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Key IFRS Challenges

for the Industry

World Financial Symposium 2016


What is the Role and the Key Deliverables of

the Industry Accounting Working Group?

Severine GuffroyChairwoman of IATA’s Industry Accounting Working Group & Senior Vice

President Accounting, Air France

KLM

What is the Industry accounting working Group?– This working group represents the accounting function of IATA members

– It is composed by a maximum of 14 motivated members with a high

representativeness of the airlines world:

5 members


4 members

2 members2 members

1 member

Role of the Industry accounting working Group– To follow the new IFRS (International Financial Reporting

Standards) developments and interpretations which impact

airlines accounting

– To make proactive lobbying to influence over the IASB

(International Accounting Standard Board) and other relevant

stakeholders

– To write accounting position papers on behalf of IATA on specific

airlines issues


Our key deliverables– Accounting Disclosure Guides (in association with KPMG) which cover the

latest accounting practices, principally from airlines reporting under IFRS

or its equivalents, to highlight key issues, judgments and disclosures made

by airlines


Our key deliverables


• Interpretation of new standards on key issues for airlines:

– IFRS 15 on revenue recognition (1st application on January 1, 2018)

• First line of the income statement Challenge for the

Industry

• Participation to the AICPA task force to follow US airline

discussions and provide input



• Interpretation of new standards on key issues for airlines:

– IFRS 15 on revenue recognition

• Writing of IATA position papers for IFRS 15 implementation

» Ex : How to record interline transactions according to this new

standard ?

• Dave Dickson will enter more deeply on this subject

Our key deliverables– Interpretation of new standards on key issues forairlines:

• IFRS 16 on leases (1st application on January 1, 2019)

– A big bang for our industry with the capitalization of all lease

contractsFuture payments for off balance sheet leases in $ billions

Ratio Future payments / total assets




– Interpretation of new standards on key issues for airlines:

• IFRS 16 on leases

– The working Group has identified the main issues for airlines and

is working on them to point the main issues and / or to find

common treatments

– Malcolm Ramsay will present you the most important issues

identified for airlines


IFRS 15, Revenues

David DicksonPartner,

Ernst &Young

IFRS 15 –New revenue recognitionstandard – impact on the airlines

IATA World Financial Symposium - Singapore

September 2016

Session objectives

Page 28

► Background of AICPA Task Force and IAWG efforts

► Normalized revenue recognition implementation plan

► Summary of the new revenue model

► Normative airline contract with customers

► Overview of most important changes in IFRS 15

► Identify of performance obligations

► Principal vs. Agent analysis

► Summary of key airline issues identified

► EY global airline sector

Revenue recognition (ASU 2014-09; IFRS15)Overview

Page 29

► Financial Accounting Standards Board (FASB) and International Accounting

Standards Board (IASB) issued converged new revenue recognition standards

on 28 May 2014.

► The standards replace nearly all existing US GAAP and IFRS guidance on

revenue recognition:

► Virtually every industry is affected.

► Standards require entities to use more judgment and make more estimates

than under current guidance.

► The effects on financial statements, business processes and internal controls

will be significant for airlines.

AICPA revenue recognition task force/IATA accounting working group

Page 30 The new revenue recognition standard – impact on the airline industry

► American Institute of Certified Public Accountants (AICPA) purpose to identify implementation issues and

provide illustration and examples on how to apply the new revenue recognition standard

► AICPA group includes nine airlines and representatives from Big Four firms. A number of task force

members helped draft the current AICPA Airlines – Audit and AccountingGuide

► IATA has a standing Accounting working group that is addressing the implementation issues from

IFRS 15 – the members assigned to lead the IFRS 15 work are

► Mr. Russell MacFarlane – Qantas and Mrs. Guffroy – Air France KLM

► The material in this presentation includes the most recent interrelations by the AICPA Task Force and the

IATA accounting working groups (IAWG).

► The groups have focused on the most significant and prevalent transactions in the industry to

provide guidance.

United Airlines Delta Airlines Southwest Airlines

American Airlines JetBlue Airlines Alaska Air Group

SkyWest Virgin America Qantas

Countdown to adoption

4 months

• Early adoption

• All calendar year-end entities

16 months

• Mandatory adoption

• Calendar year-end public entities

Page 31

► Is anyone thinking about early adopting the standard?

