AMR loses $452 million in first quarter, excluding special items

[FWAAA]

http://finance.yahoo.com/news/AMR-Corporation-Reports-First-prnews-718857901.html?x=0&.v=1

$4.5 billion unrestricted cash at 3/31, much better than the year before.

 

[FWAAA]

Pretty amazing when you think about it over the long haul.

It's only amazing because you've overstated the amount of debt reduction since early 2003. In those seven years, AA has sold billions of dollars of new stock, sold billions of dollars of non-core assets (Orbitz, Hotwire, ARINC, etc) and has issued billions of dollars of new debt to refinance maturing debt. The cash balance has grown from about $1.2 billion of unrestricted cash as of 4/15/03 to about $4.5 billion today.

From 2003 to 2010, Total debt has declined slightly, while net debt has dropped dramatically. Net debt is total debt minus unrestricted cash, and since unrestricted cash has grown substantially, net debt has dropped substantially.

In January of 2003
$1.6 Billion in unrestricted cash and lawyers on the Bankruptcy steps and nearly $22 Billon in debt.

Jump Forward to 2010

After 7+ plus years of every quarter reporting losses except for two (2) that reported a profit.
$4.5 Billion in unrestrcited cash and $10 Billion+ in debt paid down.

It appears unrestrcited cash increased by 3 Billion and debt reduced by $10 Billion all the while losing money nearly every reporting quarter after being on the brink of Bankruptcy 7 years ago.

The $22 billion debt figure from 2003 includes debt that is not included in the current total debt total of $16 billion. Subtract the unrestricted cash of $4.5 billion and Net Debt is $11.4 billion.

Yes, there has been incremental improvements in reducing debt, but nowhere near $10 billion.

 

[TWU informer]

Oh I get it now.

Since net debt goes down when unrestricted cash goes up then it really isnt amazing that after 28 quarters of losses and 2 quarters of profits from a starting point of Lawyers are on the Bankrupcty Steps that AA is still flying?

I would think that any other business that was on the verge of Bankruptcy in 2003 and reports losses in every quarter except for 2 and still remains in business would be under investigation by some governing body.

I am unable to argue specific details with you since you obviously know how to make crap like this happen.

My point still remains from a simpleton logic brand of thinking that a company on the verge of Bankruptcy in 2003 that reports massive losses for 26 out of 28 quarters, and I am talking millons in losses per quarter not hundreds and still remains in business should not only have management entitled to stock bonus awards, heck Ripley's Believe It or Not or else the Guiness Book of Records should be doing a documentary on this amazing outcome.

I just want to know where I learn to apply this same math to my household finances.
If I could accomplish such amazing feats with my finances I wouldn't really need a raise in pay, I would be better off to give up income and have greater losses.

I have sick time this week that means 1/2 pay per day in lost income can you fill me in on how to parlay that into a monetary gain and cover the gain up so nobody knows?

 

[JFK Fleet Service]

Total debt has declined slightly, while net debt has dropped dramatically. Net debt is total debt minus unrestricted cash, and since unrestricted cash has grown substantially, net debt has dropped substantially.

AMR's Net Debt, which it defines as Total Debt less unrestricted cash and short-term investments, was $11.4 billion at the end of the first quarter, compared to $11.5 billion in the first quarter of 2009.

I don't have an MBA but $11.4 billion compared to $11.5 billion doesn't seem all that much of an improvement.

Maybe it's just me...

 

[FWAAA]

AMR's Net Debt, which it defines as Total Debt less unrestricted cash and short-term investments, was $11.4 billion at the end of the first quarter, compared to $11.5 billion in the first quarter of 2009.

I don't have an MBA but $11.4 billion compared to $11.5 billion doesn't seem all that much of an improvement.

Maybe it's just me...

It's just you. Post #5 was a response to Informer's comparison of debt in 2003 to 2010. I've edited the post to make it even more clear.

 

[JFK Fleet Service]

I'm looking at it year over year, not the seven year post concession time frame.

