You are not missing anything. They are screwing around with the figures in a big way. This is a well-performing company at the existing debt level. Here is how I see the financial results for Q2. I will take out "non-recurring" debits and credits to try to get a view of how on-going operations look.
Gross profit was $199M, but this included a $49M credit for changes in allowable claims and $2M in equity income, so it is "really" $148M. SG&A ($71M), D&A ($45M), R&D ($11M) = total operating costs of $127M which means ongoing operating profit of ca. $21M. Interest expense should have been ca. $9M (they added $108M for the total interest payable upon exit), so profit before tax was ca. $12M. Pay 35% tax and you get ca. $8M x 4 = $32M annual = ca $0.13/share, so around $1.50/share or so (depending on what P/E you want to use).
Bottom line is, if you take away all of the smoke and mirrors they are making money...maybe not as much as they would like, but they are making money at the existing debt level. They are anything but insolvent. They could dilute us by 75% (i.e. give us $25M of the new $100M shares). This is the equivalent of doing a reverse split (say 10:1) and offering 75M new shares at $15/share (given above value of $1.50/share). This would dilute existing shares by 75% but still give us $1.50/share in value and raise over $1B to reduce debt (pay of interest due plus 2009 & 2016 bonds, reinstate 2026 bond). It is not the home run that everyone was looking for, but wouldn't everyone win there (except that the creditors wouldn't be able to steal a solvent company)???
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