Revenue recognitionSummary of the model

► Core principle: Recognize revenue to depict the transfer of promised goods or services to

customers in an amount that reflects the consideration to which the entity expects to be

entitled in exchange for those goods or services

Step 1:


Identify the contract(s) with a customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations

Step 5: Recognize revenue when (or as) each performance obligation is satisfied

Revenue recognition (IFRS15)Cautionary statement


► Airlines must complete their own evaluation of these and other topics in applying the new

standard

► FASB/IASB Joint Transition Resource Group for Revenue Recognition (TRG) and other

implementation resource groups are discussing various implementation issues that are being

addressed including by the AICPA Task Force andIAWG

► Certain topics are still being preliminary, and the accounting impact is not yet final. The key

areas still being deliberated are as follows:

► Loyalty status

► Interline loyalty redemption

► Breakage/customers’ unexercised rights/change fees

► Co-Brand marketing elements redemption model

► Optional purchases

► Recognition pattern for brand/customer list

Step 1: Normative airline contracts with customers


Step 1: Identify the contract(s) with a customer


► Typical airline contracts identified for assessment under ASC 606 / IFRS 15 include the

following:

► Tickets and vouchers

► Loyalty programs

► Co-branded credit cards

► Interline tickets

► Maintenance contracts

► Cargo agreements

► Regional capacity purchase agreements

► Airlines will need to identify contracts for more specific transactions than as described above

as part of their implementation project (for example, unique ticket transactions such as

Japanese net tickets or non-co-branded loyalty partner agreements).

Step 2: Identify performance obligations-biggest changearea


► Evaluate whether multiple promised goods

or services work together to deliver a

combined output(s)

► Assess whether good or service is integrated

with, highly interdependent on, highly

interrelated with, or significantly modifies/

customizes other promises in the contract


Step 1 – Focus on whether the good or

service is capable of being distinct

Customer can benefit from the individual good

or service on its own

Customer can use good or service with other

readily available resources

OR

Step 2 – Focus on whether the good or

service is distinct in the context of the

contract

Two-step model to identify which performance obligations are distinct

Step 2: Identify performance obligations

► Identify unit of account (i.e., specified good or service)

► Determine if entity controls the specified good or service prior to transfer to the customer:

► May be difficult for service contracts

► Consider indicators of being a principal:

► Primarily responsible for fulfillment and acceptability

► Inventory risk before or after transfer to customer

► Discretion in setting the price

► When rights are sold for which the good or service is not specified (e.g., loyalty points), make

determination when the material right is exercised


Principal (gross) Agent (net)

Controls good or service before transferring

to customer

Arranges for another entity to provide good

or service

Step 2: Identify performance obligationsOther aspects: Principal vs. agent considerations

Step 2: Summary of key airline issues




Customer contract Performance obligations Key considerations

Passenger tickets ► Online segment

► Loyalty points

► Interline segments

► Status points

► Individual performance obligation generally

represented by each segment

► Elimination of incremental cost

► Interline segment principal vs. agent

(gross vs. net)

► Loyalty status as a performance obligation vs.

a marketing incentive (valuation issues)

Ancillary services ► Change fees

► Other ancillary fees (bags, and other fees)

► Ancillary services do not represent separate

performance obligations under the standard

(would be classified in pass. revenue)

► Accounting system changes may be needed

► Customer value different from accounting value

► Disclosure

Interline commission

agreements

► Selling a ticket for another carrier ► Principal vs. agent – classification of commission

revenue for the related transactions




Loyalty programs ► Loyalty points

► Status points

► Interline loyalty transactions

► Loyalty status as a performance obligation vs.

marketing incentive (valuation issues)

► Principal vs. agent considerations for interline

loyalty redemptions – timing of evaluation at

redemption

Co-branded credit card

agreements

► Marketing elements – brand and customerlist

► Loyalty points

► Ancillary benefits

► Bounty

► Other

► Identification of performance obligations

► Are ancillary benefits separable in these contracts

as a material right to the customer?

► Optional purchases or variableconsideration?

