Fly the friendly Gilead Sciences skies

Why lease when you can buy?

Looks like Gilead Sciences (GILD) of Foster City is taking that old mantra to heart when it comes to investing in a fleet of new corporate planes. And yes, that’s planes as in plural.

Our friend, Michelle Leder, of generously donated this nugget to the cause. Leder stumbled across it while reading the 10-K that Gilead filed this week:

“In August 2007, as a result of a review of the terms under our existing corporate aircraft leases and upon consideration of the various alternatives available to us upon their expiration, we entered into agreements to purchase three to be constructed aircraft (Purchase Agreements) for delivery in 2010 and 2013. The aggregate purchase price under the Purchase Agreements was $94.2 million. As of September 30, 2007, we have made deposits totaling $4.7 million which has been recorded as other noncurrent assets in our Condensed Consolidated Balance Sheet. Future deposits due under the terms of the Purchase Agreements are as follows: $2.6 million in 2008, $21.2 million in 2009, $28.5 million in 2010, $4.1 million in 2011, $20.7 million in 2012 and $12.4 million in 2013. We have the option to terminate the Purchase Agreements, subject to a maximum payment of 7.5 percent of the fully-equipped price of the aircraft.

The company’s stock is up about 50 percent over the last two years. Surely those new planes will help the stock jump another 50 percent.




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