abhishreshthaa
Abhijeet S
American Electric Power (NYSE: AEP) is a major investor-owner electric utility in various parts of the United States. AEP ranks among the nation's largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation's largest electricity transmission system, a nearly 39,000-mile (63,000 km) network that includes 765 kilovolt ultra-high voltage transmission lines; more than all other U.S. transmission systems combined. AEP's transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP's utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia, West Virginia, and Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP's headquarters are in Columbus, Ohio.
American Electric Power was the first utility to utilize 345KV transmission lines which took place in 1953.
Although this report is mostly based on Boeing’s commercial airplanes unit we feel that another of Boeing’s business unit’s should also be included as it is a relatable service. This other unit is the Boeing capital corporation. Boeing’s capital corporation’s business unit is a subsidiary of Boeing. It provides asset-backed lending and leasing services to some of the company’s major clients, however its main function is to support the companies other business units with adequate financing for the extensive costs attached to selling and delivering Boeing products.
The main services that are provided are asset-based lending, operating leases, finance leases, leveraged leasing, sale/leasebacks, freighter conversion finance, long- and short-term financing, secured loans - senior and subordinated and asset value guarantees. So far this year the unit has underperformed compared to its first quarter results in 2004. In the first quarter of fiscal 2004 the company had revenues of $251 million for its capital corporation unit, however for the first quarter of this year this figure has dropped to $237 million, therefore the units revenue has dropped by a total of six per cent. The unit’s pre-tax income fluctuated more adversely with a drop of around forty per cent; total income fell from $73 million to $44 million.
This decrease in income can be accounted for through the unit’s gains on asset sales in 2004. The unit has a total of 170 employees spread out in seven different locations.
BCC is aiding the company in lowering its yearly risks and in contributing to the company’s overall portfolio. Recent years have seen an increase in the demand for aircraft financing and consequently lease rates are on the rise. For the first quarter of 2005 the BCC paid a $55 million dividend to Boeing thus allowing Boeing to realize $760 million in cash over the past fifteen months. BCC expects to have total sales of ~$.9 billion by the end of the year.
Importance of asset-backed lending and leasing in today’s market
Today the airline industry is very turbulent and many of today’s modern airlines apart from a couple of exceptions are bankrupt. The exceptions include companies like RyanAir who announced net profits for its year end of €268.9 million. Bankruptcy has now become a part of doing business for many airlines. The Air Transport Association estimates there have been "well over" 100 filings of bankruptcy since de-regulation occurred in 1978 . Therefore these airline companies cannot remotely afford to fully purchase Boeing’s products. Such was the case in March 2003 when Hawaiian Airlines had to file for Chapter 11 bankruptcy protection.
The BCC then had to reach an agreement with the airline over the restructuring of its long term leases for 11 Boeing 717-200s and three Boeing 767-300ERs and also on the amount of Boeing’s claim resulting from the bankruptcy. For airline companies to survive, they now have to find other means of acquiring aircraft.
Boeing Capital Corporation offers these airline operators financial alternatives and advice and offers them financing to buy and/or lease commercial jet airplanes. The Aircraft Financial Services group specializes in arranging creative finance and lease structures; administration of Boeing financing commitments and guarantees; and offers a broad range of financing options and solutions. The advantage the unit has over other finance companies is that it has significantly more knowledge in pricing, credit, and legal and tax expertise when dealing with aircrafts.
The life cycle of airplanes is favourable for the company. Boeing’s aircraft are probably at there growth stage since the world population is constantly increasing and there appears for the moment an ever increasing market for airplanes. Since there is currently no new mode of transport and the airplane revolution has not yet been surpassed Boeing can expect to continue selling its aircraft. Boeing and Airbus operate as a Duopoly and as such Boeing’s product life cycles depend almost solely on continuing to improve its offerings relative to its main competitor
One can postulate that the airplane industry will not reach saturation for many years especially since there are not many effective alternatives for transatlantic travel and other long distance travelling and also since there are now new economies growing significantly rapidly, such as China. Boeing expects that the demand for its commercial aircraft in China will increase dramatically as the countries growth continues to produce remarkable growth figures.
communication policy relies heavily on electronic communication; it also uses specialized presses and often uses signs, moving communication and gadgets for its communication policy. We feel Boeing utilises its advertising techniques as follows, they are in rank order of importance.
