AMR PROFIT

[Hopeful]

Press Release Source: AMR Corporation

AMR Corporation Reports a Second Quarter Profit of $317 Million, a $26 Million Improvement Year Over Year
Wednesday July 18, 9:07 am ET
DESPITE SIGNIFICANT WEATHER IMPACT, COMPANY CONTINUES MOMENTUM WITH FIFTH CONSECUTIVE PROFITABLE QUARTER
AMR Continues to Strengthen Balance Sheet, Improve Liquidity and Reinvest in its Products and Services

FORT WORTH, Texas, July 18 /PRNewswire-FirstCall/ -- AMR Corporation (NYSE: AMR - News), the parent company of American Airlines, Inc., today reported a net profit of $317 million for the second quarter of 2007, or $1.08 per diluted share.

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The current quarter results compare to a net profit of $291 million, or $1.14 per diluted share, in the second quarter of 2006.

"Our company overcame exceptional weather challenges and historically high fuel prices to earn our fifth consecutive quarterly profit and our largest quarterly net profit since we launched our Turnaround Plan more than four years ago," said AMR Chairman and CEO Gerard Arpey. "Weather has been an enormous obstacle this year, but our employees have stepped up to help take care of customers and continue our momentum toward long-term success. Our improved performance has allowed us to strengthen our balance sheet and reinvest in products and services to create a stronger company, but we must remain mindful that painfully high fuel prices and continuing intense competition present formidable challenges for the remainder of the year and beyond."

Operational Performance

American's mainline passenger revenue per available seat mile (unit revenue) increased by 3.6 percent in the second quarter compared to the year-ago quarter.

American's mainline load factor -- or the percentage of total seats filled -- was a record 83.6 percent during the second quarter, compared to 82.6 percent in the second quarter of 2006. American's second-quarter yield, which represents average fares, increased 2.3 percent compared to the second quarter of 2006, its ninth consecutive quarter of year-over-year yield increases.

AMR reported second quarter consolidated revenues of approximately $5.9 billion, a decrease of 1.6 percent year over year. AMR estimates that severe weather disruptions reduced second quarter consolidated revenue by nearly $50 million and reduced its net profit for the second quarter by approximately $0.12 per diluted share.

American's mainline cost per available seat mile (unit cost) in the second quarter increased 2.4 percent year over year, which was 1.2 percentage points higher than it would have been if not for the significant weather impact. Excluding fuel, mainline unit costs in the second quarter increased by 3.5 percent year over year.

Due to weather impact and as previously disclosed on June 22, 2007, during the period from April 1 through June 20 American cancelled 1.8 percent of its scheduled second quarter mainline departures. Thereafter, American had more than 1,000 weather-related cancellations during the last 10 days of June, increasing total weather-related cancellations during the quarter to 2.1 percent of second quarter scheduled mainline departures.

Mainline capacity, or total available seat miles, in the second quarter decreased by 4.4 percent compared to the same period in 2006.

"While our year-over-year capacity decline in the second quarter includes some impact from weather cancellations, we believe that our disciplined and careful approach to managing capacity has been an important factor in our improved financial performance," Arpey said. "This approach has helped us to improve profitability and generate better returns on our investments in the business."

Balance Sheet Improvement

Arpey noted that AMR continued to strengthen its balance sheet in the second quarter by reducing debt and improving its liquidity position.

AMR ended the second quarter with approximately $6.4 billion in cash and short-term investments, including a restricted balance of $470 million, compared to a balance of $5.7 billion in cash and short-term investments, including a restricted balance of $525 million, at the end of the second quarter of 2006.

AMR reduced Total Debt, which the Company defines as the aggregate of its long-term debt, capital lease obligations, the principal amount of airport facility tax-exempt bonds, and the present value of aircraft operating lease obligations, to $17.3 billion at the end of the second quarter of 2007, compared to $19.4 billion a year earlier. AMR reduced Net Debt, which the Company defines as Total Debt less unrestricted cash and short-term investments, from $14.2 billion at the end of the second quarter of 2006 to $11.4 billion at the end of the second quarter of 2007. The Company's interest expense was $235 million in the second quarter of 2007, a 9.6 percent year-over-year decrease.

AMR contributed $118 million to its employees' defined benefit pension plans in the second quarter and contributed an additional $86 million on July 13, 2007. The Company has contributed a total of $266 million to these plans in 2007 as part of its expected full-year contribution amount of $364 million.



