Amr Posts 166 Million Loss

WingNaPrayer

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AMR Corporation Reports Substantial Improvement in First Quarter Financial Results as Turnaround Plan Progress Continues



AMR's First Quarter Net Loss of $166 Million Is Dramatically Better Than Its
First Quarter Performance a Year Ago
AMR Posts Its Third Consecutive Quarter of Positive Operating Income, Excluding Special Items - Achieves Net Income in March of $30 Million, Despite Rising Fuel Costs

AMR Ends First Quarter With Total Cash and Short-Term Investments of $3.7 Billion, Including Restricted Balance of $501 Million

FORT WORTH, Texas, April 21 /PRNewswire-FirstCall/ -- AMR Corporation(NYSE:AMR) (NYSE: AMR), the parent company of American Airlines, Inc.(NYSE:AMR) , today reported a net loss of $166 million for the first quarter, or $1.03 per share. This is a marked improvement over last year's first quarter, when AMR had a net loss of $1.04 billion, or $6.68 per share.

Continuing the financial momentum it established last year, and once again making tremendous progress in driving down costs, AMR posted its third straight quarter of positive operating income, excluding special items. AMR achieved these results despite a very significant increase in fuel prices, which increased its fuel expense $55 million from a year ago for the quarter.

"We are never satisfied to be reporting net losses, but we are nonetheless pleased with how far we have come over the past 12 months," said Gerard Arpey, AMR's President and CEO. "It is also worth noting that the first quarter is seasonally a difficult quarter -- and that difficulty has been compounded this year by extremely high fuel prices. The fact that despite these challenges we had operating income in the quarter, generated solid net income in March and continued to produce positive cash flows is encouraging."

The company's progress, Arpey said, "is a tribute to our employees and a testament to the power of the changes we are making. We're maintaining great momentum under the Turnaround Plan," he said, "but we recognize we still have a lot of work to do in order to achieve sustained profitability at acceptable levels."

Year-over-year mainline unit costs in the first quarter dropped more than 16 percent, Arpey said. This followed two previous quarters of equally impressive cost results. "Our success in removing costs from the operation has paved the way for our improved results and has given us the ability to stand and fight rather than retreat and shrink," he said. "Without the negative impact of rising fuel prices, our progress would have been even more dramatic, with a year-over-year decline in mainline unit costs (holding fuel prices at first quarter 2003 levels) of more than 17 percent."

Arpey noted that during the first quarter, AMR continued to make significant progress under its four-point Turnaround Plan. These were among the more notable achievements:

-- In January, American held "Customer Strategy" sessions with employees
to develop ways of better serving the airline's customers. Work
teams, which also include front-line employees, are reviewing,
analyzing and implementing ideas from these sessions.
-- AMR was able once again to access the capital markets with two
financing deals during the quarter, raising $499 million.
-- American completed the addition of seats to its 757 and A300 fleets,
allowing it to make more seats available in leisure markets where
customer demand is particularly high.
-- Service also was enhanced by the shift of capacity to international
markets, including the start of Los Angeles-Tokyo service, American's
fifth route to Japan.
-- Expanding on the efficiencies created by the restructuring of the DFW,
Chicago and St. Louis hubs, American solidified plans during the
quarter for the depeaking of the Miami hub on May 1.
-- At London Gatwick, American is consolidating its operations with
British Airways, thus reducing costs and also letting American provide
better connecting opportunities and an overall better travel
experience for its customers.
-- Year to date, American has contributed $319 million to its defined
pension plans, including using its strengthened cash position to make
an early contribution of $147 million.
-- American, based on improvements in customer service performance as
measured by Survey America, is making the first payout to the
airline's employees under the company's new Annual Incentive Plan --
the third piece of a success-sharing package for employees that also
includes a Broad Based Employee Stock Plan and Profit Sharing.

