2.8 billion loss for NWA

FA Mikey

Veteran
Aug 19, 2002
4,421
301
miami
goldwatermiller08.com
Northwest Airlines Corp. on Tuesday reported a net loss of $2.8 billion for 2006, even as it narrowed its losses for the fourth quarter.

The Eagan-based carrier faced a loss of $2.56 billion for all of 2005. The airline, which is expected to emerge from Chapter 11 bankruptcy protection later this year, reported a loss of $267 million for the fourth quarter, compared to a loss of $1.3 billion during the same period in 2005.
 
From the NWA employee website:


NWA Reports Full Year 2006 Results
--------------------------------------------------------------------------------

Northwest reported on Tuesday that it made a pre-tax profit of $301 million before reorganization items in 2006, compared to a full year 2005 pre-tax loss of $1.38 billion before reorganization items.
Including reorganization items, Northwest reported a full year 2006 net loss of $2.8 billion versus a $2.56 billion net loss for the full year 2005.

For the fourth quarter, Northwest reported a pre-tax loss of $7 million before reorganization items versus a fourth quarter pre-tax loss of $386 million before reorganization items in 2005’s fourth quarter. Including reorganization items, Northwest reported a fourth quarter 2006 net loss of $267 million versus a $1.3 billion net loss for the fourth quarter of 2005.

Doug Steenland said the numbers indicate that “the work we have done to reposition Northwest for the long term is showing tangible results as we reported the first profitable year since 2000. To report an annual pre-tax profit is another major milestone in Northwest’s restructuring efforts.

“The airline’s 2006 results improved by nearly $1.7 billion over 2005,â€￾ Steenland continued. “Our efforts have allowed us to implement a new, competitive global network carrier cost structure, which when combined with the unique assets of Northwest Airlines, will produce strong results in the years ahead. Our customers, investors and employees will all benefit from a successful, global airline.â€￾

Steenland added that the progress made by Northwest “is due in large measure to the hard work and personal sacrifices of our employees. One of our goals is to share Northwest’s success with employees. I am pleased to report that during the first quarter, Northwest will distribute approximately $44 million through its profit sharing and performance incentive payments as well as special holiday payments to our employees.

“We previously had authorized the sale of 20 percent of the unsecured claims held by employees, which were part of ratified collective bargaining agreements. The sale of this 20 percent interest will total approximately $181 million in cash for our employees. Last week, we authorized the sale of another 20 percent of the unions’ claims.â€￾

During the fourth quarter, Northwest’s operating revenues increased 2.2 percent versus the fourth quarter of 2005 to $2.98 billion. System passenger revenue increased 8.0 percent to $2.2 billion on 2.0 percent more mainline available seat miles (ASMs), resulting in a 5.9 percent improvement in unit revenue.

Including regional carrier revenues, Northwest’s consolidated unit revenue improved 4.4 percent on 0.3 percent more ASMs. Because of the significant improvement in unit revenue reported by Northwest in the fourth quarter of 2005, year-over-year comparisons show smaller improvements than in previous quarters.

Operating expenses in the quarter decreased 9.9 percent year-over-year, excluding $23 million of unusual items related to the Aircraft Mechanics Fraternal Association (AMFA) severance, while mainline unit costs, excluding fuel and unusual items, decreased by 14 percent on 2 percent more ASMs. Salaries, wages and benefits decreased 22.6 percent, primarily due to a combination of labor cost reductions and headcount reductions. Aircraft rental expense decreased 41 percent, primarily due to restructured and rejected aircraft leases.

During the fourth quarter, fuel averaged $1.94 per gallon, excluding taxes, down 2.0 percent versus the fourth quarter of last year.

Northwest's year-ending unrestricted cash and short-term investments balance was approximately $2.1 billion excluding $424 million of restricted cash and short-term investments.

Neal Cohen, executive vice president and chief financial officer, said, “We remain on target to complete our restructuring in the second quarter. We continue to work with our stakeholders to successfully complete this process.â€￾