Airport Security and Ground Handling Equipment in Jordan: A Strategic Reference, 2007

Airport Security and Ground Handling Equipment in Jordan: A Strategic Reference, 2007 Edited by Philip M. Parker, Ph.D...

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Airport Security and Ground Handling Equipment in Jordan: A Strategic Reference, 2007

Edited by

Philip M. Parker, Ph.D. Eli Lilly Chair Professor of Innovation, Business and Society INSEAD (Fontainebleau & Singapore)

www.icongrouponline.com

©2007 Icon Group International, Inc.

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COPYRIGHT NOTICE ISBN 0-497-82337-3 All of ICON Group International, Inc. publications are copyrighted. Copying our publications in whole or in part, for whatever reason, is a violation of copyrights laws and can lead to penalties and fines. Should you want to copy tables, graphs, or other materials from our publications, please contact us to request permission. ICON Group International, Inc. often grants permission for very limited reproduction of our publications for internal use, press releases, and academic research. Such reproduction requires, however, confirmed permission from ICON Group International, Inc. Please read the full copyright notice, disclaimer, and user agreement provisions at the end of this report.

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About Icon Group International, Inc. Icon Group International, Inc.’s primary mission is to assist managers with their international information needs. U.S.-owned and operated, Icon Group has field offices in Paris, Hong Kong, and Lomé, Togo (West Africa). Created in 1994, Icon Group has published hundreds of multi-client databases, and global/regional market data, industry and country publications. Global/Regional Management Studies: Summarizing over 190 countries, management studies are generally organized into regional volumes and cover key management functions. The human resource series covers minimum wages, child labor, unionization and collective bargaining. The international law series covers media control and censorship, search and seizure, and trial justice and punishment. The diversity management series covers a variety of environmental context drivers that effect global operations. These include women’s rights, children’s rights, discrimination/racism, and religious forces and risks. Global strategic planning studies cover economic risk assessments, political risk assessments, foreign direct investment strategy, intellectual property strategy, and export strategies. Financial management studies cover taxes and tariffs. Global marketing studies focus on target segments (e.g. seniors, children, women) and strategic marketing planning. Country Studies: Often managers need an in-depth, yet broad and up-to-date understanding of a country’s strategic market potential and situation before the first field trip or investment proposal. There are over 190 country studies available. Each study consists of analysis, statistics, forecasts, and information of relevance to managers. The studies are continually updated to insure that the reports have the most relevant information available. In addition to raw information, the reports provide relevant analyses which put a more general perspective on a country (seen in the context of relative performance vis-à-vis benchmarks). Industry Studies: Companies are racing to become more international, if not global in their strategies. For over 2000 product/industry categories, these reports give the reader a concise summary of latent market forecasts, pro-forma financials, import competition profiles, contacts, key references and trends across 200 countries of the world. Some reports focus on a particular product and region (up to four regions per product), while others focus on a product within a particular country.



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Table of Contents 1

INTRODUCTION & METHODOLOGY.............................................................................1

1.1

What Does This Report Cover?

1

1.2

How to Strategically Evaluate Jordan

1

1.3

Latent Demand and Accessibility in Jordan

3

2

AIRPORT SECURITY AND GROUND HANDLING EQUIPMENT IN JORDAN .......5

2.1

Latent Demand and Accessibility: Background

5

2.2

Latent Demand: Market Composition

5

2.3

Market Trends

6

2.4

Import Market

9

2.5 The Structure of Competition 9 2.5.1 Competitive Factors ................................................................................................................................. 10 2.5.2 U.S. Presence............................................................................................................................................ 10 2.6

End Users

10

2.7 Accessibility: Market Entry 11 2.7.1 Import Climate ......................................................................................................................................... 11 2.7.2 Distribution and Business Practices ......................................................................................................... 11 2.8

Key Contacts

11

3 FINANCIAL INDICATORS: AIRPORTS, FLYING FIELDS AND AIRPORT TERMINAL SERVICES .............................................................................................................13 3.1 Overview 13 3.1.1 Financial Returns and Gaps in Jordan ...................................................................................................... 14 3.1.2 Labor Productivity Gaps in Jordan........................................................................................................... 16 3.1.3 Limitations and Extensions ...................................................................................................................... 17 3.2 Financial Returns in Jordan: Asset Structure Ratios 18 3.2.1 Overview .................................................................................................................................................. 18 3.2.2 Assets – Definitions of Terms .................................................................................................................. 18 3.2.3 Asset Structure: Outlook .......................................................................................................................... 20 3.2.4 Large Variances: Assets ........................................................................................................................... 21 3.2.5 Key Percentiles and Rankings .................................................................................................................. 24 3.3 Financial Returns in Jordan: Liability Structure Ratios 37 3.3.1 Overview .................................................................................................................................................. 37 3.3.2 Liabilities and Equity – Definitions of Terms .......................................................................................... 37 3.3.3 Liability Structure: Outlook ..................................................................................................................... 39 3.3.4 Large Variances: Liabilities ..................................................................................................................... 40 3.3.5 Key Percentiles and Rankings .................................................................................................................. 43 3.4

Financial Returns in Jordan: Income Structure Ratios


56 ©2007 Icon Group International, Inc.

Contents 3.4.1 3.4.2 3.4.3 3.4.4 3.4.5

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Overview .................................................................................................................................................. 56 Income Statements – Definitions of Terms .............................................................................................. 56 Income Structure: Outlook ....................................................................................................................... 58 Large Variances: Income.......................................................................................................................... 59 Key Percentiles and Rankings .................................................................................................................. 62

3.5 Financial Returns in Jordan: Profitability Ratios 77 3.5.1 Overview .................................................................................................................................................. 77 3.5.2 Ratios – Definitions of Terms .................................................................................................................. 77 3.5.3 Ratio Structure: Outlook .......................................................................................................................... 79 3.5.4 Large Variances: Ratios ........................................................................................................................... 80 3.5.5 Key Percentiles and Rankings .................................................................................................................. 83 3.6 Productivity in Jordan: Asset-Labor Ratios 98 3.6.1 Overview .................................................................................................................................................. 98 3.6.2 Asset to Labor: Outlook ........................................................................................................................... 99 3.6.3 Asset to Labor: International Gaps......................................................................................................... 100 3.6.4 Key Percentiles and Rankings ................................................................................................................ 103 3.7 Productivity in Jordan: Liability-Labor Ratios 116 3.7.1 Overview ................................................................................................................................................ 116 3.7.2 Liability to Labor: Outlook .................................................................................................................... 117 3.7.3 Liability and Equity to Labor: International Gaps.................................................................................. 118 3.7.4 Key Percentiles and Rankings ................................................................................................................ 121 3.8 Productivity in Jordan: Income-Labor Ratios 134 3.8.1 Overview ................................................................................................................................................ 134 3.8.2 Income to Labor: Outlook ...................................................................................................................... 135 3.8.3 Income to Labor: Gaps ........................................................................................................................... 136 3.8.4 Key Percentiles and Rankings ................................................................................................................ 139

4 4.1

MACRO-ACCESSIBILITY IN JORDAN ........................................................................154 Executive Summary

154

4.2 Economic Fundamentals and Dynamics 154 4.2.1 Infrastructure Development.................................................................................................................... 154 4.3 Political Risks 155 4.3.1 Economic Relationship with the United States ...................................................................................... 155 4.3.2 Politics and the Business Environment .................................................................................................. 155 4.3.3 The Political System............................................................................................................................... 155 4.4 Marketing Strategies 156 4.4.1 Agents and Distributors.......................................................................................................................... 156 4.4.2 Pricing Issues.......................................................................................................................................... 156 4.4.3 Franchising Activities............................................................................................................................. 157 4.4.4 Creating a Sales Office........................................................................................................................... 157 4.4.5 Advertising and Trade Promotion .......................................................................................................... 159 4.4.6 Public Sector Marketing......................................................................................................................... 159 4.5 Import and Export Regulation Risks 160 4.5.1 Trade Barrier Risks ................................................................................................................................ 160 4.5.2 Valuations on Imports ............................................................................................................................ 160



Contents 4.5.3 4.5.4 4.5.5 4.5.6 4.5.7 4.5.8 4.5.9 4.5.10 4.5.11 4.5.12 4.5.13

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Licenses Required for Imports ............................................................................................................... 160 Entering Temporary Imports .................................................................................................................. 161 Documentation Required for Trade........................................................................................................ 161 Labeling Issues....................................................................................................................................... 161 Restrictions on Imports .......................................................................................................................... 161 Additional Trade Issues.......................................................................................................................... 162 Controls on Exports................................................................................................................................ 163 Local Standards ...................................................................................................................................... 163 Free Trade Zone Options........................................................................................................................ 163 Adherence to Free Trade Agreements .................................................................................................... 163 Customs Department Contact Information............................................................................................. 164

4.6 Investment Climate 164 4.6.1 Openness to Foreign Investment ............................................................................................................ 164 4.6.2 Conversion and Transfer Policies........................................................................................................... 165 4.6.3 Expropriation and Compensation ........................................................................................................... 165 4.6.4 Dispute Settlement ................................................................................................................................. 166 4.6.5 The Judicial System................................................................................................................................ 166 4.6.6 Performance Requirements and Incentives ............................................................................................ 166 4.6.7 Right to Private Ownership and Establishment ...................................................................................... 168 4.6.8 Protection of Property Rights ................................................................................................................. 168 4.6.9 Transparency of the Regulatory System................................................................................................. 168 4.6.10 Capital Market Risks .............................................................................................................................. 169 4.6.11 Political Violence ................................................................................................................................... 170 4.6.12 Corruption .............................................................................................................................................. 170 4.6.13 Bilateral Investment Agreements ........................................................................................................... 170 4.6.14 OPIC and Other Investment Insurance Programs................................................................................... 171 4.6.15 Labor ...................................................................................................................................................... 171 4.6.16 Foreign Trade Zones and Free Ports....................................................................................................... 171 4.6.17 Qualifying Industrial Zones (Qiz) .......................................................................................................... 172 4.7 Trade and Project Financing 172 4.7.1 The Banking System .............................................................................................................................. 172 4.7.2 General Financing Availability .............................................................................................................. 173 4.7.3 Banks with Correspondent Banking Arrangements ............................................................................... 173 4.7.4 Country Data .......................................................................................................................................... 173 4.8

Travel Risks

174

4.9 Key Contacts 174 4.9.1 U.S. Government Contacts ..................................................................................................................... 174 4.9.2 Jordanian Government Departments ...................................................................................................... 175 4.9.3 Chambers of Commerce and Trade Associations................................................................................... 176 4.9.4 Licensed Banks and the Stock Exchange ............................................................................................... 178 4.9.5 Washington-Based U.S. Government Contacts...................................................................................... 181 4.9.6 Relevant Web Sites ................................................................................................................................ 182

5

DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS .........186

5.1

Disclaimers & Safe Harbor

186

5.2

Icon Group International, Inc. User Agreement Provisions

187



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1 1.1

INTRODUCTION & METHODOLOGY WHAT DOES THIS REPORT COVER?

The primary audience for this report is managers involved with the highest levels of the strategic planning process and consultants who help their clients with this task. The user will not only benefit from the hundreds of hours that went into the methodology and its application, but also from its alternative perspective on strategic planning relating to airport security and ground handling equipment in Jordan. As the editor of this report, I am drawing on a methodology developed at INSEAD, an international business school (www.insead.edu). For any given industry or sector, including airport security and ground handling equipment, the methodology decomposes a country’s strategic potential along four key dimensions: (1) latent demand, (2) micro-accessibility, (3) proxy operating pro-forma financials, and (4) macro-accessibility. A country may have very high latent demand, yet have low accessibility, making it a less attractive market than many smaller potential countries having higher levels of accessibility. With this perspective, this report provides both a micro and a macro strategic profile of airport security and ground handling equipment in Jordan. It does so by compiling published information that directly relates to latent demand and accessibility, either at the micro or macro level. The reader new to Jordan can quickly understand where Jordan fits into a firm’s strategic perspective. In Chapter 2, the report investigates latent demand and micro-accessibility for airport security and ground handling equipment in Jordan. In Chapters 3 and 4, the report covers proxy operating pro-forma financials and macro-accessibility in Jordan. Macro-accessibility is a general evaluation of investment and business conditions in Jordan.

1.2

HOW TO STRATEGICALLY EVALUATE JORDAN

Perhaps the most efficient way of evaluating Jordan is to consider key dimensions which themselves are composites of multiple factors. Composite portfolio approaches have long been used by strategic planners. The biggest challenge in this approach is to choose the appropriate factors that are the most relevant to international planning. The two measures of greatest relevance to airport security and ground handling equipment are “latent demand” and “market accessibility”. The figure below summarizes the key dimensions and recommendations of such an approach. Using these two composites, one can prioritize all countries of the world. Countries of high latent demand and high relative accessibility (e.g. easier entry for one firm compared to other firms) are given highest priority. The figure below shows two different scenarios. Accessibility is defined as a firm’s ease of entering or supplying from or to a market (the “supply side”), and latent demand is an indicator of the potential in serving from or to the market (the “demand side”).



Introduction & Methodology

2

Framework for Prioritizing Countries Demand/Market Potential Driven Firm

High

Highest Priority

High Priority Latent Demand

Moderate Priority Low Priority

Low

Lowest Priority Low

High Relative Accessibility

Accessibility/Supply Averse Firm High Highest Priority High Priority Latent Demand

Moderate Priority Low Priority Lowest Priority

Low High

Low Relative Accessibility



Introduction & Methodology

3

In the top figure, the firm is driven by market potential, whereas the bottom figure represents a firm that is driven by costs or by an aversion to difficult markets. This report treats the reader as coming from a “generic firm” approaching the global market – neither a market-driven nor a costdriven company. Planners must therefore augment this report with their own company-specific factors that might change the priorities (e.g. a Canadian firm may have higher accessibility in Canada than a German firm).

1.3

LATENT DEMAND AND ACCESSIBILITY IN JORDAN

This report provides a detailed overview of factors driving latent demand and accessibility for airport security and ground handling equipment in Jordan. Latent demand is largely driven by economic fundamentals specific to airport security and ground handling equipment. This topic is discussed in Chapter 2 using work carried out in Jordan on behalf of American firms and authored by the United States government (typically commercial attachés or similar persons in local offices of the U.S. Department of State). I have included a number of edits to clarify the information provided. Latent demand only represents half of the picture. Chapter 2 also deals with micro-accessibility for airport security and ground handling equipment in Jordan. I use the term “micro” since the discussion is focused specifically on airport security and ground handling equipment. Chapter 3 is also a stand-alone report that I have authored. It covers proxy pro-forma financial indicators of firms operating in Jordan. I use the word “proxy” because the provided figures only cover a “what if” scenario, based on actual operating results for firms in Jordan. The numbers are only indicative of an average firm whose primary activity is in Jordan. It covers a vertical analysis of the maximum likelihood balance sheet, income statement, and financial ratios of firms operating in Jordan. It does so for a particular Standard Industrial Classification (SIC) code. That code covers “airports, flying fields and airport terminal services”, as defined in Chapter 3. Again, while “airports, flying fields and airport terminal services” does not exactly equate to “airport security and ground handling equipment”, it nevertheless gives an indicator of how Jordan compares to other countries for a proxy adjacent category along various dimensions. Chapter 4 deals with macro-accessibility and covers factors that go beyond airport security and ground handling equipment. A country may at first sight appear to be attractive due to a high latent demand, but it is often less attractive when one considers at the macro level how easy it might be to serve that entire potential and/or general business risks. While accessibility will always vary from one company to another for a given country, the following domains are typically considered when evaluating macro-accessibility in Jordan: •

Openness to Trade in Jordan

•

Openness to Direct Investment in Jordan

•

Local Marketing and Entry Strategy Alternatives

•

Local Human Resources



Introduction & Methodology •

4

Local Risks

Across these domains, a number of not-so-obvious factors can affect accessibility and risk. These are covered in the Chapter 4, which is a general overview of investment and business conditions in Jordan. Chapter 4 is also presented from the perspective of an American firm, though is equally applicable to most firms entering Jordan. This chapter is also authored by local offices of the U.S. government, as is Chapter 2. Likewise, I have included a number of edits to clarify the provided information as it relates to the general strategic framework mentioned earlier.



5

2 2.1

AIRPORT SECURITY AND GROUND HANDLING EQUIPMENT IN JORDAN LATENT DEMAND AND ACCESSIBILITY: BACKGROUND

Air transport plays an important role in Jordan, which has heavily invested in tourism projects over the past decade. Thus, it is important for destinations to be linked—as directly, rapidly, frequently, inexpensively, and most importantly safely as possible—by means of air transport. Jordan has three airports Queen Alia International, Amman International, and King Hussein International Airports. The air transport sector has become a vital mean of passenger, goods, and mail movement in Jordan and Queen Alia International plays a significant role as a regional hub, with 60% of passengers catching connecting flights through it. In 2005, the number of passengers traveling through Jordan’s airports exceeded 3 million passengers, with an average annual increase of nearly 11% over the past few years1. The Jordan Civil Aviation Authority has single and multiple-airline bilateral air agreements with over 75 countries, including the recently-signed open skies deal with the U.S. The continuous growth in cargo and passenger volumes traveling through Jordanian airports in recent years, and the estimated growth that will result from the ongoing major real estate and tourism investments warrants the upgrade of Jordanian airports’ equipment. This trend, coupled with the events of September 11, 2201, the November 2005 hotel bombings in Amman and other recent terrorist attempts in airports around the world warrant upgrades in security equipment and ground handling equipment. Improvements needed not only concern support equipment, but also the services and management fields. With the worldwide crisis of September 11, 2001, the whole scenario of air transportation suffered a sharp change, as much more concern was placed on security and safety issues, border security, including airport security and safety today is at the top of the Jordanian Government’s, in particular the Ministry of Transportation’s, investment list. All such equipment in Jordan is currently imported, either directly or through representative dealers in Jordan. The Government of Jordan continues to liberalize trade regulation. U.S. companies are encouraged to appoint technically strong agents and distributors to sell their products and technologies in Jordan, and participate in leading trade exhibitions to create market and product exposure.

2.2

LATENT DEMAND: MARKET COMPOSITION

This report focuses on the market trends mainly for airport security and ground handling equipment including X-ray machines for luggage, X-ray machines for vehicles and trucks, hand held inspection machines, walk through detectors, explosive detection machines, containers for explosive detonation, complete inspection stations, conveyor belts, luggage handling, customs inspection, and other types of equipment. The Jordan Civil Aviation Authority (JCAA) falls under the jurisdiction of the Ministry of Transport (MoT) and is responsible for safely and securely developing, managing, and operating the civil aviation airports and airspace in Jordan. JCAA can be considered as the equivalent of the U.S. Federal Aviation Administration. JCAA is responsible for purchasing all safety and security equipment at Jordanian airports through its Purchasing and Supplies Department. In 2004 and 2005, the Jordanian market for airport security equipment generated barely just over $500,000 in revenues2. This was mainly in the form of basic luggage X-ray machines, walk through detectors, and containers for explosive detonation. However, anticipated revenues for airport security and other airport equipment needs for the 1. Jordan Ministry of Transport 2. Jordan Civil Aviation Authority-Purchasing and Supplies Department



Airport Security and Ground Handling Equipment

6

next 2 to 3 years are expected to exceed $100 million. The reason for the significant jump is two-fold; the terrorist attacks on three hotels in Amman on November 9th, 2005, and the proposed expansion of the Queen Alia International Airport, which is expected to be tendered in early 2007. Since the November 2005 bombings in Amman, security measures at Jordanian airports have significantly increased and are given utmost urgency at levels as high as the Royal Palace. A national committee headed by HRH Prince Faisal has identified the security equipment needs for the three main airports and the Royal Jordanian Terminal Facility in Amman3 over the next two years. The equipment currently used at Jordanian airports is conventional and mainly includes include metal detectors that do not allow detection of explosives or explosive material traces. Color differential equipment has just recently been introduced, however, it requires advanced experience by the users in order to identify and distinguish explosive devices and materials. Security at Jordan’s airports is mainly handled by the Public Security Directorate and the Jordanian Armed Forces. In terms of ground handling equipment, Royal Jordanian Airlines (RJ), the national airline, has a concession from the JCAA, for all luggage ground handling activities4. RJ has just started to introduce a new integrated baggage management system based on the IBM Web Sphere software platform. Such system will allow them to manage baggage handling processes by using wireless hand-held devices for screening baggage at the check-in counters where information on the passenger is captured by the wireless device and transmitted via the Web to the main system. The implementation of such a management system results in a need for equipment that is compatible and capable of implementing such advanced technology. In addition to airports, several entities are using security equipment following the November 2005 bombings. This includes hotels, restaurants, shopping centers, movie theaters, embassies, and others. Accurate data related to the overall security equipment market size and imports for such end users are not available. Therefore, the market data for end users other than airports are unofficial estimates based on discussions with leading industry specialists in the Kingdom. In addition to equipment, there is a bill currently under review of the parliament that allows the JCAA to form a Civil Aviation Regulatory Commission. Once formed, the services of the JCAA would be privatized, possibly by the establishment of state owned enterprises (SOE’s). Tentatively, there are thoughts on forming a Jordanian Airports Company, a Civil Aviation Company, and others. The proposed Civil Aviation Regulatory Commission would regulate the industry, while those SOE’s would implement. It is highly possible that such SOE’s would that would then issue service contracts to the private sector. Considering the limited capacity of Jordanian companies to assume some of those services, there is significant potential for U.S. companies that specialize in civil aviation and airport management.

2.3

MARKET TRENDS

There are three main airports in Jordan. The Amman Marka International Airport (AMIA) was established by the British as a joint military civilian airport in 1950. It grew quickly afterwards to become Jordan’s only international gateway, but flight activity significantly reduced at Amman Airport after the completion of the Queen Alia International Airport (QAIA) in 1983. It currently serves an average of 50 to 60 thousand passengers per year, and most of the flights are to Gaza, Aqaba, Tel-Aviv, Haifa, and to some Red Sea resorts. Due to its location in a saturated urban area, there are no plans for expanding it. On the contrary, the Ministry of Transport is considering suspending all civil activities and converting it for military purposes.

3. This is a passenger terminal inside Amman that serves Royal Jordanian passengers only. Passengers can check themselves and their luggage in facility before going to the airport 4. RJ handles luggage for all airlines using Jordan airports except the Saudi Airlines




7

The King Hussein International Airport (KHIA) in Aqaba was established in 1972 for domestic flights to assist in the development of the Aqaba region. It serves nearly 130,000 passengers annually. This airport is expected to witness a significant increase in air traffic as a result of transforming Aqaba into a special economic zone, and following the completion of ongoing real estate development projects, which would lead to an increase in the tourism and business activity. KHIA also handles a large number of training flights, which together account for more than half the airport’s aircraft movements. It has a 2,600 square meter passenger terminal, and no expansion activities are planned in the near future. The QAIA was built to accommodate growth in air traffic with a capacity of 4 million passengers per year. The current number of passengers passing through the airport reached exceeds 3 million per year and cargo exceeds 100,000 tons. QAIA’s capacity has to be increased for Jordan to assume a role as a Middle Eastern hub airport. QAIA features two ll.S Cat ll-equipped 3,660x61-meter runways linked by the passenger terminals, cargo terminal, maintenance hanger, central utility building and other structures. Two 31,000 square meter, three-storey terminals are connected by a second-level retail concourse. Each terminal offers a full range of services, including immigration, catering and a growing number of privately-run concessions. Plans are currently underway for a threeyear, 90,000-square-metre expansion project aimed at upgrading the airport to meet the expected increase in passenger traffic over the next 30 years. The expansion is being contracted on a BOT basis to construct a new terminal. The construction of the new terminal at the QAIA is part of Jordan’s plans to become a regional financial, trade and transport hub. The $300 million project, planned for completion in 2010, is expected to generate demand for airport security and other airport equipment needs exceeding $120 million. On the shorter term, the GoJ’s ongoing initiatives to upgrade security equipment at all Jordanian airports and auxiliary service centers is expected to trigger immediate needs of airport security and luggage handling equipment in the value of $20 million. Equipment needs for upgrading security equipment at airports and for the QAIA expansion project include the following: •

Miscellaneous mechanical equipment.

•

Communication equipment.

•

Baggage handling equipment.

•

Lifts and Travelators.

•

Baggage claim equipment.

•

Customs inspection equipment.

•

Security equipment.

•

Check-in equipment.

•

Pre-Boarding Security equipment.

•

Personnel screening equipment.

•

Hand Held Inspection Devices.

•

Passenger walk-thrus.

•

Luggage X-Ray Machines.

•

Truck X-Ray Machines.

•

Explosive detonation containers.

•

3-D X-Ray Machines.

•

Vehicle Inspection.



Airport Security and Ground Handling Equipment •

Truck Inspection.

•

Vehicle X-Ray Machines.

8

Anticipated Equipment Needs for the QAIA Expansion Project Source: Ministry of Transport

50.0 40.0 30.0 20.0

Personnel Screening

Pre-Boarding Security

Check-in

Security

Customs Inspection

Baggage Claim

Lifts and Travelators

Baggage Handling

0.0

Communication

10.0

Mechanical

Estimated Value ($ Million)

60.0

Type of Equipm ent




9

Anticipated Equipment Needs for Upgrading Airport Security Source : Civil Aviation Authority Total Es tim ate d Value $21 m illion

100 80 60 40

Vehicle X-Ray Machines

Truck Inspection

Vehicle Inspection

3-D X-Ray Machines

Explosive detonation containers

Truck X-Ray Machines

Luggage X-Ray Machines

0

Passenger walk-thrus

20

Hand Held Inspection Devices

Number Required

120

Type of Se curity Equipm e nt

2.4

IMPORT MARKET

Relative to the aforementioned equipment needs, the Jordanian industry is capable of meeting some requirements. Local industries can compete for the need for elevators and escalators for example. But there is a need to import high technology and sophisticated products and systems, especially in the development and implementation of up-todate safety and security devices and systems. Security equipment imported by the JCAA in 2004 and 2005 were mainly German products manufactured by Heimann Smith, a leading manufacturer of X-Rays systems. The values of such imports was around $500,000 in those two years, but with the recent developments in security conditions and ongoing projects, is expected to grow to over $100 million in the next 3 to 4 years.

2.5

THE STRUCTURE OF COMPETITION

The U.S. security and safety industry was one the quickest industries to respond to worldwide efforts to improve security and safety products. Thus, the U.S. market position in the sector has improved and has further possibilities, as its technological leadership in advanced products and quality standards is recognized and highly regarded. It is worth mentioning that during the JCAA’s transactions for airport security equipment in 2004 and 2005, the armed forces objected to the procurement of German products and requested a justification as to why U.S. products were not purchased. It was not until JCAA provided documentation that Heimann Smith products are used in some




10

U.S. airports that the transaction was approved. Therefore, U.S. manufacturers have opportunities in the Jordanian market for this specialized sector where state of the art technology is needed.

2.5.1

Competitive Factors

Good after sales service and support are considered essential, especially for high tech and sophisticated products. Although English is widely used among sector specialists in Jordan, Arabic language capabilities can be a useful plus especially for technician training purposes. Being mostly governmental entities, Jordanian end-users consider cost, prompt delivery and medium-to-long term credit terms of significant importance in purchasing decisions.

2.5.2

U.S. Presence

In general, all U.S. products are well accepted in Jordan, but they are perceived as high-priced products. The upcoming airport expansion project, and the ongoing need for improved security and baggage management equipment sets the stage for U.S. manufacturers for entry into the market. U.S. manufacturers and engineering firms are highly regarded for their professionalism and proven experience. Several U.S. companies are already active in the region such as Auto Clear U.S., Hewlett-Packard, Honeywell, Automated Logic Corporation, Teledyne Brown Engineering, Rapidscan, Invision Technologies, IBM and others that have earned excellent reputations in the region. This should facilitate entry into the Jordanian market, for firms with an established presence in the region, should help them improve the competitiveness of their prices.

2.6

END USERS

The Government of Jordan has high ambitions for the Kingdom to become a regional hub. For this reason, airport security and all other related services is a top priority for the development of Jordan’s transport sector. The government, the future operators of the airport expansion project, and the national carrier (RJ) are the largest end-users of airport security and luggage handling equipment. In addition, several private and public sector entities are using security equipment following the November 2005 bombings. This includes hotels, restaurants, shopping centers, movie theaters, embassies, ministries, and others. All such entities are also considered end-users of security equipment such as X-Ray machines and walk through metal detectors. The Army, the Royal Air Force, and the Public Security Directorate were not included in this market research; however, they would constitute a major end user of such equipment. For example, land entry border points with Iraq, Syria, Saudi Arabia, and Israel are in significant need of sophisticated and up to date security equipment. Shall the idea of forming a Civil Aviation Regulatory Commission go through, then the SOE’s resulting from it would also be potential end users for the services of U.S. companies that specialize in civil aviation and airport management.




2.7 2.7.1

11

ACCESSIBILITY: MARKET ENTRY Import Climate

Generally speaking, the Jordanian market is very favorable towards imports, especially those from the United States, which has been historically one of the major suppliers not only in security and safety equipment and systems, but also in a wide range of airport engineering and services. There are no particular restrictions or barriers to imports of U.S. products.

2.7.2

Distribution and Business Practices

The Jordanian market for airport safety and security products mainly consists of a number of governmental institutions including the armed forces and the Public Security Directorate. These entities and the JCAA are responsible for all aspects of purchases and contracts. Usually, tender notices are published in the major national press and notice of, and information about, tenders are given without discrimination to both foreign and domestic suppliers. However, procurement practices sometimes cause difficulties for foreign suppliers, who are advised to establish business agreements with local representatives. U.S. companies who wish to enter the Jordanian market should appoint a local agent or distributor. It is important to appoint a local agent who can deal with problems related to communications, bureaucratic procedures, local business practices and marketing. It is also highly recommended that interested U.S. suppliers contact the 6 consortia that were recently short-listed for the Queen Alia Expansion project considering the significant equipment needs of the project. The names of those consortia are included in the following contacts section. U.S. suppliers interested in working with armed forces are encouraged to contact the King Abdullah II Design and Development Bureau (www.kaddb.com), which is a Jordanian research and development facility created to provide a one-stop solution for the supply of defense and commercial equipment optimized to the requirements of the Middle East that has recently been heavily involved in security related issues in the Kingdom.

2.8

KEY CONTACTS

Ministry of Transport P.O. Box 35214 Amman 11180 Jordan Tel: +9626 5518111 Fax: +9626 5527233 www.mot.gov.jo Contact: Engineer Amer Haddidi, Secretary General Jordan Civil Aviation Authority P.O. Box 7547 Amman 11110, Jordan Tel: +962 6 4895331 Fax: +962 6 4892065 www.jcaa.gov.jo Contact: Ali Khob, Purchase and Supply Director




12

Royal Jordanian Airlines Housing Bank Commercial Center Queen Noor St. P.O. Box 302 Amman 11118 Jordan Tel: +962 6 520-2000 Fax: +962 6 5688624 www.rja.com.jo Contact: Samer Abdul Rahim, Purchase Director King Abdullah II Design and Development Bureau P.O. Box 928125 Amman, 11190, Jordan Tel: +962 6 5627201 Fax: +962 6 5627203 www.kaddb.com Contact: Lt. Omar Mayatah



13

3 3.1

FINANCIAL INDICATORS: AIRPORTS, FLYING FIELDS AND AIRPORT TERMINAL SERVICES OVERVIEW

Is Jordan competitive? With the globalization of markets, the increased mobility of corporate assets, and the need for productive human resources, this question has become all the more complex to answer. The financial indicators section was prepared to tackle this question by focusing on certain fundamentals: financial performance and labor productivity. Rather than focus on the economy as a whole, the analysis presented here considers only one sector: airports, flying fields and airport terminal services. We are essentially interested in the degree to which firms operating in Jordan have fundamentally different financial structures and performance compared to firms located elsewhere. With respect to this view of competitiveness, if one were to invest or operate in Jordan, how would the firm’s asset structure likely vary compared to a firm operating in some other country in The Middle East or average location in the world? In Jordan, do firms typically hold more cash and other short term assets, or do they concentrate their assets in physical plant and equipment? On the liability side, do firms operating in Jordan have a higher percent of payables compared to other firms operating in The Middle East, or do they hold a higher concentration of long term debt? The structure of the income statement is also telling. Do firms operating in Jordan have relatively higher costs of goods sold, operating costs, or income taxes compared to firms located elsewhere in the region or the world in general? Are returns on equity higher in Jordan? Are profit margins greater? Are inventories held longer? The financial indicators section was designed to answer these and similar questions that naturally affect one’s decision to invest or operate in Jordan. Again, we are particularly interested in airports, flying fields and airport terminal services, and not the economy as a whole. In many instances, people make all the difference. In addition to financial competitiveness, we consider the extent to which labor deployment and productivity in Jordan differs from regional and global benchmarks. In this case, we are interested in the amount of labor required to operate a typical business in Jordan and the likely returns on this human investment. What is the typical ratio of short-term and long-term assets to employee (employed in airports, flying fields and airport terminal services operations)? What are typical capital-labor ratios? How different are these ratios to those in The Middle East in general and the world as a whole? What are the average sales and net profits per employee in Jordan compared to regional benchmarks? The goal of this section is to assist managers in gauging the competitive performance of Jordan at the global level for airports, flying fields and airport terminal services. With the globalization of markets, greater foreign competition, and the reduction of entry barriers, it becomes all the more important to benchmark Jordan against other countries on a worldwide basis. Doing so, however, is not an obvious task. This report generates international benchmarks and measures gaps that might be revealed from such an exercise. First, data is collected from companies across all regions of the world. For each of these firms, data are standardized into comparable categories (assets, liabilities, income and ratios), by country, region and on a worldwide basis. From there, we eliminate all currency effects by standardizing within each category. Global benchmarks are then compared to those estimated for airports, flying fields and airport terminal services in Jordan. Though we heavily rely on historical performance, the figures reported are not historical but are forecasts and projections for the coming fiscal year.