This is good news no doubt. But only the top execs will share in the rewards and only give themselves credit

 

[eolesen]

This is good news no doubt. But only the top execs will share in the rewards and only give themselves credit

Don't be so sure. Unless something stupid like a strike or a serious disaster were to occur, it looks like profit sharing will indeed be paid out for 2007.

Profit sharing triggers at $500M, and with the $81M profit in 1Q, the full year profit is sitting at $398M.

Plus, with all of the peer group carriers out of bankruptcy, I don't think AMR's stock will be outperforming to the same degree it did for 2005 and 2006.

 

[FWAAA]

Don't be so sure. Unless something stupid like a strike or a serious disaster were to occur, it looks like profit sharing will indeed be paid out for 2007.

Profit sharing triggers at $500M, and with the $81M profit in 1Q, the full year profit is sitting at $398M.

I've told Hopeless before that I'd much rather work for a very profitable company than one that loses money. Would seem a damned sight easier to demand (and get) wage increases if profits are rolling in.

Plus, with all of the peer group carriers out of bankruptcy, I don't think AMR's stock will be outperforming to the same degree it did for 2005 and 2006.

Exactly. Except for perrenial laggard Southwest (which is in the peer group, IIRC), the others are probably gonna outperform AMR this year.

And if they don't, and AMR does outperform, and the execs get more stock, then Hopeless and the others will share in that rising tide with their options on 35 million shares granted to non-management employees just four years ago. AMR's profit sharing formual isn't generous, but combined with the stock options, AMR employees have a great opportunity to share in the success.

Net debt is now $2.9 Billion less than one year ago. THAT is the best news of all. As the debt is reduced, AMR can get back to investing in fuel efficient airplanes instead of paying over $6 Bilion a year for fuel. Tons of money for the employees at today's ticket prices if the fleet can be made more efficient.

$317 million is a great second quarter, especially with fuel at over $2.07/gal and revenues down (due to lower capacity). Gr4eat job everyone!

 

[WingNaPrayer]

AMR contributed $118 million to its employees' defined benefit pension plans in the second quarter and contributed an additional $86 million on July 13, 2007. The Company has contributed a total of $266 million to these plans in 2007 as part of its expected full-year contribution amount of $364 million.

The bulk of which, will be returned to them once they most likely dump their pension plan on the government.

Arpey will also extract his "pension" this month when he'll bonus himself just shy of an additional $2M in less than 10 days from now. It sure is nice the execs don't have to wait to hit that 500M mark to qualify for their bonus money, and it's unfortunate that those who have to wait for that mark won't see bonuses equal to Arpey's either!.(Source: WSJ) Subscription Required (Source: PUPOFF.com)

 

[FWAAA]

The bulk of which, will be returned to them once they most likely dump their pension plan on the government.

A less informed sentence has probably never been written here.

 

[lpbrian]

I wonder how AA's pension plans are doing now, given Wall streets recent bull run.

 

[Hopeful]

I've told Hopeless before that I'd much rather work for a very profitable company than one that loses money. Would seem a damned sight easier to demand (and get) wage increases if profits are rolling in.
Exactly. Except for perrenial laggard Southwest (which is in the peer group, IIRC), the others are probably gonna outperform AMR this year.

Who says I am not happy to work for a profitable company?
It's one thing to work for a profitable company who shares some rewards with its employees, especially those, like AA employees, who have sacrificed substantially, than a company like AA who is profitable and only reminds its employees how lucky they are to just have jobs.

The company has already hinted that the unions should expect too much with upcoming contract talks.

By the way FWAAA, what would you consider apt rewards for our sacrifice? What is your benchmark?

 

[WingNaPrayer]

what would you consider apt rewards for our sacrifice?

You mean, other than the fact that 'acts of god' weather delays were held against lowly employees enabling corporate to deny AIP, you still think there could possibly be an answer to that question?

Or were you just being fecitious?

The reward for your sacrifice is to sit back and read headlines that say AA is turning a profit again - just enough to pay corporate bonuses but not enough to make labor whole again.

That should be reward enough, dontcha think?

 

[Hopeful]

Or were you just being fecitious?

of course...i was responding to the AA cheerleaders

 

[FWAAA]

By the way FWAAA, what would you consider apt rewards for our sacrifice? What is your benchmark?

