www.zerohedge.

com

British Airways PLC (Britain)

CREDIT SNAPSHOT 11/10/09

01 DEBT DISTRIBUTION

02 BONDS

03 INCOME STATEMENT

04 CASH FLOW

05 BALANCE SHEET

06 COVERAGE RATIOS

07 LEVERAGE RATIOS

08 ENTERPRISE VALUE

09 RETURN ON CAPITAL
e-mail darpa@zerohedge.com 10 RECOVERY & TANGIBLE NET WORTH
blog www.zerohedge.com 11 ACCOUNTING RED FLAGS

12 LATEST SEC FILINGS

13 LEGAL DISCLAIMER

BAY LN Equity

equity ticker: BAY LN capitalisation (GBP in millions):

bond ticker: BAB stock price GBp 196.4

sector: Consumer, Cyclical shares outstanding (million) 1,153.64

subgroup: Airlines market capitalisation (GBP mm) 2,266

company description: total debt 3,763

British Airways PLC is a full service global airline
cash + marketable securities 1,381
that provides international and domestic passenger
and cargo airline services. The airline operates other capital -1,191
hubs at London's Heathrow and Gatwick airports
enterprise value (excl. cash) 3,457
that serve numerous countries.
current EV / TTM EBITDA N/A

The company's next report is expected for 2/5/2010 (type:

Confirmed).
British Airways PLC has 44,987 employees. www.bashares.com

The distribution of this report is restricted. Important information concerning these restrictions and legal disclaimer is set forth at the end of this report.
01 British Airways PLC www.zerohedge.com
facility
amount
issuer Rtg debt type & details coupon mat crncy amount issue date
out (mm)
(mm)
l BRITISH AIRWAYS NA Loan, secured, term, floater 1/31/2011 JPY 75,000 9/1/2005

l BRITISH AIRWAYS NA Loan, secured, term, floater 10/26/2012 USD 1,615 10/26/2007
DEBT DISTRIBUTION

Total amount out of instruments listed above (GBP in MM) 0 Cash (MM) 1,381

Total debt (MM) 3,763 Total Number of Debt Instruments (for the issuer and its subs) 4

Loans Bonds

0
0
0
0
0
0
0
0
0
0
0
>2032
2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

Moody's Ratings Standard & Poor's Ratings

Outlook N/A Outlook NEG 06/04/09

Issuer N/A LT Foreign Currency Issuer BB 05/08/09

Senior Secured Debt N/A LT Local Currency Issuer BB 05/08/09

LT Corp Family Ba3 *- 11/10/09 ST Foreign Currency Issuer N/A

Bank Loan Debt N/A ST Local Currency Issuer N/A

Senior Unsecured Debt B1 *- 11/10/09

Subordinated Debt N/A

Short Term N/A

02 British Airways PLC www.zerohedge.com
id issuer coupon mat outstanding S&P MDY ask px yield spread* px date

*interpol. swap spread

EC429010 BRITISH AIRWAYS 8.750 08/23/16 GBP 250,000,000 BB B1 93.75 10.0 649 10/27/09
BONDS

Total Debt for the company currently stands at GBP 3,763mm.

bond price

120

ticker CIK 809023 100

13404Z US 10-Q
14495Z US 10-K 80

15360Z US 8-K
2182Z US 42 60

24069Z US
3020A US 10-Q 40

32677Z US 10-K
20
3274Z US 8-K
3304Q US 42..
0
343226Z US
07

07

07

07

07

07

08

08

08

08

08

08

09

09

09

09

09
45226Z US alternat.
9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/
/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2
01

03

05

07

09

11

01

03

05

07

09

11

01

03

05

07

09
4732Z US
558319Q US yield
618174Q US
18

16

14

12
BRITISH AIRWAYS
8.75% 8/2016 GBP 10

0
07

07

07

07

07

07

08

08

08

08

08

08

09

09

09

09

09
9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/
/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2
01

03

05

07

09

11

01

03

05

07

09

11

01

03

05

07

09

interpolated swap spread

1400

1200

1000

800

600

400

200

0
07

07

07

07

07

07

08

08

08

08

08

08

09

09

09

09

09
9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/

9/
/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2
01

03

05

07

09

11

01

03

05

07

09

11

01

03

05

07

09

Prices & yields bid side to 28/7/08 and ask side thereafter. Spread is Govt Bid Sprd to 28/7/08 and Interpol. Swap Ask Sprd then.
03 British Airways PLC www.zerohedge.com
GBP in millions Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

