Star Data ending 2019
DATA INPUT
Guideline Companies
Instructions: Data entered on this page will flow to the applicable worksheets.
PASSENGER AIRLINES
2020 ASSESSMENT YEAR
WASHINGTON STATE DEPARTMENT OF REVENUE
Operating
Margin
Net Profit
($Mil)
Income Tax
Rate
Return on
Shareholder
Equity
Revenues
Per Share
Cash Flow
Per Share
Earnings
Per Share
Gross
Equipment
Per Share
Load
Factor
% Net
Profit
Margin
Dividends
Per Share
Bk Value Per
Share
Common
Shares
Net
Operating
Revenues
Operating
Margin
Net Profit
($Mil)
VL
VL VL VL VL VL VL VL VL VL VL VL VL VL VL VL
17.0% 798 25.0% 18.4% 75.40 11.05 7.10 90.00 84.0% 9.5% 1.50 38.10 121,000,000 9,200 17.5% 875
28.2% 232 22.9% 26.3% 128.15 29.70 18.00 150.15 84.0% 14.1% 2.80 58.45 160,000,000 2,050 29.5% 290
12.0% 2,179 24.9% 21.0% 117.05 10.55 5.25 131.00 86.0% 4.6% 0.40 0.35 410,000,000 48,000 11.5% 2,210
20.5% 4,773 23.2% 30.9% 77.95 11.85 7.55 67.00 86.0% 9.7% 1.72 28.00 630,000,000 49,100 19.0% 4,750
17.2% 224 26.6% 21.0% 64.65 8.00 3.75 68.40 86.5% 6.0% 0.48 25.00 45,000,000 2,910 14.0% 175
16.4% 568 25.9% 12.0% 31.45 4.45 2.35 45.10 84.5% 7.8% - 18.00 275,000,000 8,650 17.0% 670
28.9% 321 23.5% 14.8% 62.25 14.70 6.30 145.60 82.0% 10.3% 0.56 46.65 49,000,000 3,050 28.5% 315
18.6% 2,397 22.2% 24.4% 47.00 7.65 5.00 55.85 84.0% 11.0% 0.78 20.50 500,000,000 23,500 19.0% 2,575
19.4% 349 20.3% 15.4% 65.00 9.50 5.40 8.4% - 35.65 68,000,000 4,420 18.5% 370
16.0% 3,131 22.1% 26.1% 182.85 22.60 12.60 155.00 85.0% 6.9% - 54.70 248,000,000 45,350 16.5% 3,125
Projected (Next Year) 2020
12
Name
Alaska Air Group, Inc.
Allegiant Travel Co
American Airlines Group
Delta Air Lines, Inc.
Hawaiian Holdings, Inc.
JetBlue Airways Corp.
SkyWest, Inc.
Southwest Airlines Co.
Spirit Airlines
United Continental Holding, Inc
Value Line February 2020
The harmonic mean is the preferable method for averaging multiples, such as the price/earning ratio, in which price is in the numerator. If these ratios are averaged using an arithmetic mean (a common error),
high data points are given greater weights than low data points.
The harmonic mean, on the other hand, gives equal weight to each data point
Morning Star Data ending 2019
DATA INPUT
Guideline Companies
Instructions: Data entered on this page will flow to the applicable worksheets.