Financial Indicators

3.1.1

14

Financial Returns and Gaps in Jordan

The approach used in this report to evaluate operating performance for airports, flying fields and airport terminal services in Jordan is called "vertical analysis." For those unfamiliar with this type of analysis, frequently taught in graduate schools of business, the reader is recommended Jae K. Shim and Joel G. Siegel’s recent book titled Financial Management.5 In their discussion of financial statement analysis and ratios, Skim and Siegel (p. 42-43), describe common-size statement (vertical analysis) as follows: A common-size statement is one that shows each item in percentage terms. Preparation of common-size statements is known as vertical analysis, in which a material financial statement item is used as a base value and all other accounts on the financial statement are compared to it. In the balance sheet, for example, total assets equal 100 percent, and each individual asset is stated as a percentage of total assets. Similarly, total liabilities and stockholders’ equity are assigned a value of 100 percent and each liability or equity account is then stated as a percentage of total liabilities and stockholders’ equity, respectively. … For the income statement, a value of 100 percent is assigned to net sales, and all other revenues and expense accounts are related to it. It is possible to see at a glance how each dollar of sales is distributed among various costs, expenses, and profits. The authors suggest that vertical analyses involve industry-based comparisons. Such a comparison “allows you to answer the question, ‘How does a business fare in the industry?’ You must compare the company’s ratios to… industry norms.” (p. 43-44) This approach is extended to country competitiveness (in this case Jordan) for a particular sector (in this case airports, flying fields and airport terminal services). This involves calculating country, regional and global norms. This introduction will describe the seven-stage methodology used to perform this analysis. Each stage should be seen as a working assumption behind the numbers presented in later chapters. Stage 1. Industry Classification. This stage begins by classifying the company into an industry. For this, we have relied on a combination of the North American Industry Classification System (NAICS pronounced “Nakes”), a relatively new system for classifying business establishments, and the older Standard Industrial Classification (SIC) system. Adopted in 1997, NAICS codes are the new industry classification codes used by statistical agencies of the United States. NAICS was developed jointly by the U.S., Canada, and Mexico to provide comparability in statistics about business activity across North America. After 60 years of service, the outdated SIC system was retired on October 1, 2000, leaving only the NAICS codes for official use. The NAICS classification system adds some 350 new industries and represents a revision to over 60% of the previous SIC industries. Despite its official retirement, the SIC system is still commonly used (and often reported in firm’s financial statements). For most companies in the world, classification within either the new NAICS or older SIC systems is a rather straight forward exercise. For some, however, it can be problematic. This is true for several reasons. The first being that the SIC or NAICS classification systems are rather broad for many product and industry categories (a firm’s products or services may be only a minor aspect of the classification’s definition). The second is that some firms’ activities span multiple codes. Finally, it is possible that a firm is classified by one source using its SIC code, and by another using its NAICS code, and by a third using both. Furthermore, some sources do not report either code, but instead use qualitative statements of the firm’s activities. Nevertheless, if one wishes to pursue a vertical analysis, some classification needs to take place which selects a peer group. In making this classification, one can rely on a number of sources. In some countries, firms must “self” classify in official periodic reports (e.g. annular reports, 10Ks, etc.) to public authorities (such as the Securities and Exchange Commission). These reports are then open for public scrutiny (e.g. EDGAR filings). In other cases, commercial data vendors or private research firms provide SIC/NAICS codes for specific companies. These include: •

Bloomberg - www.bloomberg.com

•

Datastream (Thomson Financial) - www.datastream.com

5

Skim and Siegel (2000), Financial Management published by Barron’s Educational Series, Inc. (BARON’S BUSINESS LIBRARY Series), ISBN: 0-7641-1402-6. www.icongrouponline.com


Financial Indicators •

15

Dun & Bradstreet - www.dnb.com

•

Hoovers - www.hoovers.com

•

HarrisInfoSource - www.HarrisInfo.com

•

InfoUSA - www.infousa.com

•

Investext (Thomson Financial) - www.investext.com

•

Kompass International Neuenschwander SA. – www.kompass.com

•

Moody's Investors Service - www.moodys.com

•

Primark (Thomson Financial) - www.primark.com

•

Profound (The Dialog Corporation – A Thomson Company) - www.profound.com

•

Reuters - www.reuters.com

•

Standard & Poor's - www.standardandpoors.com

It is interesting to note that commercial vendors often report different qualitative descriptions and industrial classifications from one to another. These descriptions and classifications may also be different from those reported by the firm itself. Anyone hoping to perform a benchmarking study, therefore, has to make a judgment call across these various sources in order to determine a reasonable classification. In this report, we have decided a metaanalytic process, by combining various sources (including linking a classification’s keywords to qualitative descriptions of the firm’s product line). In cases of inconsistency, the most recent or globally comparable available is chosen. Again, the overall goal is to classify firms, which either produce similar products, offer similar services, or are in the same stage of the value chain for a particular industrial classification. In the case of this report, the SIC code selected is: 458;4581; which is defined as “airports, flying fields and airport terminal services”. This classification should be seen as a working assumption. In order to obtain a more detailed discussion of this classification, the reader is referred to the Web sites developed by the U.S. Census Bureau: http://www.census.gov/epcd/www/naics.html. Basic definitions and descriptions are provided at: http://www.census.gov/epcd/www/drnaics.htm#q1. A full correspondence table between SIC and NAICS codes, and detailed definitions are given at http://www.census.gov/epcd/www/naicstab.htm. Stage 2. Firm-Level Data Collection. A global search was conducted across over 20,000 companies in over 40 major economies, including Jordan, for those that report financials (balance sheet and income statements) and that are involved in airports, flying fields and airport terminal services. It should be noted that the public-domain financials can be either historic or projections. It should also be noted that even historic figures can be modified in the future and often represent “estimates” of performance. Stage 3. Standardization. Once collected, public domain financial figures of firms identified in Stage 2 are standardize into comparable categories (assets, liabilities, and income). Again, these are limited to firms involved in some aspect of airports, flying fields and airport terminal services (i.e. are members of the value chain). From there, we eliminate all currency effects by standardizing within each category (creating ratios). In order to maintain comparability over time and across countries, vertical analysis is used. In the case of a firm’s assets, we treat the total assets as equaling 100, irrespective of the value of the local currency. All other assets are then calculated as a percent of total assets. In this way, the structure of the firm’s assets can be easily interpreted and compared with international benchmarks. For liabilities, total liabilities and equity are indexed to equal to 100. For the income statement, total revenue is indexed to equal 100, and all other figures are calculated as a percent of these figures. Stage 4. Filtering. Not all the firms selected in Stage 2 or the ratios calculated in Stage 3 are used for the country, regional or global benchmarks, as a number of companies are purposely dropped from the analysis. This is justified by the “outlier” phenomenon that plagues such analysis. The problem lies in that any given company in the benchmarking pool may be facing some exceptional event or may be organized in an exceptional way so as to make its ratios vastly different from the norm. By including such firms, the global benchmarks can be overly skewed. In many countries, firms are organized into holding groups. These groups nominally have very few employees (e.g. 4




16

to 25 employees), but have extremely large assets, liabilities, or revenues. As such, the inclusion or exclusion of firms having this form of management can affect the ratios and benchmarks reported. Likewise, some firms have no net sales, no assets, no liabilities, or ratios. Others have ratios that appear implausible for a normal or viable company. In order to not allow these firms to affect the global benchmarks, only those firms with reasonable financials have been chosen. Finally, in some countries, detailed financials are not available or are not comparable to either the company in question or the global norm (e.g. various forms of depreciation). In this case, only those which exist and are comparable are reported. The details, therefore, that comprise a given ratio or set of ratios may not be reported. This may lead to the addition of several ratios, not summing to the whole. Stage 5. Calculation of Global Norms. Once the filtering process has eliminated outliers, a final list of companies included is compiled. Based on this list, the ratios discussed in Stage 3 are calculated for every firm, and then averaged to create country, regional and global benchmarks. The world average is calculated using each country’s population as a weight. Stage 6. Projection of Deviations. The goal of this report is not only to estimate raw ratios or averages, but also to present the difference between Jordan and projected global averages for that same ratio. Furthermore, it can be insightful to know the location of each ratio within the distribution of the countries represented in Stage 5. These deviations, in fact, can be seen as projections or likely scenarios for the future. This is often true for two reasons. First, while a company’s financials change from year to year, its ratios are often stable. This is especially true for the country, regional and global benchmarks which represent averages across companies. From a purely Bayesian sense, the difference between the company’s recent ratios and the benchmarks are a reasonable prior for future deviations. This is true, even if the entire industry is hit by an external or exogenous shock, such as an oil crisis or economic slowdown. In other words, we assume that the structure of the variance in the industry’s financials remains stable. Second, many of the data are based on preliminary reports that might be changed in future filings. As forecasts, therefore, the numbers derived from these are also forecasts of past and future performance (with associated uncertainties). The calculation of the difference between a country’s ratios and the global benchmarks is meant to yield roughly approximate forecasts, or "useful measures". In general, more developed countries have more reliable source data. For many, ratios are econometrically extrapolated using models that use country characteristics (e.g. income per capita) as independent variables (i.e. countries having similar economic structures are assumed to have similar operating ratios). Again, the forecasts are based on the assumption of relative stability. This assumption has proven extremely robust in previous applications of this methodology (i.e. today’s weather is a good predictor of tomorrow’s weather, but not the weather three years from now). The results reported should be viewed as those for a “proto-typical” firm operating in Jordan whose primary activity is airports, flying fields and airport terminal services. Stage 7. Projection of Ranks and Percentiles. Based on the calculation of deviations, relative ranks and percentiles are calculated across the firms used in the benchmarks. The percentile estimates the percent of a representative sample of countries in the world having values of the ratio lower than Jordan. It is important to note that a percentile being high (or low) does not mean good (or bad) past, present or future financial performance. The reader must draw this conclusion on their own. The estimates provided were created to provide managerial insight, and not a recommendation with respect to particular investments within any country. We graphically report, for each part of the financial statement, the larger structural differences between Jordan and the regional and global benchmarks, and provide a summary table of ranks and percentiles. These are estimates for firm which would be involved in airports, flying fields and airport terminal services. A deviation from the global norm need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or perhaps signal a country's relative strength or weakness for the coming fiscal year.

3.1.2

Labor Productivity Gaps in Jordan

In the case of labor productivity measures, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected www.icongrouponline.com



17

using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. The seven stage approach given above is used in a similar manner. We then report, for each part of the financial statement, the larger labor productivity gaps that Jordan has vis-à-vis the worldwide average (for airports, flying fields and airport terminal services). Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.

3.1.3

Limitations and Extensions

Shim and Siegal (p. 60) stress that “while ratio analysis is an effective tool for assessing a company’s financial condition,” operating Jordan or any other country, “its limitations must be recognized.” They find that (p. 59) “no single ratio or group of ratios is adequate for assessing all aspects of a company’s financial condition” operating in a particular country. The authors note the following limitations associated with ratio analyses which apply to the global benchmarking and vertical analysis presented here (p.60): •

Accounting standards or policies may limit useful comparisons across companies

•

Management accounting practices across companies and countries may not be performed in the same style

•

Ratios are static and do not reveal future trends

•

Ratios do not indicate the quality of the components used to calculate the ratios (i.e. ratios have ambiguous interpretations)

•

Reported ratios may not reflect real values

•

Companies may be highly diversified, limiting the comparability of their ratios to others

•

Industry averages or norms are approximate; finer industry definitions may be required for certain interpretations or comparisons

•

Financial statements and resulting ratios often mean different things to different people depending on their points of view or motivations.

Again, all figures reported here are estimates, so due caution is required. The above caveats, and the fact that statements made in this report are forward-looking, requires that this point be emphasized. A number of intervening factors can have material effect on the ratios and variances forecasted. These include changes in a company's management style, exchange rate volatility, changes in accounting standards, the lack of oversight or comparability in accounting standards, changes in economic conditions, changes in competition, changes in the global economy, changes in source data quality, and similar factors.




3.2 3.2.1

18

FINANCIAL RETURNS IN JORDAN: ASSET STRUCTURE RATIOS Overview

In this chapter we consider the asset structure of companies involved in airports, flying fields and airport terminal services operating in Jordan benchmarked against global averages. The chapter begins by defining relevant terms. A common-size statement, or vertical analysis of assets is then presented for companies operating in Jordan and the average global benchmarks (total assets = 100 percent). For ratios where there are large deviations between Jordan and the benchmarks, graphics are provided (sometimes referred to as a financial “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis asset ratios are highlighted across countries in the comparison group.

3.2.2

Assets – Definitions of Terms

The following definitions are provided for those less familiar with the asset-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of assets, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •

Accumulated Depreciation - Buildings. Accumulated depreciation is commonly understood as a contra asset account used to report the accumulation of periodic credits to reflect the use of the estimated service life of a fixed asset. Buildings are fixed assets which represent the acquisition and improvement costs of permanent structures owned or held by the company. Such structures typically include office buildings, storage quarters, or other facilities and also associated items such as loading docks, heating and airconditioning equipment, refrigeration equipment, and all other property permanently attached to or forming an integral part of the structure. However, it generally does not include furniture, fixtures, or other equipment which are not an integral part of the building.

•

Accumulated Depreciation – Property, Plant & Equipment Under Capitalized Leases. Accumulated depreciation of property, plant and equipment under capitalized leases is commonly understood as a contra asset account used to report the accumulation of periodic credits to reflect the use of the estimated service life of property, plant and equipment under capitalized lease obligations.

•

Accumulated Depreciation - Transportation Equipment. Accumulated depreciation of transportation equipment is commonly understood to be contra asset account used to report the accumulation of periodic credits to reflect the use of the estimated service life of transportation equipment.

•

Buildings. Buildings are defined as fixed assets which represent the acquisition and improvement costs of permanent structures owned or held by the company. Such structures include office buildings, storage quarters, or other facilities and also associated items such as loading docks, heating and air-conditioning equipment, refrigeration equipment, and all other property permanently attached to or forming an integral part of the structure. However, it does not include furniture, fixtures, or other equipment which are not an integral part of the building.

•

Cash. Cash is typically defined as money on hand, on deposit with chartered bank, or held in the form of eligible securities.




19

•

Current Assets. Current assets are generally defined to be resources which are available, or can readily be made available, to meet the cost of operations or to pay current liabilities.

•

Investments in Unconsolidated Subsidiaries. Investments in unconsolidated subsidiaries are typically defined as investments for the purpose of generating revenue in subsidiaries whose financial statements are not combined with the company's.

•

Prepaid Expenses. Prepaid expenses are typically defined as those supplies and/or services (not inventory) acquired or purchased but not consumed or used at the end of the accounting period.

•

Progress Payments. Progress payments are commonly defined as periodic payments to a supplier, contractor, or subcontractor for work as it is completed as desired, in order to reduce working capital requirements.

•

Property Plant & Equipment Under Capitalized Leases. Property plant & equipment under capitalized leases generally consists of the gross book value (rather than the more commonly-used measures of fixed capital stocks in current or real value), of all commercial buildings, associated land and equipment used therein that are owned by the company and that are either used or operated by the company or leased or rented to others (under capitalized leases).

•

Property Plant and Equipment - Gross. Gross property, plant and equipment generally consists of the gross book value (rather than the more commonly-used measures of fixed capital stocks in current or real value), of all commercial buildings, associated land and equipment used therein that are owned by the company and that are either used or operated by the company or leased or rented to others.

•

Property Plant and Equipment - Net. Net PP&E equals the original cost of property, plant, and equipment (PP&E), less accumulated depreciation, depletion and amortization (DD&A).

•

Raw Materials. Raw materials are materials which will be converted by a manufacturer into a finished product.

•

Receivables (Net). Net receivables are defined as the net amount due to the company from private persons, businesses, agencies, funds, or governmental units which is expected to be collected in the form of moneys, goods, and/or services.

•

Short Term Investments. Short-term investments are investments which can be typically liquidated in less than one year.

•

Tangible Other Assets. Other tangible assets are commonly understood to be something substantial or real that is capable of being given an actual or approximate value (market or estimated), not classified elsewhere.

•

Total Assets. Total assets are defined as the financial representation of economic resources, the beneficial interest in which is legally or equitably secured to a particular organization as a result of a past transaction or event.

•

Total Inventories. Total inventories are defined as the total amount of goods on hand.

•

Transportation Equipment. Transportation equipment is equipment used for the transportation of goods for sale.




3.2.3

20

Asset Structure: Outlook

Using the methodology described in the introduction, the following table summarizes asset structure benchmarks for firms involved in airports, flying fields and airport terminal services in Jordan. To allow comparable benchmarking, a common index of Total Assets = 100 is used. All figures are current-year projections for companies operating in Jordan based on latest financial results available. Asset Structure Jordan the Middle East World Avg. _________________________________________________________________________________________________________

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Progress Payments & Other Prepaid Expenses Other Current Assets Current Assets - Total Investments in Unconsolidated Subsidiaries Other Investments Property Plant and Equipment - Net Property Plant and Equipment - Gross Buildings Transportation Equipment Other Property Plant & Equipment Property Plant & Equipment Under Capitalized Leases Accumulated Depreciation - Total Accumulated Depreciation - Buildings Accumulated Depreciation - Transportation Equipment Accumulated Depreciation - Other Prop & Equip Accumulated Depreciation - PP&E Under Capitalized Leases Other Assets Tangible Other Assets Total Assets

10.18 3.77 6.42 6.43 1.72 2.69 -0.97 2.00 0.80 21.14 0.43 0.04 55.63 106.57 1.65 52.93 21.49 30.50 50.94 0.71 26.07 15.12 9.05 6.46 6.46 100.00

12.26 7.70 5.00 10.27 3.08 2.65 0.35 1.01 1.53 27.96 0.97 0.90 47.94 71.43 6.41 35.83 11.76 17.73 24.89 1.76 11.04 5.80 5.87 5.38 3.08 100.00

12.97 5.37 7.23 10.07 2.23 0.99 0.45 0.30 1.85 27.35 1.12 0.45 49.37 67.56 14.64 24.58 13.72 17.12 22.56 1.84 4.22 5.58 4.16 7.20 4.83 100.00

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007




3.2.4

21

Large Variances: Assets

The following graphics summarize for airports, flying fields and airport terminal services the large asset structure gaps between firms operating in Jordan and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Current Assets - Total 30

27.96

27.35

21.14

20 10 0 -6.21

-10 Jordan

the Middle East

World Average

Gap

Gap: Property Plant and Equipment - Net 60

55.63 47.94

50

49.37

40 30 20 6.26

10 0 Jordan

the Middle East

World Average

Gap

Gap: Property Plant and Equipment - Gross 120

106.57

100 71.43

80

67.56

60

39.01

40 20 0 Jordan


the Middle East

World Average

Gap



22

Gap: Buildings 14.64

15 10 5

6.41 1.65

0 -5 -10

-12.99

-15 Jordan

the Middle East

World Average

Gap

Gap: Transportation Equipment 60

52.93

50 35.83

40

28.35

24.58

30 20 10 0 Jordan

the Middle East

World Average

Gap

Gap: Other Property Plant & Equipment 25

21.49

20 15

11.76

13.72 7.77

10 5 0 Jordan

the Middle East

World Average

Gap

Gap: Property Plant & Equipment Under Capitalized Leases 40 30

30.5 17.73

20

17.12

13.38

10 0 Jordan


the Middle East

World Average

Gap



23

Gap: Accumulated Depreciation - Total 60

50.94

50 40 24.89

30

22.56

28.38

20 10 0 Jordan

the Middle East

World Average

Gap

Gap: Accumulated Depreciation - Transportation Equipment 30

26.07 21.85

25 20 15

11.04

10

4.22

5 0 Jordan

the Middle East

World Average

Gap

Gap: Accumulated Depreciation - Other Prop & Equip 20 15

15.12 9.54

10

5.8

5.58

5 0 Jordan

the Middle East

World Average

Gap

Gap: cumulated Depreciation - PP&E Under Capitalized Leases 10

9.05

8

5.87

6

4.16

4.89

4 2 0 Jordan


the Middle East

World Average

Gap



3.2.5

24

Key Percentiles and Rankings

We now consider the distribution of asset ratios for airports, flying fields and airport terminal services using ranks and percentiles. What percent of countries have a value lower or higher than Jordan (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of asset structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical asset ratios are highlighted in additional tables. Asset Structure

Jordan

Rank of Total

Percentile

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Progress Payments & Other Prepaid Expenses Other Current Assets Current Assets - Total Investments in Unconsolidated Subsidiaries Other Investments Property Plant and Equipment - Net Property Plant and Equipment - Gross Buildings Transportation Equipment Other Property Plant & Equipment Property Plant & Equipment Under Capitalized Leases Accumulated Depreciation - Total Accumulated Depreciation - Buildings Accumulated Depreciation - Transportation Equipment Accumulated Depreciation - Other Prop & Equip Accumulated Depreciation - P P & E Under Capitalized Leases Other Assets Tangible Other Assets Total Assets

10.18 3.77 6.42 6.43 1.72 2.69 -0.97 2.00 0.80 21.14 0.43 0.04 55.63 106.57 1.65 52.93 21.49 30.50 50.94 0.71 26.07 15.12 9.05 6.46 6.46 100.00

21 of 53 18 of 51 16 of 46 38 of 53 37 of 49 6 of 26 26 of 28 6 of 33 25 of 40 33 of 53 33 of 39 37 of 42 30 of 53 13 of 51 47 of 50 18 of 45 6 of 50 7 of 18 7 of 51 28 of 35 8 of 31 2 of 32 2 of 16 25 of 50 9 of 35

60.38 64.71 65.22 28.30 24.49 76.92 7.14 81.82 37.50 37.74 15.38 11.90 43.40 74.51 6.00 60.00 88.00 61.11 86.27 20.00 74.19 93.75 87.50 50.00 74.29

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________





25

Cash & Short Term Investments Countries

Value (total assets = 100)

Rank

Percentile

47.99 47.59 37.03 36.93 26.35 25.91 20.39 18.21 17.91 17.71 17.30 17.28 17.08 16.12 12.55 12.17 11.76 11.72 11.28 10.18 10.05 9.17 8.72 7.85 7.57 7.46 7.44 7.12 6.45 5.81 5.26 3.49 3.27 2.76 2.71 2.35 2.29 2.05 1.68 1.24 1.12 1.02 0.91 0.85 0.60 0.56

1 2 3 4 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 32 33 36 37 39 40 42 43 44 46 47 48 49 50 51 52 53

98.11 96.23 94.34 92.45 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 39.62 37.74 32.08 30.19 26.42 24.53 20.75 18.87 16.98 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Israel Ireland Turkey Mexico Spain Singapore Finland China Pakistan Germany Sweden USA Hong Kong India Japan Thailand the United Kingdom Malaysia Canada Jordan Chile Austria Belgium Norway Netherlands Italy France South Africa Brazil Peru South Korea Philippines Australia Indonesia Switzerland Luxembourg Russia Hungary Poland Taiwan Portugal Greece Czech Republic Argentina New Zealand Denmark

the Middle East Europe the Middle East Latin America Europe Asia Europe Asia the Middle East Europe Europe North America Asia Asia Asia Asia Europe Asia North America the Middle East Latin America Europe Europe Europe Europe Europe Europe Africa Latin America Latin America Asia Asia Oceana Asia Europe Europe Europe Europe Europe Asia Europe Europe Europe Latin America Oceana Europe

_________________________________________________________________________________________________________





26

Cash & Short Term Investments (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

47.99 37.03 34.66 31.09 25.75 17.91 10.18 9.60 9.07 9.06 9.02 8.73 8.31 6.73 5.28 4.86 4.86 3.35 3.27 2.39 1.70 1.46 0.97 0.88

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel Turkey Turkmenistan Kyrgyzstan Kuwait Pakistan Jordan Tajikistan Syrian Arab Republic Iraq United Arab Emirates Afghanistan Lebanon Uzbekistan Oman West Bank Iran Yemen Qatar Gaza Strip Armenia Azerbaijan Bahrain Saudi Arabia

_________________________________________________________________________________________________________





27

Receivables (Net) Countries


Rank

Percentile

26.46 24.10 19.37 19.21 19.16 19.09 18.36 16.38 14.72 13.50 12.73 12.39 12.04 11.78 11.63 11.49 11.22 10.75 10.41 10.14 9.97 9.77 9.68 9.20 8.97 8.59 8.06 7.90 7.75 7.69 7.67 6.43 6.15 6.04 5.29 3.99 3.59 3.44 3.27 3.17 2.91 2.74 2.71 0.96 0.95 0.61

1 2 4 5 6 7 8 10 11 13 14 15 16 17 18 19 20 21 22 23 24 26 27 28 29 31 32 33 34 35 36 38 39 40 41 43 44 45 46 47 48 49 50 51 52 53

98.11 96.23 92.45 90.57 88.68 86.79 84.91 81.13 79.25 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 50.94 49.06 47.17 45.28 41.51 39.62 37.74 35.85 33.96 32.08 28.30 26.42 24.53 22.64 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Australia France Peru Turkey Mexico Italy Malaysia Russia Hungary Singapore Spain South Africa Poland the United Kingdom Philippines Norway Brazil USA Chile China Pakistan Netherlands Sweden Indonesia India Germany Austria Finland Canada Thailand Belgium Jordan Hong Kong Japan South Korea Taiwan Portugal Denmark Greece Switzerland Czech Republic Luxembourg Argentina Israel Ireland New Zealand

Oceana Europe Latin America the Middle East Latin America Europe Asia Europe Europe Asia Europe Africa Europe Europe Asia Europe Latin America North America Latin America Asia the Middle East Europe Europe Asia Asia Europe Europe Europe North America Asia Europe the Middle East Asia Asia Asia Asia Europe Europe Europe Europe Europe Europe Latin America the Middle East Europe Oceana

_________________________________________________________________________________________________________





28

Receivables (Net) (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

26.46 19.21 17.98 16.23 16.13 13.42 12.20 11.72 11.19 10.47 9.97 9.93 9.39 9.38 8.60 7.98 7.93 6.43 5.31 4.89 4.86 3.11 2.81 0.96

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Qatar Turkey Turkmenistan West Bank Kyrgyzstan Kuwait Armenia Uzbekistan Yemen Azerbaijan Pakistan Tajikistan Syrian Arab Republic Iraq Lebanon Gaza Strip United Arab Emirates Jordan Oman Iran Afghanistan Bahrain Saudi Arabia Israel

_________________________________________________________________________________________________________





29

Total Inventories Countries


Rank

Percentile

9.49 9.01 8.99 8.85 7.68 5.31 4.83 4.20 4.03 3.82 3.70 3.63 3.61 3.27 2.98 2.76 2.65 2.58 2.47 2.42 2.39 2.32 2.29 2.23 2.20 2.13 2.06 2.06 1.95 1.72 1.72 1.69 1.23 0.91 0.91 0.85 0.84 0.75 0.31 0.19 0.17 0.05

1 3 4 5 7 9 10 12 13 15 16 17 18 19 21 22 23 24 25 26 27 28 29 30 31 32 33 34 36 37 38 39 40 41 42 43 44 45 46 47 48 49

97.96 93.88 91.84 89.80 85.71 81.63 79.59 75.51 73.47 69.39 67.35 65.31 63.27 61.22 57.14 55.10 53.06 51.02 48.98 46.94 44.90 42.86 40.82 38.78 36.73 34.69 32.65 30.61 26.53 24.49 22.45 20.41 18.37 16.33 14.29 12.24 10.20 8.16 6.12 4.08 2.04 0.00

Region

_________________________________________________________________________________________________________

Italy Turkey Mexico Peru Canada Philippines USA Indonesia the United Kingdom Finland Japan Taiwan Singapore Portugal Greece Netherlands Czech Republic France Argentina Australia Sweden Austria Russia Chile Belgium South Korea Hungary Thailand Spain Jordan Hong Kong Poland Germany Israel Ireland China Pakistan India Malaysia Switzerland Luxembourg New Zealand

Europe the Middle East Latin America Latin America North America Asia North America Asia Europe Europe Asia Asia Asia Europe Europe Europe Europe Europe Latin America Oceana Europe Europe Europe Latin America Europe Asia Europe Asia Europe the Middle East Asia Europe Europe the Middle East Europe Asia the Middle East Asia Asia Europe Europe Oceana

_________________________________________________________________________________________________________





30

Total Inventories (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

9.01 8.43 7.57 7.42 5.11 3.65 3.58 2.83 2.56 2.42 2.28 2.13 2.13 2.01 2.01 1.97 1.84 1.72 1.71 1.47 0.91 0.84 0.41

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

95.65 91.30 86.96 82.61 78.26 73.91 69.57 65.22 60.87 56.52 52.17 47.83 43.48 39.13 34.78 30.43 26.09 21.74 17.39 13.04 8.70 4.35 0.00

_________________________________________________________________________________________________________

Turkey Turkmenistan Kyrgyzstan West Bank Yemen Gaza Strip Kuwait Bahrain Saudi Arabia Qatar United Arab Emirates Oman Tajikistan Syrian Arab Republic Iraq Iran Lebanon Jordan Armenia Azerbaijan Israel Pakistan Afghanistan

_________________________________________________________________________________________________________





31

Current Assets - Total Countries


Rank

Percentile

67.46 67.28 50.04 49.63 44.41 43.91 41.80 39.03 37.64 35.86 34.25 33.51 32.74 31.42 29.96 29.84 29.46 29.33 29.03 27.42 26.67 26.52 26.44 26.23 25.26 24.97 23.75 22.74 21.14 21.09 20.01 19.50 19.43 19.34 19.02 17.67 14.02 9.87 8.88 8.09 7.20 7.16 6.71 6.19 4.26 1.46

1 2 4 5 7 8 9 10 11 12 13 14 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 33 34 35 37 38 39 40 41 43 45 46 47 48 49 50 51 52 53

98.11 96.23 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 37.74 35.85 33.96 30.19 28.30 26.42 24.53 22.64 18.87 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Israel Ireland Peru Singapore Spain Italy USA France Finland Australia Malaysia Sweden China Germany Pakistan the United Kingdom Canada Japan Philippines India Russia Chile Thailand Hong Kong Hungary Netherlands Jordan Indonesia Austria South Africa Poland Norway Belgium Brazil South Korea Taiwan Portugal Greece Czech Republic Switzerland Argentina Luxembourg Denmark New Zealand

the Middle East Latin America the Middle East Europe Latin America Asia Europe Europe North America Europe Europe Oceana Asia Europe Asia Europe the Middle East Europe North America Asia Asia Asia Europe Latin America Asia Asia Europe Europe the Middle East Asia Europe Africa Europe Europe Europe Latin America Asia Asia Europe Europe Europe Europe Latin America Europe Europe Oceana

_________________________________________________________________________________________________________





32

Current Assets - Total (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

67.46 63.14 56.64 50.04 43.65 37.21 33.51 29.46 25.65 25.03 23.66 23.64 21.67 21.14 19.68 19.68 18.45 18.30 16.90 14.37 14.07 12.96 7.70 6.96

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Turkey Turkmenistan Kyrgyzstan Israel Kuwait West Bank Qatar Pakistan Yemen Tajikistan Syrian Arab Republic Iraq Lebanon Jordan Armenia United Arab Emirates Uzbekistan Gaza Strip Azerbaijan Afghanistan Oman Iran Bahrain Saudi Arabia

_________________________________________________________________________________________________________





33

Property Plant and Equipment - Net Countries


Rank

Percentile

98.35 90.21 80.89 79.92 78.01 74.92 72.80 72.41 72.33 71.29 68.91 67.29 66.47 66.33 65.53 64.86 64.74 64.05 62.20 62.11 61.99 61.47 61.19 60.59 59.57 59.05 57.38 56.35 55.63 55.00 54.64 53.61 53.11 52.99 52.38 50.79 50.37 47.49 40.05 32.31 26.24 25.29 24.59 24.53 19.40 15.34

1 2 3 4 5 6 7 8 9 10 11 12 13 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 42 43 44 45 46 49 51

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 20.75 18.87 16.98 15.09 13.21 7.55 3.77

Region

_________________________________________________________________________________________________________

New Zealand Switzerland Taiwan South Africa Luxembourg Denmark Portugal Brazil South Korea Russia Austria Norway Thailand Greece Belgium Malaysia Chile Hungary Finland Canada Netherlands Hong Kong Japan China Pakistan Czech Republic the United Kingdom Germany Jordan Argentina Australia India USA Sweden Poland Israel Ireland France Singapore Peru Italy Spain Turkey Mexico Philippines Indonesia

Oceana Europe Asia Africa Europe Europe Europe Latin America Asia Europe Europe Europe Asia Europe Europe Asia Latin America Europe Europe North America Europe Asia Asia Asia the Middle East Europe Europe Europe the Middle East Latin America Oceana Asia North America Europe Europe the Middle East Europe Europe Asia Latin America Europe Europe the Middle East Latin America Asia Asia

_________________________________________________________________________________________________________





34

Property Plant and Equipment - Net (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

75.60 72.60 67.78 66.89 63.09 61.79 59.57 58.39 58.34 57.03 55.63 54.64 53.49 53.07 50.79 45.56 39.81 29.06 27.07 24.59 23.02 20.65 18.66 13.31

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Uzbekistan Oman United Arab Emirates Iran Bahrain Tajikistan Pakistan Syrian Arab Republic Iraq Saudi Arabia Jordan Qatar Lebanon Armenia Israel Azerbaijan Kuwait Afghanistan West Bank Turkey Turkmenistan Kyrgyzstan Yemen Gaza Strip

_________________________________________________________________________________________________________





35

Accumulated Depreciation - Total Countries


Rank

Percentile

68.58 67.51 65.28 60.87 60.66 59.72 50.94 50.43 49.61 46.83 46.77 46.64 42.18 40.50 40.34 40.10 36.45 32.84 31.14 30.29 27.90 26.10 26.06 25.11 23.46 23.08 22.88 20.85 20.58 20.37 20.24 19.61 18.97 18.21 18.01 17.88 16.53 16.02 13.68 12.26 12.16 9.62 7.61 2.09

1 2 3 4 5 6 7 8 9 10 11 12 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 40 41 42 43 44 46 48 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 25.49 21.57 19.61 17.65 15.69 13.73 9.80 5.88 0.00

Region

_________________________________________________________________________________________________________

Finland Russia Germany Thailand Hungary Japan Jordan Netherlands Poland Switzerland Turkey Mexico Austria Luxembourg Spain Belgium Denmark France USA Norway Taiwan Sweden Singapore Portugal the United Kingdom Hong Kong Greece Australia China Czech Republic Pakistan South Korea Argentina India Italy Malaysia Chile Peru Canada Israel Ireland Philippines Indonesia New Zealand

Europe Europe Europe Asia Europe Asia the Middle East Europe Europe Europe the Middle East Latin America Europe Europe Europe Europe Europe Europe North America Europe Asia Europe Asia Europe Europe Asia Europe Oceana Asia Europe the Middle East Asia Latin America Asia Europe Asia Latin America Latin America North America the Middle East Europe Asia Asia Oceana

_________________________________________________________________________________________________________





36

Accumulated Depreciation - Total (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

50.94 50.26 46.77 43.77 43.15 41.48 39.26 25.90 21.76 20.85 20.24 19.68 19.67 18.14 15.78 14.91 14.89 13.66 13.43 12.26 9.87 9.25 6.60

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

95.65 91.30 86.96 82.61 78.26 73.91 69.57 65.22 60.87 56.52 52.17 47.83 43.48 39.13 34.78 30.43 26.09 21.74 17.39 13.04 8.70 4.35 0.00

_________________________________________________________________________________________________________

Jordan Armenia Turkey Turkmenistan Azerbaijan United Arab Emirates Kyrgyzstan Kuwait Bahrain Qatar Pakistan Oman Saudi Arabia Iran Tajikistan Syrian Arab Republic Iraq Lebanon West Bank Israel Afghanistan Yemen Gaza Strip

_________________________________________________________________________________________________________





3.3 3.3.1

FINANCIAL RETURNS RATIOS

IN

37

JORDAN: LIABILITY STRUCTURE

Overview

In this chapter we consider the liability structure of firms operating in Jordan benchmarked against global averages. The chapter begins by defining relevant terms. A common-size statement, or vertical analysis of liabilities and shareholder equity is then presented for the proto-typical firm operating in Jordan and the average global benchmarks (sometimes referred to as a financial “gap” analysis). The figure reflect firms involved in airports, flying fields and airport terminal services in Jordan. For ratios where there are large deviations between Jordan and the benchmarks, graphics are provided (total liabilities and equity = 100 percent). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis liability ratios are highlighted.