Most Important
1: Electronic Communication
2: Institutional Communication
3: Mass Media
4: Moving Communication
5: Signs
6: Gadgets
7: Paper Communication
Less Important
American Electric Power was the first utility to utilize 345KV transmission lines which took place in 1953.
Although this report is mostly based on Boeing’s commercial airplanes unit we feel that another of Boeing’s business unit’s should also be included as it is a relatable service. This other unit is the Boeing capital corporation. Boeing’s capital corporation’s business unit is a subsidiary of Boeing. It provides asset-backed lending and leasing services to some of the company’s major clients, however its main function is to support the companies other business units with adequate financing for the extensive costs attached to selling and delivering Boeing products.
The main services that are provided are asset-based lending, operating leases, finance leases, leveraged leasing, sale/leasebacks, freighter conversion finance, long- and short-term financing, secured loans - senior and subordinated and asset value guarantees. So far this year the unit has underperformed compared to its first quarter results in 2004. In the first quarter of fiscal 2004 the company had revenues of $251 million for its capital corporation unit, however for the first quarter of this year this figure has dropped to $237 million, therefore the units revenue has dropped by a total of six per cent. The unit’s pre-tax income fluctuated more adversely with a drop of around forty per cent; total income fell from $73 million to $44 million.
This decrease in income can be accounted for through the unit’s gains on asset sales in 2004. The unit has a total of 170 employees spread out in seven different locations.
BCC is aiding the company in lowering its yearly risks and in contributing to the company’s overall portfolio. Recent years have seen an increase in the demand for aircraft financing and consequently lease rates are on the rise. For the first quarter of 2005 the BCC paid a $55 million dividend to Boeing thus allowing Boeing to realize $760 million in cash over the past fifteen months. BCC expects to have total sales of ~$.9 billion by the end of the year.
Importance of asset-backed lending and leasing in today’s market
Today the airline industry is very turbulent and many of today’s modern airlines apart from a couple of exceptions are bankrupt. The exceptions include companies like RyanAir who announced net profits for its year end of €268.9 million. Bankruptcy has now become a part of doing business for many airlines. The Air Transport Association estimates there have been "well over" 100 filings of bankruptcy since de-regulation occurred in 1978 . Therefore these airline companies cannot remotely afford to fully purchase Boeing’s products. Such was the case in March 2003 when Hawaiian Airlines had to file for Chapter 11 bankruptcy protection.
The BCC then had to reach an agreement with the airline over the restructuring of its long term leases for 11 Boeing 717-200s and three Boeing 767-300ERs and also on the amount of Boeing’s claim resulting from the bankruptcy. For airline companies to survive, they now have to find other means of acquiring aircraft.
Boeing Capital Corporation offers these airline operators financial alternatives and advice and offers them financing to buy and/or lease commercial jet airplanes. The Aircraft Financial Services group specializes in arranging creative finance and lease structures; administration of Boeing financing commitments and guarantees; and offers a broad range of financing options and solutions. The advantage the unit has over other finance companies is that it has significantly more knowledge in pricing, credit, and legal and tax expertise when dealing with aircrafts.
The life cycle of airplanes is favourable for the company. Boeing’s aircraft are probably at there growth stage since the world population is constantly increasing and there appears for the moment an ever increasing market for airplanes. Since there is currently no new mode of transport and the airplane revolution has not yet been surpassed Boeing can expect to continue selling its aircraft. Boeing and Airbus operate as a Duopoly and as such Boeing’s product life cycles depend almost solely on continuing to improve its offerings relative to its main competitor
One can postulate that the airplane industry will not reach saturation for many years especially since there are not many effective alternatives for transatlantic travel and other long distance travelling and also since there are now new economies growing significantly rapidly, such as China. Boeing expects that the demand for its commercial aircraft in China will increase dramatically as the countries growth continues to produce remarkable growth figures.
communication policy relies heavily on electronic communication; it also uses specialized presses and often uses signs, moving communication and gadgets for its communication policy. We feel Boeing utilises its advertising techniques as follows, they are in rank order of importance.
Most Important
1: Electronic Communication
2: Institutional Communication
3: Mass Media
4: Moving Communication
5: Signs
6: Gadgets
7: Paper Communication
Less Important