PASSENGER AIRLINES
2020 ASSESSMENT YEAR
WASHINGTON STATE DEPARTMENT OF REVENUE
Income Statement
Return on
Shareholder
Equity
All Dividends
to Net Profits
2021 2025
%
Annual
Change
2021 2025
%
Annual
Change
2021 2025
%
Annual
Change
Return on
Shareholder
Equity
Operating Income Current Assets PP & E Gross
VL VL VL VL VL VL VL VL VL M*/10K M*/10K M*/10K
19.0% 21.0% 1.60 1.90 3.50% 7.60 9.50 4.56% 80.60 96.20 3.60% 20.50% 1,063,000,000 2,037,000,000 10,388,000,000
31.0% 16.0% 2.80 3.30 3.34% 19.00 22.30 3.25% 145.15 196.20 6.21% 28.00% 363,950,000 562,221,000 2,236,808,000
20.4% 8.0% 0.50 0.70 6.96% 5.75 6.95 3.86% 128.20 172.25 6.09% 0.00% 3,065,000,000 20,527,000,000 52,976,000,000
27.0% 23.0% 1.95 2.85 7.89% 8.20 10.00 4.05% 82.25 93.10 2.51% 27.50% 6,618,000,000 8,249,000,000 48,337,000,000
15.5% 13.0% 0.48 0.60 4.56% 4.10 5.00 4.05% 70.00 83.80 3.66% 14.00% 327,477,000 874,706,000 3,191,478,000
13.5% 0.0% - 0.32 0.00% 2.65 3.20 3.84% 34.15 45.75 6.02% 14.00% 800,000,000 1,786,000,000 10,765,000,000
14.0% 9.0% 0.64 0.88 6.58% 7.00 8.95 5.04% 65.65 76.00 2.97% 15.00% 512,258,000 760,346,000 7,393,057,000
25.0% 16.0% 0.86 1.30 8.61% 5.50 7.30 5.83% 52.65 71.10 6.19% 26.00% 2,957,000,000 5,974,000,000 27,713,000,000
15.5% 0.0% 0.00 0.00 0.00% 6.00 7.10 3.42% 75.50 89.70 3.51% 16.00% 501,047,000 1,385,433,000 4,022,739,000
23.0% 0.0% - - 0.00% 14.40 16.00 2.13% 194.60 248.95 5.05% 21.50% 4,303,000,000 8,194,000,000 44,707,000,000
TTM DATA UPDATE
48,337,000,000
Longer Term Forecasts
Revenue Per ShareEarnings Per ShareDividends Per Share
12
Name
Alaska Air Group, Inc.
Allegiant Travel Co
American Airlines Group
Delta Air Lines, Inc.
Hawaiian Holdings, Inc.
JetBlue Airways Corp.
SkyWest, Inc.
Southwest Airlines Co.
Spirit Airlines
United Continental Holding, Inc
Value Line February 2020
The harmonic mean is the preferable method for averaging multiples, such as the price/earning ratio, in which price is in the numerator. If these ratios are averaged using an arithmetic mean (a common error),
high data points are given greater weights than low data points.
The harmonic mean, on the other hand, gives equal weight to each data point
Morning Star Data ending 2019
DATA INPUT
Guideline Companies
Instructions: Data entered on this page will flow to the applicable worksheets.
PASSENGER AIRLINES
2020 ASSESSMENT YEAR
WASHINGTON STATE DEPARTMENT OF REVENUE
Cash Flow Statement
Intangibles (excl.
GW)
Current Liabilities
Total
Long Term Debt
Less Current
Maturities
Depreciation &
Amortization
Carrying Value
Debt
Fair Value Debt
Current Maturity
Long Term Debt
Aircraft Rental
Expense
M*10K 10K/M* 10-K/M* M* 10-K 10-K 10K 10-K
122,000,000 3,201,000,000 1,264,000,000 423,000,000 1,499,000,000 1,314,000,000 235,000,000 331,000,000
- 612,584,000 1,248,579,000 155,852,000 1,329,882,000 1,140,238,000 173,274,000 -
2,084,000,000 18,311,000,000 21,454,000,000 2,318,000,000 23,645,000,000 24,508,000,000 2,861,000,000 1,326,000,000
5,163,000,000 20,204,000,000 8,873,000,000 2,581,000,000 10,106,000,000 10,400,000,000 2,287,000,000 423,000,000