09/30/09 03/31/09

Revenues 2,495 2,292 1,946 1,983 2,119 8,213 8,492 8,758 8,992

COGS

COGS % of Revenues

SG&A 7,538 7,834 7,873 9,017

SG&A % of Revenues 91.8% 92.3% 89.9% 100.3%

INCOME STATEMENT

EBITDA 1,392 1,492 1,577 669

Interest Expense 232 187 175 199

EBT 443 471 710 -224

Net Income -76 -78 -248 -106 -111 451 290 712 -375

EBITDA Margin - - - - - 16.9% 17.6% 18.0% 7.4%

EBIT Margin - - - - - 8.2% 7.7% 10.1% -0.3%

EBITDA Margin EBIT Margin

18.0%
17.6%
17.4%

16.9%
14.5%

14.3%

10.1%
8.2%
7.9%

7.7%

7.4%
5.4%
4.9%
0.0%
0.0%

0.0%
0.0%

0.0%
0.0%

0.0%
0.0%

0.0%
0.0%

0.0%
0.0%

0.0%
0.0%

0.0%
0.0%

0.0%
0.0%

0.0%
0.0%

-0.3%
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 03 04 05 06 07 08 09

GBP in millions Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

09/30/09 03/31/09
TTM INCOME STATEMENT

TTM Revenues 9,051 9,177 8,992 8,716 8,340 8,213 8,492 8,758 8,992
TTM EBITDA 1,392 1,492 1,577 669
TTM D&A 717 834 692 694
TTM EBIT 675 658 885 -25

TTM Interest Expense 232 187 175 199

TTM EBT 443 471 710 -224

TTM Net Income 153 -70 -375 -508 -543 451 290 712 -375

TTM Revenues
TTM Revenues TTM EBITDA
EBITDA
9,177

1,577
1,492
9,051

8,992

8,992

1,392
8,758
8,716

8,492
8,340

8,213

669
0

Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

TTM EBT TTM Interest Expense TTM D&A

692
717 834

175

232 187 694

710
443 471
199
0 0 0 0 0
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 -224
09
04 British Airways PLC www.zerohedge.com
GBP in millions Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

09/30/09 03/31/09

Cash from Operations (CFO) 1,439 870 423 255

CASH FLOW

Cash from Investing (CFI) -1,119 -78 -162 -379

Free Cash Flow (CFO + CFI) 320 792 261 -124

Cash from Financing Activities -471 -477 -291 -157

Cash from Operations (CFO) Free Cash Flow (CFO + CFI)

1,600
1,400
1,200
1,000
800
600
400
200
0
-200 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 03 04 05 06 07 08 09

-400

GBP in millions Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

09/30/09 03/31/09

TTM Cash from Operations (CFO) 1,439 870 423 255

TTM Cash from Invest. (CFI) -1,119 -78 -162 -379

TTM Capex -275 -331 -596 -547

TTM D&A -717 -834 -692 -694

TTM Free Cash Flow (CFO + CFI) 320 792 261 -124

TTM Cash from Financing Activities -471 -477 -291 -157

TTM CFO - Capital Expenditures 1,164 539 -173 -292

TTM CASH FLOW

TTM EBITDA - Capital Expenditures 1,117 1,161 981 122

TTM EBITDA - Capex - Change in WC 1,117 1,161 981 122

TTM EBITDA-Capex-WC-CshIntEx-CshTax-CshDiv 849 845 733 -110

TTM CFO/Total Debt 35.3% 26.0% 13.3% 6.8%

TTM FCF/Total Debt 7.8% 23.7% 8.2% -3.3%

TTM Capex TTM D&A TTM Cash from Invest. (CFI) TTM EBITDA - Capital Expenditures
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

-78

-162
-275

1,161
-331

-379

1,117
-547
-596

981
-692

-694
-717

-834
-1119

122
0 0 0 0 0

Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

TTM EBITDA - Capex - Change in WC TTM EBITDA-Capex-WC-CshIntEx-CshTax-CshDiv

1400

1200

1000

800

600

400

200

0
Q2 09 Q3 09 Q4 09 Q1 10 06 07 08 09
-200
05 British Airways PLC www.zerohedge.com
GBP in millions Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

09/30/09 03/31/09

Cash 84 594 180 247

Marketable Securities / ST Investments 2,356 1,761 1,684 1,134

Accounts & Notes Receivable 685 654 586 530

Inventories & Unbilled Receivables 83 76 112 127

Net Fixed Assets 7,882 7,357 7,263 7,233

75% of Accounts Receivable 514 491 440 398

30% of Inventories & Unbill. Rec. 25 23 34 38

10% of Net Fixed Assets 788 736 726 723

Collateral (Liquidation) Asset Value 3,767 3,604 3,063 2,540

BALANCE SHEET

Working Capital 234 -194 -381 -1,796

Cash Conversion Cycle #N/A N.A. #N/A N.A. #N/A N.A. #N/A N.A.