3.3.2

Liabilities and Equity – Definitions of Terms

The following definitions are provided for those less familiar with the liability-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of liabilities and equity, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •

Accounts Payable. Accounts payable are defined as amounts owed on open account to private persons or organizations for goods or services received.

•

Capital Surplus. Capital surplus is commonly defined as an amount of equity which is directly contributed capital in excess of the par value.

•

Capitalized Lease Obligations. A capitalized lease obligation is commonly defined as an ownership arrangement in which the item under lease is typically a long-term asset. Capital leases are generally recorded as assets with liability at the current value of the lease payment.

•

Common Equity. Common equity is defined to equal the company's net worth. It typically comprises capital stock, capital surplus, retained earnings, and, in some cases, net worth reserves. Common equity is the portion of total net worth belonging to the common stockholders. Synonyms which are often used for common equity are “common stock” and “net worth”.

•

Common Stock. Common stock is defined as the securities which represent the company's ownership interest. Common stockholders typically assume greater risk than preferred stockholders; although common stockholders maintain greater control and generally greater dividends and capital appreciation. Common stock can be used interchangeably with the term capital stock when the company has no preferred stock.

•

Current Liabilities - Total. Total current liabilities are defined as the total amount of obligations which would require the use of current assets or other current liabilities to pay.

•

Current Portion of Long Term Debt. The current proportion of long term debt is typically defined as debt which is payable in more than one year.




38

•

Deferred Taxes. Deferred taxes are compulsory charges from a previous accounting period which are yet unpaid.

•

Dividends Payable. Dividends payable typically include the declared dividend dollar amount that a company is obligated to pay. The dividend payment eliminates dividends payable and reduces cash.

•

Income Taxes Payable. Income taxes payable are understood to mean taxes which are levied by state, federal, and local governments on the company's reported accounting profit. Income taxes payable are those which are due in the current accounting period.

•

Long Term Debt. Long-term debt is defined to be due in a period exceeding one year or one operating cycle, whichever is longer. Long-term debt can have an extended repayment period such as a many-year mortgage on land and buildings, or debt that's intended to be permanent such as bonds issued to investors.

•

Long Term Debt Excluding Capitalized Leases. Long term debt excluding capitalized leases is defined as debt which is typically due in a period exceeding one year or one operating cycle, whichever is longer, less capitalized leases (see Long Term Debt for exceptions). Capital leases are generally recorded as assets with liability at the current value of the lease payment.

•

Minority Interest. Minority interest is the proportional share of the minority ownership's interest (less than 50 percent) in the earnings or losses.

•

Retained Earnings. proprietary funds.

•

Shareholders Equity. Shareholders equity is commonly defined to be the amount of total equity reserved for common and preferred shareholders.

•

Short Term Debt. Short term debt is generally defined as debt payable within one year.

•

Total Liabilities. Total liabilities are generally defined to include all the claims against a corporation. Liabilities include accounts and wages and salaries payable, dividends declared payable, accrued taxes payable, fixed or long-term liabilities such as mortgage bonds, debentures, and bank loans.


Retained earnings is an equity account reflecting the accumulated earnings of



3.3.3

39

Liability Structure: Outlook

Using the methodology described in the introduction, the following table summarizes liability and equity structure benchmarks for firms involved in airports, flying fields and airport terminal services in Jordan. To allow comparable benchmarking, a common index of Total Liabilities & Shareholders Equity = 100 is used. All figures are current-year projections for companies operating in Jordan based on latest financial results available. Liability Structure Jordan the Middle East World Avg. _________________________________________________________________________________________________________

Accounts Payable Short Term Debt & Current Portion of Long Term Debt Income Taxes Payable Dividends Payable Other Current Liabilities Current Liabilities - Total Long Term Debt Long Term Debt Excluding Capitalized Leases Capitalized Lease Obligations Provision For Risks and Charges Deferred Taxes Deferred Taxes - Debit Other Liabilities Total Liabilities Minority Interest Common Equity Common Stock Capital Surplus Other Appropriated Reserves Unappropriated Reserves Retained Earnings Total Liabilities & Shareholders Equity

1.89 15.98 0.09 0.01 14.80 32.77 38.48 21.53 16.96 1.68 -3.24 3.24 0.18 69.88 0.06 13.76 6.82 2.31 0.75 0.07 3.80 100.00

7.97 7.83 1.57 0.81 9.41 27.18 22.99 17.19 5.80 4.93 0.52 1.03 3.86 59.67 0.27 23.93 8.99 6.20 1.16 7.06 4.88 100.00

5.55 10.91 0.82 1.94 7.62 25.55 19.88 12.76 7.12 3.72 0.68 1.29 1.82 51.64 1.29 32.51 9.94 8.34 1.98 0.49 6.25 100.00

_________________________________________________________________________________________________________





3.3.4

40

Large Variances: Liabilities

The following graphics summarize for airports, flying fields and airport terminal services the large liability structure gaps between firms operating in Jordan and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Accounts Payable 7.97

8

5.55

6 4 2

1.89

0 -2 -4 Jordan

the Middle East

World Average

-3.66 Gap

Gap: Short Term Debt & Current Portion of Long Term Debt 20

15.98

15

10.91 7.83

10

5.07

5 0 Jordan

the Middle East

World Average

Gap

Gap: Other Current Liabilities 15

14.8 9.41

10

7.62

7.18

5 0 Jordan


the Middle East

World Average

Gap



41

Gap: Current Liabilities - Total 40

32.77 27.18

30

25.55

20 7.22

10 0 Jordan

the Middle East

World Average

Gap

Gap: Long Term Debt 40

38.48

30

22.99

20

19.88

18.6

10 0 Jordan

the Middle East

World Average

Gap

Gap: Long Term Debt Excluding Capitalized Leases 25

21.53

20

17.19 12.76

15

8.77

10 5 0 Jordan

the Middle East

World Average

Gap

Gap: Capitalized Lease Obligations 20

16.96

15 9.84

10

5.8

7.12

5 0 Jordan


the Middle East

World Average

Gap



42

Gap: Deferred Taxes 4

3.24

3

2.56

2 1

0.52

0.68

0 Jordan

the Middle East

World Average

Gap

Gap: Total Liabilities 80

69.88 59.67

60

51.64

40 18.24

20 0 Jordan

the Middle East

World Average

Gap

Gap: Common Equity 40

32.51 23.93

30 20

13.76

10 0 -10 -20 Jordan

the Middle East

World Average

-18.75 Gap

Gap: Capital Surplus 10 5

6.2

8.34

2.31

0 -5

-6.03

-10 Jordan


the Middle East

World Average

Gap



3.3.5

43


We now consider the distribution of liability ratios for airports, flying fields and airport terminal services using ranks and percentiles. What percent of countries have a value lower or higher than Jordan (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of liability structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical liability ratios are highlighted in additional tables. Liability Structure

Jordan

Rank of Total

Percentile


1.89 15.98 0.09 0.01 14.80 32.77 38.48 21.53 16.96 1.68 -3.24 3.24 0.18 69.88 0.06 13.76 6.82 2.31 0.75 0.07 3.80 100.00

42 of 51 5 of 52 39 of 42 15 of 15 8 of 53 14 of 53 12 of 50 21 of 50 6 of 34 33 of 43 36 of 39 5 of 16 36 of 39 16 of 53 24 of 31 41 of 53 32 of 51 25 of 41 22 of 40 20 of 26 30 of 53

17.65 90.38 7.14 0.00 84.91 73.58 76.00 58.00 82.35 23.26 7.69 68.75 7.69 69.81 22.58 22.64 37.25 39.02 45.00 23.08 43.40

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________





44

Accounts Payable Countries

Value (total liabilities & equity = 100)

Rank

Percentile

18.03 17.98 17.42 17.21 17.01 16.49 15.65 13.35 12.80 11.62 9.98 9.90 8.63 8.33 7.83 6.92 6.64 6.62 6.58 6.41 6.31 6.04 5.24 4.41 3.97 3.95 3.86 3.42 3.41 3.26 3.21 2.89 2.50 2.48 2.25 1.89 1.02 0.92 0.71 0.34 0.31 0.28 0.25 0.23

1 2 3 5 6 8 9 10 11 13 14 15 16 18 19 21 22 23 24 25 26 27 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 47 48 49 50 51

98.04 96.08 94.12 90.20 88.24 84.31 82.35 80.39 78.43 74.51 72.55 70.59 68.63 64.71 62.75 58.82 56.86 54.90 52.94 50.98 49.02 47.06 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 7.84 5.88 3.92 1.96 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Russia France Australia Peru Hungary Spain Poland Italy Chile Philippines Singapore Japan Indonesia USA Austria Netherlands the United Kingdom Canada Belgium Sweden Finland Hong Kong Germany Switzerland Norway Malaysia Luxembourg China Pakistan India Israel Ireland Thailand Jordan Denmark New Zealand South Korea Taiwan Portugal Greece Czech Republic Argentina

the Middle East Latin America Europe Europe Oceana Latin America Europe Europe Europe Europe Latin America Asia Asia Asia Asia North America Europe Europe Europe North America Europe Europe Europe Asia Europe Europe Europe Asia Europe Asia the Middle East Asia the Middle East Europe Asia the Middle East Europe Oceana Asia Asia Europe Europe Europe Latin America

_________________________________________________________________________________________________________





45

Accounts Payable (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

18.03 17.01 16.87 15.13 13.82 12.97 11.13 9.53 9.52 9.00 9.00 8.58 8.25 6.79 6.53 3.21 2.50 1.89 1.56 0.71 0.65 0.27 0.24

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

95.65 91.30 86.96 82.61 78.26 73.91 69.57 65.22 60.87 56.52 52.17 47.83 43.48 39.13 34.78 30.43 26.09 21.74 17.39 13.04 8.70 4.35 0.00

_________________________________________________________________________________________________________

Turkey Qatar Turkmenistan Kyrgyzstan West Bank Armenia Azerbaijan Tajikistan Yemen Syrian Arab Republic Iraq Kuwait Lebanon Gaza Strip United Arab Emirates Pakistan Israel Jordan Afghanistan Oman Iran Bahrain Saudi Arabia

_________________________________________________________________________________________________________





46

Current Liabilities - Total Countries


Rank

Percentile

50.83 49.47 49.33 45.67 45.65 39.15 39.13 37.35 36.38 34.64 33.09 32.77 31.69 29.93 29.91 28.96 28.18 26.82 26.56 26.37 25.41 25.20 24.67 23.97 23.73 23.50 23.28 22.44 22.23 18.58 18.25 17.72 17.08 16.84 16.45 16.31 15.95 15.17 14.53 13.79 13.78 13.74 12.93 12.05 11.93 1.84

1 2 3 5 6 8 9 10 11 12 13 14 15 16 17 18 20 21 22 23 24 25 26 28 29 30 31 32 33 35 36 37 39 40 41 42 43 44 45 46 47 48 50 51 52 53

98.11 96.23 94.34 90.57 88.68 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 62.26 60.38 58.49 56.60 54.72 52.83 50.94 47.17 45.28 43.40 41.51 39.62 37.74 33.96 32.08 30.19 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Russia Turkey Mexico Hungary France Thailand Peru Poland Sweden Australia Italy Jordan Spain Singapore Japan Chile Netherlands China South Korea Pakistan Germany Austria the United Kingdom Belgium India Philippines USA Canada Finland Indonesia Norway Taiwan Denmark Malaysia Israel Ireland Portugal South Africa Greece Switzerland Hong Kong Brazil Czech Republic Argentina Luxembourg New Zealand

Europe the Middle East Latin America Europe Europe Asia Latin America Europe Europe Oceana Europe the Middle East Europe Asia Asia Latin America Europe Asia Asia the Middle East Europe Europe Europe Europe Asia Asia North America North America Europe Asia Europe Asia Europe Asia the Middle East Europe Europe Africa Europe Europe Asia Latin America Europe Latin America Europe Oceana

_________________________________________________________________________________________________________





47

Current Liabilities - Total (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

49.47 46.30 41.53 37.84 34.64 32.79 32.77 32.49 29.75 27.64 26.66 26.37 26.12 26.10 24.79 24.56 23.93 22.60 16.45 16.12 14.35 13.82 12.86 12.49

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Turkey Turkmenistan Kyrgyzstan Armenia Qatar West Bank Jordan Azerbaijan Kuwait Tajikistan Oman Pakistan Syrian Arab Republic Iraq United Arab Emirates Iran Lebanon Yemen Israel Gaza Strip Uzbekistan Bahrain Afghanistan Saudi Arabia

_________________________________________________________________________________________________________





48

Long Term Debt Countries


Rank

Percentile

53.54 52.98 49.91 49.41 46.17 45.98 45.82 44.92 43.64 41.83 40.93 38.48 36.44 35.70 34.64 33.94 31.72 30.95 28.53 28.07 27.94 27.81 27.64 27.31 27.19 27.08 26.68 23.00 22.75 22.69 21.87 19.27 19.19 18.92 18.87 17.58 17.22 16.98 13.15 10.89 10.56 8.35 6.61 4.15

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 29 30 31 32 33 34 35 36 38 39 40 41 43 44 46 48 50

98.00 96.00 94.00 92.00 90.00 88.00 86.00 84.00 82.00 80.00 78.00 76.00 74.00 72.00 70.00 68.00 66.00 64.00 62.00 60.00 58.00 56.00 54.00 52.00 50.00 48.00 46.00 42.00 40.00 38.00 36.00 34.00 32.00 30.00 28.00 24.00 22.00 20.00 18.00 14.00 12.00 8.00 4.00 0.00

Region

_________________________________________________________________________________________________________

Japan Switzerland Taiwan Netherlands South Africa Thailand Luxembourg Portugal Chile Brazil Greece Jordan Czech Republic Denmark Norway Argentina New Zealand Russia France Australia South Korea Hungary Sweden Israel Canada Ireland USA Austria Poland the United Kingdom Belgium Italy China Finland Pakistan Peru Germany India Hong Kong Spain Philippines Indonesia Malaysia Singapore

Asia Europe Asia Europe Africa Asia Europe Europe Latin America Latin America Europe the Middle East Europe Europe Europe Latin America Oceana Europe Europe Oceana Asia Europe Europe the Middle East North America Europe North America Europe Europe Europe Europe Europe Asia Europe the Middle East Latin America Europe Asia Asia Europe Asia Asia Asia Asia

_________________________________________________________________________________________________________





49

Long Term Debt (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

43.67 41.65 39.36 39.33 38.93 38.48 36.06 35.19 28.07 28.05 27.31 25.84 23.04 22.62 19.78 18.87 14.73 10.15 9.20 7.24 4.12

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

95.24 90.48 85.71 80.95 76.19 71.43 66.67 61.90 57.14 52.38 47.62 42.86 38.10 33.33 28.57 23.81 19.05 14.29 9.52 4.76 0.00

_________________________________________________________________________________________________________

Uzbekistan Tajikistan Syrian Arab Republic Iraq Bahrain Jordan Lebanon Saudi Arabia Qatar Oman Israel Iran Armenia United Arab Emirates Azerbaijan Pakistan West Bank Yemen Afghanistan Gaza Strip Kuwait

_________________________________________________________________________________________________________





50

Total Liabilities Countries


Rank

Percentile

92.29 89.85 83.49 82.92 82.46 81.37 81.26 80.27 79.60 75.62 71.92 71.42 70.05 69.88 68.85 68.52 68.30 67.82 67.22 66.62 64.28 63.91 63.51 62.94 62.42 62.37 62.20 62.02 61.06 60.58 58.56 56.51 53.46 52.14 49.52 48.57 47.35 47.00 46.96 46.22 41.59 41.08 39.16 33.63 31.97 28.57

1 2 4 5 6 7 8 9 10 11 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 33 34 36 37 38 39 40 41 42 43 44 46 47 48 50 51 52

98.11 96.23 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 37.74 35.85 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 13.21 11.32 9.43 5.66 3.77 1.89

Region

_________________________________________________________________________________________________________

Russia Japan Thailand Hungary Peru Netherlands France Chile South Korea South Africa Spain Taiwan Switzerland Jordan Australia Brazil Sweden Poland Austria Norway Portugal Belgium Germany Canada Italy Turkey Mexico Denmark USA Luxembourg Greece Finland the United Kingdom Czech Republic Philippines Argentina Israel China Ireland Pakistan India Singapore Indonesia New Zealand Hong Kong Malaysia

Europe Asia Asia Europe Latin America Europe Europe Latin America Asia Africa Europe Asia Europe the Middle East Oceana Latin America Europe Europe Europe Europe Europe Europe Europe North America Europe the Middle East Latin America Europe North America Europe Europe Europe Europe Europe Asia Latin America the Middle East Asia Europe the Middle East Asia Asia Asia Oceana Asia Asia

_________________________________________________________________________________________________________





51

Total Liabilities (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

79.90 76.62 73.62 72.40 72.33 71.53 69.88 69.10 68.85 68.71 66.32 66.11 62.37 58.99 58.37 55.71 52.36 50.35 47.62 47.35 46.22 40.83 33.98 22.54

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Oman Tajikistan Iran Syrian Arab Republic Iraq Uzbekistan Jordan West Bank Qatar Armenia Lebanon United Arab Emirates Turkey Azerbaijan Turkmenistan Bahrain Kyrgyzstan Saudi Arabia Yemen Israel Pakistan Kuwait Gaza Strip Afghanistan

_________________________________________________________________________________________________________





52

Common Equity Countries


Rank

Percentile

67.89 66.66 66.37 58.10 53.48 53.04 50.36 49.52 45.87 44.57 43.43 38.08 37.98 37.63 37.53 37.06 35.86 34.46 33.38 32.37 31.44 31.12 30.78 29.85 28.58 27.85 25.81 25.72 25.06 23.44 22.70 20.86 20.16 19.48 19.43 17.99 17.97 16.44 13.76 13.00 9.32 7.81 7.02 6.31 6.17 5.16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 43 45 46 47 49 50 52

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 28.30 26.42 24.53 22.64 18.87 15.09 13.21 11.32 7.55 5.66 1.89

Region

_________________________________________________________________________________________________________

Hong Kong Malaysia New Zealand Singapore Israel Ireland China Pakistan the United Kingdom India Finland USA Denmark Turkey Mexico Canada Germany Italy Norway Austria Sweden Australia Belgium Switzerland Taiwan Spain Luxembourg Portugal South Africa Greece Brazil Czech Republic South Korea Chile Argentina France Netherlands Thailand Jordan Peru Japan Philippines Russia Hungary Indonesia Poland

Asia Asia Oceana Asia the Middle East Europe Asia the Middle East Europe Asia Europe North America Europe the Middle East Latin America North America Europe Europe Europe Europe Europe Oceana Europe Europe Asia Europe Europe Europe Africa Europe Latin America Europe Asia Latin America Latin America Europe Europe Asia the Middle East Latin America Asia Asia Europe Europe Asia Europe

_________________________________________________________________________________________________________





53

Common Equity (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

57.75 53.48 49.52 37.63 35.22 31.83 31.59 31.12 24.16 23.70 22.29 20.24 20.15 18.65 18.59 17.57 17.56 16.10 13.76 10.90 7.51 5.36 5.23 4.49

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Kuwait Israel Pakistan Turkey Turkmenistan United Arab Emirates Kyrgyzstan Qatar Afghanistan Uzbekistan Bahrain Oman Saudi Arabia Iran Tajikistan Syrian Arab Republic Iraq Lebanon Jordan West Bank Yemen Gaza Strip Armenia Azerbaijan

_________________________________________________________________________________________________________





54

Retained Earnings Countries


Rank

Percentile

38.02 28.37 28.21 23.55 23.44 23.24 18.11 14.26 14.17 13.47 13.10 12.34 11.18 10.84 10.72 10.63 8.93 8.82 8.67 7.80 6.57 5.81 5.74 5.17 4.84 4.71 4.54 4.19 3.91 3.80 2.36 2.12 1.79 1.73 0.64 0.55 -0.20 -0.23 -0.30 -0.49 -0.64 -2.62 -2.63 -2.64 -4.62 -5.18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 40 42 44 46 48 49 50 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 28.30 24.53 20.75 16.98 13.21 9.43 7.55 5.66 1.89 0.00

Region

_________________________________________________________________________________________________________

Hong Kong Denmark Finland USA Israel Ireland Norway Canada Austria Belgium Singapore South Africa Brazil Chile Malaysia Germany the United Kingdom China Pakistan India Spain New Zealand Taiwan Portugal Australia Greece Thailand Czech Republic Argentina Jordan Russia Hungary Italy Poland Switzerland Luxembourg Sweden Indonesia Philippines Peru France Mexico Turkey Japan South Korea Netherlands

Asia Europe Europe North America the Middle East Europe Europe North America Europe Europe Asia Africa Latin America Latin America Asia Europe Europe Asia the Middle East Asia Europe Oceana Asia Europe Oceana Europe Asia Europe Latin America the Middle East Europe Europe Europe Europe Europe Europe Europe Asia Asia Latin America Europe Latin America the Middle East Asia Asia Europe

_________________________________________________________________________________________________________





55

Retained Earnings (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

23.44 13.93 13.02 11.67 10.35 9.78 9.77 8.96 8.67 4.84 4.48 4.23 4.05 3.80 1.76 1.51 -0.20 -0.28 -0.41 -2.21 -2.46 -2.63 -4.27 -4.63

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel United Arab Emirates Kuwait Uzbekistan Tajikistan Syrian Arab Republic Iraq Lebanon Pakistan Qatar Bahrain Afghanistan Saudi Arabia Jordan Armenia Azerbaijan Gaza Strip Yemen West Bank Kyrgyzstan Turkmenistan Turkey Iran Oman

_________________________________________________________________________________________________________





3.4 3.4.1

FINANCIAL RETURNS RATIOS

IN

56

JORDAN: INCOME STRUCTURE

Overview

In this chapter we consider the income structure of companies operating in Jordan benchmarked against global averages. The chapter begins by defining relevant terms. A common-size statement, or vertical analysis of income is then presented for the proto-typical firm involved in airports, flying fields and airport terminal services operating in Jordan and the average global benchmarks (total revenue = 100 percent). For ratios where there are large deviations between Jordan and the benchmarks, graphics are provided. Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis income ratios are highlighted across countries in the comparison group.

3.4.2

Income Statements – Definitions of Terms

The following definitions are provided for those less familiar with the income-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of income, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •

Amortization. Amortization generally refers to the depreciation, depletion, or charge-off to expense of intangible and tangible assets over a period of time. Amortization is commonly understood to be the taking as an expense (writing off) of the loss of value of an intangible asset such as a copyright, a patent, or a mailing list, in an accounting period.

•

Cost of Goods Sold (excluding depreciation). For retail companies, cost of goods sold is generally defined as the equivalent of starting inventory plus purchases minus ending inventory. In manufacturing, cost of goods sold is defined to equal the starting inventory plus the cost of goods manufactured minus ending inventory. Most pure service firms do not generally have cost of goods sold.

•

Depletion. Depletion is commonly defined to be included as one of the elements of amortization, and is understood to be the portion of the carrying value (other than the portion associated with tangible assets) prorated in each accounting period for financial reporting purposes.

•

Depreciation. Depreciation generally is defined as the expiration in the service life of fixed assets, other than depletable assets, attributable to wear and tear, deterioration, action of the physical elements, inadequacy and obsolescence. Depreciation is commonly defined as the portion of the cost of a fixed asset charged as an expense during a particular period. In accounting for depreciation, the cost of a fixed asset, less any salvage value, is prorated over the estimated service life of such an asset, and each period is charged with a portion of such cost. Through this process, the cost of the asset is ultimately charged off as an expense.

•

Earnings Before Interest and Taxes (EBIT). EBIT is a financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and non-operating profit before the deduction of interest and income taxes.




57

•

Gross Income. Gross income is commonly defined as all the money, goods, and property received by the company that must be included as taxable income.

•

Income Taxes. Income taxes are defined to include those taxes levied by state, federal, and local governments on the company's reported accounting profit. Income taxes generally include both deferred and paid taxes. They are generally determined after the interest expense has been deducted.

•

Interest Expense on Debt. Interest expenses on debt are those which are spent on current debt and added to the net income so avoid underestimating interest coverage.

•

Minority Interest. Minority interest is the proportional share of the minority ownership's interest (less than 50 percent) in the earnings or losses.

•

Net Income Available to Common. Net income available to common is defined as the net income available to common stockholders.

•

Net Income Before Preferred Dividends. Net income before preferred dividends is generally calculated as the difference between total revenues and total expense prior to the granting of preferred dividends.

•

Net Sales or Revenues. Revenues or net sales are defined as payments made to and received by an entity. May take the form of taxes, user fees, fines, fees for service, and so on.

•

Non-Operating Interest Income. Non-operating interest income is generally understood to be any interest received (e.g., royalty, production payment, net profits interest) that does not involve the operation of the company.

•

Operating Expenses. Operating expenses are generally defined as those incurred in paying for the company’s day-to-day activities.

•

Operating Income. Operating income is generally defined to equal operating revenues less operating expenses. It typically excludes items of other revenue and expense such as equity in earnings of unconsolidated companies, dividends, interest income and expense, income taxes, extraordinary items, and cumulative effect of accounting changes.

•

Pretax Equity In Earnings. Pretax equity in earnings is generally defined to equal a company's proportional share (based on ownership) of the gross earnings or losses of an unconsolidated company.

•

Pretax Income. Pretax income is generally defined as income before tax deductions.

•

Selling, General & Administrative Expenses. Selling, general and administrative expenses are expenses independent from cost of sales for the purpose of illustrating the amount of the company's selling and administrative costs. Generally included in this figure are the costs of employees' salaries, commissions, and travel expenses; company payroll and office costs; and advertising and promotion.




3.4.3

58

Income Structure: Outlook

Using the methodology described in the introduction, the following table summarizes income structure benchmarks for firms involved in airports, flying fields and airport terminal services in Jordan. To allow comparable benchmarking, a common index of Net Sales or Revenues = 100 is used. All figures are current-year projections for companies operating in Jordan based on latest financial results available. Income Structure Jordan the Middle East World Avg. _________________________________________________________________________________________________________

Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Selling, General & Administrative Expenses Other Operating Expenses Operating Expenses - Total Operating Income Non-Operating Interest Income Pretax Equity In Earnings Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Minority Interest Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common

100.00 55.17 6.73 21.79 8.65 72.09 1.53 11.61 0.21 0.11 1.17 13.10 3.75 9.35 2.73 0.02 6.61 6.61 6.61

100.00 45.95 6.66 31.49 19.46 76.97 9.22 6.43 0.77 0.01 1.34 8.29 2.66 5.65 1.09 0.09 4.66 4.66 4.66

100.00 38.41 10.99 32.73 15.09 70.90 7.49 10.45 0.85 -0.01 2.31 13.01 3.15 9.94 2.47 0.70 7.18 7.16 7.17

_________________________________________________________________________________________________________





3.4.4

59

Large Variances: Income

The following graphics summarize for airports, flying fields and airport terminal services the large income structure gaps between firms operating in Jordan and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Cost of Goods Sold (Excluding Depreciation) 60

55.17 45.95

50

38.41

40 30

16.76

20 10 0 Jordan

the Middle East

World Average

Gap

Gap: Depreciation, Depletion & Amortization 15 10

10.99 6.73

6.66

5 0 -4.26

-5 Jordan

the Middle East

World Average

Gap

Gap: Gross Income 40 30

31.49

32.73

21.79

20 10 0 -10

-10.94

-20 Jordan


the Middle East

World Average

Gap



60

Gap: Selling, General & Administrative Expenses 19.46

20 15 10

15.09 8.65

5 0 -5

-6.44

-10 Jordan

the Middle East

World Average

Gap

Gap: Other Operating Expenses 80

72.09

76.97

70.9

60 40 20 1.19 0 Jordan

the Middle East

World Average

Gap

Gap: Operating Expenses - Total 9.22

10 5

7.49

1.53

0 -5

-5.96

-10 Jordan

the Middle East

World Average

Gap

Gap: Operating Income 12

11.61

10.45

10 8

6.43

6 4 1.16

2 0 Jordan


the Middle East

World Average

Gap



61

Gap: Non-Operating Interest Income 1

0.77

0.5

0.85

0.21

0 -0.5

-0.64

-1 Jordan

the Middle East

World Average

Gap

Gap: Other Income/Expense Net 3 2

2.31 1.17

1.34

1 0 -1

-1.14

-2 Jordan

the Middle East

World Average

Gap

Gap: Interest Expense on Debt 3.75

4

3.15 2.66

3 2

0.6

1 0 Jordan

the Middle East

World Average

Gap

Gap: Minority Interest 1

0.7

0.5 0.02

0.09

0 -0.5

-0.68

-1 Jordan


the Middle East

World Average

Gap



3.4.5

62


We now consider the distribution of income ratios for airports, flying fields and airport terminal services using ranks and percentiles. What percent of countries have a value lower or higher than Jordan (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of income structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical income ratios are highlighted in additional tables. Income Structure

Jordan

Rank of Total

Percentile


100.00 55.17 6.73 21.79 8.65 72.09 1.53 11.61 0.21 0.11 1.17 13.10 3.75 9.35 2.73 0.02 6.61 6.61 6.61

30 of 51 28 of 53 34 of 51 32 of 45 39 of 51 34 of 36 14 of 53 45 of 51 5 of 13 22 of 52 16 of 53 21 of 53 16 of 53 18 of 53 19 of 30 16 of 53 16 of 53 16 of 53

41.18 47.17 33.33 28.89 23.53 5.56 73.58 11.76 61.54 57.69 69.81 60.38 69.81 66.04 36.67 69.81 69.81 69.81

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________





63

Cost of Goods Sold (Excluding Depreciation) Countries

Value (total revenue = 100)

Rank

Percentile

93.24 82.37 74.09 73.58 73.45 73.06 72.65 70.77 70.58 69.97 69.95 67.67 66.69 65.92 65.85 65.40 65.14 64.29 62.98 62.46 62.39 62.27 61.25 60.76 59.67 56.56 55.17 54.21 54.21 54.09 50.38 50.00 39.86 38.22 36.41 36.12 35.84 35.80 34.34 32.22 28.34 28.08 24.35 14.82

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 17 18 19 20 22 23 24 25 26 28 29 30 31 32 33 34 35 37 38 39 40 41 42 43 44 46 47 49 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 66.67 64.71 62.75 60.78 56.86 54.90 52.94 50.98 49.02 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 9.80 7.84 3.92 0.00

Region

_________________________________________________________________________________________________________

Australia France Taiwan Austria Sweden Singapore Japan Turkey Mexico Belgium Norway Canada Portugal Thailand Germany Switzerland South Korea USA Israel Ireland Netherlands the United Kingdom Finland Greece Peru Luxembourg Jordan Spain Hong Kong Czech Republic Argentina Malaysia Denmark Russia China Italy Philippines Pakistan Hungary India Indonesia Poland New Zealand Chile

Oceana Europe Asia Europe Europe Asia Asia the Middle East Latin America Europe Europe North America Europe Asia Europe Europe Asia North America the Middle East Europe Europe Europe Europe Europe Latin America Europe the Middle East Europe Asia Europe Latin America Asia Europe Europe Asia Europe Asia the Middle East Europe Asia Asia Europe Oceana Latin America

_________________________________________________________________________________________________________





64

Cost of Goods Sold (Excluding Depreciation) (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

93.24 72.62 72.37 70.77 66.24 65.39 62.98 60.25 59.42 57.79 55.17 52.24 50.01 35.80 34.46 28.45 24.59 24.42 17.46 14.15 13.37 13.36 12.25

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

95.65 91.30 86.96 82.61 78.26 73.91 69.57 65.22 60.87 56.52 52.17 47.83 43.48 39.13 34.78 30.43 26.09 21.74 17.39 13.04 8.70 4.35 0.00

_________________________________________________________________________________________________________

Qatar Kuwait United Arab Emirates Turkey Turkmenistan Oman Israel Iran Kyrgyzstan Bahrain Jordan Saudi Arabia West Bank Pakistan Yemen Armenia Gaza Strip Azerbaijan Afghanistan Tajikistan Syrian Arab Republic Iraq Lebanon

_________________________________________________________________________________________________________





65

Selling, General & Administrative Expenses Countries


Rank

Percentile

46.70 41.82 35.88 24.87 22.98 22.92 21.50 20.90 20.35 19.31 19.08 18.03 17.83 17.58 17.32 17.28 17.00 15.79 15.57 15.55 15.02 13.82 12.43 10.40 10.33 9.19 8.65 8.27 8.22 7.67 7.54 6.71 6.63 6.25 5.55 3.74 2.00 1.98

1 2 3 4 5 6 7 9 10 11 12 14 15 16 17 18 19 21 22 23 24 25 27 28 29 30 32 33 34 36 37 38 39 40 42 43 44 45

97.78 95.56 93.33 91.11 88.89 86.67 84.44 80.00 77.78 75.56 73.33 68.89 66.67 64.44 62.22 60.00 57.78 53.33 51.11 48.89 46.67 44.44 40.00 37.78 35.56 33.33 28.89 26.67 24.44 20.00 17.78 15.56 13.33 11.11 6.67 4.44 2.22 0.00