13,500,000 1,075,216,000 547,254,000 158,714,000 610,397,000 605,286,000 53,273,000 118,904,000
- 2,663,000,000 1,990,000,000 525,000,000 2,245,000,000 2,367,000,000 344,000,000 99,000,000
- 924,676,000 26,628,989,000 368,098,000 3,017,500,000 3,049,100,000 364,126,000 71,998,000
296,000,000 8,952,000,000 1,846,000,000 1,219,000,000 2,051,000,000 2,122,000,000 819,000,000 161,000,000
- 1,112,044,000 1,960,453,000 225,264,000 2,213,600,000 2,303,000,000 258,852,000 182,609,000
3,009,000,000 14,938,000,000 13,145,000,000 2,288,000,000 14,552,000,000 15,203,000,000 1,407,000,000 288,000,000
Capital lease 2019
24,850,000
Balance Sheet Other Financials
12
2019 Multi Stage Dividend Growth Model Using FCFE
Airline Industry
Assumptions:
3.90%
8.1
11.0%
19.7%
Alaska Air Group
ALK
Growth
Reinvestment
Payout
Terminal
Cash
Year
Rate
ROE
Rate
Ratio
Earnings
FCFE
Value
Flow
Historic
0 18.40% 53.77% 46.23% 6.42 -69.02 price = 69.02
2019 1 10.59% 19.00% 44.48% 55.52% 7.10 3.94 3.94
2020 2 8.45% 19.38% 40.22% 59.78% 7.70 4.60 4.60
Stage 1
2021 3 7.79% 19.75% 36.60% 63.40% 8.30 5.26 5.26
2022 4 7.23% 20.13% 33.50% 66.50% 8.90 5.92 5.92
2023 5 6.74% 20.50% 30.11% 69.89% 9.50 6.64 6.64
2024 6 6.17% 20.34% 27.56% 72.44% 10.09 7.31 7.31
2025 7 5.60% 20.18% 24.96% 75.04% 10.65 7.99 7.99
Stage 2
2026 8 5.04% 20.02% 22.32% 77.68% 11.19 8.69 8.69
2027 9 4.47% 19.86% 19.64% 80.36% 11.69 9.39 9.39
2028 10 3.90% 19.70% 19.80% 80.20% 12.14 9.74 101.86 111.60
Stage 3
11+ 3.90% 19.70% 19.80% 80.20% 12.62 10.12
Ke = 11.91%
Allegiant Travel Co
ALGT
Growth
Reinvestment
Payout
Terminal
Cash
Year
Rate
ROE
Rate
Ratio
Earnings
FCFE
Value
Flow
Historic
0 26.30% 133.13% -33.13% 14.26 -176.18 price = 176.18
2019 1 26.23% 31.00% 19.27% 80.73% 18.00 14.53 14.53
2020 2 5.97% 30.25% 18.63% 81.37% 19.08 15.52 15.52
Stage 1
2021 3 5.64% 29.50% 18.08% 81.92% 20.15 16.51 16.51
2022 4 5.33% 28.75% 17.62% 82.38% 21.23 17.49 17.49
2023 5 5.06% 28.00% 17.26% 82.74% 22.30 18.45 18.45
2024 6 4.83% 26.34% 17.46% 82.54% 23.38 19.30 19.30
2025 7 4.60% 24.68% 17.69% 82.31% 24.45 20.13 20.13
Stage 2
2026 8 4.37% 23.02% 17.95% 82.05% 25.52 20.94 20.94
2027 9 4.13% 21.36% 18.26% 81.74% 26.57 21.72 21.72
2028 10 3.90% 19.70% 19.80% 80.20% 27.61 22.15 231.59 253.73
Stage 3
11+ 3.90% 19.70% 19.80% 80.20% 28.69 23.01
Ke = 11.94%
American Airlines Group
AAL
Growth
Reinvestment
Payout
Terminal
Cash
Year
Rate
ROE
Rate
Ratio
Earnings
FCFE
Value
Flow
Historic
0 21.00% 36.26% 63.74% 4.90 -28.57 price = 28.57
2019 1 7.14% 20.40% 39.68% 60.32% 5.25 3.17 3.17
2020 2 8.10% #VALUE! #VALUE! #VALUE! 5.68 #VALUE! #VALUE!
Stage 1
2021 3 7.49% #VALUE! #VALUE! #VALUE! 6.10 #VALUE! #VALUE!
2022 4 6.97% #VALUE! #VALUE! #VALUE! 6.53 #VALUE! #VALUE!
2023 5 6.51% wa #VALUE! #VALUE! 6.95 #VALUE! #VALUE!
2024 6 5.99% #VALUE! #VALUE! #VALUE! 7.37 #VALUE! #VALUE!
2025 7 5.47% #VALUE! #VALUE! #VALUE! 7.77 #VALUE! #VALUE!
Stage 2
2026 8 4.95% #VALUE! #VALUE! #VALUE! 8.15 #VALUE! #VALUE!
2027 9 4.42% #VALUE! #VALUE! #VALUE! 8.51 #VALUE! #VALUE!
2028 10 3.90% #VALUE! #VALUE! #VALUE! 8.85 #VALUE! 74.19 #VALUE!
Stage 3
11+ 3.90% 19.70% 19.80% 80.20% 9.19 7.37
Ke = #VALUE!