Total Borrowings (includes ST Borrowings) 4,081 3,346 3,174 3,763

Net Debt 1,641 991 1,310 2,382

Collateral Asset Value / Total Borrowings 92.3% 107.7% 96.5% 67.5%

explanations and definitions:

The approximation we use to calculate a company's total Collateral (Liquidation) Asset Value (for an asset based liquidation scenario) is calculated as the sum of
Cash plus Marketable Securities / Short-Term Investments plus assets with the following valuation rates applied:
75% of stated Accounts Receivable
30% of stated Inventory
10% of stated Net Fixed Assets.
Although we acknowledge that some industries and individual situations demand clearly different assumptions we nevertheless think this is a useful approximation
across all industries covered, if only as a starting point for further individual in-depth analysis.

75% of Accounts Receivable 30% of Inventories & Unbill. Rec. Working Capital
10% of Net Fixed Assets
234
0 0 0 0 0

-194
788
736 -381
726 723

25 23
34 38
514 491 440 398

0 0 0 0 0 -1,796
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

Cash Conversion Cycle Total Borrowings (includes ST Borrowings) Net Debt

4,081

3,763
3,346

3,174

2,382
1,641

1,310
991

0 0 0 0 0 0 0 0 0
0
0

0
0

0
0

0
0

0
0

Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

Collateral Asset Value / Total Borrowings

107.7%
96.5%
92.3%

As of 3/31/2009 the Pension Plan of British Airways PLC was underfunded by

67.5%
GBP -601mm.

0.0% 0.0% 0.0% 0.0% 0.0%

Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09
06 British Airways PLC www.zerohedge.com
GBP in millions Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09
COVERAGE RATIOS

09/30/09 03/31/09

TTM EBITDA / TOTAL INTEREST - - - - - 6.0x 7.8x 8.3x 3.3x

TTM EBITDAR / TOTAL INTEREST+RENT - - - - - 3.5x 4.2x 4.8x 2.2x

TTM EBITDA-CAPEX / TOTAL INTEREST - - - - - 4.8x 6.0x 5.2x 0.6x

TTM EBITDAR-CAPEX / TOTAL INTEREST+RENT - - - - - 2.9x 3.4x 3.2x 0.8x

explanations and definitions:

TTM TOTAL INTEREST: For all coverage ratio calculations we use the Total Interest figure which in addition to Interest Expense also includes Capitalized Interest
Expenses. We think this gives a better view of the economic reality than the simple Interest Expense figure.

TTM EBITDA / TOTAL INTEREST TTM EBITDAR / TOTAL INTEREST+RENT

8.3x
7.8x
4.8x

4.2x
6.0x
3.5x

3.3x 2.2x

0.0x 0.0x 0.0x 0.0x 0.0x 0.0x 0.0x 0.0x 0.0x 0.0x

Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

TTM EBITDA-CAPEX / TOTAL INTEREST TTM EBITDAR-CAPEX / TOTAL INTEREST+RENT

6.0x 3.4x
3.2x
5.2x 2.9x
4.8x

0.8x

0.6x
0.0x 0.0x 0.0x 0.0x 0.0x 0.0x 0.0x 0.0x 0.0x 0.0x

Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09
07 British Airways PLC www.zerohedge.com
GBP in millions Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

09/30/09 03/31/09

NET DEBT / TTM EBITDA 1.2x 0.7x 0.8x 3.6x

TOTAL DEBT / TTM EBITDA 2.9x 2.2x 2.0x 5.6x

LEVERAGE RATIOS

TOTAL DEBT / TTM EBITDA-CAPEX 3.7x 2.9x 3.2x 30.8x

Rentadj. TOT DEBT / TTM EBITDAR 3.6x 3.0x 2.6x 6.1x

Rentadj. TOT DEBT / TTM EBITDAR-CAPEX 4.4x 3.7x 4.0x 17.3x

HAIRCUT EBITDA MULTIPLE / TOTAL DEBT 107.4% 140.5% 156.5% 56.0%

TOTAL DEBT / TTM EBIT 6.0x 5.1x 3.6x NM

explanations and definitions:

Rent adj. Total Debt/TTM EBITDAR: This ratio is calculated by dividing the Rent Adjusted Total Debt figure (Total Debt plus 8 times TTM Rental
Expenses) by EBITDAR (TTM EBITDA plus TTM Rental Expenses).
HAIRCUT EBITDA MULTIPLE / TOTAL DEBT: We adjust TTM EBITDA to 70% of its stated value, multiply the result with 4.5 as an assumed exit multiple and relate
the resulting figure (the haircut EBITDA multiple) to the TOTAL DEBT number. This ratio should reflect the situation of an issuer's liquidation, whereby the assets can
be sold at a reduced EBITDA multiple.