Cargo agreements ► Airbills

► ACMI and wet lease agreements

► CMI agreements

► Separation of lease and non-leaseelements

► Principal vs. agent considerations for interline

and other intra-modal providers

Regional capacity

purchase agreement

► Aircraft

► Flight services

► Ground services

► Terminals

► Separation of lease and non-leaseelements

► Allocation of variable consideration

► Principal vs. agent considerations for services

provided (primarily ground and terminal)

Step 3: Determine the transaction price



Passenger tickets ► Flight

► Loyalty points

► Status points

► Excise taxes – practical expedient available must apply to

all taxes – election gross vs. net treatment

► Customer’s unexercised rights / refund rights and

impact of ticket validity-Airline’s performance if

customer does not exercise rights

Loyalty programs ► Loyalty points

► Marketing elements: brand and

customer list

► Financing on advance purchases

► Elimination of the residual method for co-branded

credit card arrangements

► Estimating variable consideration – estimates from

contract inception updated periodically forvolumes

Regional capacity purchase

agreements

► Aircraft

► Flight services

► Ground services

► Terminals

► Impact of variable consideration that fluctuatesbased on

flight hours

Step 4: Allocate the transaction price




► Loyalty points

► Status points

► Acceptable valuation methods for point deferrals:

ETV or redemption values

► Loyalty status valuation, if considered a

performance obligation

► Loyalty point required use of deferred revenue;

elimination of incrementalcost


agreements

► Loyalty points


customer list

► Unlimited ancillary services (two free

bags per flight)

► Determine allocation at contract inceptionand update

only for changes in volumes

► Estimating variable consideration related to profit-

sharing components and attribution to elements


agreements

► Aircraft

► Flight services

► Ground services

► Terminals

► Stand-alone selling prices often not observable

► Companies to estimate the selling price of the identified

stand-alone deliverables under thecontract

and allocate

Step 5: Recognize revenue




► Loyalty points

► Status points

► Flight revenues recorded upon lift

► Points – recognized at flight or satisfaction of award (ticket-

to-lift lag on loyalty redemption tickets)

► Timing of commission revenue recognition on interlinesales

► Commissions and selling costs deferral


agreement

► Loyalty points


customer list

► Consideration of ticket-to-lift lag on loyaltyredemptions

► General apply the license model for brand and

customer list recognition – if intellectual property is the

predominant element


agreements

► Flight services

► Ground services

► Recognition over time vs. at a point in time

SummaryKey issues to evaluate


► Based on our assessment to date, the Task Force believes these to be the critical areas most

impacted by the new revenue standard

► Recognition model for invalid tickets, change fees, and true breakage

► Loyalty – valuation model for points – likely elimination of residual method

► Loyalty status

► Reclassification of ancillary revenues to passenger revenue (disclosures)

► Co-brand loyalty related: recognition, valuation, and accounting model changes

► Increased disclosures

► Transition accounting considerations and plans

Page 46 The new revenue recognition standard – impact on the airline industry4

EY aviation industry thought leadership

• The extent and depth of our global Aviation sector teams means we

can provide leading insights into key issues facing our Aviation

clients, as well as our point of view on Aviation matters. Our

Aviation sector team address technical issues, coordinate

knowledge sharing and leverage our vast industry experience for

the benefit of our clients.

• The following topics are examples of the thought leadership which

has been developed by professionals in our Aviation sector group

to share our views and experiences in the industry:

►

►

►

►

►

►

►

►

►

►

►

►

Global airline industry update

US airline industry update

Airline accounting update

Frequent flyer program developments

Airline hedging overview and survey

Airline restructuring activities

Airline asset rationalization and industry

consolidation

Airline IFRS guide

Airline outsourcing and technology

Airline Enterprise Risk Management

Anti-fraudprograms

SOX 404/Internal control

►

►

►

►

►

EY | Assurance | Tax | Transactions | Advisory

About EY

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services. The insights and quality services we deliver help build trust

and confidence in the capital markets and in economies the world

over. We develop outstanding leaders who team to deliver on our

promises to all of our stakeholders. In so doing, we play a critical role

in building a better working world for our people, for our clients and

for our communities.

EY refers to the global organization, and may refer to one

or more, of the member firms of Ernst & Young Global Limited, each

of which is a separate legal entity. Ernst & Young

Global Limited, a UK company limited by guarantee, does not

provide services to clients. For more information about our

organization, please visit ey.com.