Delta Air Lines Inc
DAL
Growth
Reinvestment
Payout
Terminal
Cash
Year
Rate
ROE
Rate
Ratio
Earnings
FCFE
Value
Flow
Historic
0 30.90% 16.67% 83.33% 7.31 -58.58 price = 58.58
2019 1 3.28% 27.00% 30.05% 69.95% 7.55 5.28 5.28
2020 2 8.11% 27.13% 27.66% 72.34% 8.16 5.90 5.90
Stage 1
2021 3 7.50% 27.25% 25.61% 74.39% 8.78 6.53 6.53
2022 4 6.98% 27.38% 23.83% 76.17% 9.39 7.15 7.15
2023 5 6.52% 27.50% 21.82% 78.18% 10.00 7.82 7.82
2024 6 6.00% 25.94% 21.11% 78.89% 10.60 8.36 8.36
2025 7 5.47% 24.38% 20.30% 79.70% 11.18 8.91 8.91
Stage 2
2026 8 4.95% 22.82% 19.39% 80.61% 11.73 9.46 9.46
GDP
Median Industry PE
Target Dividend Payout Ratio
Target ROE
2027 9 4.42% 21.26% 18.34% 81.66% 12.25 10.01 10.01
2028 10 3.90% 19.70% 19.80% 80.20% 12.73 10.21 106.78 116.99
Stage 3
11+ 3.90% 19.70% 19.80% 80.20% 13.23 10.61
Ke = 16.24%
Hawaiian Holdings Inc
HA
Growth
Reinvestment
Payout
Terminal
Cash
Year
Rate
ROE
Rate
Ratio
Earnings
FCFE
Value
Flow
Historic
0 21.00% -103.46% 203.46% 4.71 -30.56 price = 30.56
2019 1 -20.38% 15.50% 53.76% 46.24% 3.75 1.73 1.73
2020 2 8.33% 15.13% 50.86% 49.14% 4.06 2.00 2.00
Stage 1
2021 3 7.69% 14.75% 48.43% 51.57% 4.38 2.26 2.26
2022 4 7.14% 14.38% 46.38% 53.62% 4.69 2.51 2.51
2023 5 6.67% 14.00% 43.67% 56.33% 5.00 2.82 2.82
2024 6 6.11% 15.14% 36.72% 63.28% 5.31 3.36 3.36
2025 7 5.56% 16.28% 30.75% 69.25% 5.60 3.88 3.88
Stage 2
2026 8 5.01% 17.42% 25.56% 74.44% 5.88 4.38 4.38
2027 9 4.45% 18.56% 21.01% 78.99% 6.14 4.85 4.85
2028 10 3.90% 19.70% 19.80% 80.20% 6.38 5.12 53.53 58.65
Stage 3
11+ 3.90% 19.70% 19.80% 80.20% 6.63 5.32
Ke = 13.46%
JetBlue Airways Corp
JBLU
Growth
Reinvestment
Payout
Terminal
Cash
Year
Rate
ROE
Rate
Ratio
Earnings
FCFE
Value
Flow
Historic
0 12.00% 120.22% -20.22% 1.90 -18.79 price = 18.79
2019 1 23.68% 13.50% 66.98% 33.02% 2.35 0.78 0.78
2020 2 9.04% 13.63% 60.86% 39.14% 2.56 1.00 1.00
Stage 1
2021 3 8.29% 13.75% 55.69% 44.31% 2.78 1.23 1.23
2022 4 7.66% 13.88% 51.26% 48.74% 2.99 1.46 1.46
2023 5 7.11% 14.00% 46.22% 53.78% 3.20 1.72 1.72
2024 6 6.47% 15.14% 38.49% 61.51% 3.41 2.10 2.10
2025 7 5.83% 16.28% 31.85% 68.15% 3.61 2.46 2.46
Stage 2
2026 8 5.19% 17.42% 26.08% 73.92% 3.79 2.80 2.80
2027 9 4.54% 18.56% 21.01% 78.99% 3.96 3.13 3.13
2028 10 3.90% 19.70% 19.80% 80.20% 4.12 3.30 34.55 37.86
Stage 3
11+ 3.90% 19.70% 19.80% 80.20% 4.28 3.43
Ke = 13.49%
SkyWest Inc
SKYW
Growth
Reinvestment
Payout
Terminal
Cash
Year
Rate
ROE
Rate
Ratio
Earnings
FCFE
Value
Flow
Historic
0 14.80% 4.06% 95.94% 6.25 -64.96 price = 64.96
2019 1 0.80% 14.00% 75.11% 24.89% 6.30 1.57 1.57
2020 2 10.52% 14.25% 66.77% 33.23% 6.96 2.31 2.31
Stage 1
2021 3 9.52% 14.50% 59.92% 40.08% 7.63 3.06 3.06
2022 4 8.69% 14.75% 54.20% 45.80% 8.29 3.80 3.80
2023 5 7.99% 15.00% 47.83% 52.17% 8.95 4.67 4.67