 

[TWU informer]

I'm looking at it year over year, not the seven year post concession time frame.

Well then you are NOT even discussing or looking at the time frame we have been discussing. You basically have stepped all over a conversation taken place on the post 2003 concession facts that after 26 quarters of massive losses after a "near bankruptcy filing" AA is still flying and still "improving".

 

[JFK Fleet Service]

Silly me, I thought this thread was about the first quarter results released today.After all,the title of the thread is "AMR loses $452 Million in the first quarter" is it not?

 

[mweiss]

I just want to know where I learn to apply this same math to my household finances.

Easy. Sell your assets (furniture, clothing, houses, whatever) and use the proceeds to cover your expenses. The trick is to start out with a large amount so you can stretch it out over a decade.

BTW, you can probably see how that's not sustainable. Eventually you run out of things to sell.

 

[JFK Fleet Service]

Transcript of the earnings call if anyone is interested.

1st Quarter Conference Call Transcript


Wall Street isn't too impressed with the Tom and Gerry show.

Jamie Baker unloads on them with this question:

"I don’t want to beat around the bush here. You have the highest costs. You have the lowest margins. You are the only major airline expected to lose money this year. Your year-to-date equity performance has trailed that of your peers. In other businesses I can think of when there is a company standing out like this you sort of expect a major overhaul and it isn’t clear to me that Flight Plan 2020 is that plan. I am trying myself to find a reasonably intelligent question here. I guess it has to be is this really all you have got?"

 

[JAMAKE1]

Hmmm...let me get this straight: A first quarter loss that practically negates any annual earnings over the past decade; under performing RASM relative to industry peers; 15 percentage point RJ-to-Mainline flying disparity compared to industry peers; significant labor cost/productivity gap; all labor contracts open and/or in mediation; no sense of urgency on the part of AA Senior Management other than Flight Plan 2020. Seems to me that AMR's stock may be headed for a downgrade in the coming days...

Thanks for the good read, JFK Fleet Service.

 

[Hopeful]

Familiar PR Spin


http://cbs11tv.com/services/popoff.aspx?categoryId=11&videoId=53672@ktvt.dayport.com&videoPlayStatus=false&videoStoryIds=53672@ktvt.dayport.com&videoTime=&stationName=KTVT&

 

[eolesen]

Jamie's a smart guy. I put more faith in what equity analysts like Jamie and Gary Chase have to say vs. the industry analysts like Mike Boyd who like to hear themselves talk...

Jamie Baker unloads on them with this question:

"I don’t want to beat around the bush here. You have the highest costs. You have the lowest margins. You are the only major airline expected to lose money this year. Your year-to-date equity performance has trailed that of your peers. In other businesses I can think of when there is a company standing out like this you sort of expect a major overhaul and it isn’t clear to me that Flight Plan 2020 is that plan. I am trying myself to find a reasonably intelligent question here. I guess it has to be is this really all you have got?"

I can see the next theme emerging: Wall Street says AMR is in deep trouble, and employees will respond by saying the books are cooked, analysts are crooked, and the company can afford billions in raises and snapbacks on workrules....

 

[The Goose]

Familiar PR Spin


http://cbs11tv.com/services/popoff.aspx?categoryId=11&videoId=53672@ktvt.dayport.com&videoPlayStatus=false&videoStoryIds=53672@ktvt.dayport.com&videoTime=&stationName=KTVT&

"... highly skilled executives ... jump ship and go to a competing airline ..."

Damn - I wish Arpey and minions would leave but I believe most other airlines try to operate as a real business - why would they want these twits?

Please excuse me - I have to roll on the floor laughing.

 

[Ralph]

The topis is AMR's 1st quarter losss. Be aware...if this thread devolves into another rant about executive bonuses or the plight of the AMR working man and his concessions, the thread will be closed and time off will be given. Posts with no purpose other than to comment on bonuses have been deleted already.