Ernst & Young LLP is a client-serving member firm of

Ernst & Young Global Limited operating in the US.

About EY‘s Assurance Services

Our assurance services help our clients meet their reporting

requirements by providing an objective and independent examination

of the financial statements that are provided to investors and other

stakeholders. Throughout the audit process, our teams provide a

timely and constructive challenge to management on accounting and

reporting matters and a robust and clear perspective to audit

committees charged with oversight.

The quality of our audits starts with our 60,000 assurance

professionals, who have the breadth of experience and ongoing

professional development that come from auditing many of the

world’s leading companies.

For every client, we assemble the right multidisciplinary team with

the sector knowledge and subject matter knowledge to address your

specific issues. All teams use our Global Audit Methodology and

latest audit tools to deliver consistent audits worldwide.

© 2016 Ernst & Young LLP.

All Rights Reserved.

1609-2041714

ED None

ey.com


IFRS 16, Leases

Malcolm RamsayPartner,

KPMG

IFRS 16 LeasesImplications for airlines

Malcolm Ramsay

Partner

Asia Pacific Head of Transport

2© 2016 KPMG LLP (Registration No: T08LL1267L), an accounting limited liability partnership registered in Singapore under the Limited Liability Partnership Act (Chapter 163A) and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Singapore.

IFRS 16 LEASES – Implications for airlines

What we are going to discuss today

• What are the new requirements of the leasing standard?

• Top eight issues and opportunities for airlines

• Q&A



New requirements – what has changed?

Off balance sheet

Old standard

New standard

Operating

lease

Service

contracts

Finance

lease

All leases

On balance sheet

Lease

classification

test

The new on/off balance sheet test for lessees – a key judgement area

All leases now on balance sheet with exclusions for low value and short term leases



Lease definition – The new on/off balance sheet judgment area

NoIdentified assets?

Lessee obtains the

economic

benefits?

Lessee directs the

use?

Contract is or

contains a lease

Contract does

not contain a

lease, account

for payments

through P/L

No

No

Yes

Yes

Yes



Initial measurement – Right of use (“ROU”) asset

ROU asset is initially measured as the sum of:

Lease incentives received

PV of

lease

payments

Initial

direct

costs

Prepaid

lease

payments

IFRS 16 does

not specify

whether the

ROU asset is

tangible or

intangible

Estimated costs to dismantle, remove

or restore, measured in accordance

with IAS 37



Initial measurement – Lease liability

Discount

rate

PV of lease payments over the lease term – includes:

Purchase options

Fixed payments less

any lease incentive

receivable

Termination option

penalties

Residual value

guarantees

Certain variable lease

payments



Top eight issues and opportunities for airlines

Issue 1:US dollar liabilities for non US airlines

Issue 2:

Accounting for ROU asset components

Issue 3:

Recognition of lease return costs in the initial ROU asset

Issue 4:

Leases, service contracts or combined contracts – which one is it?

Issue 5:Reviewing your leases annually

Issue 6:Determining your adoption election

Issue 7:Impact on headline financial ratios

Issue 8:Sale and leaseback transactions



Issue 1: US dollar liabilities for non US airlines

Functional currency

ROU Asset

US dollar lease

liability

Movements

taken to P/L

ROU Asset = Lease Liability on Day 1

Exchange movement to P/L over life of

lease

Under a typical 10 year operating lease, all FX exposure moves onto the balance sheet.

Often, airlines have a hedging horizon of 1 to 2 years, resulting in 8 to 9 years of additional

P/L volatility from these lease payments now on the balance sheet

Issue



Issue 2: Accounting for ROU asset componentsProfile of net book value and depreciation of ROU asset – utilizing component accounting for ROU asset

[CELLRANGE] [CELLRANGE][CELLRANGE] [CELLRANGE][CELLRANGE] [CELLRANGE][CELLRANGE] [CELLRANGE]

0

20

40

60

80

100

120

140

160

180

200

220

240

0

50

100

150

200

250

De

pre

cia

tio

n e

xp

en

se

($

)

Ne

t B

oo

k V

alu

e ($

)

Time (years)ROU asset - Aircraft componentROU asset - "Embedded maintenance (e.g. engine overhauls)" componentDepreciation

Capitalized major engine

check for leased asset as

and when they occur

Opportunity to align accounting of “heavy checks” with airline’s owned aircraftOpportunity



Issue 3: Recognition of lease return costs in the initial ROU asset

Initial measurement Subsequent measurement

Estimate of costs to be incurred in restoring the underlying

asset to the condition required by the terms and conditions

of the lease.