2024 6 7.18% 15.94% 39.88% 60.12% 9.59 5.77 5.77
2025 7 6.36% 16.88% 32.81% 67.19% 10.20 6.86 6.86
Stage 2
2026 8 5.54% 17.82% 26.48% 73.52% 10.77 7.92 7.92
2027 9 4.72% 18.76% 20.79% 79.21% 11.27 8.93 8.93
2028 10 3.90% 19.70% 19.80% 80.20% 11.71 9.40 98.25 107.65
Stage 3
11+ 3.90% 19.70% 19.80% 80.20% 12.17 9.76
Ke = 10.38%
Southwest Airlines Co
LUV
Growth
Reinvestment
Payout
Terminal
Cash
Year
Rate
ROE
Rate
Ratio
Earnings
FCFE
Value
Flow
Historic
0 24.40% 62.74% 37.26% 4.45 -53.60 price = 53.60
2019 1 12.36% 25.00% 46.00% 54.00% 5.00 2.70 2.70
2020 2 11.50% 25.25% 40.85% 59.15% 5.58 3.30 3.30
Stage 1
2021 3 10.31% 25.50% 36.67% 63.33% 6.15 3.90 3.90
2022 4 9.35% 25.75% 33.20% 66.80% 6.73 4.49 4.49
2023 5 8.55% 26.00% 29.31% 70.69% 7.30 5.16 5.16
2024 6 7.62% 24.74% 27.04% 72.96% 7.86 5.73 5.73
2025 7 6.69% 23.48% 24.53% 75.47% 8.38 6.33 6.33
Stage 2
2026 8 5.76% 22.22% 21.74% 78.26% 8.86 6.94 6.94
2027 9 4.83% 20.96% 18.61% 81.39% 9.29 7.56 7.56
2028 10 3.90% 19.70% 19.80% 80.20% 9.66 7.74 80.98 88.73
Stage 3
11+ 3.90% 19.70% 19.80% 80.20% 10.03 8.05
Ke = 11.96%
Spirit Airlines Co
SAVE Growth Reinvestment Payout Terminal Cash
Year
Rate
ROE
Rate
Ratio
Earnings
FCFE
Value
Flow
Historic
0
15.40%
30.92%
69.08%
5.09
-40.42
price =
40.42
2019
1
6.09%
15.50%
50.78%
49.22%
5.40
2.66
2.66
2020
2
7.87%
15.63%
46.70%
53.30%
5.83
3.11
3.11
Stage 1
2021
3
7.30%
15.75%
43.17%
56.83%
6.25
3.55
3.55
2022
4
6.80%
15.88%
40.11%
59.89%
6.68
4.00
4.00
2023
5
6.37%
16.00%
36.71%
63.29%
7.10
4.49
4.49
2024
6
5.87%
16.74%
32.14%
67.86%
7.52
5.10
5.10
2025
7
5.38%
17.48%
27.96%
72.04%
7.92
5.71
5.71
Stage 2
2026
8
4.89%
18.22%
24.11%
75.89%
8.31
6.31
6.31
2027
9
4.39%
18.96%
20.57%
79.43%
8.67
6.89
6.89
2028
10
3.90%
19.70%
19.80%
80.20%
9.01
7.23
75.59
82.81
Stage 3
11+
3.90%
19.70%
19.80%
80.20%
9.36
7.51
Ke =
14.98%
United Continental Holdings
UAL
Growth
Reinvestment
Payout
Terminal
Cash
Year
Rate
ROE
Rate
Ratio
Earnings
FCFE
Value
Flow
Historic
0 26.10% 23.17% 76.83% 12.05 -88.84 price = 88.84
2019 1 4.56% 23.00% 29.33% 70.67% 12.60 8.90 8.90
2020 2 6.75% 22.63% 27.93% 72.07% 13.45 9.69 9.69
Stage 1
2021 3 6.32% 22.25% 26.71% 73.29% 14.30 10.48 10.48
2022 4 5.94% 21.88% 25.65% 74.35% 15.15 11.26 11.26
2023 5 5.61% 21.50% 24.50% 75.50% 16.00 12.08 12.08
2024 6 5.27% 21.14% 23.30% 76.70% 16.84 12.92 12.92
2025 7 4.93% 20.78% 22.06% 77.94% 17.67 13.77 13.77
Stage 2
2026 8 4.58% 20.42% 20.77% 79.23% 18.48 14.64 14.64
2027 9 4.24% 20.06% 19.44% 80.56% 19.27 15.52 15.52
2028 10 3.90% 19.70% 19.80% 80.20% 20.02 16.06 167.90 183.96
Stage 3
11+ 3.90% 19.70% 19.80% 80.20% 20.80 16.68
Ke = 16.95%
source: Value Line
IMPLIED PREMIUMS FOR US MARKET
Updated January 2020
These implied premiums are calculated using the S&P 500.