Region

_________________________________________________________________________________________________________

Chile Italy Australia Netherlands Turkey Mexico Russia USA Japan Hungary the United Kingdom South Korea Norway China Peru Pakistan Sweden Poland France India Singapore Malaysia Canada Philippines Thailand Taiwan Jordan Portugal Indonesia Switzerland Greece Czech Republic Luxembourg Argentina Germany Denmark Israel Ireland

Latin America Europe Oceana Europe the Middle East Latin America Europe North America Asia Europe Europe Asia Europe Asia Latin America the Middle East Europe Europe Europe Asia Asia Asia North America Asia Asia Asia the Middle East Europe Asia Europe Europe Europe Europe Latin America Europe Europe the Middle East Europe

_________________________________________________________________________________________________________





66

Selling, General & Administrative Expenses (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

44.58 42.13 42.09 38.59 35.88 22.98 21.51 19.29 18.09 17.28 16.67 16.00 14.93 14.51 13.74 10.00 8.65 8.43 7.17 7.13 6.48 2.00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

95.45 90.91 86.36 81.82 77.27 72.73 68.18 63.64 59.09 54.55 50.00 45.45 40.91 36.36 31.82 27.27 22.73 18.18 13.64 9.09 4.55 0.00

_________________________________________________________________________________________________________

Tajikistan Syrian Arab Republic Iraq Lebanon Qatar Turkey Turkmenistan Kyrgyzstan Oman Pakistan Iran Armenia Kuwait West Bank Azerbaijan Yemen Jordan Afghanistan Bahrain Gaza Strip Saudi Arabia Israel

_________________________________________________________________________________________________________





67

Operating Expenses - Total Countries


Rank

Percentile

41.33 31.70 31.01 29.53 27.87 25.98 22.79 17.86 14.97 11.56 11.41 10.85 9.47 7.91 7.52 7.16 7.04 6.54 6.34 6.28 6.12 5.69 4.66 4.50 4.26 3.68 3.36 1.83 1.53 0.12

1 2 3 4 5 6 7 8 9 10 11 12 14 15 16 17 18 20 21 22 23 24 26 27 28 30 31 33 34 35

97.22 94.44 91.67 88.89 86.11 83.33 80.56 77.78 75.00 72.22 69.44 66.67 61.11 58.33 55.56 52.78 50.00 44.44 41.67 38.89 36.11 33.33 27.78 25.00 22.22 16.67 13.89 8.33 5.56 2.78

Region

_________________________________________________________________________________________________________

Spain Finland Russia Chile Hungary Australia Poland USA Malaysia Hong Kong Sweden Germany Peru Austria Belgium China Pakistan Netherlands India France Canada Philippines the United Kingdom Indonesia Switzerland Luxembourg Italy Thailand Jordan South Korea

Europe Europe Europe Latin America Europe Oceana Europe North America Asia Asia Europe Europe Latin America Europe Europe Asia the Middle East Europe Asia Europe North America Asia Europe Asia Europe Europe Europe Asia the Middle East Asia

_________________________________________________________________________________________________________





68

Operating Expenses - Total (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

28.19 26.64 26.61 25.98 24.40 23.09 19.82 7.93 7.78 7.04 5.47 3.90 3.44 1.53 0.12 0.11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

93.75 87.50 81.25 75.00 68.75 62.50 56.25 50.00 43.75 37.50 31.25 25.00 18.75 12.50 6.25 0.00

_________________________________________________________________________________________________________

Tajikistan Syrian Arab Republic Iraq Qatar Lebanon Armenia Azerbaijan West Bank United Arab Emirates Pakistan Yemen Gaza Strip Afghanistan Jordan Oman Iran

_________________________________________________________________________________________________________





69

Operating Income Countries


Rank

Percentile

59.84 34.36 26.33 26.11 21.63 18.26 17.96 17.83 16.16 14.62 13.87 13.63 12.24 11.61 8.15 7.38 7.22 7.08 6.73 6.49 5.92 5.88 5.77 5.45 5.27 5.11 4.91 4.11 4.06 3.98 3.64 3.63 3.53 3.45 2.79 2.57 2.31 2.07 1.91 1.89 1.27 1.23 1.12 0.64 0.07 -1.25

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 20 21 23 24 25 26 27 28 29 31 32 33 34 35 36 37 40 42 43 44 46 47 48 49 50 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 62.26 60.38 56.60 54.72 52.83 50.94 49.06 47.17 45.28 41.51 39.62 37.74 35.85 33.96 32.08 30.19 24.53 20.75 18.87 16.98 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

New Zealand Denmark Israel Ireland Hong Kong China Pakistan Malaysia India Canada Thailand Singapore the United Kingdom Jordan Germany South Korea Taiwan Austria Belgium Portugal Greece Peru Italy USA Czech Republic Norway Argentina Australia Chile Switzerland Turkey Mexico Philippines Luxembourg Indonesia Russia Hungary Sweden Japan Poland France South Africa Brazil Spain Finland Netherlands

Oceana Europe the Middle East Europe Asia Asia the Middle East Asia Asia North America Asia Asia Europe the Middle East Europe Asia Asia Europe Europe Europe Europe Latin America Europe North America Europe Europe Latin America Oceana Latin America Europe the Middle East Latin America Asia Europe Asia Europe Europe Europe Asia Europe Europe Africa Latin America Europe Europe Europe

_________________________________________________________________________________________________________





70

Operating Income (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

26.33 17.96 13.55 11.61 8.76 7.40 6.96 6.82 5.63 5.09 4.93 4.11 3.87 3.66 3.66 3.64 3.41 3.40 3.35 3.06 2.42 1.92 1.64 1.17

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel Pakistan Kuwait Jordan Afghanistan Oman United Arab Emirates Iran Bahrain Saudi Arabia West Bank Qatar Tajikistan Syrian Arab Republic Iraq Turkey Turkmenistan Yemen Lebanon Kyrgyzstan Gaza Strip Armenia Azerbaijan Uzbekistan

_________________________________________________________________________________________________________





71

Earnings Before Interest and Taxes (EBIT) Countries


Rank

Percentile

60.29 35.66 31.02 30.76 23.88 22.60 22.22 20.43 20.00 15.65 15.11 15.03 14.93 13.17 13.11 13.10 12.47 9.73 8.52 8.43 7.67 6.99 6.47 6.22 6.10 6.08 5.98 5.79 5.67 5.44 5.37 5.20 5.20 4.90 4.86 4.69 4.67 4.21 3.88 3.16 3.07 2.84 2.58 2.33 1.79 -1.96

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 20 21 22 23 25 26 27 28 29 30 31 33 34 35 36 37 38 40 41 42 43 45 46 48 49 50 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 62.26 60.38 58.49 56.60 52.83 50.94 49.06 47.17 45.28 43.40 41.51 37.74 35.85 33.96 32.08 30.19 28.30 24.53 22.64 20.75 18.87 15.09 13.21 9.43 7.55 5.66 1.89 0.00

Region

_________________________________________________________________________________________________________

New Zealand Denmark Israel Ireland Hong Kong China Pakistan Malaysia India Thailand Singapore Canada Italy the United Kingdom Austria Jordan Belgium South Korea Taiwan Norway Portugal Greece Peru Czech Republic Turkey Mexico USA Argentina Switzerland Chile South Africa Spain Sweden Luxembourg Brazil Germany Australia Finland Philippines Russia Indonesia Hungary France Poland Japan Netherlands

Oceana Europe the Middle East Europe Asia Asia the Middle East Asia Asia Asia Asia North America Europe Europe Europe the Middle East Europe Asia Asia Europe Europe Europe Latin America Europe the Middle East Latin America North America Latin America Europe Latin America Africa Europe Europe Europe Latin America Europe Oceana Europe Asia Europe Asia Europe Europe Europe Asia Europe

_________________________________________________________________________________________________________





72

Earnings Before Interest and Taxes (EBIT) (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

31.02 22.22 15.02 13.10 12.90 10.84 9.76 9.00 6.65 6.10 6.01 5.71 5.42 5.19 5.12 5.08 4.91 4.90 4.67 4.49 3.74 2.66 2.36 2.02

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel Pakistan Kuwait Jordan United Arab Emirates Afghanistan Oman Iran Bahrain Turkey Saudi Arabia Turkmenistan West Bank Tajikistan Kyrgyzstan Uzbekistan Syrian Arab Republic Iraq Qatar Lebanon Yemen Gaza Strip Armenia Azerbaijan

_________________________________________________________________________________________________________





73

Pretax Income Countries


Rank

Percentile

50.92 27.85 27.62 26.08 19.57 18.96 18.96 18.64 16.78 14.75 11.17 10.61 10.56 10.09 9.99 9.35 9.15 6.09 6.07 4.33 4.08 3.98 3.97 3.91 3.67 3.34 3.32 3.28 2.98 2.88 2.77 2.63 1.55 0.78 0.63 0.57 0.47 0.37 0.28 0.25 0.21 0.21 -0.60 -2.06 -2.38 -4.18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 21 22 23 24 25 26 28 29 30 31 32 33 34 35 37 38 40 41 43 45 47 48 49 50 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 60.38 58.49 56.60 54.72 52.83 50.94 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 30.19 28.30 24.53 22.64 18.87 15.09 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

New Zealand Israel Ireland Denmark Hong Kong China Malaysia Pakistan India Singapore Thailand Austria Canada Belgium the United Kingdom Jordan Italy Turkey Mexico Spain Taiwan Norway USA South Korea Portugal Greece Finland Australia Czech Republic Sweden Argentina Chile Germany Peru South Africa Brazil Philippines Indonesia Russia Hungary France Poland Japan Luxembourg Switzerland Netherlands

Oceana the Middle East Europe Europe Asia Asia Asia the Middle East Asia Asia Asia Europe North America Europe Europe the Middle East Europe the Middle East Latin America Europe Asia Europe North America Asia Europe Europe Europe Oceana Europe Europe Latin America Latin America Europe Latin America Africa Latin America Asia Asia Europe Europe Europe Europe Asia Europe Europe Europe

_________________________________________________________________________________________________________





74

Pretax Income (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

27.85 18.64 14.66 10.44 9.35 9.09 6.09 5.70 5.11 3.93 3.62 3.28 3.18 2.87 2.51 2.38 2.37 2.18 0.65 0.59 0.45 0.32 0.21 0.18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel Pakistan Kuwait United Arab Emirates Jordan Afghanistan Turkey Turkmenistan Kyrgyzstan Oman Iran Qatar Bahrain Saudi Arabia Tajikistan Syrian Arab Republic Iraq Lebanon West Bank Uzbekistan Yemen Gaza Strip Armenia Azerbaijan

_________________________________________________________________________________________________________





75

Income Taxes Countries


Rank

Percentile

15.29 7.68 4.67 4.64 4.56 4.48 4.10 3.76 3.55 3.53 3.26 3.10 3.07 2.95 2.88 2.87 2.74 2.73 1.52 1.44 1.43 1.41 1.13 1.05 0.76 0.48 0.41 0.40 0.39 0.37 0.23 0.19 0.18 0.18 0.13 -0.14 -0.15 -0.16 -0.17 -0.19 -0.19 -0.21 -0.67 -0.82 -0.91 -1.31

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 24 25 26 27 28 30 31 32 35 37 38 39 42 43 44 45 46 47 48 49 50 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 54.72 52.83 50.94 49.06 47.17 43.40 41.51 39.62 33.96 30.19 28.30 26.42 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

New Zealand Denmark Malaysia China Pakistan Hong Kong India Italy Israel Ireland Thailand Austria Canada Belgium Singapore the United Kingdom Germany Jordan USA Turkey Mexico Norway Australia Finland Spain Chile South Africa South Korea Peru Brazil Philippines Japan Indonesia France Sweden Argentina Czech Republic Luxembourg Greece Switzerland Portugal Taiwan Poland Hungary Russia Netherlands

Oceana Europe Asia Asia the Middle East Asia Asia Europe the Middle East Europe Asia Europe North America Europe Asia Europe Europe the Middle East North America the Middle East Latin America Europe Oceana Europe Europe Latin America Africa Asia Latin America Latin America Asia Asia Asia Europe Europe Latin America Europe Europe Europe Europe Europe Asia Europe Europe Europe Europe

_________________________________________________________________________________________________________





76

Income Taxes (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East


Rank

Percentile

4.56 3.55 3.05 2.86 2.73 2.22 1.44 1.34 1.21 1.13 0.46 0.44 0.43 0.40 0.40 0.39 0.37 0.33 0.22 0.16 -0.15 -0.17 -0.58 -0.68

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Pakistan Israel United Arab Emirates Kuwait Jordan Afghanistan Turkey Turkmenistan Kyrgyzstan Qatar Tajikistan Syrian Arab Republic Iraq Oman Lebanon Uzbekistan Iran West Bank Yemen Gaza Strip Saudi Arabia Bahrain Azerbaijan Armenia

_________________________________________________________________________________________________________





3.5 3.5.1

77

FINANCIAL RETURNS IN JORDAN: PROFITABILITY RATIOS Overview

In this chapter we consider additional financial ratios estimated for firms involved in airports, flying fields and airport terminal services operating in Jordan benchmarked against global averages. The chapter begins by defining relevant terms. Estimates are then presented for the proto-typical firm operating in Jordan compared to average global benchmarks. For ratios where there are large deviations between the average firm in Jordan and the benchmarks, graphics are provided. Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key ratios are highlighted across countries in the comparison group.

3.5.2

Ratios – Definitions of Terms

The following definitions are provided for those less familiar with financial ratio analysis. As this chapter deals with the global benchmarking of ratios, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •

Accounts Receivables Days. The number of days' receivable sales generally correlates to the amount of the accounts receivables to the average daily sales on account. Accounts receivables days is often determined by dividing the gross receivables by (net sales/365).

•

Cash Earnings Return On Equity (%). Cash earnings return on equity generally measures the return of revenues to the shareholders. This ratio is generally calculated by dividing (net income before nonrecurring items minus preferred dividends) by the average common equity.

•

Cash Flow. Cash flow is generally defined as being equal to the company's net income plus the charge-off amounts for depreciation, depletion, amortization, extraordinary charges to reserves. These are bookkeeping deductions which are not paid out as cash.

•

Current Ratio. The current ratio is generally defined as a ratio of liquidity measuring the ability of a business to pay its current obligations when due. The current ratio is generally calculated by dividing total current assets by total current liabilities. Managers and lenders often want the current ratio to be 2.00 or greater. This ratio is often seen as an indication of short-term debt-paying ability. The higher the ratio, the more liquid the company.

•

Dividend Payout (% Earnings) - Total Dividends (%). The dividend payout ratio is generally used to measure the amount of current earnings per common share which are paid out in dividends. This ratio is generally determined by dividing dividends per common share by diluted earnings per share.

•

Fixed Charge Coverage Ratio. The fixed charge coverage ratio is generally seen as an indication of the company's ability to cover its fixed charges. This ratio is typically determined by dividing recurring earnings excluding interest expense, tax expense, equity earnings, and minority earnings plus interest from rentals by interest expense including capitalized interest and interest from rentals.

•

Gross Profit Margin (%). The gross profit margin is typically defined to equals the difference, in percent, between net sales revenue and the cost of goods sold.




78

•

Inventories (# of Days) Held. Inventory days held is generally determined by dividing the ending inventory by (the cost of goods held/365). The number of days held results in the average daily cost of goods held.

•

Inventory Turnover (%). Inventory turnover is used as a measure of the balance of inventory. It generally compares the amount of inventory with the total sales for the year. The ratio can reflect both on the quality of the inventory and the efficiency of management. Typically, the higher the turnover rate, the greater the likelihood that profits would be larger and less working capital bound up in inventory.

•

Net Margin (%). The net margin is the ratio of net income dollars generated by each dollar of sales.

•

Operating Profit Margin (%). Operating profit margin percent is the ratio of operating profit to net sales. Operating profit (loss) is income or loss before taxes calculated by the difference between total revenues and total expense disregarding the effects of any extraordinary transactions.

•

Quick Ratio. The quick ratio, also commonly known as the “acid test ratio”, is a refined current ratio and is often seen as a more conservative measure of liquidity. The quick ratio is generally determined by dividing cash and equivalents plus trade receivables by total current liabilities. The ratio shows the degree to which a company's current liabilities can be covered by the most liquid current assets. Financial management texts generally conclude that any value of less than 1 to 1 implies a reciprocal dependency on inventory or other current assets to liquidate short-term debt.

•

Reinvestment Rate - Total (%). The reinvestment rate is typically defined as the rate at which an investor assumes interest payments made on a debt security can be reinvested over the life of that security.

•

Return on Assets (%). Return on assets is generally used to measure a company's ability to use assets to create profit.

•

Return on Equity - Total (%). The return on total equity ratio is often seen to reflect the profitability of the company's operations after income taxes. Return on equity is often considered to be a good measure of the company's profitability. Tax laws and tax loss carryovers can affect the net income and therefore can also affect the return on equity.

•

Return on Invested Capital (%). The ratio of return on invested capital is typically defined as an evaluation of earnings performance without regard to the method of financing. This ratio measures the earnings on investment and is an indication of how well the company utilizes its asset base. Return on investment is a type of return on capital, therefore this ratio can be an indication of the company’s ability to reward investors who provide long-term funds and to attract future investors.

•

Tax Rate (%). The tax rate is typically defined as the average rate of domestic tax owed to government by the company.

•

Working Capital. Net working capital equals the difference between total current assets and total current liabilities. Working capital often reflects a company's ability to expand volume and meet obligations. Since growth is usually one goal, the amount of working capital on this year's balance sheet should be greater than that of the previous year's. This is an efficiency, or turnover, ratio which benchmarks the rate at which current assets less current liabilities are used by the company in making sales. A low ratio can indicate a less profitable use of working capital in making sales. On the other hand, a very high ratio can indicate the company is wasting current assets which could be more efficiently deployed in production and in increasing sales and profits; or that the company my be undercapitalized, and thus vulnerable to liquidity problems in a period of weak business conditions.




3.5.3

79

Ratio Structure: Outlook

Using the methodology described in the introduction, the following table summarizes ratio structure benchmarks for firms involved in airports, flying fields and airport terminal services in Jordan. All figures are current-year projections for companies operating in Jordan based on latest financial results available. Ratios Jordan the Middle East World Avg. _________________________________________________________________________________________________________

Profitability Return on Equity - Total (%) Reinvestment Rate - Total (%) Return on Assets (%) Return on Invested Capital (%) Cash Earnings Return On Equity (%) Cash Flow % Sales Cost Goods Sold / Sales (%) Gross Profit Margin (%) Selling, General & Administrative Expense/Net Sales (%) Operating Profit Margin (%) Operating Inc / Total Capital (%) Pretax Margin (%) Tax Rate (%) Net Margin (%) Total Asset Turnover (X) th USD Asset Utilization Inventory Turnover (%) Net Sales % Working Capital Capital Expenditure % Gross Fixed Assets Capital Expenditure % Total Assets Capital Expenditure % Total Sales Accumulated Depreciation % Gross Fixed Assets Leverage Total Debt % Total Capital Long Term Debt % Total Capital Equity % Total Capital Fixed Charge Coverage Ratio Dividend Payout (% Earnings) - Total Dividends Fixed Assets % Common Equity Working Capital % Total Capital Liquidity Quick Ratio Current Ratio Receivables % Total Current Assets Inventories % Total Current Assets Accounts Receivables Days Inventories (# of Days) Held

68.02 67.98 6.85 8.53 131.79 12.80 55.17 21.79 8.65 11.61 14.03 9.35 24.41 6.61 0.63

17.74 16.57 6.14 13.90 56.18 12.92 45.95 31.49 19.46 6.43 15.67 5.65 23.51 4.66 0.83

8.09 5.18 4.32 8.16 43.63 19.52 38.41 32.73 15.09 10.45 11.24 9.94 21.81 7.16 0.64

19.94 -4.52 1.80 2.29 3.04 40.01

17.13 -2.38 7.97 8.27 13.51 28.71

19.35 0.67 8.52 7.63 13.75 26.82

66.76 61.58 22.01 2.93 0.06 338.49 -18.61

44.98 40.23 43.18 1410.81 6.73 253.65 -0.02

41.43 35.84 47.70 9345.44 19.48 236.90 -1.52

0.42 0.54 25.47 6.81 31.88 12.65

0.79 0.95 33.62 9.98 34.22 24.98

1.20 1.33 33.16 7.36 36.28 27.72

_________________________________________________________________________________________________________





3.5.4

80

Large Variances: Ratios

The following graphics summarize for airports, flying fields and airport terminal services the large ratio structure gaps between firms operating in Jordan and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Return on Equity - Total (%) 80

68.02

59.93

60 40 17.74

20

8.09

0 Jordan

the Middle East

World Average

Gap

Gap: Reinvestment Rate - Total (%) 80

67.98

62.8

60 40 16.57

20

5.18

0 Jordan

the Middle East

World Average

Gap

Gap: Cash Earnings Return On Equity (%) 150

131.79 88.16

100 56.18 50

43.63

0 Jordan


the Middle East

World Average

Gap



81

Gap: Cost Goods Sold / Sales (%) 60

55.17 45.95

50

38.41

40 30

16.76

20 10 0 Jordan

the Middle East

World Average

Gap

Gap: Total Debt % Total Capital 80

66.76

60

44.98

41.43

40

25.33

20 0 Jordan

the Middle East

World Average

Gap

Gap: Long Term Debt % Total Capital 80 61.58 60 40.23

40

35.84 25.74

20 0 Jordan

the Middle East

World Average

Gap

Gap: Equity % Total Capital 60 40

43.18

47.7

22.01

20 0 -20

-25.69

-40 Jordan


the Middle East

World Average

Gap



82

Gap: Fixed Charge Coverage Ratio 9345.44

10000 5000 2.93

0

1410.81

-5000 -9342.51 Gap

-10000 Jordan

the Middle East

World Average

Gap: Dividend Payout (% Earnings) - Total Dividends 19.48

20 6.73

10 0

0.06

-10 -19.42 Gap

-20 Jordan

the Middle East

World Average

Gap: Fixed Assets % Common Equity 400

338.49

300

253.65

236.9

200 101.59

100 0 Jordan

the Middle East

World Average

Gap

Gap: Working Capital % Total Capital 20

18.61

17.09

15 10 5 0.02

0 Jordan


the Middle East

1.52 World Average

Gap



3.5.5

83


We now consider the distribution of financial ratios for airports, flying fields and airport terminal services using ranks and percentiles. What percent of countries have a value lower or higher than Jordan (what is the ratio's rank or percentile)? The table below answers this question with respect to financial ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key financial ratios are highlighted in additional tables. Ratios

Jordan

Rank of Total

Percentile

68.02 67.98 6.85 8.53 131.79 12.80 55.17 21.79 8.65 11.61 14.03 9.35 24.41 6.61 0.63

2 of 53 2 of 53 14 of 53 22 of 53 6 of 53 25 of 53 30 of 51 34 of 51 32 of 45 14 of 53 17 of 53 16 of 53 21 of 40 16 of 53 28 of 53

96.23 96.23 73.58 58.49 88.68 52.83 41.18 33.33 28.89 73.58 67.92 69.81 47.50 69.81 47.17

19.94 -4.52 1.80 2.29 3.04 40.01

28 of 49 36 of 53 45 of 48 41 of 50 41 of 50 14 of 51

42.86 32.08 6.25 18.00 18.00 72.55

66.76 61.58 22.01 2.93 0.06 338.49 -18.61

13 of 53 10 of 50 45 of 53 24 of 53 28 of 30 11 of 53 44 of 53

75.47 80.00 15.09 54.72 6.67 79.25 16.98

0.42 0.54 25.47 6.81 31.88 12.65

37 of 53 41 of 53 42 of 53 35 of 49 33 of 53 41 of 49

30.19 22.64 20.75 28.57 37.74 16.33

_________________________________________________________________________________________________________

Profitability Return on Equity - Total (%) Reinvestment Rate - Total (%) Return on Assets (%) Return on Invested Capital (%) Cash Earnings Return On Equity (%) Cash Flow % Sales Cost Goods Sold / Sales (%) Gross Profit Margin (%) Selling, General & Administrative Expense/Net Sales (%) Operating Profit Margin (%) Operating Inc / Total Capital (%) Pretax Margin (%) Tax Rate (%) Net Margin (%) Total Asset Turnover (X) th USD Asset Utilization Inventory Turnover (%) Net Sales % Working Capital Capital Expenditure % Gross Fixed Assets Capital Expenditure % Total Assets Capital Expenditure % Total Sales Accumulated Depreciation % Gross Fixed Assets Leverage Total Debt % Total Capital Long Term Debt % Total Capital Equity % Total Capital Fixed Charge Coverage Ratio Dividend Payout (% Earnings) - Total Dividends Fixed Assets % Common Equity Working Capital % Total Capital Liquidity Quick Ratio Current Ratio Receivables % Total Current Assets Inventories % Total Current Assets Accounts Receivables Days Inventories (# of Days) Held

_________________________________________________________________________________________________________





84

Gross Profit Margin (%) Countries

Value

Rank

Percentile

Chile New Zealand Russia Italy Hungary China Pakistan Malaysia Spain Poland India Denmark Hong Kong Peru Finland the United Kingdom USA Netherlands Israel Ireland Canada Turkey Mexico Thailand South Korea Germany Norway Japan Sweden Jordan Singapore Philippines Taiwan Switzerland Indonesia Austria Portugal Belgium Luxembourg Greece Czech Republic Argentina France Australia

80.29 59.84 55.08 51.53 49.49 44.80 44.04 42.01 41.97 40.48 39.64 38.10 33.20 32.66 31.77 31.75 30.19 30.16 28.32 28.09 26.95 26.62 26.55 26.03 25.52 24.55 22.94 22.26 21.97 21.79 20.70 19.61 16.41 15.91 15.51 14.99 14.77 14.25 13.76 13.45 11.98 11.16 11.00 2.18

1 2 3 4 5 6 7 8 9 10 11 12 14 15 16 17 18 19 20 21 22 23 24 25 26 28 31 32 33 34 35 36 38 39 40 41 42 44 45 46 47 48 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 45.10 39.22 37.25 35.29 33.33 31.37 29.41 25.49 23.53 21.57 19.61 17.65 13.73 11.76 9.80 7.84 5.88 1.96 0.00

Region

_________________________________________________________________________________________________________

Latin America Oceana Europe Europe Europe Asia the Middle East Asia Europe Europe Asia Europe Asia Latin America Europe Europe North America Europe the Middle East Europe North America the Middle East Latin America Asia Asia Europe Europe Asia Europe the Middle East Asia Asia Asia Europe Asia Europe Europe Europe Europe Europe Europe Latin America Europe Oceana

_________________________________________________________________________________________________________





85

Gross Profit Margin (%) (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value

Rank

Percentile

Tajikistan Syrian Arab Republic Iraq Lebanon Pakistan Armenia Azerbaijan Israel West Bank Turkey Oman Turkmenistan Iran Kyrgyzstan Jordan Afghanistan Kuwait Yemen United Arab Emirates Gaza Strip Bahrain Saudi Arabia Qatar

76.64 72.42 72.36 66.34 44.04 41.01 35.20 28.32 27.37 26.62 25.62 24.91 23.61 22.35 21.79 21.49 20.58 18.86 14.74 13.46 12.80 11.57 2.18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

95.65 91.30 86.96 82.61 78.26 73.91 69.57 65.22 60.87 56.52 52.17 47.83 43.48 39.13 34.78 30.43 26.09 21.74 17.39 13.04 8.70 4.35 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________





86

Pretax Margin (%) Countries

Value

Rank

Percentile

New Zealand Israel Ireland Denmark Hong Kong China Malaysia Pakistan India Singapore Thailand Austria Canada Belgium the United Kingdom Jordan Italy Turkey Mexico Spain Taiwan Norway USA South Korea Portugal Greece Finland Australia Czech Republic Sweden Argentina Chile Germany Peru South Africa Brazil Philippines Indonesia Russia Hungary France Poland Japan Luxembourg Switzerland Netherlands

50.92 27.85 27.62 26.08 19.57 18.96 18.96 18.64 16.78 14.75 11.17 10.61 10.56 10.09 9.99 9.35 9.15 6.09 6.07 4.33 4.08 3.98 3.97 3.91 3.67 3.34 3.32 3.28 2.98 2.88 2.77 2.63 1.55 0.78 0.63 0.57 0.47 0.37 0.28 0.25 0.21 0.21 -0.60 -2.06 -2.38 -4.18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 21 22 23 24 25 26 28 29 30 31 32 33 34 35 37 38 40 41 43 45 47 48 49 50 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 60.38 58.49 56.60 54.72 52.83 50.94 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 30.19 28.30 24.53 22.64 18.87 15.09 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Oceana the Middle East Europe Europe Asia Asia Asia the Middle East Asia Asia Asia Europe North America Europe Europe the Middle East Europe the Middle East Latin America Europe Asia Europe North America Asia Europe Europe Europe Oceana Europe Europe Latin America Latin America Europe Latin America Africa Latin America Asia Asia Europe Europe Europe Europe Asia Europe Europe Europe

_________________________________________________________________________________________________________





87

Pretax Margin (%) (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value

Rank

Percentile

Israel Pakistan Kuwait United Arab Emirates Jordan Afghanistan Turkey Turkmenistan Kyrgyzstan Oman Iran Qatar Bahrain Saudi Arabia Tajikistan Syrian Arab Republic Iraq Lebanon West Bank Uzbekistan Yemen Gaza Strip Armenia Azerbaijan

27.85 18.64 14.66 10.44 9.35 9.09 6.09 5.70 5.11 3.93 3.62 3.28 3.18 2.87 2.51 2.38 2.37 2.18 0.65 0.59 0.45 0.32 0.21 0.18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________





88

Quick Ratio Countries

Value

Rank

Percentile

3.00 2.98 1.89 1.85 1.77 1.76 1.67 1.42 1.41 1.29 1.27 1.23 1.21 1.16 1.14 1.13 1.06 1.03 0.89 0.85 0.85 0.82 0.78 0.74 0.72 0.71 0.66 0.62 0.62 0.61 0.54 0.51 0.47 0.42 0.41 0.37 0.37 0.33 0.30 0.29 0.27 0.27 0.24 0.23 0.22 0.20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 19 20 21 22 23 24 25 26 27 28 30 31 32 33 34 35 37 38 40 41 42 44 45 47 48 49 50 51 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 43.40 41.51 39.62 37.74 35.85 33.96 30.19 28.30 24.53 22.64 20.75 16.98 15.09 11.32 9.43 7.55 5.66 3.77 0.00

Region

_________________________________________________________________________________________________________

Israel Ireland China Pakistan Malaysia Hong Kong India USA Singapore South Africa Finland Spain Germany Brazil Turkey Mexico Norway the United Kingdom Australia Italy Canada Austria Belgium Sweden France Chile New Zealand Japan Netherlands Peru Switzerland Thailand Luxembourg Jordan South Korea Philippines Russia Hungary Taiwan Indonesia Poland Portugal Greece Denmark Czech Republic Argentina

the Middle East Europe Asia the Middle East Asia Asia Asia North America Asia Africa Europe Europe Europe Latin America the Middle East Latin America Europe Europe Oceana Europe North America Europe Europe Europe Europe Latin America Oceana Asia Europe Latin America Europe Asia Europe the Middle East Asia Asia Europe Europe Asia Asia Europe Europe Europe Europe Europe Latin America

_________________________________________________________________________________________________________





89

Quick Ratio (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value

Rank

Percentile

3.00 1.85 1.40 1.22 1.14 1.06 0.95 0.90 0.89 0.81 0.67 0.64 0.64 0.58 0.51 0.42 0.41 0.38 0.35 0.27 0.25 0.23 0.23 0.21

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel Pakistan Kuwait Uzbekistan Turkey Turkmenistan Kyrgyzstan Afghanistan Qatar United Arab Emirates Tajikistan Syrian Arab Republic Iraq Lebanon West Bank Jordan Oman Iran Yemen Armenia Gaza Strip Azerbaijan Bahrain Saudi Arabia

_________________________________________________________________________________________________________





90

Current Ratio Countries

Value

Rank

Percentile

3.07 3.04 1.96 1.95 1.92 1.91 1.91 1.73 1.54 1.54 1.36 1.36 1.34 1.32 1.29 1.29 1.25 1.24 1.16 1.08 1.06 1.00 0.92 0.92 0.91 0.87 0.86 0.81 0.81 0.79 0.66 0.65 0.65 0.57 0.56 0.55 0.54 0.52 0.51 0.50 0.47 0.46 0.41 0.38 0.38 0.25

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 18 19 20 22 23 24 25 26 27 28 29 30 31 33 34 35 36 37 38 40 41 42 43 45 47 48 49 50 51 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 66.04 64.15 62.26 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 37.74 35.85 33.96 32.08 30.19 28.30 24.53 22.64 20.75 18.87 15.09 11.32 9.43 7.55 5.66 3.77 0.00

Region

_________________________________________________________________________________________________________

Israel Ireland China Malaysia Pakistan Hong Kong USA India Singapore Finland Turkey Mexico Germany Spain Canada South Africa Italy the United Kingdom Brazil Peru Norway Australia Austria Japan Chile Belgium Sweden France Netherlands New Zealand Switzerland Philippines Thailand Luxembourg Taiwan South Korea Jordan Russia Indonesia Portugal Hungary Greece Czech Republic Poland Argentina Denmark

the Middle East Europe Asia Asia the Middle East Asia North America Asia Asia Europe the Middle East Latin America Europe Europe North America Africa Europe Europe Latin America Latin America Europe Oceana Europe Asia Latin America Europe Europe Europe Europe Oceana Europe Asia Asia Europe Asia Asia the Middle East Europe Asia Europe Europe Europe Europe Europe Latin America Europe

_________________________________________________________________________________________________________





91

Current Ratio (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value

Rank

Percentile

3.07 1.92 1.53 1.36 1.28 1.22 1.14 1.00 0.94 0.91 0.90 0.86 0.82 0.82 0.75 0.63 0.55 0.54 0.51 0.45 0.43 0.39 0.39 0.33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel Pakistan Kuwait Turkey Turkmenistan Uzbekistan Kyrgyzstan Qatar Afghanistan West Bank United Arab Emirates Tajikistan Syrian Arab Republic Iraq Lebanon Yemen Oman Jordan Iran Gaza Strip Bahrain Saudi Arabia Armenia Azerbaijan

_________________________________________________________________________________________________________





92

Inventories % Total Current Assets Countries

Value

Rank

Percentile

Taiwan Portugal Greece Czech Republic Argentina Canada Italy Peru South Korea the United Kingdom Japan Turkey Mexico Netherlands USA Austria Philippines Finland Belgium Indonesia Russia Chile Thailand Australia Hungary Sweden France Hong Kong Jordan Poland Singapore China Pakistan Spain India Germany New Zealand Switzerland Luxembourg Israel Ireland Malaysia