Results in the adjustments to ROU asset

Potential for FX movements for lease return costs

only to be taken to the balance sheet

Lease return costs

The ROU asset includes an estimate of costs to “dismantle, remove or restore” the asset.

Basis of measurement – IAS 37 Basis of measurement – IAS 37

Reassessment of return provisions are capitalized into ROU asset and depreciated going forward over

remaining lease term. Opportunity



Issue 4: Leases, service contracts or combined contracts – which one is it?

Lease or service contract

Rights to substantially all of the economic benefits from

use of the identified asset

Scenarios:

Airline check in desks

Key considerations:

Wet leases

Separation of service

components

Substitution rights

Allocation of consideration between

various components

Practical expedient –election by class of

underlying asset

Contracts with airports, aviation service providers (catering, security, ground handling, wet lease providers, etc)

will require review to determine if there is an embedded lease. Issue



Issue 5: Reviewing your leases on an ongoing basis

Annual reassessment of lease liability

Each reporting period requires a reconciliation between lease assumptions and your fleet plan.

No more “set and forget” accounting. Issue



Issue 6: Determining your adoption election

Transition options:

Full retrospective approach

Modified retrospective

approach

Modified retrospective approach: Can choose basis of measurement of ROU asset on a lease-by-lease basis.

The decision on what is the “best” transition choice depends on what metric is chosen for optimization,

directional changes in interest rates over the life to date of the leased portfolio and your communication

strategy with stakeholders

Opportunity




IFRS 16 IFRS 16Full retrospective

Lease liability

IAS 17 (opening retained earnings adjustment)

IFRS 16Modified

retrospective

1 January 2019

Modified retrospective offers considerable relief on transition as it does not result in a

restatement of comparative information. However, communications to stakeholders need

to be carefully managed as financial information is now less comparable.

Issue

Implications on the financial statements:



$8.000

$8.500

$9.000

$9.500

$10.000

$10.500

$11.000

$11.500

$12.000

2016 2017 2018 2019 2020 2021 2022

Total expense under different scenarios

IAS17 Full retro ROU = retro ROU = liability

Discount

rate: 6%

Discount

rate: 4%

2019

2016

$10k per

annum

7 year

lease


However, full retrospective has

the lowest future expense overall.

Modified retro with ROU asset =

retrospective (i.e. as if IFRS 16 had

always been applied) had the lowest

P/L impact in the year of initial

application.



Discount

rate: 4%

Discount

rate: 6%

2019

2016

$8.000

$8.500

$9.000

$9.500

$10.000

$10.500

$11.000

$11.500

$12.000

2016 2017 2018 2019 2020 2021 2022

Total expense under different scenarios

IAS17 Full retro ROU = retro ROU = liability

� Modified retro with ROU

asset = retrospective is

now clearly gives the

lowest future outcome.

Modified retro with ROU asset =

retrospective now clearly gives the

lowest ongoing P/L impact




Issue 7: Impact on headline financial ratios

GearingEBITDA

EPS

(in early years)Net assets Interest cover

Asset turnover

Total assets

RatiosProfit/loss Balance sheet

Issue Whilst you have known for years that capitalization of operating leases is coming, how educated are your

Boards and stakeholders about your own lease portfolio and the implications on your financial statements?

Leased aircraft

Leased property Outsourced ITAirport facilities Wet lease

operations

Ground

support

equipment

Catering

equipmentAirport

security

Trucking

operationsEngines

Customer

contact

centres

Maintenance

facilities

Motor

vehicles



De-recognition of the underlying

asset*

Underlying asset continues to be

recognized

Is there a sale

according to

IFRS15?

Yes No

ROU asset: proportion kept of the

carrying value*

P/L limited to the rights sold*

Transfer proceed is treated as a

financial liability (IFRS 9)

Issue 8: Sale and leaseback transactions

Significant reduction in “Day 1” profits from sale and leaseback transactions as the profits are

reduced by the proportion of the ROU assets retained on balance sheet.

Airline lessees:

*: Adjustments are required if the sale is not at

fair value or lease payments are off-market

Issue

kpmg.com/socialmedia kpmg.com/app

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or

entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as

of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate

professional advice after a thorough examination of the particular situation.

28 September 2016© KPMG LLP (Registration No: T08LL1267L), an accounting limited liability partnership registered in Singapore under the Limited

Liability Partnership Act (Chapter 163A) and a member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Singapore.


What is the Impact of IFRS 15 & 16

Changes on our Accounting?

Thomas EganIndustry Accounting Working Group, Technical Expert,

IATA

IFRS 15, Revenue from Contracts with Customers

IAS 18 (current revenue standard) disclosure requirements were very limited:

An entity shall disclose:

(a) the accounting policies adopted for the recognition of revenue;(b) the amount of each significant category of revenue recognised during

the period, and(c) the amount of revenue arising from exchanges of goods or services

included in each significant category of revenue.


IFRS 15 disclosure requirements cover 20 paragraphs:

The disclosure requirements will require considerably more data to be gathered (especially for loyalty programs) and may require substantial effort to compile, but:

1. they will frequently be easily satisfied with readily availableinformation;

2. many of the requirements will not significantly impact airlines, and3. there is no rigid format and considerable flexibility in terms of

approach.


Still a careful analysis needs to be done as the new requirements will have challenges. For example IFRS 15.120 requires information about:

(a)the aggregate amount of the transaction price allocated to theperformance obligations that are unsatisfied; and(b)an explanation of when the entity expects to recognise the revenue from the unsatisfied obligations.

You need not disclose the information if the performance obligation is part of a contract that has an original expected duration of one year or less.

This would appear to rule out passenger travel obligations, but if part of the contract relates to loyalty programs this prevents the use of this practical expedient.


Under IFRS 16, the disclosure requirements for lessees for operating leases increased

dramatically as you now have a right of use (ROU) asset and a financial liability.

The IASB does not identify the ROU asset as a tangible or an intangibleasset.

A lessee shall disclose information about its leases for which it is a lessee in a

single note or separate section in its financial statements. However, a lessee

need not duplicate information that is already presented elsewhere in the

financial statements, provided that the information is incorporated by

cross-reference in the single note or separate section about leases.

The IASB does not permit “ROU Assets”as a class of assets

under IAS 16 or IAS 38.


IFRS 16, Leases

Option to Not Apply Standard for Short Term and Low Value Leases


If a lessee elects not to apply the requirements of IFRS 16 to either

short-term leases (one year or less) or leases for which the underlying asset is

of low value ($5,000 or less when new), the lessee shall recognise the lease

payments associated with those leases as an expense on either a straight-line

basis over the lease term or another systematic basis. The lessee shall apply

another systematic basis if that basis is more representative of the pattern of the lessee’s benefit.

A lessee shall disclose the following amounts for the reporting period:

a) depreciation charge for right-of-use assets by class of underlying asset;b) interest expense on lease liabilities;c) the expense relating to short-term leases accounted for applying exemption. This

expense need not include the expense relating to leases with a lease term of onemonth or less;

d) the expense relating to leases of low-value assets accounted for applying exemption (not including short-term leases of low-value assets included in (c)


These changes will result in a need to consider changes to systems, process, controls, and data structures as well as reporting formats.

IFRS 16 will involve a major increase in the amount of data required relative to the current cash-based/straight-line approach under IAS 17. Leases for aircraft, buildings, vehicles and equipment will need to be modeled to deal with initial adoption and annual reassessment, as well as other business data needs. This will likely require an IT solution to create the financial reporting information, as well information for the information needs of functions such as budgeting and financial analysis.


Communication of these changes will be critical. It will not just be about numbers, butmessaging and supporting that message clearly and transparently.

The information provided will vary widely from historical data and comparative informationmay not give a picture that as a result of the changes:

• Cash flows have not changed;• Operations have not changed;• Financial obligations have not changed; and• Risks have not changed.

All that has changed is timing and classifications. If you do not provide a full andtransparent narrative, analysts, investors and other users will be left to write the story.


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