burkey
Jan 12, 00, 8:17 pm
Continental to take charge related to accounting
NEW YORK, Jan 12 (Reuters) - Continental Airlines said on Wednesday it will take charges totaling $48 million to 1999 earnings related to a change in how the air carrier accounts for its frequent flier mileage credits.
The Houston-based company also said it plans to post a $6 million gain to fourth-quarter earnings related to asset sales.
The nation's fifth largest airline said that, under the new accounting method, revenue from the sale of mileage credits will be deferred and recognized when transportation is provided. This change will be effective as of Jan. 1, 1999.
In order to apply the account method to prior years, the company said it booked a $27 million charge to the first quarter 1999, which ended March 31. The change will also impact results for 1999 by $21 million to apply the new accounting method to operations in 1999.
A company official said the charges will be treated as special items and Continental will not have to refile or restate past figures.
Continental said that other asset sales, including a portion of its interest in Equant N.V., leading to a net gain of $6 million in the fourth quarter.
NEW YORK, Jan 12 (Reuters) - Continental Airlines said on Wednesday it will take charges totaling $48 million to 1999 earnings related to a change in how the air carrier accounts for its frequent flier mileage credits.
The Houston-based company also said it plans to post a $6 million gain to fourth-quarter earnings related to asset sales.
The nation's fifth largest airline said that, under the new accounting method, revenue from the sale of mileage credits will be deferred and recognized when transportation is provided. This change will be effective as of Jan. 1, 1999.
In order to apply the account method to prior years, the company said it booked a $27 million charge to the first quarter 1999, which ended March 31. The change will also impact results for 1999 by $21 million to apply the new accounting method to operations in 1999.
A company official said the charges will be treated as special items and Continental will not have to refile or restate past figures.
Continental said that other asset sales, including a portion of its interest in Equant N.V., leading to a net gain of $6 million in the fourth quarter.