36.80 33.12 30.18 26.86 25.02 19.71 19.58 19.02 15.14 14.84 13.49 13.36 13.32 12.14 12.06 11.44 11.42 11.15 10.88 9.03 8.68 8.51 8.14 7.81 7.80 7.60 7.23 6.81 6.81 6.38 6.32 5.08 4.99 4.66 4.49 3.72 3.37 2.68 2.32 1.84 1.83 1.61

1 2 3 4 5 7 8 9 10 11 14 15 16 18 19 20 21 22 23 25 26 27 29 30 31 32 33 34 35 37 38 39 40 41 42 43 44 45 46 47 48 49

97.96 95.92 93.88 91.84 89.80 85.71 83.67 81.63 79.59 77.55 71.43 69.39 67.35 63.27 61.22 59.18 57.14 55.10 53.06 48.98 46.94 44.90 40.82 38.78 36.73 34.69 32.65 30.61 28.57 24.49 22.45 20.41 18.37 16.33 14.29 12.24 10.20 8.16 6.12 4.08 2.04 0.00

Region

_________________________________________________________________________________________________________

Asia Europe Europe Europe Latin America North America Europe Latin America Asia Europe Asia the Middle East Latin America Europe North America Europe Asia Europe Europe Asia Europe Latin America Asia Oceana Europe Europe Europe Asia the Middle East Europe Asia Asia the Middle East Europe Asia Europe Oceana Europe Europe the Middle East Europe Asia

_________________________________________________________________________________________________________





93

Inventories % Total Current Assets (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value

Rank

Percentile

Bahrain Saudi Arabia West Bank Oman Iran Turkey Turkmenistan United Arab Emirates Kyrgyzstan Yemen Tajikistan Gaza Strip Qatar Syrian Arab Republic Iraq Lebanon Jordan Armenia Kuwait Azerbaijan Pakistan Afghanistan Israel

28.70 25.94 15.94 15.20 14.01 13.36 12.50 11.26 11.21 10.99 8.12 7.84 7.81 7.68 7.67 7.03 6.81 6.46 6.28 5.55 4.99 2.43 1.84

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

95.65 91.30 86.96 82.61 78.26 73.91 69.57 65.22 60.87 56.52 52.17 47.83 43.48 39.13 34.78 30.43 26.09 21.74 17.39 13.04 8.70 4.35 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________





94

Accounts Receivables Days Countries

Value

Rank

Percentile

Malaysia Italy Singapore Australia France Norway Hong Kong the United Kingdom Peru Netherlands Denmark Germany Canada Spain Austria Russia Belgium China Chile Pakistan Switzerland South Africa Hungary Thailand India Brazil Luxembourg Sweden USA Poland Jordan South Korea Taiwan Philippines Japan Portugal Greece Turkey Mexico Finland Indonesia Czech Republic Argentina New Zealand Israel Ireland

141.81 125.92 93.24 71.07 69.54 68.11 57.10 51.42 48.87 48.60 47.21 46.77 46.55 46.15 45.16 43.99 42.94 41.50 41.24 40.81 40.58 39.94 39.52 38.09 36.73 36.19 35.10 33.32 32.85 32.32 31.88 31.58 31.34 29.35 28.82 28.21 25.70 24.94 24.87 24.41 23.20 22.88 21.31 17.48 8.06 7.99

1 2 3 4 5 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 29 30 31 32 33 34 35 36 38 39 40 41 43 44 45 47 49 50 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 28.30 26.42 24.53 22.64 18.87 16.98 15.09 11.32 7.55 5.66 1.89 0.00

Region

_________________________________________________________________________________________________________

Asia Europe Asia Oceana Europe Europe Asia Europe Latin America Europe Europe Europe North America Europe Europe Europe Europe Asia Latin America the Middle East Europe Africa Europe Asia Asia Latin America Europe Europe North America Europe the Middle East Asia Asia Asia Asia Europe Europe the Middle East Latin America Europe Asia Europe Latin America Oceana the Middle East Europe

_________________________________________________________________________________________________________





95

Accounts Receivables Days (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value

Rank

Percentile

Kuwait Qatar United Arab Emirates West Bank Pakistan Tajikistan Uzbekistan Syrian Arab Republic Iraq Lebanon Armenia Jordan Oman Iran Yemen Azerbaijan Turkey Bahrain Turkmenistan Saudi Arabia Kyrgyzstan Gaza Strip Afghanistan Israel

92.67 71.07 44.42 40.95 40.81 39.37 37.78 37.20 37.17 34.08 32.75 31.88 31.70 29.20 28.22 28.11 24.94 24.45 23.34 22.10 20.94 20.13 19.91 8.06

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________





96

Inventories (# of Days) Held Countries

Value

Rank

Percentile

Italy Canada Chile Taiwan Portugal Peru Hong Kong Greece China Pakistan Czech Republic India Argentina Singapore the United Kingdom USA South Korea Japan Philippines Netherlands Finland Turkey Mexico Indonesia Malaysia Israel Ireland Thailand Russia Spain Austria Hungary Belgium Sweden Jordan Poland France Australia Germany New Zealand Switzerland Luxembourg

402.39 58.29 57.92 40.70 36.63 36.24 35.72 33.37 32.79 32.24 29.71 29.01 27.67 26.57 25.90 24.62 23.68 21.96 21.77 21.31 20.04 17.98 17.93 17.21 15.83 15.41 15.29 15.11 14.43 13.70 13.45 12.96 12.79 12.68 12.65 10.60 9.33 9.01 7.95 3.64 3.07 2.65

1 2 3 4 6 7 8 9 10 11 12 13 14 16 17 18 19 20 21 23 24 26 27 28 31 32 33 34 35 36 37 38 39 40 41 43 44 45 46 47 48 49

97.96 95.92 93.88 91.84 87.76 85.71 83.67 81.63 79.59 77.55 75.51 73.47 71.43 67.35 65.31 63.27 61.22 59.18 57.14 53.06 51.02 46.94 44.90 42.86 36.73 34.69 32.65 30.61 28.57 26.53 24.49 22.45 20.41 18.37 16.33 12.24 10.20 8.16 6.12 4.08 2.04 0.00

Region

_________________________________________________________________________________________________________

Europe North America Latin America Asia Europe Latin America Asia Europe Asia the Middle East Europe Asia Latin America Asia Europe North America Asia Asia Asia Europe Europe the Middle East Latin America Asia Asia the Middle East Europe Asia Europe Europe Europe Europe Europe Europe the Middle East Europe Europe Oceana Europe Oceana Europe Europe

_________________________________________________________________________________________________________





97

Inventories (# of Days) Held (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value

Rank

Percentile

Tajikistan Syrian Arab Republic Iraq Lebanon Pakistan Bahrain West Bank Saudi Arabia Kuwait Oman Iran Yemen Turkey Turkmenistan Afghanistan Israel Kyrgyzstan Gaza Strip United Arab Emirates Jordan Armenia Azerbaijan Qatar

55.28 52.24 52.20 47.86 32.24 31.74 30.37 28.69 26.41 23.77 21.90 20.93 17.98 16.83 15.72 15.41 15.10 14.93 13.23 12.65 10.74 9.22 9.01

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

95.65 91.30 86.96 82.61 78.26 73.91 69.57 65.22 60.87 56.52 52.17 47.83 43.48 39.13 34.78 30.43 26.09 21.74 17.39 13.04 8.70 4.35 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________





3.6 3.6.1

98

PRODUCTIVITY IN JORDAN: ASSET-LABOR RATIOS Overview

In this chapter, we consider numerous asset-labor ratios for airports, flying fields and airport terminal services in Jordan benchmarked against global averages. Productivity and utilization ratios are presented for companies oprating in Jordan and the average global benchmarks for airports, flying fields and airport terminal services. For ratios where there are large deviations between Jordan and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain asset-labor ratios are highlighted across countries in the comparison group. In the case of asset-labor ratios, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. We then report the larger asset-labor ratio gaps for airports, flying fields and airport terminal services that Jordan has vis-à-vis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.




3.6.2

99

Asset to Labor: Outlook

The following tables and graphs are prepared using the methodology described at the beginning of this section. All units are in thousands of US dollars per employee. All figures are current-year projections for airports, flying fields and airport terminal services in Jordan based on latest financial results available. Labor-asset Ratios ($k/employee) Jordan the Middle East World Avg. _________________________________________________________________________________________________________

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Progress Payments & Other Prepaid Expenses Other Current Assets Current Assets - Total Investments in Unconsolidated Subsidiaries Other Investments Property Plant and Equipment - Net Property Plant and Equipment - Gross Buildings Transportation Equipment Other Property Plant & Equipment Property Plant & Equipment Under Capitalized Leases Accumulated Depreciation - Total Accumulated Depreciation - Buildings Accumulated Depreciation - Transportation Equipment Accumulated Depreciation - Other Prop & Equip Accumulated Depreciation - PP&E Under Capitalized Leases Other Assets Tangible Other Assets Total Assets

15.69 5.80 9.89 9.91 2.65 4.14 -1.49 3.08 1.23 32.57 0.66 0.05 85.71 164.19 2.55 81.55 33.10 46.99 78.48 1.09 40.16 23.29 13.94 9.95 9.95 128.94

36.06 28.05 10.84 17.14 6.12 4.14 0.86 1.87 2.68 63.52 2.86 3.23 142.87 199.30 14.30 104.96 50.68 72.95 54.89 4.95 42.87 23.91 22.37 12.64 8.00 226.13

23.09 11.45 15.32 20.87 4.61 1.73 0.93 0.57 3.23 52.24 2.89 1.38 126.89 165.23 34.50 63.42 32.78 46.38 49.35 4.50 12.18 13.23 10.91 16.64 11.84 199.76

_________________________________________________________________________________________________________





3.6.3

100

Asset to Labor: International Gaps

The following graphics summarize for airports, flying fields and airport terminal services the large labor-asset gaps between firms operating in Jordan and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Cash & Short Term Investments ($k/employee) 36.06

40 30 20

23.09 15.69

10 0 -7.4

-10 Jordan

the Middle East

World Average

Gap

Gap: Receivables (Net) ($k/employee) 30 20 10

17.14

20.87

9.91

0 -10

-10.96

-20 Jordan

the Middle East

World Average

Gap

Gap: Current Assets - Total ($k/employee) 80

63.52

60 40

52.24

32.57

20 0 -20 Jordan


the Middle East

World Average

-19.67 Gap



101

Gap: Property Plant and Equipment - Net ($k/employee) 142.87

150 100

126.89

85.71

50 0 -41.18

-50 Jordan

the Middle East

World Average

Gap

Gap: Buildings ($k/employee) 34.5

40 20

14.3 2.55

0 -20 -31.95

-40 Jordan

the Middle East

World Average

Gap

Gap: Transportation Equipment ($k/employee) 120 100 80

104.96 81.55 63.42

60 40

18.13

20 0 Jordan

the Middle East

World Average

Gap

Gap: Accumulated Depreciation - Total ($k/employee) 80

78.48 54.89

60

49.35

40

29.13

20 0 Jordan


the Middle East

World Average

Gap



102

Gap: Accumulated Depreciation - Transportation Equipment ($k/employee) 50 40

40.16

42.87 27.98

30 20

12.18

10 0 Jordan

the Middle East

World Average

Gap

Gap: Accumulated Depreciation - Other Prop & Equip ($k/employee) 25

23.29

23.91

20 13.23

15

10.06

10 5 0 Jordan

the Middle East

World Average

Gap

Gap: Other Assets ($k/employee) 20 15 10

16.64 9.95

12.64

5 0 -5

-6.69

-10 Jordan

the Middle East

World Average

Gap

Gap: Total Assets ($k/employee) 250 200 150 100 50 0 -50 -100

226.13

199.76

128.94

-70.82 Jordan


the Middle East

World Average

Gap



3.6.4

103


We now consider the distribution of asset-labor ratios using ranks and percentiles across . What percent of countries have a productivity indicator lower or higher than Jordan (what is the indicator's rank or percentile)? The table below answers this question with respect to asset-labor structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key asset-labor ratios are highlighted in additional tables. Asset Structure ($k/employee)

Jordan

Rank of Total

Percentile

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Progress Payments & Other Prepaid Expenses Other Current Assets Current Assets - Total Investments in Unconsolidated Subsidiaries Other Investments Property Plant and Equipment - Net Property Plant and Equipment - Gross Buildings Transportation Equipment Other Property Plant & Equipment Property Plant & Equipment Under Capitalized Leases Accumulated Depreciation - Total Accumulated Depreciation - Buildings Accumulated Depreciation - Transportation Equipment Accumulated Depreciation - Other Prop & Equip Accumulated Depreciation - P P & E Under Capitalized Leases Other Assets Tangible Other Assets Total Assets

15.69 5.80 9.89 9.91 2.65 4.14 -1.49 3.08 1.23 32.57 0.66 0.05 85.71 164.19 2.55 81.55 33.10 46.99 78.48 1.09 40.16 23.29 13.94 9.95 9.95 128.94

29 of 53 26 of 51 23 of 46 51 of 53 38 of 49 12 of 26 26 of 28 14 of 33 33 of 40 46 of 53 31 of 39 35 of 42 36 of 53 28 of 51 49 of 50 24 of 45 21 of 50 8 of 18 22 of 51 31 of 35 19 of 31 9 of 32 7 of 16 33 of 50 15 of 35 40 of 53

45.28 49.02 50.00 3.77 22.45 53.85 7.14 57.58 17.50 13.21 20.51 16.67 32.08 45.10 2.00 46.67 58.00 55.56 56.86 11.43 38.71 71.88 56.25 34.00 57.14 24.53

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________





104

Cash & Short Term Investments Countries

Value ($K/employee)

Rank

Percentile

511.63 507.40 63.37 55.30 49.08 47.94 41.39 34.35 32.83 32.58 32.36 31.69 31.16 30.98 29.92 28.05 28.05 25.97 24.11 23.46 22.46 21.99 21.27 20.30 20.25 18.75 15.69 14.64 14.36 12.23 11.45 11.14 7.93 7.18 7.01 6.69 6.26 5.64 5.29 5.13 4.93 4.57 4.26 1.64 1.47 1.21

1 2 3 4 5 6 7 8 9 10 11 12 13 14 16 17 18 19 20 21 22 23 24 25 26 28 29 30 31 32 34 35 37 38 39 40 41 43 44 45 47 48 49 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 47.17 45.28 43.40 41.51 39.62 35.85 33.96 30.19 28.30 26.42 24.53 22.64 18.87 16.98 15.09 11.32 9.43 7.55 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Israel Ireland the United Kingdom Hong Kong Spain Japan Singapore Germany South Korea Austria Sweden China Pakistan Belgium Finland USA India Switzerland Canada Italy Luxembourg Netherlands Norway Turkey Mexico Thailand Jordan Chile France New Zealand Malaysia Peru South Africa Brazil Australia Philippines Taiwan Portugal Indonesia Greece Denmark Czech Republic Argentina Russia Hungary Poland

the Middle East Europe Europe Asia Europe Asia Asia Europe Asia Europe Europe Asia the Middle East Europe Europe North America Asia Europe North America Europe Europe Europe Europe the Middle East Latin America Asia the Middle East Latin America Europe Oceana Asia Latin America Africa Latin America Oceana Asia Asia Europe Asia Europe Europe Europe Latin America Europe Europe Europe

_________________________________________________________________________________________________________





105

Cash & Short Term Investments (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

511.63 41.14 32.95 32.05 31.16 30.36 20.30 19.00 17.04 15.69 15.20 13.97 13.20 13.19 12.10 9.34 7.50 7.01 6.44 4.88 4.59 4.41 1.22 1.05

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel Kuwait Oman United Arab Emirates Pakistan Iran Turkey Turkmenistan Kyrgyzstan Jordan Afghanistan Tajikistan Syrian Arab Republic Iraq Lebanon West Bank Uzbekistan Qatar Yemen Bahrain Gaza Strip Saudi Arabia Armenia Azerbaijan

_________________________________________________________________________________________________________





106

Receivables (Net) Countries

Value ($K/employee)

Rank

Percentile

50.46 41.95 37.44 37.19 32.52 32.38 31.24 31.15 30.40 29.00 28.42 28.40 27.02 26.20 25.76 23.96 23.71 23.18 23.07 22.33 21.83 20.59 20.07 18.69 18.35 18.07 17.66 16.84 16.46 15.15 14.92 14.65 13.80 13.65 12.50 12.30 11.84 11.76 11.59 10.57 10.53 10.50 10.19 10.11 9.91 8.64

1 2 4 5 6 7 8 9 10 11 13 14 16 17 18 19 20 21 22 23 24 25 26 28 29 30 31 32 34 35 36 37 38 39 41 42 43 44 45 46 47 48 49 50 51 53

98.11 96.23 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 75.47 73.58 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 47.17 45.28 43.40 41.51 39.62 35.85 33.96 32.08 30.19 28.30 26.42 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 0.00

Region

_________________________________________________________________________________________________________

Italy France Switzerland Peru Australia Luxembourg South Korea Norway Denmark Malaysia Austria Netherlands Belgium China Pakistan the United Kingdom Spain India Japan Philippines Singapore Canada Taiwan Hong Kong Sweden Portugal Indonesia Germany Greece Chile USA Czech Republic South Africa Argentina Brazil New Zealand Thailand Russia Finland Hungary Turkey Mexico Israel Ireland Jordan Poland

Europe Europe Europe Latin America Oceana Europe Asia Europe Europe Asia Europe Europe Europe Asia the Middle East Europe Europe Asia Asia Asia Asia North America Asia Asia Europe Europe Asia Europe Europe Latin America North America Europe Africa Latin America Latin America Oceana Asia Europe Europe Europe the Middle East Latin America the Middle East Europe the Middle East Europe

_________________________________________________________________________________________________________





107

Receivables (Net) (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

32.52 31.35 31.16 28.89 27.95 25.76 21.70 21.48 15.66 15.32 14.46 14.15 13.67 13.66 13.05 12.56 12.52 10.53 10.19 9.91 9.86 8.84 8.76 7.52

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Qatar Oman West Bank Iran United Arab Emirates Pakistan Kuwait Yemen Bahrain Gaza Strip Tajikistan Saudi Arabia Syrian Arab Republic Iraq Uzbekistan Afghanistan Lebanon Turkey Israel Jordan Turkmenistan Kyrgyzstan Armenia Azerbaijan

_________________________________________________________________________________________________________





108

Total Inventories Countries

Value ($K/employee)

Rank

Percentile

36.08 21.88 18.28 16.99 16.45 14.99 14.16 14.12 13.34 12.43 10.20 9.74 9.66 8.07 8.03 7.93 7.55 6.87 6.20 6.20 5.63 5.60 4.94 4.93 4.45 3.99 3.63 3.43 3.25 3.17 2.65 2.52 2.26 2.22 2.09 2.00 1.81 1.65 1.48 1.21 1.00 0.53

1 2 3 5 6 7 8 9 10 13 14 15 16 18 19 20 22 23 24 25 27 28 29 30 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49

97.96 95.92 93.88 89.80 87.76 85.71 83.67 81.63 79.59 73.47 71.43 69.39 67.35 63.27 61.22 59.18 55.10 53.06 51.02 48.98 44.90 42.86 40.82 38.78 34.69 32.65 30.61 28.57 26.53 24.49 22.45 20.41 18.37 16.33 14.29 12.24 10.20 8.16 6.12 4.08 2.04 0.00

Region

_________________________________________________________________________________________________________

Italy Canada Taiwan Peru Portugal Greece South Korea Japan Czech Republic Argentina Philippines Israel Ireland Indonesia Netherlands Austria Belgium USA the United Kingdom Singapore France Finland Turkey Mexico Sweden Australia Spain Hong Kong Chile Thailand Jordan Germany China Pakistan Switzerland India Luxembourg Russia Hungary Poland New Zealand Malaysia

Europe North America Asia Latin America Europe Europe Asia Asia Europe Latin America Asia the Middle East Europe Asia Europe Europe Europe North America Europe Asia Europe Europe the Middle East Latin America Europe Oceana Europe Asia Latin America Asia the Middle East Europe Asia the Middle East Europe Asia Europe Europe Europe Europe Oceana Asia

_________________________________________________________________________________________________________





109

Total Inventories (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

14.26 14.23 14.21 13.10 12.89 9.81 9.74 7.80 7.00 6.16 4.94 4.62 4.15 3.99 3.10 2.93 2.93 2.68 2.65 2.22 1.23 1.08 1.05

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

95.65 91.30 86.96 82.61 78.26 73.91 69.57 65.22 60.87 56.52 52.17 47.83 43.48 39.13 34.78 30.43 26.09 21.74 17.39 13.04 8.70 4.35 0.00

_________________________________________________________________________________________________________

Bahrain West Bank Oman Iran Saudi Arabia Yemen Israel United Arab Emirates Gaza Strip Kuwait Turkey Turkmenistan Kyrgyzstan Qatar Tajikistan Syrian Arab Republic Iraq Lebanon Jordan Pakistan Armenia Afghanistan Azerbaijan

_________________________________________________________________________________________________________





110

Current Assets - Total Countries

Value ($K/employee)

Rank

Percentile

533.53 529.12 115.96 104.72 98.36 86.28 85.25 77.87 77.86 77.45 71.75 71.62 70.85 67.36 67.34 66.13 63.97 61.31 60.28 58.92 58.36 55.81 54.25 52.42 51.20 50.27 49.67 46.84 45.50 44.70 40.73 40.48 38.91 38.18 37.65 36.99 36.89 36.26 33.78 32.57 29.62 21.73 19.68 18.98 17.05 13.95

1 2 3 4 5 7 8 10 11 12 13 14 15 16 17 18 19 21 22 23 24 25 26 27 28 29 30 31 32 33 35 36 37 38 40 41 42 43 45 46 47 49 50 51 52 53

98.11 96.23 94.34 92.45 90.57 86.79 84.91 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 33.96 32.08 30.19 28.30 24.53 22.64 20.75 18.87 15.09 13.21 11.32 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Israel Ireland Italy Japan the United Kingdom South Korea Peru Spain Switzerland Hong Kong Singapore Canada Austria Belgium Luxembourg Netherlands France China Pakistan Sweden Germany USA India Norway Philippines Finland Taiwan Malaysia Australia Portugal Greece Indonesia Thailand Chile Denmark Turkey Mexico Czech Republic Argentina Jordan New Zealand South Africa Brazil Russia Hungary Poland

the Middle East Europe Europe Asia Europe Asia Latin America Europe Europe Asia Asia North America Europe Europe Europe Europe Europe Asia the Middle East Europe Europe North America Asia Europe Asia Europe Asia Asia Oceana Europe Europe Asia Asia Latin America Europe the Middle East Latin America Europe Latin America the Middle East Oceana Africa Latin America Europe Europe Europe

_________________________________________________________________________________________________________





111

Current Assets - Total (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

533.53 86.60 79.79 71.44 71.32 69.68 60.28 49.23 45.50 38.74 36.99 36.45 35.12 35.02 34.62 34.44 34.41 32.57 31.55 31.05 29.40 20.55 14.13 12.13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel Oman Iran West Bank Kuwait United Arab Emirates Pakistan Yemen Qatar Bahrain Turkey Tajikistan Gaza Strip Saudi Arabia Turkmenistan Syrian Arab Republic Iraq Jordan Lebanon Kyrgyzstan Afghanistan Uzbekistan Armenia Azerbaijan

_________________________________________________________________________________________________________





112

Property Plant and Equipment - Net Countries

Value ($K/employee)

Rank

Percentile

1991.66 1153.22 997.32 662.58 541.52 537.04 452.07 407.09 366.38 333.81 297.17 276.82 265.28 252.77 252.25 233.69 205.62 182.41 180.22 162.52 159.79 152.84 143.81 128.42 123.66 106.76 102.41 99.37 95.97 94.25 92.54 91.29 90.93 89.03 85.71 80.66 72.81 62.02 51.18 47.12 45.98 37.61 37.25 29.45 13.48 13.45

1 2 3 4 5 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 40 41 42 43 45 46 48 51 52

98.11 96.23 94.34 92.45 90.57 88.68 86.79 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 22.64 20.75 18.87 15.09 13.21 9.43 3.77 1.89

Region

_________________________________________________________________________________________________________

New Zealand Switzerland Luxembourg Denmark Israel Ireland South Korea Taiwan Portugal Greece Czech Republic Argentina Austria the United Kingdom Belgium Japan Hong Kong Norway Netherlands China Pakistan Malaysia India Canada France Germany Thailand Sweden USA Chile Australia Finland Singapore South Africa Jordan Brazil Italy Peru Russia Spain Hungary Poland Philippines Indonesia Turkey Mexico

Oceana Europe Europe Europe the Middle East Europe Asia Asia Europe Europe Europe Latin America Europe Europe Europe Asia Asia Europe Europe Asia the Middle East Asia Asia North America Europe Europe Asia Europe North America Latin America Oceana Europe Asia Africa the Middle East Latin America Europe Latin America Europe Europe Europe Europe Asia Asia the Middle East Latin America

_________________________________________________________________________________________________________





113

Property Plant and Equipment - Net (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

541.52 453.77 418.10 317.53 287.00 260.92 159.79 92.54 90.38 89.97 85.71 85.01 84.94 84.21 77.95 77.88 51.97 38.10 35.82 32.71 25.55 13.48 12.62 11.32

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel Oman Iran Bahrain Saudi Arabia United Arab Emirates Pakistan Qatar Kuwait Tajikistan Jordan Syrian Arab Republic Iraq Uzbekistan Afghanistan Lebanon West Bank Armenia Yemen Azerbaijan Gaza Strip Turkey Turkmenistan Kyrgyzstan

_________________________________________________________________________________________________________





114

Accumulated Depreciation - Total Countries

Value ($K/employee)

Rank

Percentile

533.88 461.71 322.38 228.09 153.84 146.61 146.28 140.40 130.69 129.61 126.36 123.55 120.83 115.13 102.49 100.65 95.47 93.77 86.03 82.10 78.48 75.15 61.04 56.98 52.81 51.92 49.04 48.47 48.25 46.73 46.49 46.00 43.55 42.34 37.51 35.61 30.87 30.75 30.25 25.64 25.57 24.06 18.47 14.60

1 2 3 4 5 6 7 8 9 10 11 12 13 14 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 39 40 41 42 43 44 47 49

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 23.53 21.57 19.61 17.65 15.69 13.73 7.84 3.92

Region

_________________________________________________________________________________________________________

Switzerland Luxembourg Denmark Japan Austria Netherlands Belgium Taiwan Israel Ireland Portugal Germany South Korea Greece Czech Republic Finland Argentina Thailand Hong Kong Norway Jordan Spain the United Kingdom Singapore China Pakistan Sweden Russia USA India Italy Australia Hungary New Zealand France Poland Malaysia Peru Canada Turkey Mexico Chile Philippines Indonesia

Europe Europe Europe Asia Europe Europe Europe Asia the Middle East Europe Europe Europe Asia Europe Europe Europe Latin America Asia Asia Europe the Middle East Europe Europe Asia Asia the Middle East Europe Europe North America Asia Europe Oceana Europe Oceana Europe Europe Asia Latin America North America the Middle East Latin America Latin America Asia Asia

_________________________________________________________________________________________________________





115

Accumulated Depreciation - Total (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

151.31 130.69 121.29 111.76 109.51 98.98 78.48 56.63 51.92 46.00 36.08 30.98 25.77 25.64 25.33 24.00 22.97 21.70 21.68 21.53 19.88 17.76 12.67

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

95.65 91.30 86.96 82.61 78.26 73.91 69.57 65.22 60.87 56.52 52.17 47.83 43.48 39.13 34.78 30.43 26.09 21.74 17.39 13.04 8.70 4.35 0.00

_________________________________________________________________________________________________________

United Arab Emirates Israel Oman Iran Bahrain Saudi Arabia Jordan Kuwait Pakistan Qatar Armenia Azerbaijan West Bank Turkey Afghanistan Turkmenistan Tajikistan Syrian Arab Republic Iraq Kyrgyzstan Lebanon Yemen Gaza Strip

_________________________________________________________________________________________________________





3.7 3.7.1

116

PRODUCTIVITY IN JORDAN: LIABILITY-LABOR RATIOS Overview

In this chapter we consider the liability-labor ratios of companies operating in Jordan benchmarked against global averages for airports, flying fields and airport terminal services. For ratios where there are large deviations between Jordan and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of productivity ratios is presented in the form of ranks and percentiles. Certain key liability-labor ratios are highlighted for airports, flying fields and airport terminal services across countries in the comparison group. Definitions of liability statement terms are given in Chapter 3. In the case of liability-labor ratios, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. I then report the larger liability-labor ratio gaps for airports, flying fields and airport terminal services that Jordan has vis-à-vis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.




3.7.2

117

Liability to Labor: Outlook

The following tables and graphs are prepared using the methodology described at the beginning of this section. All units are in thousands of US dollars per employee. All figures are current-year projections for airports, flying fields and airport terminal services in Jordan based on latest financial results available. Labor-liability Ratios ($k/employee) Jordan the Middle East World Avg. _________________________________________________________________________________________________________


2.91 24.63 0.14 0.02 22.80 50.49 59.29 33.16 26.13 2.59 -4.99 4.99 0.28 107.66 0.09 21.19 10.51 3.57 1.16 0.10 5.85 128.94

11.74 22.68 1.74 1.69 20.94 58.03 70.55 51.38 19.17 10.10 0.13 4.20 14.29 153.65 0.52 71.89 20.52 38.42 4.53 10.20 17.90 226.13

8.65 29.36 1.00 4.13 15.49 55.76 52.22 33.57 18.65 7.65 0.94 3.25 5.00 121.39 2.14 76.15 23.27 20.98 4.92 0.47 13.41 199.76

_________________________________________________________________________________________________________





3.7.3

118

Liability and Equity to Labor: International Gaps

The following graphics summarize for airports, flying fields and airport terminal services the large labor-liability gaps between firms operating in Jordan and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Accounts Payable ($k/employee) 15

11.74 8.65

10 5

2.91

0 -5

-5.74

-10 Jordan

the Middle East

World Average

Gap

Gap: Other Current Liabilities ($k/employee) 25

22.8

20.94

20

15.49

15 10

7.31

5 0 Jordan

the Middle East

World Average

Gap

Gap: Long Term Debt ($k/employee) 80 60

70.55 59.29

52.22

40 20

7.07

0 Jordan


the Middle East

World Average

Gap



119

Gap: Capitalized Lease Obligations ($k/employee) 30

26.13

25

19.17

20

18.65

15 7.48

10 5 0 Jordan

the Middle East

World Average

Gap

Gap: Deferred Taxes ($k/employee) 4.99

5

4.05

4 3 2

0.94

1

0.13

0 Jordan

the Middle East

World Average

Gap

Gap: Total Liabilities ($k/employee) 200 150

153.65 121.39

107.66

100 50 0

-13.73

-50 Jordan

the Middle East

World Average

Gap

Gap: Common Equity ($k/employee) 100 50

71.89

76.15

21.19

0 -50

-54.96

-100 Jordan


the Middle East

World Average

Gap



120

Gap: Common Stock ($k/employee) 30 20 10

20.52

23.27

10.51

0 -10

-12.76

-20 Jordan

the Middle East

World Average

Gap

Gap: Capital Surplus ($k/employee) 38.42

40 30

20.98

20 10

3.57

0 -10

-17.41

-20 Jordan

the Middle East

World Average

Gap

Gap: Retained Earnings ($k/employee) 17.9

20

13.41

15 10

5.85

5 0 -5

-7.56

-10 Jordan

the Middle East

World Average

Gap

Gap: Total Liabilities & Shareholders Equity ($k/employee) 250 200 150 100 50 0 -50 -100

226.13

199.76

128.94

-70.82 Jordan


the Middle East

World Average

Gap



3.7.4

121


We now consider the distribution of liability-labor ratios using ranks and percentiles across . What percent of countries have a value lower or higher than Jordan (what is the indicator's rank or percentile)? The table below answers this question with respect to liability-labor ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key liabilitylabor ratios are highlighted in additional tables. Liability Structure ($k/employee)

Jordan

Rank of Total

Percentile


2.91 24.63 0.14 0.02 22.80 50.49 59.29 33.16 26.13 2.59 -4.99 4.99 0.28 107.66 0.09 21.19 10.51 3.57 1.16 0.10 5.85 128.94

46 of 51 23 of 52 39 of 42 15 of 15 23 of 53 32 of 53 26 of 50 29 of 50 18 of 34 37 of 43 33 of 39 6 of 16 38 of 39 36 of 53 27 of 31 41 of 53 31 of 51 27 of 41 23 of 40 20 of 26 32 of 53 40 of 53

9.80 55.77 7.14 0.00 56.60 39.62 48.00 42.00 47.06 13.95 15.38 62.50 2.56 32.08 12.90 22.64 39.22 34.15 42.50 23.08 39.62 24.53

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________





122

Accounts Payable Countries

Value ($K/employee)

Rank

Percentile

39.65 34.29 31.81 31.65 29.25 27.30 26.61 26.39 24.86 22.72 21.60 19.24 19.01 18.64 17.21 15.03 14.54 13.97 13.10 12.89 12.51 11.45 11.24 10.46 10.36 9.88 9.86 9.57 9.19 9.01 7.89 7.70 6.64 5.49 5.40 4.86 4.43 3.47 2.91 1.73 1.55 1.42 1.26 1.17

1 2 4 5 6 7 8 9 10 12 13 14 15 16 17 19 20 22 23 24 25 26 27 29 30 31 32 33 34 36 37 38 39 40 41 42 43 45 46 47 48 49 50 51

98.04 96.08 92.16 90.20 88.24 86.27 84.31 82.35 80.39 76.47 74.51 72.55 70.59 68.63 66.67 62.75 60.78 56.86 54.90 52.94 50.98 49.02 47.06 43.14 41.18 39.22 37.25 35.29 33.33 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 11.76 9.80 7.84 5.88 3.92 1.96 0.00

Region

_________________________________________________________________________________________________________

Switzerland Luxembourg Japan Peru Italy Australia Israel Ireland Spain Austria Belgium Netherlands Philippines New Zealand Singapore Indonesia Chile France the United Kingdom Canada Russia Sweden Hungary Norway USA Turkey Mexico Hong Kong Poland Denmark Germany Finland Malaysia China Pakistan India South Korea Thailand Jordan Taiwan Portugal Greece Czech Republic Argentina

