AMR Sees Over $5.5B Cash, Short-Term Invest At End Of 2Q

[Bill]

AMR Sees Over $5.5B Cash, Short-Term Invest At End Of 2Q


DOW JONES NEWSWIRES
June 23, 2006 4:30 p.m.



WASHINGTON (Dow Jones)--AMR Corp. (AMR) said Friday that it expects to end its second quarter with a cash and short-term-investment balance of more than $5.5 billion.

AMR, the parent company of American Airlines, said in a filing with the Securities and Exchange Commission that the $5.5 billion figure includes about $500 million in restricted cash and short-term investments.

The company had $4.27 billion in unrestricted cash and short-term investments at the end of its first quarter ended March 31, as well as $510 million in restricted cash and short-term investments.

AMR also said in Friday's filing that it expects mainline unit revenue during the second quarter to increase between 11.1% and 12.1% compared with last year's second quarter.

AMR also expects second-quarter consolidated unit revenue to increase between 12% and 13% compared with the year-earlier quarter.

-By Ed Welsch, Dow Jones Newswires; 202-862-1356; [email protected]

 

[jimntx]

That we have been able to put aside an additional $1 billion since last year even with making the scheduled pension payments says a lot about our money management.

However, I can't help but wonder exactly what the company is up to with keeping that much cash on hand. I know it's invested in interest-bearing accounts, etc, but something is afoot if they feel the need to keep that much cash on hand instead of paying down some of the debt.

Another airline merger/acquisition? (God forbid. )

 

[1 VF-1 2NV]

That we have been able to put aside an additional $1 billion since last year even with making the scheduled pension payments says a lot about our money management.

However, I can't help but wonder exactly what the company is up to with keeping that much cash on hand. I know it's invested in interest-bearing accounts, etc, but something is afoot if they feel the need to keep that much cash on hand instead of paying down some of the debt.

Another airline merger/acquisition? (God forbid. )

No. I believe if the pension legislation (???) doesn't pass, then AA has to make "catch up" payments. Correct me if I am wrong .

 

[jimntx]

No. I believe if the pension legislation (???) doesn't pass, then AA has to make "catch up" payments. Correct me if I am wrong .

That is correct, but I doubt seriously that Congress is going to risk a bunch more pension plans being dumped on the PBGC. AMR is not the only major corporation that has underfunded pension plans.

 

[FWAAA]

That is correct, but I doubt seriously that Congress is going to risk a bunch more pension plans being dumped on the PBGC. AMR is not the only major corporation that has underfunded pension plans.

AA's relatively strong cash flow has put it in a strange position: It will have plenty of cash next year to make its approx. $3 billion catch-up pension contribution (which will be required under present law), but will it do so?

One problem with the current pension legislation is that it conditions longer catch-up periods on freezing the plans, which AA has said it does not want to do.

The current cash balance also makes it easy for AA to ground more leased MD-80s and A300s by simply paying the lessors off (as Alaska Air is doing to ground its MD-80s). If AA generates a like amount of cash in the 3rd quarter, AA may just be able to order some 738s (on an expedited basis) to replace some MD-80s.

Nice to see fare hikes finally generating significantly more revenue. Good news for all concerned.

 

[NewHampshire Black Bears]

FWAAA,

Search that "financial Cranium(Crainum) " of yours to tell me what Larger amounts of "Dough re mi", have other/any carriers had on hand, in years gone by ?

NH/BB's

"That is a LOT of "scratch" to have lying around !!!

 

[goingboeing]

This does put AMR in an awkward position of being desireable for a hostile takeover.Having too much cash and easily converted to liquid assets is the reason Donald Trump tried a hostile takeover in 1988-89 era.

 

[flyhigh]

...the debt load alone is enough to scare off anyone even remotely thinking of a hostile takeover. Plus, after Trump, Lorenzo, Icahn, and the Hooter's chairman have all failed miserable in this industry, I think it's safe to say that the billionaires have all been scared away. Look more for it to be a stash used to buy assets. When UA first entered bankruptcy and people thought they might fail, or at least shed assets to fund operations, DL started storing cash in hopes of being able to buy the TPAC routes. AA is most likely thinking similarly about being able to buy NW's TPACs if they need to see something.

 

[Wretched Wrench]

will have plenty of cash next year to make its approx. $3 billion catch-up pension contribution (which will be required under present law), but will it do so?

Ummm.......if it "will be required", how can we ask "Will AA do so"? Does AA have a choice?

 

[MCI transplant]

This does put AMR in an awkward position of being desireable for a hostile takeover.Having too much cash and easily converted to liquid assets is the reason Donald Trump tried a hostile takeover in 1988-89 era.

<_< ----- Does the name Carl Icahn ring a bell here!? Now that would be ironic!

 

[twaokc]

<_< ----- Does the name Carl Icahn ring a bell here!? Now that would be ironic!

That would be the greatest thing that ever happened to AA and its NATIVES...

After all, all Carl would do is pocket the 5.5 billion, sell some nice assets and then put AMR into bankruptcy and say goodbye. Then maybe the NATIVES would understand what happened to TWA.

 

[AAviator]

That would be the greatest thing that ever happened to AA and its NATIVES...

After all, all Carl would do is pocket the 5.5 billion, sell some nice assets and then put AMR into bankruptcy and say goodbye. Then maybe the NATIVES would understand what happened to TWA.

:down:
Cradle to grave 'eh Carl? (googled your username)

How many days did you put in at AA?

 

[MCI transplant]

That would be the greatest thing that ever happened to AA and its NATIVES...

After all, all Carl would do is pocket the 5.5 billion, sell some nice assets and then put AMR into bankruptcy and say goodbye. Then maybe the NATIVES would understand what happened to TWA.

<_< ---- There's a problem there twaoakc! :unsure: As much as I'd like to say "turn around is far play", We'd all go down with them!!!! So let's just leave it to speculation!!!! But I do believe it would take their arrogance down a few notches!!!

 

[twaokc]

:down:
Cradle to grave 'eh Carl? (googled your username)

How many days did you put in at AA?

Thank the dear lord, none. I have even dropped my insurance with AA and would rather buy a ticket on any airline than to fly on AA on a pass. Now, I hope you know how I feel about AA. Its lower than low.

 

[TWU informer]

I am sure this has been answered before, but I still do not get it.

Call me slow, call me stupid, but how does a company go from the verge of Bankruptcy to over $5 BILLION in unrestricted cash and short term investment, when the operation has reported losing millions quarter after quarter?


I have started a small business myself, to supplement the loss of income from the 2003 without further ratification concessions.

I would love to see the small business, on a smaller scale have a continuous increase in unrestricted cash on hand and short term investments while I report a loss to the US government.

If someone can help me understand how to make this happen, I will leave AA sooner rather than later and will gladly remove myself from this forum for life.

Thanks