Year
Earnings
Yield
Dividend
Yield
S&P 500 Earnings* Dividends*
Dividends
+
Buybacks
Change in
Earnings
Change in
Dividends
T.Bill Rate
T.Bond
Rate
Bond-Bill
Smoothed
Growth
Implied
Premium
(DDM)
Analyst Growth
Estimate
Implied Premium
(FCFE)
1960 5.34% 3.41% 58.11 3.10 1.98 2.66% 2.76% 0.10% 2.45%
1961 4.71% 2.85% 71.55 3.37 2.04 8.60% 2.91% 2.13% 2.35% 0.22% 2.41% 2.92% 2.92%
1962 5.81% 3.40% 63.1 3.67 2.15 8.79% 5.21% 2.73% 3.85% 1.12% 4.05% 3.56% 3.56%
1963 5.51% 3.13% 75.02 4.13 2.35 12.75% 9.45% 3.12% 4.14% 1.02% 4.96% 3.38% 3.38%
1964 5.62% 3.05% 84.75 4.76 2.58 15.23% 10.08% 3.54% 4.21% 0.67% 5.13% 3.31% 3.31%
1965 5.73% 3.06% 92.43 5.30 2.83 11.20% 9.42% 3.93% 4.65% 0.72% 5.46% 3.32% 3.32%
1966 6.74% 3.59% 80.33 5.41 2.88 2.23% 1.96% 4.76% 4.64% -0.12% 4.19% 3.68% 3.68%
1967 5.66% 3.09% 96.47 5.46 2.98 0.85% 3.37% 4.21% 5.70% 1.49% 5.25% 3.20% 3.20%
1968 5.51% 2.93% 103.86 5.72 3.04 4.81% 2.09% 5.21% 6.16% 0.95% 5.32% 3.00% 3.00%
1969 6.63% 3.52% 92.06 6.10 3.24 6.66% 6.49% 6.58% 7.88% 1.30% 7.55% 3.74% 3.74%
1970 5.98% 3.46% 92.15 5.51 3.19 -9.72% -1.61% 6.53% 6.50% -0.03% 4.78% 3.41% 3.41%
1971 5.46% 3.10% 102.09 5.57 3.16 1.15% -0.74% 4.39% 5.89% 1.50% 4.57% 3.09% 3.09%
1972 5.23% 2.70% 118.05 6.17 3.19 10.76% 0.71% 3.84% 6.41% 2.57% 5.21% 2.72% 2.72%
1973 8.16% 3.70% 97.55 7.96 3.61 28.93% 13.24% 6.93% 6.90% -0.03% 8.30% 4.30% 4.30%
1974 13.64% 5.43% 68.56 9.35 3.72 17.48% 3.14% 8.00% 7.40% -0.60% 6.42% 5.59% 5.59%
1975 8.55% 4.14% 90.19 7.71 3.73 -17.54% 0.30% 5.80% 7.76% 1.96% 5.99% 4.13% 4.13%
1976 9.07% 3.93% 107.46 9.75 4.22 26.39% 13.10% 5.08% 6.81% 1.73% 8.19% 4.55% 4.55%
1977 11.43% 5.11% 95.1 10.87 4.86 11.53% 15.07% 5.12% 7.78% 2.66% 9.52% 5.92% 5.92%
1978 12.11% 5.39% 96.11 11.64 5.18 7.07% 6.60% 7.18% 9.15% 1.97% 8.48% 5.72% 5.72%
1979 13.48% 5.53% 107.94 14.55 5.97 25.01% 15.23% 10.38% 10.33% -0.05% 11.70% 6.45% 6.45%
1980 11.04% 4.74% 135.76 14.99 6.44 3.01% 7.81% 11.24% 12.43% 1.19% 11.01% 5.03% 5.03%
1981 12.39% 5.57% 122.55 15.18 6.83 1.31% 6.08% 14.71% 13.98% -0.73% 11.42% 5.73% 5.73%
1982 9.83% 4.93% 140.64 13.82 6.93 -8.95% 1.58% 10.54% 10.47% -0.07% 7.96% 4.90% 4.90%
1983 8.06% 4.32% 164.93 13.29 7.12 -3.84% 2.76% 8.80% 11.80% 3.00% 9.09% 4.31% 4.31%