Statements in this news release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company's expectations or beliefs concerning future events. When used in this news release, the words "expects," "plans," "anticipates," "believes," and similar expressions are intended to identify forward-looking statements. Forward-looking statements include, without limitation, the Company's expectations concerning operations and financial conditions, including changes in capacity, revenues, and costs, future financing needs, overall economic conditions, plans and objectives for future operations, and the impact on the Company of its results of operations for the past three years and the sufficiency of its financial resources to absorb that impact. Other forward-looking statements include statements which do not relate solely to historical facts, such as, without limitation, statements which discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements are subject to a number of risk factors that could cause actual results to differ materially from our expectations. The following factors, in addition to other possible factors not listed, could cause the Company's actual results to differ materially from those expressed in forward-looking statements: changes in economic, business and financial conditions; the Company's substantial indebtedness; high fuel prices and the availability of fuel; the residual effects of the war in Iraq; conflicts in the Middle East or elsewhere; the highly competitive business environment faced by the Company, with increasing competition from low cost carriers and historically low fare levels; the ability of the Company to implement its restructuring program and the effect of the program on operational performance and service levels; uncertainties with respect to the Company's international operations; changes in the Company's business strategy; actions by U.S. or foreign government agencies; the possible occurrence of additional terrorist attacks; another outbreak of a disease (such as SARS) that affects travel behavior; uncertainties with respect to the Company's relationships with unionized and other employee work groups; the inability of the Company to satisfy existing financial or other covenants in certain of its credit agreements; the availability of future financing; and increased insurance costs and potential reductions of available insurance coverage. Additional information concerning these and other factors is contained in the Company's Securities and Exchange Commission filings, including but not limited to the Form 10-K for the year ended Dec. 31, 2003.


Detailed financial information follows:

AMR CORPORATION(NYSE:AMR)

CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)

Three Months Ended
March 31, Percent
2004 2003 Change
Revenues
Passenger - American Airlines $ 3,678 $ 3,394 8.4
- Regional Affiliates 420 326 28.8
Cargo 148 134 10.4
Other revenues 266 266 ---
Total operating revenues 4,512 4,120 9.5

Expenses
Wages, salaries and benefits 1,640 2,098 (21.8)
Aircraft fuel 808 729 10.8
Depreciation and amortization 326 338 (3.6)
Other rentals and landing fees 305 291 4.8
Commissions, booking fees
and credit card expense 288 255 12.9
Maintenance, materials and repairs 231 231 ---
Aircraft rentals 153 190 (19.5)
Food service 137 149 (8.1)
Other operating expenses 582 683 (14.8)
Special charges --- 25 *
Total operating expenses 4,470 4,989 (10.4)

Operating Income (Loss) 42 (869) *

Other Income (Expense)
Interest income 14 13 7.7
Interest expense (212) (192) 10.4
Interest capitalized 18 19 (5.3)
Miscellaneous - net (28) (14) *
(208) (174) 19.5

Loss Before Income Taxes (166) (1,043) (84.1)
Income tax --- --- ---
Net Loss $ (166) $(1,043) (84.1)

Basic and Diluted Loss Per Share $ (1.03) $ (6.68)

Number of Shares Used in Computation
Basic and Diluted 160 156

* Greater than 100%

Note: Certain amounts have been reclassified to conform with the 2004
presentation.


AMR CORPORATION(NYSE:AMR)

OPERATING STATISTICS
(Unaudited)

Three Months Ended
March 31, Percent
2004 2003 Change
American Airlines, Inc.(NYSE:AMR)
Mainline
Jet Operations
Revenue passenger miles (millions) 30,290 27,838 8.8
Available seat miles (millions) 42,597 40,274 5.8
Cargo ton miles (millions) 521 490 6.3
Passenger load factor 71.1% 69.1% 2.0 pts.
Passenger revenue yield
per passenger mile (cents) 12.14 12.19 (0.4)
Passenger revenue per available
seat mile (cents) 8.64 8.43 2.5
Cargo revenue yield per ton mile (cents) 28.47 27.38 4.0
Operating expenses per available seat mile,
excluding Regional Affiliates (cents) (A) 9.49 11.39 (16.7)
Fuel consumption (gallons, in millions) 741 725 2.2
Fuel price per gallon (cents) 101.0 94.0 7.4

Regional Affiliates
Revenue passenger miles (millions) 1,539 1,165 32.1
Available seat miles (millions) 2,453 1,987 23.5
Passenger load factor 62.7% 58.6% 4.1 pts.

AMR Corporation(NYSE:AMR)

Average Equivalent Number of Employees
American Airlines 79,900 92,200
Other 12,100 11,800
Total 92,000 104,000

(A) Excludes $487 million and $423 million of expense incurred related to
Regional Affiliates in 2004 and 2003, respectively.


AMR CORPORATION(NYSE:AMR)

OPERATING STATISTICS (CONTINUED)
(Unaudited)

American Airlines, Inc.(NYSE:AMR)
Mainline Jet Operations Three Months Ended
(in millions, except as noted) March 31,
2004 2003

Total operating expenses as reported $ 4,528 $ 5,011
Less: Operating expenses incurred related
to Regional Affiliates 487 423
Operating expenses excluding expenses incurred
related to Regional Affiliates $ 4,041 $ 4,588
American mainline jet operations
available seat miles 42,597 40,274
Operating expenses per available seat mile,
excluding Regional Affiliates (cents) 9.49 11.39

Operating expenses excluding expenses incurred
related to Regional Affiliates $ 4,041 $ 4,588
Less: Aircraft fuel price variance * 52 ---
Operating expenses, excluding aircraft
fuel price variance and expenses incurred
related to Regional Affiliates $ 3,989 $ 4,588
American mainline jet operations
available seat miles 42,597 40,274
Operating expenses per available seat mile,
excluding aircraft fuel price variance
and Regional Affiliates (cents) 9.36 11.39

Percent change 17.8

* Change in price times current year consumption (7.0 cents x 741 million
gallons)

Note: The company believes that operating expenses per available seat
mile, excluding fuel price variance, assists investors in
understanding the impact of changes in fuel prices on the
company's operations.
 
For those keeping track, in Q4/03 AMR filed a loss of $111 million. Subtract Q1/04 claimed fuel increase of $55 Million and you have the the exact same loss, $111 Million
 
AMR's 1Q Loss Narrowed on Cost-Cutting, Higher Revenue



FORT WORTH, Texas
-- AMR Corp.(NYSE:AMR) (AMR) posted a much narrower net loss for the first quarter amid cost-cutting and a 9.5% increase in revenue.

The parent company of American Airlines on Wednesday posted a net loss of $166 million, or $1.03 a share, compared with a year-earlier net loss of $1.04 billion, or $6.68 a share.

Total revenue rose to $4.51 billion from $4.12 billion, as passenger revenue at American Airlines climbed 8.4% to $3.68 billion.

Total operating expenses fell 10% to $4.47 billion, as expenses for wages, salaries and benefits fell 22% to $1.64 billion. Employees agreed to hefty cuts in pay and major changes to work rules last spring when AMR teetered on the verge of a bankruptcy filing.

AMR had a total of 92,000 employees at the end of the first quarter, down 12% from the year-earlier quarter amid a 13% decline to 79,900 workers at American Airlines.

First-quarter expenses for aircraft fuel, meanwhile, rose 11% to $808 million.

AMR reported operating income -- excluding a variety of costs -- of $42 million, compared with an operating loss of $869 million a year earlier.

"We are never satisfied to be reporting net losses, but we are nonetheless pleased with how far we have come over the past 12 months," President and Chief Executive Gerard Arpey said in a prepared statement.

"It is also worth noting that the first quarter is seasonally a difficult quarter -- and that difficulty has been compounded this year by extremely high fuel prices," Mr. Arpey added.

At American Airlines, revenue passenger miles -- or one paying passenger flown one mile -- rose 8.8% during the quarter, and load factor increased to 71.1% from 69.1% a year earlier.

AMR said it ended the quarter with total cash and short-term investments of $ 3.7 billion, including restricted balance of $501 million.
 
Cash Positive and making an Operating Profit!! Maybe there's some light at the end of this tunnel? Stock went up earlier too!!
 
I'm lovin' it!




koolaid.jpg
 
There's enough to be pissed off about. It isn't this drop in the bucket that you call "making money" it's what was done with it while you are busy NOT paying attention.

Are YOU making more money? The executives who run your company are, and they just coughed up a financial report that is going to put sizeable bonuses in their pockets.

Enjoy your 25 bucks!
 
WingNaPrayer said:
There's enough to be pissed off about. It isn't this drop in the bucket that you call "making money" it's what was done with it while you are busy NOT paying attention.

Are YOU making more money? The executives who run your company are, and they just coughed up a financial report that is going to put sizeable bonuses in their pockets.

Enjoy your 25 bucks!
Wing, I'm with you on this.I do not understand why employees on this forum think that it is okay for management to take money from our pocket and put it in their pockets.Improved [or percieved improvement] just makes the management's excessive stock options worth more money.They can keep their $25.00 and give me back my vacation and holidays along with the 17.5%.

Big deal if AA makes 1 Billion dollars in profit if they don't give us back our concessions.Have you seen what has happened in the last year[since our concessions] to gas prices,homeowners insurance,groceries,property taxes,and everything else in the economy?Forget buying any luxuries such as a new or like new used car as it is a struggle to make the routine monthly expenses.My 17.5% was the money I needed to purchase a better car. [I drive a 1993 model Plymouth]

Until AA management gives us back our concessions it is just more of the same old crap.I"ll rejoice at good economic news when it is again shared with the employee groups.
 
goingboeing said:
Until AA management gives us back our concessions it is just more of the same old crap.I"ll rejoice at good economic news when it is again shared with the employee groups.
I don't think that will happen for at least five years, at least for the non-union work groups who consequently took the smallest hit, but they also make far less money.

In all the years I've been flying with AA, I've met a lot of great people who are AA employees, and every one of them has a similar story. They are scraping to make ends meet, management is all over them just begging for a reason to stick a CR1 in their personnel files and the stress level is so high on you guys right now, I'm expecting nervous breakdowns to be the norm in the transportation industry.

I listen, I read, I pay attention, I know what airline employees are going through and I really wish there were better jobs for all of them somewhere else, but this is a republican economy we are sweltering in, everyone is pretty much stuck and with the government turning a blind eye to anything the airlines want to pull on their labor forces right now, it isn't going to get any better any time soon.

I take a lot of heat for poking AMR in the nose, but you know what? Secretly, most of the people handing me the heat are the same ones who can't seem to grow a pair and do it themselves!

Hell my interest is only stock, I can dump it anytime, but its too much fun being a pain in the ass, the little pleasures in life are so few and far between ;)

When AMR stock tanked at 1.35, the employees failed to realize that if they would all have just invested 1000 bucks and bought stock, they would own American Airlines today, and things would be quite different. In the very least, they would all be sitting on about a hundred grand right now - which kind of makes the concessions moot. When I made that suggestion, I got a lot of email saying "We're taking wage cuts, we're loosing money, we can't afford to waste a thousand dollars" Well it was the word "waste" I zeroed in on - if you think your job is a waste, it's time to get out.

Everyone wants to think things can only get better. We'll see at the end of Q3, and after the November elections. Those two things will be the crystal ball.

Until then, everyone that disagrees with me, which they have the right to do, can continue to enjoy the 25 dollar insult. That "bonus" won't even buy enough gas to get most of them to work for three days!
 
WingNaPrayer said:
I don't think that will happen for at least five years,
So we have at least 5 years now? I thought BK was right around the corner? Stock closed up 9% yesterday not "down 3$ for a few days"?

Thank you for flying AA! I hope we continue to find ways to keep your business!

:up:
 
AAviator said:
So we have at least 5 years now?

Thats five years according to the concessions you were either given, or agreed to by union vote. Just because you have a concessions limit doesn't mean you'll still be around to see it through, eh?

As for the flying - don't get too overly excited, JetBlue is getting ready to invade a few of the AA markets I fly, and I do intend to check them out extensively! ;)
 
WingNaPrayer said:
When AMR stock tanked at 1.35, the employees failed to realize that if they would all have just invested 1000 bucks and bought stock, they would own American Airlines today, and things would be quite different. In the very least, they would all be sitting on about a hundred grand right now
How much did YOU buy at that price? Believe me, I considered it. But BK threatened to turn even that into useless paper. BTW, I think that original $1000 would be worth about 10k today, not 100k.

MK
 
Wing,

You are so full of it.

I did buy a buttload of AMR and I'm sitting pretty, so I don't understand or better yet, believe you that you do own AMR share. As a stock owner I'm looking for nice returns, AMR just handed me few nice vacations. We could all get into the moral part of the game, but if that was the case why don't we just go socialist/communist and share/share alike, regardless of what we do. You are so full of it.
You wouldn't know where to purchase shares. You are a disgrunteled old fart that has no idea what the real world is about.
BTW, I fly my favorite airline(AA) as far as it will take me, and only then do I look at some other options. Majority of the employees I deal with are just outstanding, better yet, they are my neighbors, and I don't mean literally. They are Americans and they buy my product as well. Yet, at the same time I do enjoy living in a capitalist system and on occasion, in that system, there is a need for adjustment. The market adjustment was needed and I do feel for employees, but I also live in the real world. About 15 years ago, I had to get off the high horse myself as the market was pulling the plugs on my income. For about 10 years before I enjoyed the ride VERY much, yet when it came crashing down, I did not sit around and cry. I planned for the future while the ride was good, so I didn't go into a total tailspin. It did take some time to adjust to lower income, but within a reasonable time I came back.
So please spare me the socialist rhetoric and live in the real world.

BTW, I love AA and I will see you guys again on Tuesday!!!! :up: