Investment in Other Companies

6 Months Ended

Jun. 30, 2012

Investment in Other Companies

Investment in Other Companies

Note H — Investment in Other Companies

In September 2008, the Company entered into an agreement to acquire a 20% interest in Trip Linhas Aereas, a regional airline operating in Brazil (“TRIP”).  As of June 30 2012, the Company’s investment balance in TRIP was $24.1 million, which represented a 20% voting ownership interest in TRIP common stock and a 6% non-voting ownership interest in TRIP preferred stock. In connection with the investment in TRIP, the Company entered into a put option agreement with the majority shareholder of TRIP that allows the Company to put its investment to TRIP’s majority shareholder at an established price based on a 5% annual rate of return over the investment period.

As a subsequent event, on July 12, 2012, the Company sold its interest in TRIP for a price of $42 million.  The purchase price is scheduled to be paid in three installments over a two-year period and may be accelerated upon the occurrence of certain conditions identified in the purchase agreement.  As part of the sale transaction, the Company also received an option to acquire 15.38% of the ownership in Trip Investimentos Ltda., the purchaser of the Company’s TRIP shares.  The option has an initial exercise price per share, the exercise price escalates annually at a specified rate and the Company can exercise the option, in its discretion, between the fourth and sixth anniversaries of the Company’s receipt of the required installment payments from Trip Investimentos Ltda. under the purchase agreement.

On September 29, 2010, the Company invested $7 million for a 30% ownership interest in Mekong Aviation Joint Stock Company, an airline operating in Vietnam (“Air Mekong”). During 2011, the Company invested an additional $3 million in Air Mekong. As of June 30, 2012, the Company’s investment balance in Air Mekong was $2.1 million. These investments were recorded as an “Other asset” on the Company’s consolidated balance sheet. The Company accounts for its interest in Trip and Air Mekong using the equity method of accounting. The Company records its equity in Trip’s and Air Mekong’s earnings on a one-quarter lag. The Company’s portion of the losses incurred by Trip and Air Mekong for the six months ended June 30, 2012 was $5.3 million.