Europe Europe Asia Latin America Europe Oceana the Middle East Europe Europe Europe Europe Europe Asia Oceana Asia Asia Latin America Europe Europe North America Europe Europe Europe Europe North America the Middle East Latin America Asia Europe Europe Europe Europe Asia Asia the Middle East Asia Asia Asia the Middle East Asia Europe Europe Europe Latin America

_________________________________________________________________________________________________________





123

Accounts Payable (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

27.30 26.61 26.52 22.34 18.28 17.10 13.87 13.11 13.10 13.04 12.01 9.88 9.31 9.25 8.30 7.99 5.40 4.45 4.10 2.91 2.63 1.35 1.22

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

95.65 91.30 86.96 82.61 78.26 73.91 69.57 65.22 60.87 56.52 52.17 47.83 43.48 39.13 34.78 30.43 26.09 21.74 17.39 13.04 8.70 4.35 0.00

_________________________________________________________________________________________________________

Qatar Israel West Bank United Arab Emirates Yemen Kuwait Tajikistan Syrian Arab Republic Iraq Gaza Strip Lebanon Turkey Armenia Turkmenistan Kyrgyzstan Azerbaijan Pakistan Oman Iran Jordan Afghanistan Bahrain Saudi Arabia

_________________________________________________________________________________________________________





124

Current Liabilities - Total Countries

Value ($K/employee)

Rank

Percentile

191.15 175.34 173.89 165.31 156.29 151.07 114.22 93.55 91.36 89.17 88.95 81.93 80.25 75.10 73.56 73.12 68.61 68.34 67.19 67.03 65.09 60.63 60.47 60.32 59.02 57.47 53.79 50.84 50.49 50.01 49.64 49.46 45.10 42.17 37.43 37.36 36.86 36.49 35.66 32.79 32.62 27.12 27.05 26.82 16.90 15.31

1 2 3 4 5 6 8 9 10 11 12 13 14 16 17 18 19 20 21 22 23 24 25 26 27 28 30 31 32 33 34 35 36 37 39 40 41 42 43 45 46 47 48 49 52 53

98.11 96.23 94.34 92.45 90.57 88.68 84.91 83.02 81.13 79.25 77.36 75.47 73.58 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 26.42 24.53 22.64 20.75 18.87 15.09 13.21 11.32 9.43 7.55 1.89 0.00

Region

_________________________________________________________________________________________________________

Switzerland Israel Ireland Luxembourg South Korea Denmark Japan Austria Italy Taiwan Belgium Netherlands Portugal Peru France Greece Sweden China Pakistan the United Kingdom Czech Republic Argentina India Thailand Spain Australia Singapore Germany Jordan Canada Hong Kong Norway Philippines Chile Malaysia New Zealand USA Russia Indonesia Hungary Finland Turkey Mexico Poland South Africa Brazil

Europe the Middle East Europe Europe Asia Europe Asia Europe Europe Asia Europe Europe Europe Latin America Europe Europe Europe Asia the Middle East Europe Europe Latin America Asia Asia Europe Oceana Asia Europe the Middle East North America Asia Europe Asia Latin America Asia Oceana North America Europe Asia Europe Europe the Middle East Latin America Europe Africa Latin America

_________________________________________________________________________________________________________





125

Current Liabilities - Total (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

175.34 156.88 144.55 92.01 69.55 67.19 62.94 62.86 57.47 53.47 50.49 43.37 40.25 38.03 38.00 34.84 32.78 30.94 27.17 27.12 25.38 23.32 22.77 15.98

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel Oman Iran United Arab Emirates Bahrain Pakistan West Bank Saudi Arabia Qatar Kuwait Jordan Yemen Tajikistan Syrian Arab Republic Iraq Lebanon Afghanistan Gaza Strip Armenia Turkey Turkmenistan Azerbaijan Kyrgyzstan Uzbekistan

_________________________________________________________________________________________________________





126

Long Term Debt Countries

Value ($K/employee)

Rank

Percentile

661.15 642.42 571.77 315.74 291.13 288.72 251.21 226.08 205.99 204.47 189.59 183.38 170.82 143.65 109.69 104.30 103.86 93.90 83.59 77.86 70.84 63.54 61.17 60.34 59.29 53.02 51.81 51.43 50.94 48.07 46.59 45.85 40.72 33.74 32.94 27.77 26.27 22.22 20.28 20.26 19.97 16.33 16.02 11.04

1 2 3 4 5 6 7 8 9 10 11 12 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 36 37 38 39 41 42 43 44 46 47 50

98.00 96.00 94.00 92.00 90.00 88.00 86.00 84.00 82.00 80.00 78.00 76.00 72.00 70.00 68.00 66.00 64.00 62.00 60.00 58.00 56.00 54.00 52.00 50.00 48.00 46.00 44.00 42.00 40.00 38.00 36.00 34.00 32.00 28.00 26.00 24.00 22.00 18.00 16.00 14.00 12.00 8.00 6.00 0.00

Region

_________________________________________________________________________________________________________

Switzerland New Zealand Luxembourg Denmark Israel Ireland Taiwan Portugal Greece Japan South Korea Czech Republic Argentina Netherlands Austria Belgium the United Kingdom Norway Italy France Thailand Chile Hong Kong Canada Jordan Sweden China South Africa Pakistan USA Brazil India Australia Peru Germany Finland Malaysia Russia Spain Philippines Hungary Poland Indonesia Singapore

Europe Oceana Europe Europe the Middle East Europe Asia Europe Europe Asia Asia Europe Latin America Europe Europe Europe Europe Europe Europe Europe Asia Latin America Asia North America the Middle East Europe Asia Africa the Middle East North America Latin America Asia Oceana Latin America Europe Europe Asia Europe Europe Asia Europe Europe Asia Asia

_________________________________________________________________________________________________________





127

Long Term Debt (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

291.13 195.94 190.30 177.10 175.35 107.88 60.65 59.29 57.31 57.26 52.50 50.94 48.65 40.72 28.28 24.85 19.49 16.54 14.20 13.90 10.97

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

95.24 90.48 85.71 80.95 76.19 71.43 66.67 61.90 57.14 52.38 47.62 42.86 38.10 33.33 28.57 23.81 19.05 14.29 9.52 4.76 0.00

_________________________________________________________________________________________________________

Israel Bahrain Oman Saudi Arabia Iran United Arab Emirates Tajikistan Jordan Syrian Arab Republic Iraq Lebanon Pakistan Uzbekistan Qatar West Bank Afghanistan Yemen Armenia Azerbaijan Gaza Strip Kuwait

_________________________________________________________________________________________________________





128

Total Liabilities Countries

Value ($K/employee)

Rank

Percentile

890.42 770.05 681.03 548.50 504.82 500.65 483.04 359.44 343.18 323.49 294.74 267.33 262.39 254.20 244.42 236.58 201.78 199.90 180.58 168.97 158.29 145.45 135.78 133.97 130.15 128.63 124.76 122.49 120.43 116.86 110.67 108.39 107.66 103.97 95.07 84.24 83.02 82.93 76.32 75.17 72.93 66.26 59.53 48.69 34.19 34.10

1 2 3 4 5 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 23 24 25 26 27 28 29 30 31 33 34 35 36 37 38 39 40 41 43 44 45 47 48 50 51 52

98.11 96.23 94.34 92.45 90.57 88.68 86.79 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 18.87 16.98 15.09 11.32 9.43 5.66 3.77 1.89

Region

_________________________________________________________________________________________________________

Switzerland Luxembourg New Zealand Denmark Israel Ireland South Korea Taiwan Japan Portugal Greece Austria Czech Republic Belgium Argentina Netherlands Italy the United Kingdom Norway France Peru Canada Hong Kong Spain Sweden Thailand Germany China Pakistan Chile Australia India Jordan USA Philippines South Africa Singapore Finland Brazil Indonesia Malaysia Russia Hungary Poland Turkey Mexico

Europe Europe Oceana Europe the Middle East Europe Asia Asia Asia Europe Europe Europe Europe Europe Latin America Europe Europe Europe Europe Europe Latin America North America Asia Europe Europe Asia Europe Asia the Middle East Latin America Oceana Asia the Middle East North America Asia Africa Asia Europe Latin America Asia Asia Europe Europe Europe the Middle East Latin America

_________________________________________________________________________________________________________





129

Total Liabilities (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

504.82 484.86 446.75 280.36 262.94 253.40 132.65 120.43 111.55 110.67 107.66 105.41 105.31 96.56 91.42 82.52 79.68 65.22 58.75 49.33 42.35 34.19 32.00 28.71

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel Oman Iran Bahrain United Arab Emirates Saudi Arabia West Bank Pakistan Tajikistan Qatar Jordan Syrian Arab Republic Iraq Lebanon Yemen Kuwait Uzbekistan Gaza Strip Afghanistan Armenia Azerbaijan Turkey Turkmenistan Kyrgyzstan

_________________________________________________________________________________________________________





130

Common Equity Countries

Value ($K/employee)

Rank

Percentile

1344.09 570.23 565.52 366.56 335.83 317.00 207.29 174.09 143.83 130.00 129.45 119.08 117.94 117.08 112.94 109.46 105.37 105.00 104.08 103.62 97.81 93.88 90.49 77.07 66.63 63.74 60.62 57.43 52.23 51.87 46.89 35.60 32.53 28.36 27.92 25.32 25.29 24.96 21.19 20.63 20.57 14.99 11.85 5.04 4.53 3.70

1 2 3 4 5 6 7 8 9 10 11 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 42 43 46 48 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 28.30 26.42 24.53 22.64 20.75 18.87 13.21 9.43 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

New Zealand Israel Ireland Switzerland Denmark Luxembourg the United Kingdom Hong Kong Taiwan South Korea Portugal China Greece Pakistan Malaysia Austria India Czech Republic Belgium Singapore Argentina Italy Norway Canada Germany Finland USA Sweden Netherlands Spain Australia Japan France Chile South Africa Thailand Brazil Peru Jordan Turkey Mexico Philippines Indonesia Russia Hungary Poland

Oceana the Middle East Europe Europe Europe Europe Europe Asia Asia Asia Europe Asia Europe the Middle East Asia Europe Asia Europe Europe Asia Latin America Europe Europe North America Europe Europe North America Europe Europe Europe Oceana Asia Europe Latin America Africa Asia Latin America Latin America the Middle East the Middle East Latin America Asia Asia Europe Europe Europe

_________________________________________________________________________________________________________





131

Common Equity (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

570.23 130.49 120.23 117.08 112.19 107.66 102.99 101.40 57.11 46.89 27.07 26.41 25.58 25.56 23.43 21.19 20.92 20.63 19.31 17.32 14.42 10.28 3.75 3.22

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel Oman Iran Pakistan Bahrain United Arab Emirates Kuwait Saudi Arabia Afghanistan Qatar Tajikistan Uzbekistan Syrian Arab Republic Iraq Lebanon Jordan West Bank Turkey Turkmenistan Kyrgyzstan Yemen Gaza Strip Armenia Azerbaijan

_________________________________________________________________________________________________________





132

Retained Earnings Countries

Value ($K/employee)

Rank

Percentile

250.91 249.89 247.83 117.75 104.75 49.10 44.20 43.58 42.58 41.44 41.40 38.42 36.83 29.06 28.91 26.02 24.36 24.28 23.71 21.10 20.70 19.95 19.66 19.62 17.65 15.79 13.75 12.46 12.24 10.85 7.00 5.85 1.69 1.52 1.24 0.66 -0.42 -0.45 -0.57 -0.94 -1.44 -1.44 -2.49 -10.06 -15.05 -21.91

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 39 40 42 44 47 48 49 50 51 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 26.42 24.53 20.75 16.98 11.32 9.43 7.55 5.66 3.77 0.00

Region

_________________________________________________________________________________________________________

Denmark Israel Ireland New Zealand Hong Kong Norway the United Kingdom Austria Switzerland Belgium Finland USA Luxembourg Canada Taiwan Portugal Malaysia Singapore Greece Czech Republic Germany China Argentina Pakistan India Chile South Africa Brazil Spain Australia Thailand Jordan Russia Hungary Poland France Sweden Indonesia Philippines Peru Mexico Turkey Italy Japan Netherlands South Korea

Europe the Middle East Europe Oceana Asia Europe Europe Europe Europe Europe Europe North America Europe North America Asia Europe Asia Asia Europe Europe Europe Asia Latin America the Middle East Asia Latin America Africa Latin America Europe Oceana Asia the Middle East Europe Europe Europe Europe Europe Asia Asia Latin America Latin America the Middle East Europe Asia Europe Asia

_________________________________________________________________________________________________________





133

Retained Earnings (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

249.89 42.87 24.14 22.55 20.38 19.62 15.07 14.24 14.23 13.05 13.01 10.85 9.57 5.85 1.26 1.08 -0.39 -0.55 -0.79 -1.21 -1.35 -1.44 -20.26 -21.99

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel United Arab Emirates Kuwait Bahrain Saudi Arabia Pakistan Tajikistan Syrian Arab Republic Iraq Lebanon Uzbekistan Qatar Afghanistan Jordan Armenia Azerbaijan Gaza Strip Yemen West Bank Kyrgyzstan Turkmenistan Turkey Iran Oman

_________________________________________________________________________________________________________





3.8 3.8.1

134

PRODUCTIVITY IN JORDAN: INCOME-LABOR RATIOS Overview

In this chapter we consider the income-labor ratios for airports, flying fields and airport terminal services in Jordan benchmarked against global averages. For ratios where there are large deviations between the average firm operating in Jordan and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key income-labor ratios are highlighted across countries in the comparison group. In the case of income-labor ratios, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. We then report the larger income-labor ratio gaps for airports, flying fields and airport terminal services that Jordan has vis-à-vis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.




3.8.2

135

Income to Labor: Outlook

The following tables and graphs are prepared using the methodology described at the beginning of this section. All units are in thousands of US dollars per employee. All figures are current-year projections for airports, flying fields and airport terminal services in Jordan based on latest financial results available. Labor-income Ratios ($k/employee) Jordan the Middle East World Avg. _________________________________________________________________________________________________________


96.85 63.85 7.79 25.21 10.01 83.42 1.77 13.43 0.24 0.13 1.36 15.16 4.34 10.82 3.16 0.02 7.64 7.64 7.64

145.45 86.22 11.31 48.39 30.29 136.67 12.94 11.71 1.64 0.01 2.11 15.09 5.47 9.66 1.56 0.10 8.17 8.16 8.17

114.02 58.01 11.18 36.13 19.16 99.00 8.82 9.52 0.92 -0.01 1.89 11.79 4.94 6.95 1.94 0.65 4.65 4.62 4.65

_________________________________________________________________________________________________________





3.8.3

136

Income to Labor: Gaps

The following graphics summarize for airports, flying fields and airport terminal services the large labor-income gaps between firms operating in Jordan and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Net Sales or Revenues ($k/employee) 145.45

150 100

114.02

96.85

50 0

-17.17

-50 Jordan

the Middle East

World Average

Gap

Gap: Cost of Goods Sold (Excluding Depreciation) ($k/employee) 100 80

86.22 63.85

58.01

60 40 20

5.84

0 Jordan

the Middle East

World Average

Gap

Gap: Depreciation, Depletion & Amortization ($k/employee) 15 10

11.31

11.18

7.79

5 0 -3.39

-5 Jordan


the Middle East

World Average

Gap



137

Gap: Gross Income ($k/employee) 50 40 30 20 10 0 -10 -20

48.39 36.13 25.21

-10.92 Jordan

the Middle East

World Average

Gap

Gap: Selling, General & Administrative Expenses ($k/employee) 40

30.29

30 20 10

19.16 10.01

0 -10 Jordan

the Middle East

World Average

-9.15 Gap

Gap: Other Operating Expenses ($k/employee) 136.67

150 100

99

83.42

50 0

-15.58

-50 Jordan

the Middle East

World Average

Gap

Gap: Operating Expenses - Total ($k/employee) 12.94

15

8.82

10 5

1.77

0 -5

-7.05

-10 Jordan


the Middle East

World Average

Gap



138

Gap: Operating Income ($k/employee) 15

13.43

11.71 9.52

10

3.91

5 0 Jordan

the Middle East

World Average

Gap

Gap: Earnings Before Interest and Taxes (EBIT) ($k/employee) 20 15

15.16

15.09 11.79

10 3.37

5 0 Jordan

the Middle East

World Average

Gap

Gap: Pretax Income ($k/employee) 12

10.82

10

9.66 6.95

8 6

3.87

4 2 0 Jordan

the Middle East

World Average

Gap

Gap: Net Income Before Preferred Dividends ($k/employee) 10 8

7.64

8.16

6

4.62 3.02

4 2 0 Jordan


the Middle East

World Average

Gap



3.8.4

139


We now consider the distribution of income-labor ratios using ranks and percentiles across . What percent of countries have a value lower or higher than Jordan (what is the ratio's rank or percentile)? The table below answers this question with respect to income-labor ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key income-labor ratios are highlighted in additional tables. Income Structure ($k/employee)

Jordan

Rank of Total

Percentile

96.85 63.85 7.79 25.21 10.01 83.42 1.77 13.43 0.24 0.13 1.36 15.16 4.34 10.82 3.16 0.02 7.64 7.64 7.64

44 of 53 41 of 51 35 of 53 45 of 51 40 of 45 45 of 51 34 of 36 16 of 53 48 of 51 7 of 13 27 of 52 20 of 53 38 of 53 15 of 53 9 of 53 25 of 30 18 of 53 18 of 53 18 of 53

16.98 19.61 33.96 11.76 11.11 11.76 5.56 69.81 5.88 46.15 48.08 62.26 28.30 71.70 83.02 16.67 66.04 66.04 66.04

_________________________________________________________________________________________________________


_________________________________________________________________________________________________________





140

Cost of Goods Sold (Excluding Depreciation) Countries

Value ($K/employee)

Rank

Percentile

324.18 280.35 224.69 221.74 219.91 217.68 180.12 171.27 166.54 149.89 146.36 145.29 140.45 136.57 123.37 121.58 120.23 113.25 106.30 99.61 99.27 98.27 98.09 93.08 92.70 89.90 89.25 88.80 87.26 85.90 85.67 81.34 76.29 68.99 63.85 46.88 39.05 37.08 34.80 34.22 33.32 30.79 27.25 18.95

1 2 3 4 5 6 8 9 10 12 13 14 15 16 17 18 19 20 22 23 24 25 26 27 28 29 30 31 32 33 34 35 37 39 41 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 84.31 82.35 80.39 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 27.45 23.53 19.61 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

Region

_________________________________________________________________________________________________________

Switzerland Luxembourg Japan Israel Ireland South Korea Austria Belgium Taiwan Portugal Netherlands Peru Sweden Greece the United Kingdom Czech Republic Norway Argentina USA Finland Canada Australia Spain France Germany New Zealand Hong Kong Denmark Philippines Turkey Mexico Singapore Thailand Indonesia Jordan Italy Malaysia Russia China Pakistan Hungary India Poland Chile

Europe Europe Asia the Middle East Europe Asia Europe Europe Asia Europe Europe Latin America Europe Europe Europe Europe Europe Latin America North America Europe North America Oceana Europe Europe Europe Oceana Asia Europe Asia the Middle East Latin America Asia Asia Asia the Middle East Europe Asia Europe Asia the Middle East Europe Asia Europe Latin America

_________________________________________________________________________________________________________





141

Cost of Goods Sold (Excluding Depreciation) (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

221.74 218.50 201.33 177.16 129.90 121.75 117.41 98.27 85.90 83.91 80.85 80.40 72.11 63.85 59.86 34.22 27.61 23.70 18.09 17.09 17.08 16.69 15.66

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

95.65 91.30 86.96 82.61 78.26 73.91 69.57 65.22 60.87 56.52 52.17 47.83 43.48 39.13 34.78 30.43 26.09 21.74 17.39 13.04 8.70 4.35 0.00

_________________________________________________________________________________________________________

Israel Oman Iran United Arab Emirates Bahrain West Bank Saudi Arabia Qatar Turkey Yemen Kuwait Turkmenistan Kyrgyzstan Jordan Gaza Strip Pakistan Armenia Azerbaijan Tajikistan Syrian Arab Republic Iraq Afghanistan Lebanon

_________________________________________________________________________________________________________





142

Selling, General & Administrative Expenses Countries

Value ($K/employee)

Rank

Percentile

68.33 62.94 60.08 59.71 59.61 58.35 42.16 35.59 32.81 30.78 30.65 27.89 27.86 27.81 27.41 25.32 24.02 20.86 20.66 20.02 18.74 18.60 16.97 16.94 16.00 15.33 15.08 14.48 14.23 14.05 12.81 11.96 10.01 8.32 7.62 7.03 6.97 4.10

1 2 3 4 5 6 9 10 11 13 14 15 16 17 18 20 21 23 24 25 27 28 29 30 31 32 33 34 36 37 38 39 40 41 42 43 44 45

97.78 95.56 93.33 91.11 88.89 86.67 80.00 77.78 75.56 71.11 68.89 66.67 64.44 62.22 60.00 55.56 53.33 48.89 46.67 44.44 40.00 37.78 35.56 33.33 31.11 28.89 26.67 24.44 20.00 17.78 15.56 13.33 11.11 8.89 6.67 4.44 2.22 0.00

Region

_________________________________________________________________________________________________________

Australia Japan South Korea Chile Italy Netherlands Peru Switzerland USA Luxembourg Norway Turkey the United Kingdom Mexico Sweden Philippines France Russia Taiwan Indonesia Hungary Portugal Canada Greece Singapore Poland Czech Republic China Pakistan Argentina India Thailand Jordan Denmark Germany Israel Ireland Malaysia

Oceana Asia Asia Latin America Europe Europe Latin America Europe North America Europe Europe the Middle East Europe Latin America Europe Asia Europe Europe Asia Asia Europe Europe North America Europe Asia Europe Europe Asia the Middle East Latin America Asia Asia the Middle East Europe Europe the Middle East Europe Asia

_________________________________________________________________________________________________________





143

Selling, General & Administrative Expenses (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

68.33 60.30 57.00 55.56 53.86 53.81 49.34 35.33 27.89 26.10 24.35 23.41 17.37 16.12 15.90 15.53 14.57 14.23 13.33 10.01 7.03 6.94

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

95.45 90.91 86.36 81.82 77.27 72.73 68.18 63.64 59.09 54.55 50.00 45.45 40.91 36.36 31.82 27.27 22.73 18.18 13.64 9.09 4.55 0.00

_________________________________________________________________________________________________________

Qatar Oman Tajikistan Iran Syrian Arab Republic Iraq Lebanon West Bank Turkey Turkmenistan Yemen Kyrgyzstan Gaza Strip Bahrain Kuwait Armenia Saudi Arabia Pakistan Azerbaijan Jordan Israel Afghanistan

_________________________________________________________________________________________________________





144

Operating Expenses - Total Countries

Value ($K/employee)

Rank

Percentile

74.80 51.56 49.47 37.76 30.09 28.53 27.04 23.05 22.11 19.02 18.39 18.09 17.56 15.99 15.34 13.84 13.83 10.94 9.82 8.36 8.26 8.17 5.37 5.28 4.84 4.75 2.30 2.12 1.77 0.42

1 2 3 4 5 6 7 9 10 11 12 13 14 16 17 18 19 21 23 24 25 26 28 29 30 31 32 33 34 35

97.22 94.44 91.67 88.89 86.11 83.33 80.56 75.00 72.22 69.44 66.67 63.89 61.11 55.56 52.78 50.00 47.22 41.67 36.11 33.33 30.56 27.78 22.22 19.44 16.67 13.89 11.11 8.33 5.56 2.78

Region

_________________________________________________________________________________________________________

Spain Finland Australia Chile Russia USA Hungary Peru Poland Austria Sweden Belgium Germany Switzerland Netherlands Philippines Luxembourg Indonesia France Canada Malaysia Hong Kong China Pakistan Italy India the United Kingdom Thailand Jordan South Korea

Europe Europe Oceana Latin America Europe North America Europe Latin America Europe Europe Europe Europe Europe Europe Europe Asia Europe Asia Europe North America Asia Asia Asia the Middle East Europe Asia Europe Asia the Middle East Asia

_________________________________________________________________________________________________________





145

Operating Expenses - Total (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

49.47 36.04 34.06 34.03 31.20 22.41 19.31 19.23 18.71 13.31 9.50 5.28 2.58 1.77 0.42 0.39

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

93.75 87.50 81.25 75.00 68.75 62.50 56.25 50.00 43.75 37.50 31.25 25.00 18.75 12.50 6.25 0.00

_________________________________________________________________________________________________________

Qatar Tajikistan Syrian Arab Republic Iraq Lebanon Armenia West Bank Azerbaijan United Arab Emirates Yemen Gaza Strip Pakistan Afghanistan Jordan Oman Iran

_________________________________________________________________________________________________________





146

Operating Income Countries

Value ($K/employee)

Rank

Percentile

220.94 92.70 91.93 76.55 24.68 23.88 21.38 21.23 16.22 16.05 15.57 14.60 14.31 13.43 13.30 12.91 12.03 11.84 11.83 11.03 10.64 8.87 8.78 8.60 7.82 6.90 6.80 5.90 5.19 4.80 4.51 4.42 4.41 4.29 3.94 3.81 3.55 3.41 2.50 2.24 1.84 1.17 1.16 1.06 0.11 -2.93

1 2 3 4 5 6 8 9 10 11 12 14 15 16 17 18 19 20 21 22 23 25 26 27 28 30 31 33 34 36 37 38 39 40 42 43 44 45 46 47 48 49 50 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 84.91 83.02 81.13 79.25 77.36 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 52.83 50.94 49.06 47.17 43.40 41.51 37.74 35.85 32.08 30.19 28.30 26.42 24.53 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

New Zealand Israel Ireland Denmark South Korea the United Kingdom Canada Hong Kong Taiwan Thailand Malaysia Portugal Peru Jordan Greece Singapore China Czech Republic Pakistan Argentina India USA Norway Philippines Germany Australia Indonesia Japan Chile Italy Austria Turkey Mexico Belgium Switzerland France Sweden Luxembourg Russia Hungary Poland South Africa Spain Brazil Finland Netherlands

Oceana the Middle East Europe Europe Asia Europe North America Asia Asia Asia Asia Europe Latin America the Middle East Europe Asia Asia Europe the Middle East Latin America Asia North America Europe Asia Europe Oceana Asia Asia Latin America Europe Europe the Middle East Latin America Europe Europe Europe Europe Europe Europe Europe Europe Africa Europe Latin America Europe Europe

_________________________________________________________________________________________________________





147

Operating Income (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

92.70 24.77 22.82 13.43 12.83 12.65 11.99 11.83 11.43 8.27 6.90 5.90 5.77 4.95 4.68 4.67 4.44 4.42 4.29 4.14 3.71 1.86 1.60 1.10

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel Oman Iran Jordan Kuwait Bahrain West Bank Pakistan Saudi Arabia Yemen Qatar Gaza Strip Afghanistan Tajikistan Syrian Arab Republic Iraq United Arab Emirates Turkey Lebanon Turkmenistan Kyrgyzstan Armenia Azerbaijan Uzbekistan

_________________________________________________________________________________________________________





148

Earnings Before Interest and Taxes (EBIT) Countries

Value ($K/employee)

Rank

Percentile

222.58 109.23 108.32 79.45 32.47 27.25 25.97 21.96 20.09 19.15 19.11 18.11 17.23 16.86 15.75 15.70 15.18 15.16 15.03 14.75 14.59 14.50 14.49 13.98 13.05 13.02 13.00 9.79 9.46 9.42 9.08 8.43 7.60 7.48 7.40 7.38 6.95 6.84 6.12 5.54 5.07 4.59 3.07 2.76 2.26 -4.59

1 2 3 4 5 7 8 9 10 11 12 13 14 15 17 18 19 20 21 22 23 24 25 26 27 28 29 31 32 33 34 35 37 38 39 40 42 44 45 46 48 49 50 51 52 53

98.11 96.23 94.34 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 41.51 39.62 37.74 35.85 33.96 30.19 28.30 26.42 24.53 20.75 16.98 15.09 13.21 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

New Zealand Israel Ireland Denmark South Korea Hong Kong the United Kingdom Canada Austria Taiwan Belgium Thailand Portugal Malaysia Peru Greece Italy Jordan Switzerland China Singapore Pakistan Norway Czech Republic India Argentina Luxembourg USA Philippines Spain Sweden Germany Australia Indonesia Turkey Mexico Chile Finland France Japan South Africa Brazil Russia Hungary Poland Netherlands

Oceana the Middle East Europe Europe Asia Asia Europe North America Europe Asia Europe Asia Europe Asia Latin America Europe Europe the Middle East Europe Asia Asia the Middle East Europe Europe Asia Latin America Europe North America Asia Europe Europe Europe Oceana Asia the Middle East Latin America Latin America Europe Europe Asia Africa Latin America Europe Europe Europe Europe

_________________________________________________________________________________________________________





149

Earnings Before Interest and Taxes (EBIT) (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

109.23 32.60 30.03 19.76 15.16 14.94 14.51 14.50 13.50 13.20 9.09 7.60 7.40 7.07 6.93 6.64 6.49 6.27 6.27 6.21 5.75 4.80 2.29 1.96

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel Oman Iran United Arab Emirates Jordan Bahrain Kuwait Pakistan Saudi Arabia West Bank Yemen Qatar Turkey Afghanistan Turkmenistan Tajikistan Gaza Strip Syrian Arab Republic Iraq Kyrgyzstan Lebanon Uzbekistan Armenia Azerbaijan

_________________________________________________________________________________________________________





150

Pretax Income Countries

Value ($K/employee)

Rank

Percentile

188.01 98.07 97.26 58.10 20.03 19.43 15.18 14.84 14.22 12.94 12.93 12.84 12.30 10.82 10.29 10.12 9.25 9.16 9.11 8.25 7.83 7.51 7.39 7.37 6.84 6.69 6.38 6.23 5.69 5.40 4.64 4.04 3.37 1.90 1.29 1.14 0.90 0.59 0.54 0.27 0.25 0.20 -1.84 -9.80 -14.20 -16.42

1 2 3 4 5 6 7 8 9 10 11 12 13 15 16 17 18 19 20 21 22 23 24 25 27 28 29 30 31 32 33 34 35 37 39 40 42 45 46 47 48 49 50 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 30.19 26.42 24.53 20.75 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

New Zealand Israel Ireland Denmark the United Kingdom Hong Kong Canada Malaysia Singapore Austria Thailand South Korea Belgium Jordan China Pakistan Italy Taiwan India Portugal Spain Greece Turkey Mexico Norway Czech Republic USA Argentina Australia Finland Sweden Germany Chile Peru France Philippines Indonesia South Africa Brazil Russia Hungary Poland Japan Netherlands Luxembourg Switzerland

Oceana the Middle East Europe Europe Europe Asia North America Asia Asia Europe Asia Asia Europe the Middle East Asia the Middle East Europe Asia Asia Europe Europe Europe the Middle East Latin America Europe Europe North America Latin America Oceana Europe Europe Europe Latin America Latin America Europe Asia Asia Africa Latin America Europe Europe Europe Asia Europe Europe Europe

_________________________________________________________________________________________________________





151

Pretax Income (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

98.07 14.13 12.89 12.73 11.87 10.82 10.12 7.39 7.15 6.92 6.46 6.20 5.69 4.94 3.21 3.04 3.03 2.78 1.59 1.10 0.78 0.56 0.20 0.18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel Kuwait Oman United Arab Emirates Iran Jordan Pakistan Turkey Bahrain Turkmenistan Saudi Arabia Kyrgyzstan Qatar Afghanistan Tajikistan Syrian Arab Republic Iraq Lebanon West Bank Yemen Gaza Strip Uzbekistan Armenia Azerbaijan

_________________________________________________________________________________________________________





152

Income Taxes Countries

Value ($K/employee)

Rank

Percentile

56.46 17.11 12.52 12.41 5.81 4.33 4.07 3.77 3.16 3.01 2.96 2.94 2.87 2.82 2.71 2.68 2.67 2.42 2.40 2.36 1.95 1.74 1.74 1.72 1.38 1.33 0.94 0.62 0.58 0.57 0.45 0.39 0.35 0.20 0.12 -0.32 -0.35 -0.39 -0.43 -0.48 -0.49 -0.56 -0.65 -0.79 -0.88 -3.07

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 26 27 30 32 33 34 36 38 39 41 42 43 44 45 46 47 48 49 50 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 50.94 49.06 43.40 39.62 37.74 35.85 32.08 28.30 26.42 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

New Zealand Denmark Israel Ireland the United Kingdom Canada Italy Thailand Jordan China Pakistan Germany Singapore Austria Hong Kong Belgium India Norway USA Malaysia Australia Turkey Mexico Finland Spain South Korea Peru Chile Japan Philippines Indonesia South Africa Brazil France Sweden Argentina Czech Republic Greece Portugal Taiwan Luxembourg Switzerland Poland Hungary Russia Netherlands

Oceana Europe the Middle East Europe Europe North America Europe Asia the Middle East Asia the Middle East Europe Asia Europe Asia Europe Asia Europe North America Asia Oceana the Middle East Latin America Europe Europe Asia Latin America Latin America Asia Asia Asia Africa Latin America Europe Europe Latin America Europe Europe Europe Asia Europe Europe Europe Europe Europe Europe

_________________________________________________________________________________________________________





153

Income Taxes (Airports, Flying Fields and Airport Terminal Services) Countries in the Middle East

Value ($K/employee)

Rank

Percentile

12.52 3.16 2.96 2.86 2.77 1.95 1.74 1.63 1.46 1.45 1.33 1.23 0.79 0.59 0.56 0.56 0.55 0.51 0.39 0.37 -0.34 -0.37 -0.57 -0.66

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00

_________________________________________________________________________________________________________

Israel Jordan Pakistan Kuwait United Arab Emirates Qatar Turkey Turkmenistan Kyrgyzstan Afghanistan Oman Iran West Bank Tajikistan Syrian Arab Republic Iraq Yemen Lebanon Gaza Strip Uzbekistan Saudi Arabia Bahrain Azerbaijan Armenia

_________________________________________________________________________________________________________




154

4

MACRO-ACCESSIBILITY IN JORDAN

4.1

EXECUTIVE SUMMARY

The U.S. Government has encouraged Jordan to continue moving forward on its economic reform program, as illustrated by the following: •

Jordan and the U.S. signed a Free Trade Agreement (FTA);

•

In 1999, the two countries signed a Trade and Investment Framework Agreement (TIFA), which seeks to remove impediments to trade and investment;

•

The U.S. and Jordan have ratified a Bilateral Investment Treaty (BIT), which protects investors and establishes procedures for resolving investment disputes;

•

The Zarqa Free Zone is Jordan’s major free zone area. Other areas include the Sahab Industrial Estate Free Zone, Queen Alia International Airport Free Zone, and the Gateway Qualifying Industrial Zone.