NET DEBT / TTM EBITDA TOTAL DEBT / TTM EBITDA TOTAL DEBT / TTM EBITDA-CAPEX

3.6x 30.8x

1.2x
0.8x
0.7x 5.6x
3.7x
2.9x 2.9x 3.2x
2.2x 2.0x
0.0x 0.0x 0.0x 0.0x 0.0x 0.0x
0.0x 0.0x
0.0x 0.0x
0.0x 0.0x
0.0x 0.0x
0.0x

Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

HAIRCUT EBITDA MULTIPLE / TOTAL DEBT Rentadj. TOT DEBT / TTM EBITDAR
Rentadj. TOT DEBT / TTM EBITDAR-CAPEX

156.5%
17.3x
140.5%

107.4%

56.0%
6.1x
4.4x 4.0x
3.6x 3.7x
3.0x 2.6x

0.0% 0.0% 0.0% 0.0% 0.0% 0.0x

0.0x 0.0x
0.0x 0.0x
0.0x 0.0x
0.0x 0.0x
0.0x

Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

TOTAL DEBT / TTM EBIT

6.0x

5.1x

3.6x

0.0x 0.0x 0.0x 0.0x 0.0x 0.0x

Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09
08 British Airways PLC www.zerohedge.com
GBP in millions Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

09/30/09 03/31/09
ENTERPRISE VALUE

EV / TTM EBITDA 4.2x 4.5x 2.7x 6.3x

EV / TTM EBIT 8.7x 10.3x 4.8x NM

Enterprise Value 5,849 6,788 4,211 4,206

TOTAL DEBT 4,081 3,346 3,174 3,763

Equity Market Cap 1,940 2,073 1,624 1,439 2,544 3,995 5,597 2,701 1,624

EV / TTM EBITDA
EV / TTM EBIT

6.3x
10.3x

8.7x
4.5x
4.2x

2.7x
4.8x

0.0x 0.0x 0.0x 0.0x 0.0x

0.0x 0.0x 0.0x 0.0x 0.0x 0.0x
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

TOTAL DEBT EV - TOTAL DEBT Equity Market Cap

5,597

3,995
3,442
1,768

2,701
443
1,037

2,544
2,073
1,940
1,624 1,624
4,081

1,439
3,763
3,346

3,174
0

Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

BAY LN stock closing price

600

500

400

300

200

100

0
Mär/00

Mär/01

Mär/02

Mär/03

Mär/04

Mär/05

Mär/06

Mär/07

Mär/08

Mär/09
Sep/00

Sep/01

Sep/02

Sep/03

Sep/04

Sep/05

Sep/06

Sep/07

Sep/08

Sep/09
Dez/99

Dez/00

Dez/01

Dez/02

Dez/03

Dez/04

Dez/05

Dez/06

Dez/07

Dez/08
Jun/00

Jun/01

Jun/02

Jun/03

Jun/04

Jun/05

Jun/06

Jun/07

Jun/08

Jun/09
09 British Airways PLC www.zerohedge.com
GBP in millions Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

09/30/09 03/31/09

Adjusted Cap Rate 10.17% 8.60% 17.37% 3.33%

RETURN ON CAPITAL

Tangible Capital 3,482 3,190 4,351 3,961

Total Intangibles 233 212 221 267

Pre-tax ROIC 19.4% 20.6% 20.3% -0.6%

After-tax ROIC (effective tax rate) 14.6% 14.8% 16.1%

After-tax ROIC (assumed tax rate) 12.6% 13.4% 13.2% -0.4%

WACD (Pre-tax) 5.7% 5.7% 6.0% 5.4%

explanations and definitions:

Adjusted Cap Rate: This ratio shows EBIT reduced by an assumed tax rate of 35% and adjusted for Net Non-Operating and Extraordinary Losses (Gains) - averaged
over the last 5 years - divided by the Enterprise Value.
Tangible Capital: Starting with the Total Book Capital the Tangible Capital figure is calculated by subtracting Intangibles, Cash and Marketable Securities as well as
Short Term Investments.
We calculate three different ROIC (Return on Invested Capital) figures:
Pre-Tax ROIC: this ratio relates the trailing twelve months (TTM) EBIT to Tangible Capital as defined above.
After-tax ROIC (effective tax rate): here EBIT is corrected by the company's effective tax rate as stated in it's latest financials, giving an after-tax ROIC rate.
After-tax ROIC (assumed tax rate): here EBIT is corrected by an assumed tax rate of 35%, giving a modified after-tax ROIC rate.
WACD (Pre-Tax): This rate is defined as trailing twelve months (TTM) TOTAL INTEREST EXPENSE divided by Total Borrowings.

Adjusted Cap Rate After-tax ROIC (assumed tax rate)

17.4% 13.4% 13.2%

12.6%

10.2%
8.6%

3.3%
0.0% 0.0% 0.0% 0.0% 0.0%

0.0% 0.0% 0.0% 0.0% 0.0% -0.4%

Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

WACD (Pre-tax)

6.0%
5.7% 5.7%
5.4%

0.0% 0.0% 0.0% 0.0% 0.0%

Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09
10
DEFAULT ESTIMATE British Airways PLC www.zerohedge.com

Average Bond Spread (in BPoints (1)) 649

Estimated Bond Recovery Rate (2) 100.0%

Resulting Tolerable Default Rate (3) N/A

explanations and definitions:

We calculate estimated default and recovery rates to be used in other credit models (f.i. for the valuation of CDOs or similar structures) as follows:
(1) Average Bond Spread: Average Spread of all bonds listed on page 2 of this report.
(2) Estimated Bond Recovery Rate: To calculate this rate we first divide the total debt amount into bond debt and loan debt that is senior to bond debt. As an
approximation for the total amount of bond debt we use the sum of the amounts outstanding of all bonds listed on page 1 of this report. The total debt figure is reduced
by this sum, giving us an approximate figure for debt that is senior to bond debt. We then calculate a collateral asset coverage figure for the bond debt by starting with
the Collateral Asset Value (as defined on page 5 of this report) which we reduce by the amount of senior debt ahead of the bonds. The remaining Collateral Asset Value
is then divided by the approximate bond debt amount as defined above, giving an estimated recovery value on a collateral asset basis. We apply the same logic to an
EBITDA multiple ratio (as on page 7 of this report) and get a second recovery estimate based on the EBITDA multiple. The higher of the 2 estimates is used as the
"Estimated Bond Recovery Rate".
(3) Resulting Tolerable Default Rate: The implied default rate calculated using the Market Spread (1) and the Estimated Recovery Rate (2). With the given Market
Spread and Estimated Recovery Rate it defines the maximum tolerable default probability for the risk premium paid in the form of Spread. Please note: This rate will
only be displayed when it is greater than 0% and lower than 30% as we believe it is not meaningful ('NM') out of this range.

Although we acknowledge that the calculated results are by no means exact, we think they make for a good estimate in the valuation of credit structures when individual
default and recovery rates for single issuers are to be used.

GBP in millions Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09
TANGIBLE NET WORTH ESTIMATE

09/30/09 03/31/09

Total Assets 12,174 11,384 11,292 10,488

Total Liabilites 10,100 8,973 8,030 8,642

Total Intangibles 233 212 221 267

Tangible Net Worth 1,841 2,199 3,041 1,579

Rent Debt (8x Annual Rental Expense) 1,416 1,416 1,416 1,416 1,416 1,816 1,688 1,392 1,416

Underfunded Pension & Post Ret. Liab. -1,501 -1,294 722 -601

Discount on Hard Assets 7,323 6,838 6,762 6,731

Adjusted Tangible Net Worth -1,416 -1,416 -1,416 -1,416 -1,416 -8,799 -7,621 -4,391 -7,169
11 British Airways PLC www.zerohedge.com
GBP in millions Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 06 07 08 09