1984 10.07% 4.68% 167.24 16.84 7.83 26.69% 9.85% 9.85% 11.51% 1.66% 11.02% 5.11% 5.11%
1985 7.42% 3.88% 211.28 15.68 8.20 -6.91% 4.74% 7.72% 8.99% 1.27% 7.89% 4.03% 6.75% 3.84%
1986 5.96% 3.38% 242.17 14.43 8.19 -7.93% -0.15% 6.16% 7.22% 1.06% 5.54% 3.36% 6.96% 3.58%
1987 6.49% 3.71% 247.08 16.04 9.17 11.10% 11.99% 5.47% 8.86% 3.39% 9.66% 4.18% 8.58% 3.99%
1988 8.20% 3.68% 277.72 24.12 10.22 50.42% 11.49% 6.35% 9.14% 2.79% 9.76% 4.12% 7.67% 3.77%
1989 6.80% 3.32% 353.4 24.32 11.73 0.83% 14.80% 8.37% 7.93% -0.44% 9.58% 3.85% 7.46% 3.51%
1990 6.58% 3.74% 330.22 22.65 12.35 -6.87% 5.26% 7.81% 8.07% 0.26% 7.39% 3.92% 7.19% 3.89%
1991 4.58% 3.11% 417.09 19.30 12.97 -14.79% 5.03% 7.00% 6.70% -0.30% 6.34% 3.27% 7.81% 3.48%
1992 4.16% 2.90% 435.71 20.87 12.64 8.13% -2.59% 5.30% 6.68% 1.38% 4.67% 2.83% 9.83% 3.55%
1993 4.25% 2.72% 466.45 26.90 12.69 28.89% 0.41% 3.50% 5.79% 2.29% 4.73% 2.74% 8.00% 3.17%
1994 5.89% 2.91% 459.27 31.75 13.36 18.03% 5.34% 5.00% 7.82% 2.82% 7.23% 3.06% 7.17% 3.55%
1995 5.74% 2.30% 615.93 37.70 14.17 18.74% 6.00% 3.50% 5.57% 2.07% 5.65% 2.44% 6.50% 3.29%
1996 4.83% 2.01% 740.74 40.63 14.89 7.77% 5.10% 5.00% 6.41% 1.41% 6.13% 2.11% 7.92% 3.20%
1997 4.08% 1.60% 970.43 44.09 15.52 8.52% 4.25% 5.35% 5.74% 0.39% 5.45% 1.67% 8.00% 2.73%
1998 3.11% 1.32% 1229.23 44.27 16.20 0.41% 4.37% 4.33% 4.65% 0.32% 4.60% 1.38% 7.20% 2.26%
1999 3.07% 1.14% 1469.25 51.68 16.71 16.74% 3.16% 5.37% 6.44% 1.07% 5.75% 1.20% 12.50% 2.05%
2000 3.94% 1.23% 1320.28 56.13 16.27 8.61% -2.65% 5.73% 5.11% -0.62% 3.71% 1.65% 12.00% 2.87%
2001
3.85%
1.37%
1148.09
38.85
15.74
30.08
-30.79%
-3.24%
1.80%
5.05%
3.25%
3.56%
1.73%
10.30%
3.62%
2002
5.23%
1.83%
879.82
46.04
16.08
29.83
18.51%
2.15%
1.20%
3.81%
2.61%
3.57%
2.29%
8.00%
4.10%
2003
4.87%
1.61%
1111.91
54.69
17.88
31.58
18.79%
11.19%
1.00%
4.25%
3.25%
5.35%
2.12%
11.00%
3.69%
2004
5.58%
1.60%
1211.92
67.68
19.407
40.60
23.75%
8.54%
2.18%
4.22%
2.04%
4.90%
2.02%
8.50%
3.65%
2005
5.47%
1.79%
1248.29
76.45
22.38
61.17
12.96%
15.32%
4.31%
4.39%
0.08%
6.16%
2.20%
8.00%
4.08%
2006
6.18%
1.77%
1418.3
87.72
25.05
73.16
14.74%
11.93%
4.88%
4.70%
-0.18%
5.93%
1.97%
12.50%
4.16%
2007
5.62%
1.89%
1468.36
82.54
27.73