•

The government converted the Aqaba port and surrounding area into a Special Economic Zone (SEZ) in May 2001, with streamlined bureaucracy, lower taxes and facilitated customs handling. In the ASEZ, the private sector has been given a free hand to develop transportation and communication services, tourism, and high value-added activities.

•

Annual cash transfers from the U.S. Agency for International Development (USAID) are conditioned on the implementation of specific policy reforms aimed at speeding privatization, developing capital markets and improving the investment climate. In addition, USAID supports a comprehensive set of economic reform and private enterprise development activities aimed at implementing policy reforms and improving the overall business climate for trade and investment.

Jordan is becoming an increasingly attractive market for global trade and investment. In addition to its accession to the WTO, privatizations and extensive trade and investment reforms, Jordan is looking at becoming a strong platform for regional and international trade. Joining the U.S. - Jordan FTA, development of the ASEZA and continued growth in the QIZ’s should both strengthen Jordan’s economy and create a more attractive market for international trade and investment.

4.2 4.2.1

ECONOMIC FUNDAMENTALS AND DYNAMICS Infrastructure Development

Road connections with Syria and Saudi Arabia remain good if underdeveloped relative to Western standards. Transportation links with Israel and the Palestinian Authority are hampered by lengthy border checks and transport restrictions. Modern and efficient cargo handling facilities exist at the port of Aqaba. Jordan’s two international airports, Queen Alia near Amman and the Aqaba Airport, provide excellent facilities for cargo traffic. Blackouts and brownouts occasionally occur in the summer. Communications have improved, with wider cellular telephone coverage and easier access to pay phones. As the result of a new law reforming the telecommunications sector, an independent telecommunications agency has been established. However, the high cost and low quality of international fax and telephone communications coming into the country remains problematic. Access to the Internet and electronic mail is available throughout the Kingdom, but



Macro-Accessibility

155

the top speed for residential service is limited to 49 kbps. ADSL lines, although expensive, are available for business and residential use.

4.3 4.3.1

POLITICAL RISKS Economic Relationship with the United States

The United States and Jordan have enjoyed a strong bilateral relationship since the 1940’s. Over that period, the U.S. has provided Jordan substantial economic and military assistance, and more recently has become one of the Kingdom’s largest trading partners. Regional tensions related to the Iraqi invasion of Kuwait buffeted the U.S.Jordan relationship in the early 1990’s. However, close collaboration on the Middle East peace negotiations and King Hussein’s decision in 1994 to sign a full peace treaty with Israel largely restored the relationship. Since that time, the U.S. has repeatedly restated its commitment to assist Jordan as part of a larger effort to promote a comprehensive peace in the region.

4.3.2

Politics and the Business Environment

As Jordan’s third-largest export market (especially for light manufacturing) and the only source of petroleum products at concessionary prices, there is great domestic pressure to expand trade opportunities with Iraq. Prospects have improved somewhat through limited trade with Iraq under U.N. Security Council Resolution 986 and subsequent resolutions (oil-for-food program). However, competition from other countries, as well as the declining level of income in Iraq, has limited Jordan-Iraq trade. Jordan’s regional trade relations, strained during the Gulf War, rebounded somewhat with Saudi Arabia and Gulf nations (including Kuwait) through the determined efforts of King Abdullah II. Trade with the West Bank, Gaza and Israel remains limited due to non-tariff barriers, the complicated nature of trilateral Jordan-PNA-Israel relations and the disruption caused by Israeli-Palestinian confrontations since September 2000. The political problems of the region have not slowed the increase in Jordanian exports to the U.S. under the Qualified Industrial Zone (QIZ) concept.

4.3.3

The Political System

Jordan is a constitutional monarchy. Under the constitution, power is vested in the King and the Parliament, which consists of the Senate and the Chamber of Deputies (or Lower House). The Senate is comprised of 40 appointed members, while the Chamber of Deputies has 80 elected members. The King appoints the Prime Minister and members of the Senate. The King also appoints cabinet ministers in consultation with the Prime Minister. Parliamentary representatives serve four-year renewable terms. Political parties were legalized in 1992 and approximately 20 are licensed, but they do not exert a great deal of influence on Jordanian political life. The Council of Ministers can issue provisional laws with the King’s approval in the absence of a functioning Parliament.



Macro-Accessibility

4.4

MARKETING STRATEGIES

4.4.1

Agents and Distributors

156

Following Jordan’s accession to the WTO, the government amended the Commercial Agents and Mediators Law to make the law compatible with WTO. The current Commercial Agents and Mediator Law governs the contract between foreign firms and commercial agents. It clearly delineates the distinction between commercial agency and distribution contracts relationships. Private foreign entities, whether licensed under sole foreign ownership or as a joint venture, compete on an equal basis with local companies. The most significant provisions affecting the principal/agent relationship are: •

The Commercial agent or commercial mediator must be a Jordanian national, or a Jordanian company registered in accordance with the provisions of this Law. (Article 3)

•

Once an agency contract is signed, the agent must take the agreement to the Registrar of Companies at the Ministry of Industry and Trade for filing agents’ names and all other related information regarding their agencies in the Kingdom, and another record for filing commercial-mediators. No person shall be entitled to act as an agent or commercial-mediator in the Kingdom unless registered in the commercial agents register or the commercial mediators register. (Articles 4, 5, and 6)

•

Notwithstanding the contents of the provisions of this Law, or any other legislation, Jordanians and nonJordanians shall be prohibited from practicing the business of commercial agency or commercial mediation in the import or sale of arms (weapons), or their complementary or developing parts, or the ammunitions which are supplied to the Jordanian Armed Forces and security organizations, including the maintenance of such arms and their insurance. (Article 12)

•

Foreign companies and institutions registered to operate in the Kingdom may not practice in addition to its activities, the representation of foreign companies incorporated abroad under a commercial agency. This prohibition, however shall not include the commercial agencies which were registered in their name for this purpose prior to the effectiveness (implementation) of the provisions of this Law. (Article 13)

•

Where the principal cancels the agency contract prior to the expiry of its turn, without an error from the agent, or for any illegal reason, then the agent will be entitled to claim the principal to compensate him for the damages suffered by him, as well as for his loss of profit. (Article 14)

•

The Jordanian courts shall be the competent courts to look into any dispute or conflict arising from the commercial agency contract, or from the implementation of the provisions of this Law. (Article 16A)

•

No lawsuit concerning any dispute or conflict arising from the commercial agency contract shall be heard after the lapse of three years from the expiry of the contract or from its termination for any reason whatsoever. (Article 16B)

4.4.2

Pricing Issues

Local importers base their pricing on the export price, freight costs, applicable import tariffs and taxes, the sales tax and profit margin. Recently, policies on customs valuation have been made compatible with Article VII of the GATT code, which limits the scope for arbitrary assessment. However, U.S. manufacturers and suppliers should coordinate with local representatives before assigning a final price to a product. Out of every 10 customs valuation disputes,



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nine cases are held up by disagreement over the invoice price. It remains a customs officer’s prerogative to reject an exporter’s invoice price, which could result in fines or a higher assessed value.

4.4.3

Franchising Activities

Local investors are increasingly interested in franchising, especially in services and the fast food industry. Despite the economy’s slow growth, the local market remains enthusiastic about U.S. franchises. U.S. retail and service franchises have increased in the last several years. Examples include Subway, Pizza Hut, Popeye’s, KFC, Baskin Robbins, McDonald’s, Dunkin’ Donuts, and Burger King.

4.4.4

Creating a Sales Office

The Companies Act of 1997 provides guidance for registering foreign companies and establishing regional and representative offices. The law distinguishes between four types of business entities: •

Non-Operating Foreign Companies (Regional Offices);

•

Operating Foreign Companies (Branch or Project Offices);

•

Offshore Companies; and

•

Joint Ventures.

Non-Operating Foreign Companies (Regional Offices) A non-operating foreign company is a company, which establishes a regional or representative office to represent the affairs, which it conducts outside Jordan, with the intention of using its regional or representative office in directing the said affairs and coordinating them with the head office. Such a company is not allowed to conduct any business or commercial activity in Jordan, including activities of agents and middlemen. In addition, the number of Jordanian employees should not be less than half of the total number of employees. Non-operating foreign companies enjoy the following incentives: •

Exemption from income and social service taxes on profits generated from business conducted outside Jordan.

•

Exemption from income and social service taxes on wages and salaries of non-Jordanian employees.

•

Exemption from the formalities of registration with the Chamber of Commerce and from the payment of registration fees or any other fees in connection to their operations.

•

Exemption from foreign exchange control restrictions. Regional offices can also maintain an account in Jordan in any foreign or local currency provided that they are fed with moneys from foreign sources. Money can be deposited in and repatriated out of the accounts freely and without restrictions.

•

Non-operating foreign companies are permitted to import one car for the use of their non-Jordanian employees once every five years, provided that they deposit a bank guarantee for the amount of the duty with the Ministry of Finance (Customs Department). This guarantee will be released upon exporting the car out of Jordan or selling the car locally after paying the duty thereon.

•

Exemption from customs fees and other charges on imports of office equipment, furniture, business samples and demonstration models. The only tax paid on such imports is the sales tax.

•

Non-Jordanian employees are granted a residence and work permit.



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Operating Foreign Companies (Branch or Project Offices) An operating foreign company is a company or a body registered outside Jordan, whose head office is in another country, and whose nationality is non-Jordanian. Such companies are classified into two types according to the nature of their activities: •

Non-permanent: A foreign company that has been awarded a contract in Jordan requiring the execution of work within a limited period of times (e.g. a construction contract). Upon termination of the contract, a new one may be obtained in order to extend the period of operation. If the company obtains no new contract, then the branch office must be closed and liquidated.

•

Permanent: A branch office operating in Jordan permanently with licenses to that effect from the concerned authorities.

An operating foreign company is allowed to conduct commercial activities in Jordan after registering and obtaining a work permit. Registration fees paid for a branch office are JD 250, if the share capital of the foreign company at its home office does not exceed the equivalent of JD 1 million, and JD 500 if it exceeds the equivalent of JD 1 million. A branch or project office must notify the Controller of Companies in writing of the date it expects its operations to end in Jordan, or the date specified for the termination thereof, at least 30 days prior to that date. It must prove to the Controller of Companies the settlement of all its commitments resulting from operating in Jordan prior to the cancellation of registration.

Offshore Companies An offshore company can take the form of a private shareholding company with limited liability, a limited partnership in shares, or a public shareholding company. The offshore company is listed as a Jordanian entity, but cannot conduct any business in Jordan. Furthermore, the words “Exempt Company” must be added to the name of the company. Offshore companies cannot offer their shares for public subscription in Jordan. They are obliged to invest a minimum of 5% of the share capital in securities traded in the Amman Stock Exchange.

Joint Ventures A joint venture is a commercial undertaking formed by two or more persons, who may be natural persons or legal entities. A joint venture is not subject to the provisions and procedures of registration and licensing and does not have a separate legal identity. However, a joint venture is confined to the special relationship between partners in the venture as specified in the joint venture agreement. Joint ventures with Jordanian partners are one means of penetrating the local market. The advantage lies in the Jordanian partner’s market experience, which helps in bridging cultural gaps when conducting business. They are also essential in some services where foreign ownership/share of companies cannot exceed 50%. One of Jordan’s two mobile phone companies is a U.S./Jordanian joint venture. Other joint ventures exist in the Al Hassan Industrial Estate QIZ and the mining and contracting sectors of the economy. Joint ventures in contracting require 50% local partnership.

General Registration Procedures All enterprises, whatever their legal form, operating in Jordan must register with the Controller of Companies at the Ministry of Industry and Trade. Only joint ventures are excluded. Foreign companies seeking to open a regional www.icongrouponline.com


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office or a branch in Jordan must apply to the Controller of Companies for registration by submitting all necessary documents in Arabic. Companies operating in Jordan must register with the Chamber of Commerce or the Chamber of Industry, as applicable. All companies operating in Jordan should register with the Income Tax Department. Companies employing more than five people must register with the Social Security Corporation. All enterprises must obtain an annual license from the concerned municipality. Industrial projects can receive an industrial registration certificate from the Ministry of Industry and Trade upon completing an application with the Department of Industrial Development. The Jordan Investment Board (JIB) assists investors through every step of the investment process. JIB in Amman also offers one-stop-shop assistance with customs and registering establishing an office. For details, refer to www.jordaninvestment.com and www.aci.org.jo.

4.4.5

Advertising and Trade Promotion

U.S.-style contests, giveaways, drawings and other creative promotions are gaining popularity as consumers become more sophisticated and competition increases. U.S. exporters can participate in local exhibitions and advertise in newspapers, television, radio, and business journals as a means to locate agents, distributors or buyers. Billboards and electronic screens are also in widespread use. The main local newspapers include: •

Jordan Times (English daily)

•

Al-Rai (Arabic daily)

•

Al-Dustour (Arabic daily)

•

Al-Aswaq (Arabic daily)

•

Al-Arab al-Yawm (Arabic daily)

Supplying Service and customer support are important selling points in Jordan. U.S. firms that compete with European and Asian suppliers find that workshops and training seminars for local agents or sub-contracting firms are useful sales tools.

4.4.6

Public Sector Marketing

The General Supplies Department is the government’s procurement agency. A local agent/distributor or representative must be appointed to act on behalf of any potential American supplier for local tenders. Direct bids for tenders financed by international donors or the World Bank may be permitted as stated in tender documents.



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IMPORT AND EXPORT REGULATION RISKS

4.5.1

Trade Barrier Risks

Jordan continues to have an open market economy. Jordan has acceded to the WTO, finalized a Free Trade Agreement (FTA) with the United States, and, through Qualified Industrial Zones (QIZ) significantly increased its exports to the United States.

4.5.2

Valuations on Imports

The customs law of 1999 was amended in March 2000 to include WTO-compliant criteria for customs valuation (which is based on certified invoices) and to make the valuation process clearly defined and more transparent. The law restricts customs officers’ mandate to use arbitrary valuation but still rewards those who uncover invoice misreporting and impose penalties on importers. The customs valuation is CIF-based. The value of the imported good is converted into JD at the official central bank exchange rate (1 JD = USD 1.41). In some cases, invoice or export discounts have been included in the valuation by the customs department. Still, the exporter should consult the local importer to determine how to best grant any such discounts or rebates.

4.5.3

Licenses Required for Imports

Import licenses are required for imports of: •

Non-commercial shipments exceeding JD 2,000 in value;

•

Biscuits of all types;

•

Mineral water;

•

Dried milk for industry;

•

Used tires;

•

Certain goods imported from Syria with which Jordan has special trade balance arrangements;

•

Items requiring prior clearance from specific authorities.

Goods entering the country under temporary entry status, bonded goods and goods benefiting from the investment promotion law are exempt from import licenses (refer www.jordaninvestment.com). All Jordanian and foreign trading companies must either obtain an importer’s card from the Ministry of Industry and Trade for customs clearance purposes, or pay Customs a fee equivalent to 5% of the value of the imported goods. At the Ministry a complete and updated list of all import requirements and provisions is periodically issued. For nontrading entities such as banks, hospitals and hotels, the ministry issues a special, “limited” card that allows the import of goods specific to that entity’s purpose.



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Entering Temporary Imports

U.S. and Jordanian businesses are treated equally with regard to temporary entry rights. Foreign industrial inputs, raw materials, semi-manufactured inputs used in manufacturing for export purposes, equipment for scientific tests, as well as containers and wrapping material used for packaging domestic produce, can be granted temporary entry status for a maximum three year period, subject to approval by the customs department and the submission of a bank guarantee. Temporary entry exemptions may be obtained by submitting a written request, accompanied by supporting documentation, to the customs department. Imported primary, secondary, or complementary inputs used in the production of export goods are exempt from custom duties and all additional import fees on a reimbursable or “drawback” basis.

4.5.5

Documentation Required for Trade

According to the Customs Law, every customs declaration must include the following: •

Maritime or air bill of lading.

•

Commercial invoice indicating value, weight, freight and insurance charges, etc. The Jordanian diplomatic mission in the country of origin should notarize all invoices. Certification by the local chamber of commerce is sufficient, subject to the approval of the Customs Department director, in cases in which a Jordanian consulate is not available.

•

A notarized certificate of origin issued by the relevant authority in the exporter’s local area.

•

Value declaration form for shipments exceeding JD2000.

The Customs Department may request other documents related to the shipment as needed. All invoices should describe the imported goods in Arabic.

4.5.6

Labeling Issues

Imported products must comply with labeling and marking requirements issued by the Institute of Standards and Metrology and relevant government ministries. These labeling and marking requirements have been made to conform to the relevant WTO directives. Different regulations apply to imported foodstuffs, medicines, chemicals and other consumer products. Importers are responsible for informing foreign suppliers of any applicable labeling and marking requirements.

4.5.7

Restrictions on Imports

The government bans the import of plastic waste, the narcotic plant “qat”, and diesel passenger cars. Imports of raw leather are restricted to the Jordan Tanning Company; crude oil and its derivatives (except metallic oils) and household gas cylinders are restricted to the Jordan Petroleum Refinery Company; cement is restricted to the Jordan Cement Factories Company; explosives and gun powder are restricted to the Jordan Phosphate Mines Company; and used tires are restricted to tire retreading factories.



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Additional Trade Issues

Pre-import clearance is required for certain goods. The clearance, once obtained, acts as an import license. However, these clearances are not automatic. The relevant pre-import license-issuing agency and the respective goods include: •

Ministry of Industry and Trade (these are given out in the form of import licenses): flour and its by-products;

•

Ministry of Agriculture: Frozen animal semen, live animals, fresh/chilled/frozen meat, embalmed wild animals, imported milk products (not required for import of dairy products from countries with whom Jordan has concluded a bilateral trade protocol);

•

Agricultural Marketing Corporation: Potatoes, onions, garlic, fresh fruit and vegetables (not required for import of fresh fruits and vegetables from countries with whom Jordan has concluded a bilateral trade protocol);

•

Ministry of Interior/Public Security Directorate: arms and ammunitions, explosives, switch-blade knives, fueloperated toy cars, remote control operated toy planes, electric and electronic games for commercial use, selfdefense electric tools;

•

Jordan Armed Forces: Military clothing;

•

Ministry of Energy and Mineral Resources: radioactive materials and uranium;

•

Telecommunications Regulatory Commission: Wireless receivers and broadcast stations, wireless alarm devices, remote control devices (including motor, garage, window and shutter control; excluding television and video devices), site mapping equipment, wireless receivers and broadcast devices, cellular-phone equipment, wireless microphones, communication terminals, remote control toy-planes (also to be cleared by the Public Security Department of the Ministry of the Interior), mobile TV equipment;

•

Radio and Television Corporation: Decoders and satellite receivers;

•

Central Bank of Jordan: Color photocopiers;

•

Ministry of Health: All types of medical drugs and antibiotics, food supplements for athletes, potassium bromide, food dyes, asbestos pipes and panels, frozen ice cream, baby food and milk, laser pens, oxygen and nitrogen oxide;

•

Ministry of Municipal and Rural Affairs and the Environment: Halogenous materials, freon gas;

•

Ministry of Post and Communications: Postal clearing devices;

•

Ministry of Water and Irrigation: Artesian well drills;

•

Military Security: Small monitoring cameras.

For the import of used electronic equipment (including photocopiers, refrigerators, freezers and pumps), and used gas water heaters and gas ovens, the following conditions apply: •

Equipment must be in suitable, usable condition;

•

Equipment must conform to Jordanian and international standards;

•

Equipment must be free of any substances, which may negatively affect the environment and the ozone layer; Importer must supply a certificate from manufacturing company proving the equipment is under three years old (if a manufacturer’s certificate cannot be produced, shipment must be accompanied by certificate of selling agent in the exporting country);

•

Ten percent of shipment by value must comprise new spare parts.



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Controls on Exports

The Customs Department, part of the Ministry of Finance, controls goods that enter and exit the Kingdom. Export licenses are not required for Jordanian-made products, transit goods, free trade zone goods, re-exports or goods entering the country under temporary status. There are exceptions to that rule, particularly with respect to shipments exceeding JD 1000 ($1410) in value to countries which maintain special banking arrangements with Jordan, such as Syria and Iraq. Exports of scrap metal, such as steel, aluminum, or copper, are subject to a fee of JD 25 ($35).

4.5.10

Local Standards

The Jordanian Institute of Standards and Metrology (www.jism.gov.jo) is responsible for most issues related to standards, measures, technical specifications and ISO 9000 certification. The number of Jordanian companies that qualified for ISO 9000 and ISO 14000 certifications continues to grow.

4.5.11

Free Trade Zone Options

Goods may be shipped to Jordan’s free trade zones by shipping agents and representatives of land, sea and air transport and clearing firms. All shipping documentation must be received within 72 hours of arrival and before the shipment is unloaded. Transit goods entering the Kingdom may be stored in warehouses at the port of Aqaba for up to one month, after which goods must be moved to a free zone area.

Aqaba Special Economic Zone (ASEZ) The Government of Jordan established the ASEZ in May 2001. The Zone offers a duty free and low tax environment (%5 on all net business income). Along with streamlined business registration and licensing procedures. For more information, please see www.aqabazone.com.

4.5.12

Adherence to Free Trade Agreements

Jordan recently concluded a Free Trade Agreement (FTA) with the United States, which entered into force December 2001, making Jordan only the fourth country in the world to enjoy an FTA with the U.S. The agreement commits both parties to establishing a free trade area over the next 10 years. This includes phased reductions in tariffs, down to zero in 10 years, for trade in goods and barriers. It also streamlines the movement of goods, and natural person. Jordan acceded to the WTO in April 2000. The EU-Jordan Association Agreement, which will create a free trade area between Jordan and the EU within a twelve-year transition period, came into force in May 2002. Jordan is also a signatory to the Arab Free Trade Agreement, which will establish a free trade zone with ten of the Arab countries by 2008.



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Customs Department Contact Information

Jordan Customs Department Mr. Mahmoud Quteishat, Acting Director General P.O. Box 90, Amman, Jordan Telephone: 962-6-462-3186/8; 462-4394/6 Fax: 962-6-464-7791 E-mail: [email protected] Web site: www.customs.gov.jo Ministry of Industry and Trade Mr. Wasef Azer, Minister P.O. Box 2019, Amman, Jordan Telephone: 962-6-560-7191/5663774 Fax: 962-6-560-3721 / 568-4692 Web site: www.mit.gov.jo

4.6 4.6.1

INVESTMENT CLIMATE Openness to Foreign Investment

Jordan’s investment laws treat foreign and local investors equally, with the following exceptions (as per Regulation No. 54 of 2000, entitled “Non-Jordanian Investments Promotion Regulation”): Foreign investors may not own more than 50 percent of projects in: •

Construction and contracting;

•

Wholesale and retail trade;

•

Transport (maritime, air and train transport) and auxiliary services;

•

Wastewater treatment;

•

Food services;

•

Travel agent services;

•

Import and export services;

•

Advertising services;

•

A number of business-related and commercial services;

Under the terms of the U.S.- Jordan FTA, foreign investors are limited to 60 percent ownership in publishing and in aircraft maintenance and repair services. Foreign investors may not have whole or partial ownership of: •

Investigation and security services;

•

Sports clubs (except for health clubs)

•

Stone quarrying for construction purposes



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Customs clearance services

•

Land transportation of passengers and cargo using trucks, buses and taxis.

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A minimum capital requirement of JD 50,000 (USD 70,000) is set for foreign investors. This requirement does not apply to participation in public shareholding companies. There is no formal screening or host government selection process for foreign investment. However, investors in large projects find that the informal approval of local and central government officials helps to ensure governmental cooperation in project implementation. The law stipulates that expropriation is prohibited unless deemed in the public interest. It provides for fair compensation to the investor in convertible currency. Some large U.S. Investors have reported that there were many “hidden costs” involved when investing in Jordan due to bureaucracy, red tape, vague regulations and conflicting jurisdictions. Investors should execute due diligence in exploring investment opportunities and concluding purchases.

4.6.2

Conversion and Transfer Policies

Jordan’s liberal foreign exchange law entitles foreign investors to remit abroad, in a fully convertible foreign currency, foreign capital invested, including all returns, profits, and proceeds arising from the liquidation of investment projects. Non-Jordanian administrative and technical employees are permitted to transfer their salaries and compensation abroad. The Jordanian dinar (JD) is fully convertible for all commercial and capital transactions. The JD is pegged to the U.S. dollar. Licensed money-exchangers are supervised by the central bank, but are free to set their own exchange rates depending on market conditions. Unlike banks, they do not pay the central bank commissions for exchange transactions, giving them a competitive edge over banks. Other foreign exchange regulations include: •

Non-residents are allowed to open bank accounts in foreign currencies. These accounts are exempted from all transfer-related commission fees charged by the central bank.

•

Banks are permitted to purchase an unlimited amount of foreign currency from their clients in exchange for JD on a forward basis. Banks are permitted to engage in reverse operations involving the selling of foreign currency in exchange for JD on a forward deal basis for the purpose of covering the value of imports.

•

There are no restrictions on the amount of foreign currency that residents may hold in bank accounts, and there are no ceilings on the amount residents are permitted to transfer abroad.

•

Banks do not require prior central bank approval for the transfer of funds, including investment-related transfers.

4.6.3

Expropriation and Compensation

There are no known cases where the government has expropriated the private property of an investor.



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Dispute Settlement

Under Jordanian law, foreign investors may seek third party arbitration or an internationally recognized settlement of disputes. The Jordanian government recognizes decisions issued by the International Center for the Settlement of Investment Disputes (ICSID), of which it is a member. Jordan is also a member of the New York Convention of 1958 on the recognition and enforcement of foreign arbitral awards. In cases where the government (or its agencies) is a party to the dispute, it generally prefers settlement in local courts if an out-of-court settlement is not forthcoming. Jordan abides by WTO dispute settlement mechanisms. Dispute settlement mechanisms under the FTA are consistent with WTO commitments. Article IX of the Bilateral Investment Treaty (BIT), signed in 1997, established procedures for dispute settlement.

4.6.5

The Judicial System

In the legislative process, draft laws are prepared by various ministries, which are then submitted to the Cabinet and subsequently presented to the lower house of Parliament for consideration. Once passed by the lower house, draft laws must be approved by the Senate. All laws require royal assent and must be published in the National Gazette before they come into force. According to the constitution, the judiciary is independent of other branches of the government. In some cases, it is susceptible to political pressure and interference by the executive. The Constitution classifies the judiciary into three categories: Religious courts, special courts (e.g. Military Court, Customs Court, Income Tax Court) and regular courts. Verdicts rendered by the Jordanian judiciary are based on decisions made by a judge or a panel of judges. General legal provisions are incorporated within the Civil Code, unless a separate, more specialized law governs the nature of the specific relationship. Commercial activities are governed by the Commercial Code. Business contracts, such as commercial agency and commission agency contracts, are subject to the Code’s provisions. Financial papers such as checks and promissory notes are also dealt with under the Commercial Code. Various provisions in the Commercial Code, the Civil Code, and the Companies Law govern bankruptcy and insolvency.

4.6.6

Performance Requirements and Incentives

Following Jordan’s accession to the WTO, the Trade-Related Investment Measures (TRIMS) agreement came into force. Investment and commercial laws do not contain any trade-restrictive investment measures and have generally been in compliance with trims. Investment incentives take the form of income tax and custom-duties exemptions, which are granted to both Jordanian and foreign investors. The country is divided into three development areas: Zones A, B, and C. Investments in Zone C, the least developed areas of Jordan, receive the highest level of exemptions.



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However, all agricultural, maritime transport, and railway investments are classified as Zone C, irrespective of location. Hotel and tourism-related projects set up along the Dead Sea coastal area, leisure and recreational compounds, and convention and exhibition centers receive Zone A designations. Qualified industrial zones (QIZs) are considered Zone B projects unless they fall in Zone C. The three-zone classification scheme does not apply to nature reserves and environmental protection areas, which are granted special consideration.

Investment Promotion Law Exemptions from income and social services taxes of up to ten years for projects approved by the Investment Promotion Committee (which includes senior officials from the Ministry of Industry and Trade, Income Tax Department, Customs Department, the private sector, and the Director General of the Jordan Investment Board), in accordance with the designated zone scheme: •

25 percent tax exemption for Zone A

•

50 percent tax exemptions for Zone B

•

75 percent tax exemptions for Zone C

An additional year of these tax exemptions is granted to projects each time they undergo expansion, modernization, or development resulting in a 25 percent increase in their production capacity for a maximum of four years. Capital goods are exempt from duties and taxes if delivered within three years from the date of the investment promotion committee’s approval. The committee may extend the three-year period if necessary. Imported spare parts related to a specific project are exempt from duties and taxes, provided that their value does not exceed 15 percent of the value of fixed assets requiring spare parts. They should be imported within ten years from the production date. Capital goods used for expansion and modernization of a project are exempt from duties and taxes, provided they result in at least a 25 percent increase in production capacity. Hotel and hospital projects receive exemptions from duties and taxes on furniture and supply purchases, which are required for modernization and renewal once every seven years. Increases in the value of imported capital goods are exempt from duties and taxes if the increases result from higher freight charges or changes in the exchange rate.

Special Industrial Zones In addition to the Investment Promotion Law, additional exemptions are granted to investments within industrial estates designated as Special Industrial Zones: •

Industrial projects are granted exemptions on income and social services taxes for a two-year period. Established industrial facilities that relocate to an industrial estate also receive this benefit.

•

Industrial projects are granted property tax exemptions throughout their lifetime.

•

Industrial projects are granted partial or full exemptions from most municipality and planning fees.



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Right to Private Ownership and Establishment

In general, the laws on investment and property ownership permit domestic and foreign entities to establish and own businesses and engage in remunerative activities. However, activities relevant to military and national security are subject to different provisions and procedures. Foreign companies may open representative (regional) and branch offices; branch offices may carry out full business activities, while regional offices may serve as liaisons between head offices and Jordanian or regional clients. The Ministry of Industry and Trade manages the government’s policy on setting up regional and branch offices. No foreign firm may import goods without appointing an agent registered in Jordan. The agent’s connection to the foreign company must be direct, without a sub-agent or intermediary. In mid 2001, a Commercial Agents and Intermediaries Law was passed to govern the contract between foreign firms and commercial agents. It clearly delineates the distinction between commercial agency and distribution contracts relationships. Private foreign entities, whether licensed under sole foreign ownership or as a joint venture, compete on an equal basis with local companies. Non-Arab foreign nationals are permitted to own or lease property in Jordan, provided that their home country does not discriminate against Jordanians and the property is developed within five years from the date of approval. The Cabinet is the authority on licensing foreign ownership of land and property. Agricultural land is not included in the provisions of this law. However, a foreign company that invests in the agricultural sector in Jordan automatically obtains national treatment with respect to ownership of agricultural land, once registered as a Jordanian company.

4.6.8

Protection of Property Rights

Interest in property (moveable and real) is recognized, enforced and recorded through reliable legal processes. The legal system facilitates and protects the acquisition and disposition of all property rights. Prior to its accession to the WTO, Jordan passed several new laws to improve protection of intellectual property rights (IPR), patents, copyrights, and trademarks. TRIPS (Trade Related Aspects of Intellectual Property Rights)consistent laws now protect trade secrets, plant varieties and semiconductor chip designs. The law requires registration of copyrights, patents and trademarks. Copyrights must be registered at the National Library, part of the Ministry of Culture. Patents must be registered with the Registrar of Patents and Trademarks at the Ministry of Industry and Trade. Jordan’s record on IPR enforcement has improved. However, effective enforcement mechanisms and legal procedures are yet to be fully established. As a result, the government’s record on IPR protection remains mixed. A sizeable proportion of videos and software sold in the marketplace continues to be pirated. Enforcement action against audio/video and software piracy is improving, but remains spotty.

4.6.9

Transparency of the Regulatory System

The government is slowly implementing policies to improve competition and foster transparency. These reforms aim to change an existing system that can be influenced greatly by family affiliations and business ties. Although in many instances bureaucratic procedures have been streamlined; red tape and opaque procedures still present problems for foreign and domestic investors. The arbitrary applications of customs, tax, labor, health and other laws or regulations, particularly at the level of local government, have impeded investment.



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Capital Market Risks

Jordan’s capital market is small, with a capitalization of approximately USD 6.3 billion (around 70 percent of GDP). Major restructuring of the market was completed in 2000. The Amman Financial Market (AFM) is divided among the Jordan Securities Commission (JSC), the Amman Stock Exchange (ASE) and the Securities Depository Center (SDC). The SDC is the custodian for all transaction contracts, clearing and settlement. The JSC was established as the government’s supervisory and monitoring agency for the capital market in Jordan. There are approximately 30 brokerage firms and 158 listed public-shareholding companies on the ASE. Thirty-eight percent of ownership is by non-Jordanian, mostly Arab, investors. The ASE also suffers from intermittent liquidity problems, which have ensured that the bourse remains prone to speculative movements. Structural problems (such as lack of transparency and corporate governance and the dearth of mutual funds) have been exacerbated by the insufficiency of institutional buying and wavering investor confidence. The central bank, on behalf of the ministry of finance, conducts regular auctions of six-month treasury bills and three-year treasury bonds. Treasury bonds and bills and development bonds (equivalent to Treasury bonds) are listed on the ASE. Monthly trading volume averages JD 600,000 (USD 840,000) at face value. Despite this low volume, markets are actively quoted on development bonds each trading day. These quotes provide the basis for the benchmark yield curve published daily on the Central Bank Reuters pages and in the local Arabic newspapers. Foreign investors are welcome to participate in auctions and to purchase government securities. The corporate bond market remains under-developed, and continues to be over-shadowed by traditional direct lending. One reason is rigid interest rates; another relates to the absence of a secondary market for such issues. Increasingly, however, some banks have started introducing new products and corporate bond issues. One flaw in the credit market is the lack of long-term credit, owing to the short-term nature of banks’ deposit structure. On average, regular corporate loans are extended for periods of 1-3 years, while syndicated loans may reach up to 7 years. Long-term financing has also been long curtailed by the ottoman-era law that stipulated that total interest payments over the life of a bond might not be greater than the principal amount. This effectively impeded the development of longer-maturity fixed-income instruments, even though it was not effectively enforced. The new Public Debt Law has scrapped this requirement, allowing for longer maturities and increased volumes. The absence of long-term credit discourages projects requiring long development periods. As a consequence, large investment projects often resort to foreign markets to raise capital. The Central Bank of Jordan (CBJ) is the banking system’s regulatory authority. An economic slow-down since 1996 has taken a toll on Jordanian banks, and unofficial estimates of non-performing loans put the total at around 30 percent of all loans. Banks offer loans, discounted bills, and overdraft facilities. Investment banks are not permitted to extend overdraft facilities. The CBJ permits banks to extend loans and credit facilities in foreign currency. In such cases, it requires debt repayment to be in foreign currency. A number of banks have established mutual funds. New capital instruments such as commercial paper and convertible bonds are under consideration. In addition to long-term instruments, securitization, short-selling, and treasury stocks are being introduced in some banks.