09/30/09 03/31/09

(CFO-Net Income)/Revenues 12.0% 6.8% -3.3% 7.0%

yoy Revenue Growth 10.3% 5.8% -8.7% -12.2% -15.1% 5.7% 3.4% 3.1% 2.7%

Gross Margin

Days Sales Outstanding 30 28 24 22

Days Sales of Inventory 4 3 5 5

Soft Assets - - - - - 1,051 835 1,387 1,152

ACCOUNTING RED FLAGS

Unbilled Receivables - - - - - - - - -

Deferred / Unearned Revenue - - - - - - - - -

Allowance for Doubtful Accounts - - - - - - - - -

TTM Dividends Paid - - - - - 0 0 0 58

TTM Preferred Dividends - - - - - 0 0 0 0

Net Change in Capital Stock 0 0 0 0 0 21 38 4 1

Non-Capex CFI (CFI less Capex) -844 253 434 168

Gross Margin yoy Revenue Growth (CFO-Net Income)/Revenues

15.0%

10.0% 12%
12%
10%
9%
10.3%

5.0% 7% 7%

7%
5.8%

5.7%
3.0%

2.8%

3.4%

3.1%

2.7%
6%
0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%
0.0%

-1.7%
0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
-8.7%

-12.2%

-5.0%
-3%
-15.1%

-10.0%

-15.0%

-20.0%

Days Sales Outstanding Days Sales of Inventory

5
5
4

4
4

3
0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 03 04 05 06 07 08 09

Auditor Information:

Current auditor ERNST & YOUNG (as of 21.5.2009)

Auditor's opinion Unqualified

Auditor's opinion - Definitions

Not Audited / Unaudited No tests were performed to verify amounts in financial statements. Typically applied to interim statement.

Partially audited Not all statements were audited. Auditor may specifically give opinion on one or two statements.

Unqualified Auditor declares, without reservation, that the financial statements fairly represent the company's financial position at
a point in time and that the statements conform in all material respects to GAAP.
Qualified: Limited Scope An aspect of the company's financial statements could not be verified, such as a portion of inventory not counted.

Qualified: Inconsistent Standards Accounting standards were not applied consistently between periods.

Qualified: not GAAP Standard accounting principles for the country were not followed. Typically related to a unique line item and uses the
phrase 'except for.'
Qualified: uncertainty Doubt exists related to a material balance sheet item, such as value of investment or collectability of major
receivable; or auditor doubts going concern ability of company. This opinion usually employs the phrase 'subject to.'

Disclaimer Auditor refuses to state opinion on financial statements, typically due to lack of sufficient documentation provided by
company and/or subsidiaries.
12
LATEST SEC FILINGS British Airways PLC www.zerohedge.com

Annual and transition report of foreign private issuers (Form Type 20-F) end of period

Current report of foreign issuer (Form Type 6-K) filing date

MAY TRAFFIC STATISTICS http://www.sec.gov/Archives/edgar/data/809023/000119163807001607/bay200706056k.txt 06/05/07

BATCH FILING http://www.sec.gov/Archives/edgar/data/809023/000119163807001580/bay200706016kbatch.txt 06/01/07

NEW SHORTHAUL AIRCRAFT ORDER http://www.sec.gov/Archives/edgar/data/809023/000119163807001482/bay200705176k3.txt 05/23/07

STRONG FULL YEAR RESULTS http://www.sec.gov/Archives/edgar/data/809023/000119163807001481/bay200705176k2.txt 05/23/07

FULL YEAR RESULTS http://www.sec.gov/Archives/edgar/data/809023/000119163807001480/bay200705176k.txt 05/23/07

STATEMENT ON IBERIA http://www.sec.gov/Archives/edgar/data/809023/000119163807001469/bay200705226k.txt 05/22/07

APRIL TRAFFIC STATISTICS http://www.sec.gov/Archives/edgar/data/809023/000119163807001309/bay200705036k.txt 05/04/07

INTENT TO DELIST FROM NYSE http://www.sec.gov/Archives/edgar/data/809023/000119163807001262/bay200704256k.txt 05/01/07

LONGHAUL FUEL SURCHARGE http://www.sec.gov/Archives/edgar/data/809023/000119163807001261/bay200704276k.txt 05/01/07

BATCH FILING http://www.sec.gov/Archives/edgar/data/809023/000119163807001258/bay200705016kbatch.txt 05/01/07

Prospectus (Form Type 42..) filing date

 www.zerohedge.com

CREDIT SNAPSHOT provided by

www.HIGHYIELDBLOG.com

This research report was prepared by HIGHYIELDBLOG. The information herein has been obtained from, and any opinions
herein are based upon, sources believed to be reliable, but HIGHYIELDBLOG does not represent that it is accurate or
complete and it should not be relied upon as such. All opinions, forecasts and estimates herein reflect our judgement on the
date of this report and are subject to change without notice.

This document may not be reproduced, distributed or published without the prior consent of HIGHYIELDBLOG.