95.36
-5.91%
10.70%
3.31%
4.02%
0.71%
5.03%
2.06%
5.00%
4.37%
2008
7.24%
3.11%
903.25
65.39
28.05
67.52
-20.78%
1.15%
1.59%
2.21%
0.62%
2.11%
4.05%
4.00%
6.43%
2009
5.35%
2.00%
1115.10
59.65
22.31
37.43
-8.78%
-20.46%
0.14%
3.84%
3.70%
0.28%
2.60%
7.20%
4.36%
2010
6.65%
1.84%
1257.64
83.66
23.12
55.53
40.25%
3.63%
0.13%
3.29%
3.16%
3.33%
2.24%
6.95%
5.20%
2011
7.72%
2.07%
1257.60
97.05
26.02
71.28
16.01%
12.54%
0.03%
1.88%
1.85%
2.75%
2.71%
7.18%
6.01%
2012
7.18%
2.13%
1426.19
102.47
30.44
75.90
5.58%
16.99%
0.05%
1.76%
1.71%
2.93%
2.47%
5.27%
5.78%
2013
5.81%
1.96%
1848.36
107.45
36.28
88.13
4.86%
19.19%
0.07%
3.04%
2.97%
5.01%
2.03%
4.28%
4.96%
2014
5.49%
1.92%
2058.90
113.01
39.44
101.98
5.17%
8.71%
0.05%
2.17%
2.12%
2.77%
2.24%
5.58%
5.78%
2015
5.20%
2.11%
2043.94
106.32
43.16
106.10
-5.92%
9.43%
0.21%
2.27%
2.06%
2.96%
2.46%
5.51%
6.12%
2016
4.86%
2.01%
2238.83
108.86
45.03
108.67
2.39%
4.33%
0.51%
2.45%
1.94%
2.64%
2.41%
5.54%
5.69%
2017
4.67%
1.86%
2673.61
124.94
49.73
108.28
14.77%
10.44%
1.39%
2.41%
1.02%
3.22%
2.36%
7.05%
5.08%
2018
5.92%
2.14%
2506.85
148.34
53.61
136.65
18.73%
7.80%
2.37%
2.68%
0.31%
3.24%
2.50%
4.12%
5.96%
2019
5.03%
1.82%
3230.78
162.35
58.80
150.50
9.44%
9.68%
1.55%
1.92%
0.37%
2.57%
3.96%
5.20%
http://pages.stern.nyu.edu/~adamodar/
16
Summary of Bloomberg Bond Yields by Rating
2020 S&P Monthly Bond Yields
Rating
20Y
25Y
30Y
20Y
25Y
30Y
20Y
25Y
30Y
AA 3.159 3.361 3.77 3.164 3.366 3.757 3.244 3.477 3.886
AA- 3.264 3.264 3.274 3.276 3.28 3.299 3.38 3.393 3.414
A+ 3.371 3.496 3.622 3.386 3.495 3.613 3.441 3.539 3.63
A 3.324 3.354 3.375 3.287 3.287 3.334 3.356 3.331 3.364
A- 3.675 3.624 3.646 3.675 3.621 3.631 3.721 3.672 3.663
BBB+ 3.747 3.694 3.533 3.696 3.668 3.577 3.682 3.65 3.569
BBB 4.339 4.318 4.393 4.314 4.317 4.426 4.347 4.353 4.474
BBB- 4.981 5.328 5.913 5.049 5.358 5.943 5.059 5.378 5.792
BB+ 5.647 5.054 5.45 4.856 5.524 4.672
BB 8.488 8.509 8.515 7.541 7.558 7.56 7.059 7.083 7.087
BB- 6.754 7.86 7.731 7.142 7.577 7.461 6.681 6.802 6.722
B+ 7.387 7.504 7.511 6.889 7.386 7.388 6.802 7.27 7.274
B 8.094 7.588 7.933 6.938 7.645 6.712
B- 12.863 N/A N/A 13.12 N/A N/A 15.27 N/A N/A
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