The consolidated financial statements for Carmody Shipping Corporation and Subsidiaries appear below and on the following pages.

Required:
1. Evaluate Carmody Shipping€™s performance in 2009.
2. What were the primary factors responsible for Carmody Shipping€™s loss in 2008 and return to profitability in 2009?
3. How did Carmody Shipping finance the $329,878,000 increase in assets in2009?

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Carmody Shipping Corporation and Subsidiaries Consolidated Statements of Operations Years Ended May 31, 2008 $7,550,060 In thousands, except per share 2009 2007 amounts $7,808,043 $7.688,296 Operating expenses: Salaries and employee benefits $3,807493 $3,637080 3,438,391 Rentals and landing fees Depreciation and amortization Fuel Maintenance and repairs Restructuring charges Other 658,138 579,896 495,384 404,639 (12,500) 1,497,820 672,341 577,157 508,386 404,311 254,000 1473,818 650,001 562,207 663,327 449,394 121,000 1,551,850 S 377,173 $ 22,967 $252,126 Operating income Other income (expenses: $(160,923) (164,315 (181,880) Interest, net Gain on disposition of aircraft 2,832 (8,312) and related equipment 4,633 (17 307) 11,375 Other, net (8,679) Payroll tax loss Other income (expenses), net Income (loss) before Income taxes and (169,79 (211.184 extraordinary loss Provision (credit) for income taxes Income (loss) before Extraordinary $ (203,576) (146,828 (33,046) 40,942 35,044 93,767 $ 109,809 (113,782$5,898 Extraordinary loss, net of tax benefit of $34,287 Net income (loss) (55,943) $ (113,782) $ 5,898 Carmody Shipping Corporation and Subsidiaries Consolidated Balance Sheets (In thousands) ASSETS 2009 2008 Current assets: Cash and cash equivalents Receivable, less allowance for doubtful 78,177 $ 155,456 accounts of $31,308 and $32,074 Spare parts, supplies and fuel Prepaid expenses and other Deferred income taxes 922,727 164,087 63,573 133,875 $1,439,718 899,773 158,062 69,994 Total current assets Property and equipment, at cost $2,843,253 Flight equipment Package handling and ground support $2,540,350 1,413,793 947,913 1,501,250 1352,659 851,686 1,433,212 $6,177,907 equipment Computer and electronic equipment er Less accumulated depreciation and 2,766,610 $3,411,297 amortization Net property and equipment $3,476,268 Other assets: Goodwill Equipment deposits and other assets $ 432,215 444,863 $ 877,078 $5,793,064 $487,780 358,103 845,883 $5,463,186 Total other assets Total assets LIABILITIES AND STOCKHOLDERS EQUITY Current liabilities: $ 133,797 554,111 761,357 $1.,449,265 1,882,279 72,479 717.660 $4,121,683 Current portion of long-term debt $ 155.257 430,130 799,468 Accounts payabl Accrued es Total current liabilities Long-term debt, less current portion Deferred income taxes Other liabilities Total liabilities Common stockholders' equity: 1,797,844 123,715 577,050 Common stock, $0.10 par value, 100,000 shares authorized, 54,743 and 54,100 $ 5,474 699,385 969,515 $1,674,374 ares i Additional paid-in capital Retained earnings 672,727 906,555 $1,584,692 Less treasury stock and deferred com- 4,970 1,579,722 $ 2,993 pensation related to stock plans Total common stockholders' equity Total liabilities and stockholders' equity