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With respect to ownership and participation in the major economic sectors in Jordan, there is no apparent discrimination against foreign participation. In fact, many Jordanian businesses seek foreign partners, which are perceived as the key to increased competitiveness and easier entry into international markets. There are a number of internationally recognized accounting and auditing firms in Jordan. The government’s accounting and auditing regulations are consistent with international standards and are internationally recognized.

4.6.11

Political Violence

There have been relatively few significant incidents of political violence in Jordan recently. However, as conditions in the West Bank and Gaza dictate, sporadic protests can take place. While the government generally limits and contains these events, demonstrations, particularly in the refugee camps, can become violent. While the U.S. has confidence in the government of Jordan’s ability to address terrorist threats, it cannot be ruled out that terrorist elements may be at large.

4.6.12

Corruption

Corruption is a crime in Jordan. The General Intelligence Directorate (GID) has an anti-corruption department that is responsible for combating bribery, extortion, and other similar crimes. Influence peddling and a lack of transparency have been alleged in government procurement and dispute settlement. “Wasta”, the use of family, business, and other personal connections to advance business and interests, is endemic.

4.6.13

Bilateral Investment Agreements

A free trade agreement (FTA) between the U.S. and Jordan entered into force in December 2001. The agreement mandates that a free trade area between the two countries will be attained following a gradual phasing out of import duties and other trade barriers over the next ten years. The agreement incorporates labor, environmental, and intellectual property rights provisions. The U.S. and Jordan signed a Bilateral Investment Treaty in 1997. The agreement provides reciprocal protection of Jordanian and U.S. individual and corporate investments. Jordan signed the Trade and Investment Framework Agreement (TIFA) in 1999. Under the TIFA, a U.S.-Jordan council on trade and investment was established with the objective of working towards the removal of impediments to trade and investment. Jordan is a member of a pan-Arab accord on facilitating the movement of capital between Arab countries. Countries that have signed the accord include Jordan, UAE, Bahrain, Tunisia, Saudi Arabia, Iraq, Oman, Kuwait, Libya, Egypt, Morocco, Qatar, Syria, and Lebanon. An economic association agreement between Jordan and the European Union that establishes free trade over a twelve-year period entered into force in 2002. This agreement calls for the free movement of capital, as well as cooperation on development and political issues.



Macro-Accessibility

4.6.14

171

OPIC and Other Investment Insurance Programs

Investments in Jordan are eligible for Overseas Private Investment Corporation (OPIC) insurance and private financing. In addition, there are two OPIC-backed investment funds that make equity investments in businesses in Jordan, the West Bank/Gaza, and Oman. Jordan is also a member of the Multilateral Investment Guarantee Agency (MIGA), a World Bank Agency, which guarantees investment against non-commercial risks such as civil war, nationalization, policy changes, etc. The program covers investments in Jordan irrespective of the investor’s nationality, in addition to covering Jordanian investments abroad. Several European countries have official debt-for-equity swap programs that are open to investors of all nationalities.

4.6.15

Labor

The rate of population growth (births minus deaths) is about 2.3 percent a year. About two-thirds of the population is under the age of 30. In general, the labor force is well educated. Literacy rates approach 94.5 percent for men and 83.5 percent for women. Jordan has a labor force of 1.17 million and a government-estimated unemployment rate of 14.9 percent. The officially estimated 140,000 foreign laborers in Jordan work primarily in unskilled sectors, such as construction, agriculture, and domestic service. They constitute around 12 percent of the labor force. The Ministry of Labor regulates foreign worker licensing, licensing fees, prohibited sectors, and employer liability. Among its responsibilities, the ministry approves the hiring of professional foreign workers by private businesses. Non-citizens are not permitted by law to join unions. Labor unions serve primarily as intermediaries between workers and the Ministry of Labor, and may engage in collective bargaining on behalf of workers. In order to strike, workers must obtain permission from the government. Currently, about 30 percent of the total labor force, including government service, is unionized. However, this figure includes numerous professional associations where membership is mandatory. Article 28 of the Labor Law specifies the conditions under which an employer can discharge a worker without notice. Article 31 allows employers to lay off employees if economic or technical circumstances necessitate reorganization. The law does not require employers to include retirement plans in their employment package. However, if the employer agreed to provide retirement benefits when the worker was contracted, the employer must fulfill his/her commitment. The Social Security Law stipulates that if the employer has more than five employees, they must be enrolled in the social security system. The Labor Law also addresses worker compensation and outlines compensatory categories for work-related injuries. Article 67 provides unpaid maternity leave for a maximum of one year for mothers working in firms employing 10 or more workers, and article 70 requires full pay for 10 weeks of maternity leave. The law provides for 14 days of annual leave for employees during the first five years with the employer, and 21 days after five years of successive service. This law places Jordan in compliance with international and arab labor agreements.

4.6.16

Foreign Trade Zones and Free Ports

The Zarqa Free Zone is Jordan’s major free zone area. Other areas include the Sahab Industrial Estate Free Zone, Queen Alia International Airport Free Zone, and the Gateway Qualifying Industrial Zone.



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In May 2001, the government converted the Aqaba port and surrounding area into a special economic zone (SEZ) with streamlined bureaucracy, lower taxes, and facilitated customs handling. Both Jordanian and foreign investors are permitted to invest in trade, services, and industrial projects in free zones. Industrial projects must fulfill one of the following conditions: •

New industries which depend on advanced technology;

•

Industries requiring raw material and/or locally manufactured parts that are locally available;

•

Industries that complement domestic industries;

•

Industries that enhance labor skills and promote technical know-how;

•

Industries providing consumer goods, and that contribute to reducing market dependency on imported goods.

The following incentives are granted to investors in the designated free zones: •

Profits are exempt from income and social services taxes for a period of twelve years, with the exception of profits generated from storage services that involve goods released to the domestic market.

•

Salaries and allowances payable non-Jordanian employees are exempt from income and social services taxes.

•

Goods imported to and/or exported from free zones are exempt from import taxes and customs duties, with the exception of goods released to the domestic market.

•

Industrial goods manufactured in free zones enjoy partial customs duties exemption once released to the domestic market, depending on the proportion of the value of local inputs and locally incurred production costs.

•

Construction projects are exempt from licensing fees and urban property taxes.

•

Free transfer of capital invested in free zones, including profits.

4.6.17

Qualifying Industrial Zones (Qiz)

Approved goods produced in a “qualifying industrial zone” (QIZ) can be imported into the united states free of duty if they involve economic cooperation between Jordan and Israel, and if 35 percent of the product’s content comes from the QIZ, Israel, and/or the West Bank/Gaza. This makes investment in a QIZ particularly attractive to industries whose products are assessed with high tariffs when they are imported into the U.S. There are currently ten QIZs, three of which are publicly owned and the remaining seven are privately owned. Four additional zones are planned.

4.7 4.7.1

TRADE AND PROJECT FINANCING The Banking System

The Central Bank of Jordan (CBJ) is the banking system’s regulatory authority. To curtail the phenomenon of bounced checks, the CBJ established a Credit Bureau for bounced checks in 2001. It requires banks to report on a timely basis the names of writers of bounced checks; after the third report, the CBJ will circulate the bounced check writer’s name to all banks with instructions to withhold check-books and related check writing facilities for a time to be determined.



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Some banks have started adopting modern banking practices such as automated check clearing and the use of magnetic check processors, unified reporting forms and electronic data-transmission networks. Some banks have also started Tele-banking and e-banking services. Credit facilities include loans, discounted bills, and overdraft facilities. Investment banks are not permitted to extend overdraft facilities. Due to rigid interest rates and the absence of a secondary market, the corporate bond market remains underdeveloped and continues to be overshadowed by traditional direct lending. Increasingly, however, some banks have started introducing new products and corporate bond issues. The CBJ is keen on stimulating the local capital market, particularly where long-term project finance is required. A number of banks have established mutual funds. New capital instruments such as commercial paper and convertible bonds are under consideration. In addition to long-term instruments, securitization, short selling, and treasury stocks are being introduced in some banks. The CBJ permits banks to extend loans and credit facilities in foreign currencies. In such cases, it requires debt repayment in foreign currency. There are no restrictions on the flow of foreign currency for commercial and capital transactions.

4.7.2

General Financing Availability

To obtain project financing, banks require a comprehensive feasibility study, including a detailed cash flow analysis. Where larger projects are concerned, banks generally prefer to spread credit risk by syndicating the loan. The CBJ has stepped up its role as banking sector overseer, and has given greater attention to the quality of a bank’s assets, particularly with respect to loan portfolios. Conventional financing methods include overdrafts, one-year discounted loans, three-year loans with interest payable monthly, and syndicated loans for periods of one to seven years. The United States Export-Import Bank and the CBJ signed an agreement in 1996 allowing the private sector to import U.S. goods using Ex-Im Bank short- or medium-term credit guarantees. to date, this program has been underutilized. Out of a limit of $200 million in credit guarantees, only around $95 million has been utilized. More information on this program can be obtained at Ex-Im Bank’s Web page at: www.exim.gov. Investments in Jordan are eligible for Overseas Private Investment Corporation (OPIC) insurance and project financing. Terms and conditions are fully described on OPIC’s Web site: www.opic.gov.

4.7.3

Banks with Correspondent Banking Arrangements

All of the country’s banks maintain direct correspondence with U.S.-based banks. Each local Jordanian bank deals with at least two to three New York-based banks.

4.7.4

Country Data

•

Religion(s): Islam and Christianity

•

Government System: Constitutional Monarchy



Macro-Accessibility •

Languages: Arabic (Official), English (Business)

•

Work Week: Sunday-Thursday

4.8

174

TRAVEL RISKS

Jordan has excellent air connections with other Middle Eastern countries, Europe and Asia. The national airline, Royal Jordanian, flies to several major cities in the U.S. Major European airlines also have frequent connections to Jordan. Most major hotels have business service offices with fax machines, Internet and e-mail. U.S.-based telephone calling cards such as ATT, MCI and Sprint do not function in Jordan. International calls must be made through the Jordan Telecommunications Company, which has relatively high international tariffs. Car rental facilities and airport-tohotel shuttle buses are available. The climate is Mediterranean, relatively mild and very favorable compared to the Gulf region and North Africa.

4.9 4.9.1

KEY CONTACTS U.S. Government Contacts

U.S. Embassy Amman International mailing address: Economic/Commercial Section P.O. Box 354 Amman 11118, Jordan U.S. domestic mail address: Economic/Commercial Section APO, AE 09892-0200 Telephone: (962) (6) 592-0101, ext. 2558 or 2632 Fax: (962) (6) 592-7653 / 592-0146 Web site: www.csj.org.jo

U.S. Agency for International Development International mailing address: USAID/Jordan Economic Opportunities Office U.S. Embassy Amman P.O. Box 354 Amman 11118, Jordan U.S. domestic mail address: U.S. Embassy Amman, USAID APO, AE 09892-0200 Toni-Christiansen-Wagner, Director Telephone: (962) (6) 592-0101, ext. 2614/2615 Fax: (962) (6) 592-0143



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E-mail: [email protected]

Jordan-United States Business Partnership (JUSBP) Suite 500, Qammou Building 30 Prince Shaker Bin Zaid Street Shmeisani, Amman, Jordan Mr. Lewis Reade, CEO Telephone: (962) (6) 568-4308/56843081/5684250 Fax: (962) (6) 568-4266 E-mail: [email protected]

AMIR Program 66, Abdul Hameed Badees Street, Shmeisani P.O. Box 940503 Amman 11194, Jordan Telephone: (962) (6) 566-1831/2 Fax: (962) (6) 560-3599 E-mail: [email protected] www.amir-jordan.org

U.S. Department of State, Office of Business Affairs 2201 C Street NW, RM 2318 Washington, D.C. 20520 Telephone: (202) 746-1625 Fax: (202) 647-3953

U.S. Department of Commerce 14th Street and Constitution Avenue, NW Washington, D.C. 20230 Telephone: (202) 482-1209 Fax: (202) 482-5179

4.9.2

Jordanian Government Departments

Ministry of Industry and Trade P.O. Box 2019, Amman, Jordan Telephone: (962) (6) 560-7191/5663774 Fax: (962) (6) 560-3721 / 568-4692 www.mit.gov.jo Jordan Investment Board P.O. Box 893, Amman 11821, Jordan Telephone: (962) (6) 553-1081/2/3 Fax: (962) (6) 552-1084 E-mail: [email protected] www.jordaninvestment.com Jordan Export Development and Commercial Centers Corporation (JEDCO) www.icongrouponline.com


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P.O. Box 7704, Amman 11118, Jordan Telephone: (962) (6) 560-3507 Fax: (962) (6) 568-4568 E-mail: [email protected] www.jedco.gov.jo Jordan Industrial Estates Corporation P.O. Box 950278, Amman 11195, Jordan P.O. Box 17, Sahab Industrial Estate, Amman, Jordan Telephone: (962) (6) 402-2101/3 Fax: (962) (6) 402-1194 E-mail: [email protected] www.jiec.com Free Zones Corporation P.O. Box 20036, Amman, Jordan Telephone: (962) (5) 382-6429 Fax: (962) (5) 382-6430 www.free-zones.gov.jo Central Bank of Jordan P.O. Box 37, Amman 11118, Jordan Telephone: (962) (6) 463-0301/9 Fax: (962) (6) 463-8889/463-9730 www.cbj.gov.jo General Sales Tax Department Telephone: (962) (6) 582-3441/5823392 Fax: (962) (6) 582-3395 Aqaba Special Economic Zone Authority P. O. Box 2565, Aqaba 77110, Jordan Telephone: (962) (3) 203-5757 Fax: (962) (3) 203-0912 E-mail: [email protected] www.aqabazone.com

4.9.3

Chambers of Commerce and Trade Associations

Jordanian American Business Association (JABA) American Chamber of Commerce P.O. Box 941865, Amman 11194, Jordan Telephone: (962) (6) 565-1860/1 Fax: (962) (6) 565-1862 E-mail: [email protected] www.jaba.org.jo Federation of Jordanian Chambers of Commerce and Amman Chamber of Commerce (ACC) P.O. Box 287, Amman, Jordan Telephone: (962) (6) 566-5492/566-6151 www.icongrouponline.com


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Fax: (962) (6) 568-5997/566-6155 www.fjcc.com www.ammanchamber.org Amman Chamber of Industry P.O. Box 1800, Amman, Jordan Telephone: (962) (6) 464-4569/464-3001 Fax: (962) (6) 464-7852 E-mail: [email protected] www.aci.org.jo Jordan Exporters Association P.O. Box 830432, Amman, Jordan Telephone: (962) (6) 568-5603/4 Fax: (962) (6) 568-5605 E-mail: [email protected] www.jta-jordan.com Jordanian Businessmen Association (JBA) P.O. Box 926182, Amman, Jordan Telephone: (962) (6) 568-0855/5604424 Fax: (962) (6) 568-0663 E-mail: [email protected] www.jba.com.jo Amman World Trade Center P.O. Box 962140, Amman, Jordan Telephone: (962) (6) 560-5791/2 Fax: (962) (6) 560-5793 E-mail: [email protected] www.awcc.com Information Technology Association of Jordan (INTAJ) P.O. Box 2383 Amman 11953, Jordan Telephone: (962) (6) 515-2322 Fax: (962) (6) 515-2344 E-mail: [email protected] www.intaj.net Business and Professional Women’s Association (BPWA) Telephone: (962) (6) 551-1647/8 www.bpwa.org.jo Jordan Society of Tourist & Travel Agents (JSTA) Telephone: (962) (6) 463-8599 Fax: (962) (6) 567-8295 E-mail: [email protected] www.jsta.gor



Macro-Accessibility

4.9.4

178

Licensed Banks and the Stock Exchange

Citibank P.O. Box 5055, Amman 11183, Jordan Telephone: (962) (6) 464-4065/2276 Fax: (962) (6) 465-8693/464-1923 www.citibank.com/jordan HSBC P.O. Box 925286, Amman 11110, Jordan Telephone: (962) (6) 560-7471 Fax: (962) (6) 568-2047 E-mail: [email protected] www.hsbc.com ANZ Grindlays Bank P.O. Box 9997, Amman 11191, Jordan Telephone: (962) (6) 560-7201 Fax: (962) (6) 567-9115 E-mail: [email protected] www.anz.com Arab Bank Limited P.O. Box 950545, Amman 11195, Jordan Telephone: (962) (6) 560-7231 Fax: (962) (6) 560-6793 E-mail: [email protected] www.arabbank.com The Housing Bank P.O. Box 7693, Amman 11118, Jordan Telephone: (962) (6) 560-7315 Fax: (962) (6) 567-8121 E-mail: [email protected] www.iskanbank.com.jo Cairo-Amman Bank P.O. Box 950661, Amman 11195, Jordan Telephone: (962) (6) 461-6910 Fax: (962) (6) 464-2890 E-mail: info@ca_bank.com.jo www.ca_bank.com Arab Banking Corporation/Jordan P.O. Box 926691, Amman 11110, Jordan Telephone: (962) (6) 566-4183 Fax: (962) (6) 568-6291 E-mail: [email protected] www.abc.com.jo Jordan National Bank P.O. Box 3103, Amman 11181, Jordan www.icongrouponline.com


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Telephone: (962) (6) 562-2282 Fax: (962) (6) 562-2281 E-mail: [email protected] www.ahli.com Bank of Jordan P.O. Box 2140, Amman 11181, Jordan Telephone: (962) (6) 569-6277 Fax: (962) (6) 569-6291 E-mail: [email protected] www.boj.com.jo Jordan Gulf Bank P.O. Box 9989, Amman 11191, Jordan Telephone: (962) (6) 560-3931 Fax: (962) (6) 566-4110 E-mail: [email protected] Jordan Kuwait Bank P.O. Box 9776, Amman 11191, Jordan Telephone: (962) (6) 568-8814 Fax: (962) (6) 569-5604 E-mail: [email protected] www.jordan-kuwait-bank.com Union Bank for Savings and Investment P.O. Box 35104, Amman 11180, Jordan Telephone: (962) (6) 560-7011 Fax: (962) (6) 566-6149 E-mail: [email protected] www.unionbankjo.com Jordan Investment and Finance Bank P.O. Box 950601, Amman 11195, Jordan Telephone: (962) (6) 566-5145 Fax: (962) (6) 568-1410 E-mail: [email protected] www.jifbank.com Arab Jordan Investment Bank P.O. Box 8797, Amman 11121, Jordan Telephone: (962) (6) 560-7126 Fax: (962) (6) 568-1482 E-mail: [email protected] www.ajib.com Philadelphia Bank P.O. Box 925993, Amman 11110, Jordan Telephone: (962) (6) 566-3141 Fax: (962) (6) 568-3247 E-mail: [email protected] www.philibank.com



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Middle East Investment Bank P.O. Box 560, Amman 11118, Jordan Telephone: (962) (6) 569-5470 Fax: (962) (6) 569-3410 Export and Finance Bank P.O. Box 941283, Amman 11194, Jordan Telephone: (962) (6) 569-4250 Fax: (962) (6) 569-2062 E-mail: [email protected] www.efbank.com.jo Industrial Development Bank P.O. Box 1982, Amman, Jordan Telephone: (962) (6) 464-2216 Fax: (962) (6) 464-7821 Jordan Islamic Bank P.O. Box 926225, Amman 11110, Jordan Telephone: (962) (6) 566-6326 Fax: (962) (6) 566-6326 E-mail: [email protected] www.jordanislamic.com.jo Amman Stock Exchange P.O. Box 212466, Amman 11121, Jordan Telephone: (962) (6) 566-4109/566-4081 Fax: (962) (6) 566-4071 E-mail: [email protected] www.ammanstockex.com Jordan Securities Commission (JSC) P.O. Box 8802, Amman, Jordan Telephone: (962) (6) 560-7171 Fax: (962) (6) 568-6830 www.jsc.gov.jo Securities Depository Center (SDC) P.O. Box 212465, Amman 11121, Jordan Telephone: (962) (6) 567-2788 www.sdc.com.jo Institute of Banking Studies P.O. Box 1378, Amman 11953, Jordan Telephone: (962) (6) 553-6395 Fax: (962) (6) 553-2199 E-mail: [email protected] www.ibs.edu.jo Arab Credit and Commercial Information Amman, Jordan Telephone: (962) (6) 568-3798/9 Fax: (962) (6) 568-3791 www.icongrouponline.com


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E-mail: [email protected]

4.9.5

Washington-Based U.S. Government Contacts

TPCC Trade Information Center / Washington Telephone: 1-800-USA-TRADE Steve Seche Desk Officers for Jordan, Syria and Lebanon NEA/ARN, Department of State Washington, DC 20520 Telephone: (202) 647-1058 Fax: (202) 647-0989 Paul Thanos Jordan Desk Officer Office of the Near East Department of Commerce Washington, DC Telephone: (202) 377-1870 Fax: (202) 377-0878 Paul Hoffman Area Officer Department of Agriculture Washington, DC Telephone: (202) 720-7053 Fax: (202) 720-6063 Overseas Private Investment Corporation (OPIC) 1100 New York Avenue, N.W. Washington, D.C. 20527 Telephone: (202) 336-8799 Fax: (202) 408-9859 www.opic.gov Export-Import Bank (Exim-Bank) 811 Vermont Avenue, N.W. Washington DC 20571 Telephone: (800) 565-3946 or (202) 565-3946 Fax: (202) 565-3380 www.exim.gov U.S. Trade & Development Agency (TDA) 1621 North Kent Street, Suite 300 Arlington, VA 22209 Telephone: (703) 875-4357 Fax: (703) 875-4009 www.tda.gov



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Other Relevant Contacts Jordanian Embassy, Washington 3504 International Drive, N.W. Washington DC 20008 Telephone: (202) 966-2664 Fax: (202) 244-0239 E-mail: [email protected] www.jordanembassyus.org National U.S. Arab Chamber of Commerce 1100 New York Avenue, N.W. East Tower, Suite 550 Washington, DC 20005 Telephone: (202) 289-5920 Fax: (202) 289-5938 www.nusacc.org

4.9.6

Relevant Web Sites

U.S. Government U.S. Embassy, Amman, Jordan www.usembassy-amman.org.jo CS Amman www.buyusa.gov/jordan U.S. Department of Commerce www.export.gov U.S. State Department www.state.gov U.S. Customs Department www.customs.ustreas.gov Export-Import Bank of the U.S. www.exim.gov Overseas Private Investment Corporation www.opic.gov U.S. Trade and Development Agency www.tda.gov U.S. and Foreign Agricultural Service www.fas.usda.gov U.S. Trade Representative www.ustr.gov



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World Bank www.worldbank.org

U.S. Trade Organizations U.S. Chamber of Commerce www.uschamber.org National U.S.-Arab Chamber of Commerce www.nusacc.org Business Roundtable www.brtable.org

Jordanian Government Jordanian Embassy in Washington www.jordanembassyus.org Jordan Customs Department www.customs.gov.jo Ministry of Industry and Trade www.mit.gov.jo Free Zones Corporation www.free-zones.gov.jo Central Bank of Jordan www.cbj.gov.jo Telecommunications Regulatory Commission www.trc.gov.jo Ministry of Post & Communications www.mopc.gov.jo Ministry of Planning www.mop.gov.jo Ministry of Energy and Mineral Resources www.nic.gov.jo/memr/memr.html Jordan Department of Statistics www.dos.gov.jo Jordanian Ministry of Health www.health.gov.jo Jordan Export Development and Commercial Centers Corporation www.jedco.gov.jo National Information Center, Amman, Jordan www.icongrouponline.com


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www.nic.gov.jo Royal Scientific Society www.rss.gov.jo Ministry of Tourism & Antiquities www.mota.gov.jo Petra (Jordanian government news agency) www.petra.gov.jo Jordan Civil Aviation Authority www.jcaa.gov.jo

Jordanian Organizations and Businesses FTA-Jordan Exporters Association www.justrade.jo Jordan Investment Board www.jordaninvestment.com Jordanian American Business Association (JABA) www.jaba.org.jo Jordan Trade Association www.jta-jordan.com Amman Chamber of Commerce www.ammanchamber.org Amman Chamber of Industry www.aci.org.jo Amman World Trade Center www.awcc.com Federation of Jordanian Chambers of Commerce www.fjcc.com Aqaba Special Economic Zone www.aqabazone.com Jordan Industrial Estates Corporation www.jiec.com Jordanian Businessmen’s Association (JBA) www.jba.com.jo Information Technology Association of Jordan (INTAJ) www.intaj.net Business and Professional Women’s Association www.icongrouponline.com


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www.bpwa.org.jo Jordan Society of Tourist and Travel Agents (JSTA) www.jsta.org AMIR Program www.amir-jordan.org Amman Financial Market (stock exchange) www.access2arabia.com/afm Jordanian Association of Manufacturers of Pharmaceuticals and Medical Appliances www.japm.com Jordan’s Yellow Net www.mideastweb.com/yellow Arab Potash Company www.nic.gov.jo/industry/apc The Jordan Times www.access2arabia.com/jordantimes The Star www.star.arabia.com Jordan University of Science and Technology www.just.edu.jo Yarmouk University www.yu.edu.jo University of Jordan www.ju.edu.jo Interarab Investment Fund www.interarab.com.jo JTMS-Fastlink (mobile phones) www.jmts-fastlink.com Kawar Group www.kawar.com The Unified Company for Organizing Land Transport www.unified.com.jo Nabresco (land transport) www.nabresco.com.jo



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5 5.1

DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS DISCLAIMERS & SAFE HARBOR

Summary Disclaimer. This publication ("Report") does not constitute legal, valuation, tax, or financial consulting advice. Nor is it a statement on the performance, management capability or future potential (good or bad) of the company(ies), industry(ies), product(s), region(s), city(ies) or country(ies) discussed. It is offered as an information service to clients, associates, and academicians. Those interested in specific guidance for legal, strategic, and/or financial or accounting matters should seek competent professional assistance from their own advisors. Information was furnished to Icon Group International, Inc. ("Icon Group"), and its subsidiaries, by its internal researchers and/or extracted from public filings, or sources available within the public domain, including other information providers (e.g. EDGAR filings, national organizations and international organizations). Icon Group does not promise or warrant that we will obtain information from any particular independent source. Published regularly by Icon Group, this and similar reports provide analysis on cities, countries, industries, and/or foreign and domestic companies which may or may not be publicly traded. Icon Group reports are used by various companies and persons including consulting firms, investment officers, pension fund managers, registered representatives, and other financial service professionals. Any commentary, observations or discussion by Icon Group about a country, city, region, industry or company does not constitute a recommendation to buy or sell company shares or make investment decisions. Further, the financial condition or outlook for each industry, city, country, or company may change after the date of the publication, and Icon Group does not warrant, promise or represent that it will provide report users with notice of that change, nor will Icon Group promise updates on the information presented. Safe Harbor for Forward-Looking Statements. Icon Group reports, including the present report, make numerous forward-looking statements which should be treated as such. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995, and similar local laws. Forward-looking statements involve known and unknown risks and uncertainties, which may cause a company's, city's, country's or industry's actual results or outlook in future periods to differ materially from those forecasted. These risks and uncertainties include, among other things, product price volatility, exchange rate volatility, regulation volatility, product demand volatility, data inaccuracies, computer- or software-generated calculation inaccuracies, market competition, changes in management style, changes in corporate strategy, and risks inherent in international and corporate operations. Forward-looking statements can be identified in statements by the fact that they do not relate strictly to historical or current facts. They use words such as "anticipate,'' "estimate," "expect,'' "project,'' "intend,'' "plan,'' "feel", "think", "hear," "guess," "forecast," "believe," and other words and terms of similar meaning in connection with any discussion of future operating, economic or financial performance. This equally applies to all statements relating to an industry, city, country, region, economic variable, or company financial situation. Icon Group recommends that the reader follow the advice of Nancy M. Smith, Director of SEC's Office of Investor Education and Assistance, who has been quoted to say, "Never, ever, make an investment based solely on what you read in an online newsletter or Internet bulletin board, especially if the investment involves a small, thinly-traded company that isn't well known … Assume that the information about these companies is not trustworthy unless you can prove otherwise through your own independent research." Similar recommendations apply to decisions relating to industry studies, product category studies, corporate strategies discussions and country evaluations. In the case of Icon Group reports, many factors can affect the actual outcome of the period discussed, including exchange rate volatility, changes in accounting standards, the lack of oversight or comparability in accounting standards, changes in economic conditions, changes in competition, changes in the global economy, changes in source data quality, changes in reported data quality, changes in methodology and similar factors. Information Accuracy. Although the statements in this report are derived from or based upon various information sources and/or econometric models that Icon Group believes to be reliable, we do not guarantee their accuracy, reliability, quality, and any such information, or resulting analyses, may be incomplete, rounded, inaccurate or condensed. All estimates included in this report are subject to change without notice. This report is for informational purposes only and is not intended as a recommendation to invest in a city, country, industry or product area, or an offer or solicitation with respect to the purchase or sale of a security, stock, or financial instrument. This report does not take into account the investment



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objectives, financial situation or particular needs of any particular person or legal entity. With respect to any specific company, city, country, region, or industry that might be discussed in this report, investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the information in this report. Investing in either U.S. or non-U.S. securities or markets entails inherent risks. In addition, exchange rate movements may have an effect on the reliability of the estimates provided in this report. Icon Group is not a registered Investment Adviser or a Broker/Dealer.

5.2

ICON GROUP INTERNATIONAL, INC. USER AGREEMENT PROVISIONS

Ownership. User agrees that Icon Group International, Inc. ("Icon Group") and its subsidiaries retain all rights, title and interests, including copyright and other proprietary rights, in this report and all material, including but not limited to text, images, and other multimedia data, provided or made available as part of this report ("Report"). Restrictions on Use. User agrees that it will not copy nor license, sell, transfer, make available or otherwise distribute the Report to any entity or person, except that User may (a) make available to its employees electronic copies of Report, (b) allow its employees to store, manipulate, and reformat Report, and (c) allow its employees to make paper copies of Report, provided that such electronic and paper copies are used solely internally and are not distributed to any third parties. In all cases the User agrees to fully inform and distribute to other internal users all discussions covering the methodology of this Report and the disclaimers and caveats associated with this Report. User shall use its best efforts to stop any unauthorized copying or distribution immediately after such unauthorized use becomes known. The provisions of this paragraph are for the benefit of Icon Group and its information resellers, each of which shall have the right to enforce its rights hereunder directly and on its own behalf. No Warranty. The Report is provided on an "AS IS" basis. ICON GROUP DISCLAIMS ANY AND ALL WARRANTIES, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, RELATING TO THIS AGREEMENT, PERFORMANCE UNDER THIS AGREEMENT, THE REPORT. Icon Group makes no warranties regarding the completeness, accuracy or availability of the Report. Limitation of Liability. In no event shall Icon Group, its employees or its agent, resellers and distributors be liable to User or any other person or entity for any direct, indirect, special, exemplary, punitive, or consequential damages, including lost profits, based on breach of warranty, contract, negligence, strict liability or otherwise, arising from the use of the report or under this Agreement or any performance under this Agreement, whether or not they or it had any knowledge, actual or constructive, that such damages might be incurred. Indemnification. User shall indemnify and hold harmless Icon Group and its resellers, distributors and information providers against any claim, damages, loss, liability or expense arising out of User's use of the Report in any way contrary to this Agreement. © Icon Group International, Inc., 2007. All rights reserved. Any unauthorized use, duplication or disclosure is prohibited by law and will result in prosecution. Text, graphics, and HTML or other computer code are protected by U.S. and International Copyright Laws, and may not be copied, reprinted, published, translated, hosted, or otherwise distributed by any means without explicit permission. Permission is granted to quote small portions of this report with proper attribution. Media quotations with source attributions are encouraged. Reporters requesting additional information or editorial comments should contact Icon Group via email at [email protected]. Sources: This report was prepared from a variety of sources including excerpts from documents and official reports or databases published by the World Bank, the U.S. Department of Commerce, the U.S. State Department, various national agencies, the International Monetary Fund, the Central Intelligence Agency, and Icon Group International, Inc.



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END



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Biofuel Equipment and Services in Turkey: A Strategic Reference, 2007

Broadband Equipment and Services in China: A Strategic Reference, 2007

Biofuel Equipment and Services in Greece: A Strategic Reference, 2007

Semiconductor Production Equipment in Taiwan: A Strategic Reference, 2007

Thermal Power Generating Equipment in China: A Strategic Reference, 2007

Recycling Equipment in Bulgaria: A Strategic Reference, 2007

Telecommunication Equipment in Bulgaria: A Strategic Reference, 2007

Wind Energy Equipment in Egypt: A Strategic Reference, 2007

Renewable Energy Equipment in Poland: A Strategic Reference, 2007

Safety and Security Equipment and Services in Turkey: A Strategic Reference, 2007

Mass Transportation Security Equipment and Services in Japan: A Strategic Reference, 2007

Information Security (IS) Equipment and Services in India: A Strategic Reference, 2007

Medical Equipment and Supplies in Finland: A Strategic Reference, 2006

Electronic and Biometric Security Equipment and Services in Saudi Arabia: A Strategic Reference, 2006

Nuclear Power Generating Equipment in Canada: A Strategic Reference, 2003

Renewable Energy Equipment and Services in Dominican Republic: A Strategic Reference, 2007

Renewable Energy Equipment and Services in Bulgaria: A Strategic Reference, 2007

Medical Equipment and Supplies for Cardiac Surgery in India: A Strategic Reference, 2007

Wind Energy Equipment in India: A Strategic Reference, 2006

Telecommunications Equipment in Taiwan: A Strategic Reference, 2006

Air Pollution Control Equipment and Services in China: A Strategic Reference, 2007

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Renewable Energy Equipment and Services in United Kingdom: A Strategic Reference, 2007

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Environmentally Friendly Building Products in Philippines: A Strategic Reference, 2007

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