A whole lot more than your pathetic union negotiated for you four years ago. As I've posted numerous times, employees should have received (at the very least) a majority of the equity in AMR in exchange for the paycuts instead of merely 19% or so. But The Worthless Union didn't get that for you. What else is new?

I hope you guys can replace that Worthless Union in time for the negotiations next year. Otherwise, prepare for a few more years of Management Pay Envy.

 

[WingNaPrayer]

A whole lot more than your pathetic union negotiated for you four years ago. As I've posted numerous times, employees should have received (at the very least) a majority of the equity in AMR in exchange for the paycuts instead of merely 19% or so. But The Worthless Union didn't get that for you. What else is new?

I hope you guys can replace that Worthless Union in time for the negotiations next year. Otherwise, prepare for a few more years of Management Pay Envy.

Spoken with a true backhand, I'm sure :blink:

I'm guessing whatever they get will pale in comparison to the 30 cent joke that was thrown to agents to shut them up and keep them away from the stockholder's meeting just before the big bonus pay-o-rama?

 

[Hopeful]

A whole lot more than your pathetic union negotiated for you four years ago. As I've posted numerous times, employees should have received (at the very least) a majority of the equity in AMR in exchange for the paycuts instead of merely 19% or so. But The Worthless Union didn't get that for you. What else is new?

I hope you guys can replace that Worthless Union in time for the negotiations next year. Otherwise, prepare for a few more years of Management Pay Envy.

Be careful not to bump you head when you're getting up from underneath your boss's desk!

 

[WingNaPrayer]

Be careful not to bump you head when you're getting up from underneath your boss's desk!

Now THAT was FUNNY!

 

[NewHampshire Black Bears]

Hopeful,

To be fair, I've got to agree with FWAAA, on this one point(WHICH YOU + I + OTHERS KNOW SOOOOO WELL), and that is.......our #1 ENEMY, is not AA management(...THOUGH they ARE almost in a virtual TIE for the #1 spot), ...It's the SPINELESS MOTHER ****ERS that keep you guys from dumping the VILE TWU, "EXCLUSIVELY" the "MAJORITY" of our "fellow Brothers"("WHAT A ****ING JOKE THAT IS), that punch in every day in good ol' TULSA, OKIE-HOMA :down: :down:

Be honest.
If (HYPOTHETICALLY), I gave you a pistol, with 1 lone round in the chamber.....and said that you could eradicate(without any penalty to yourself) ..."1" of the following individuals.

A. Arpey
or
B. Jim(CHICKEN) little

YOU and I both know what your answer would be !!!!

I know it SUCKS, and I felt your pain, while I was active.

Regards,

NH/BB's

 

[TIME FOR CHANGE]

I've told Hopeless before that I'd much rather work for a very profitable company than one that loses money. Would seem a damned sight easier to demand (and get) wage increases if profits are rolling in.
Exactly. Except for perrenial laggard Southwest (which is in the peer group, IIRC), the others are probably gonna outperform AMR this year.

And if they don't, and AMR does outperform, and the execs get more stock, then Hopeless and the others will share in that rising tide with their options on 35 million shares granted to non-management employees just four years ago. AMR's profit sharing formual isn't generous, but combined with the stock options, AMR employees have a great opportunity to share in the success.

Net debt is now $2.9 Billion less than one year ago. THAT is the best news of all. As the debt is reduced, AMR can get back to investing in fuel efficient airplanes instead of paying over $6 Bilion a year for fuel. Tons of money for the employees at today's ticket prices if the fleet can be made more efficient.

$317 million is a great second quarter, especially with fuel at over $2.07/gal and revenues down (due to lower capacity). Gr4eat job everyone!

If the company one works for isnt sharing in the gain I dont really think it matters if they turn a profit or not.

We arent getting anything in return for AMR's return to profitability so who cares if they are making money.

The twu went to the company on their knees with their pants around their ankles asking for some more stock options. The company laughed and told them to get F%&#ed.


It seems the only people sharing in the gain are the upper crust. Maybe if AMR wasnt making a profit the execs wouldnt be reaping the rewards just like the employees arent. Its not envy its corporate greed at its finest.

As for that 500 million dollar goal I cant wait to get my 30 dollar bonus check. What should I buy first

:down: :down: :down: