TIME FOR CHANGE
Veteran
A PICTURE IS WORTH A THOUSAND WORDS...
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We need to put that on a few thousand t Shirts
AMR Corporation Reports 2007 Net Profit of $504 Million
- Thread starter 700UW
- Start date
Love it
We need to put that on a few thousand t Shirts
You're wrong again. I looked it up; AA's profit sharing plan $500 million net income threshhold ignores accounting adjustments and special items:
Wouldn't matter if special charges wiped out net income - the profit sharing would still be paid on amounts over $500 million.
Prepayment of debt didn't reduce the 2007 profits. Reduced an asset (cash) and reduced a liability (outstanding debt). Didn't affect profit. It will help increase profits next year, since AA will pay a lot less interest expense (increasing profits).
In AAs entire 75+ years of existance how many times have they exceeded $500,000,000 in profits?
Servicing debt is part of the operating costs isnt it? If profits are revenue less costs then prepayment of debt, while enhancing the balance sheet for the long term, would result in a smaller profit for the snapshot figure of yearly profits. While prepaying debt is a good thing, as usual you can count on AA management to use a good thing in a bad way. In this case its used to mislead employees as to the financial strength of the company, like they did in 2003.
Not enough times to base future profit sharing on that threshhold. Your union, the APA and the APFA dropped the ball on this one just like they did the options. Should have negotiated a much more lucrative plan, but they didn't. The CO profit sharing plan is very generous, and the rampers at CO aren't even represented. The $800 paid to each employee (costing $67 million total) is the profit sharing that would have been paid under the plan if AA mainline had earned $947 million, and that's happened even more infrequently.
Yes, "Servicing debt" is an operating cost, as servicing debt means the payment of interest. Paying down principal is NOT an operating cost. Not if it's repaid on time or if it's repaid early. AA didn't pay any extra interest on the early debt repayment, so NO, the profits were not diminished by the early repayment.
Fortunately, AA doesn't borrow money on terms using the rule of 78s like down on their luck people often do (where the full contract interest is paid even if you pay off the debt early). AA's credit ratings ain't stellar, but it hasn't had to borrow from The Associates or Household Finance.
Interest expense is an operating cost. Repayment of the principal owed (as in repayment of debt) is NOT an operating cost.
Ed Norton
Veteran
Poo on this!
To paraphrase Henry Hill in the movie Goodfellas: "Price of fuel went up? Fuque you pay me.. Had to service the debt? Fuque you, pay me! Lost money in the fourth quarter? You guessed it. FUQUE YOU, PAY ME! :down:
Anyone happen to read the APA hotline? It makes perfectly clear how high the pilots think of themselves. Their "union" is pissed, because they didn't get more than $800 and were treated like every other employee. They make it perfectly clear that they "got LESS on an annual compensation basis." Well boo friggen hoo. Seems like the ego is running rampant again and needs to be pulled back to reality.
Tense? Irrittable? Have a cat escape from the ranch?
No reason to take a jab at your supervisors in a public forum
Tense? Irrittable? Have a cat escape from the ranch?
No reason to take a jab at your supervisors in a public forum
My supervisor, yeah riiiiggggghhhhhhht. Maybe you escaped from the cat ranch.
No problem, I guess I could be wrong. After the main door closes, run up to the cockpit, tell your boss that he is wrong, his flight manual is wrong along with the FAA/ICAO as well.
I would not recommend doing this, my humble suggestion would be to keep your mouth shut and enjoy one of the most nonintrusive, benign supervisor-subordinate relationships existing in todays working world.
TWU informer
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- Nov 4, 2003
- 7,550
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The Pilots must have forgotten that we all gave away the farm to save their "sacred caw" pension.
The PGBC would have nearly if not completely covered my pension in BK, but we all gave away the farm to save the pension that is way beyond PGBC coverage.
The Pilots will soon enough be faced with the loss of pension again as they continue to play hard ball with complete disregard for fellow employees. No need to spread the division any further as corporate ploy of division is coming full speed down the tracks on a train without brakes.
Maybe a few Pilots that frequent this board would like to share with us the value of their pension? Give us both the annuity coverage amount and/or the lump sum payment amount. I can tell you right now that most Pilots go home on retirement making considerably more than I do while still working for these corporate thieving bastards.
Exactly correct and I agree with you. Everyone sacrificed (to the tune of at least $8.1 billion) and the primary beneficiaries were the pilots, whose generous pensions remain intact. Everyone else's pension, as you correctly point out, would have been covered by the PBGC had AA filed for Ch 11 and terminated the pensions ala US or UA. You'd think those pilots would be sorta grateful that everyone sacrificed so they could benefit.
The Pilots will soon enough be faced with the loss of pension again as they continue to play hard ball with complete disregard for fellow employees. No need to spread the division any further as corporate ploy of division is coming full speed down the tracks on a train without brakes.
The company may threaten Ch 11 and may say the pensions are at risk, but now that they're funded at 96%, that would be a very hollow threat. For all practical purposes, they're fully funded, and if they were terminated now and handed to the PBGC, the pilots would get their full pension. They'd come up short only if the pension were severely underfunded (like the other airlines' pensions when they were terminated).
eolesen
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- Jul 23, 2003
- 15,988
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I don't know if that's true, FWAAA. They'd get their the amount under their qualified plan and maybe a little more, but the lump-sum is in a non-qualifying plan (identical in structure to the executive SERP that everyone thinks is so evil....). That gets handled a lot differently IIRC.
Grateful?
Surely you jest. 
Those self-proclaimed "Masters of the Universe" are every bit as selfish as upper management, if not moreso.
Pounding their chests about a strike? Don't make me laugh. Most of them are so highly leveraged, and so in debt, with the various ex-wives and toys, they will bruise and bloody each other to get across the picket line if push came to shove.
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