I know that I am being VERY presumtuous(sic), but does anyone have a timeline of when we might find out if AMR/AA has finished their fuzzy accounting for 2007? I am just curious if we all might actually get $100 for a 2007 profit sharing/bone-us. Seems like we should know by the end of JAN.
Possible Profit Sharing
- Thread starter IORFA
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AA announced last week that it anticipates releasing its 2007 results on Wed., Jan. 16, so you'll know by then.
I doubt there will be any profit sharing for 2007, as most analysts are predicting a loss for the 4th quarter, so the full year profit will be less than the $500 million floor (employees get 15% of everything above that, IIRC). Last week, the spot price for jetA hit $2.825/gal on both coasts, and only slightly cheaper at DFW. But the analysts could be wrong.
I doubt there will be any profit sharing for 2007, as most analysts are predicting a loss for the 4th quarter, so the full year profit will be less than the $500 million floor (employees get 15% of everything above that, IIRC). Last week, the spot price for jetA hit $2.825/gal on both coasts, and only slightly cheaper at DFW. But the analysts could be wrong.
A/C FIXER
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Besides by the time the bean counters get finished with their "ENRON" accounting, we'll be owing money to the company. You know all the "One time" charges for this and that.
Wretched Wrench
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There was already profit sharing. Just not for us.
AA's idea of profit sharing for the proles is like me letting you lick my plate after dinner and calling it Meal Sharing.
NewHampshire Black Bears
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"Wrench",
THAT was a GOOD ONE !!
Had me laughing my **** Off !!(especially the FIRST sentence)
eolesen
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I'm with FWAAA, in that there will be a 4Q loss, especially with $900M in debt payments. Typically, special items (writedowns) won't affect profit sharing, but I don't think scheduled debt repayment isn't considered a special item.
One thing that is certain: AMR performed second best of the stock peer group for three year rate of return (only CAL was better). So, there will be a PUP trigger. Bigger question is whether or not Arpey and the BOD are smart enough to not pay it. That won't go over well in bankruptcy court.... But the good news is that a lot of the options granted to execs are holding are probably underwater right now.
One thing that is certain: AMR performed second best of the stock peer group for three year rate of return (only CAL was better). So, there will be a PUP trigger. Bigger question is whether or not Arpey and the BOD are smart enough to not pay it. That won't go over well in bankruptcy court.... But the good news is that a lot of the options granted to execs are holding are probably underwater right now.
Connected1
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Repayment of debt principal is not an expense, and thus does not get included in the calculation of profit. Only interest payments on debt is included as an expense.
I am not as well informed on this as I should be....but last years PUP payments, did they cash them out immediately? I remember stock went sky high around that time. I would find it curious that if and when PUP is triggered, they don't suddenly announce they have a buyer with an incredible price for Eagle. Can't this be considered a form of insider trading? If it happens again this year...I hope they will revisit the case that was filed against them last year, or a new one filed. Maybe, I am wrong. Does anyone want to enlighten me? And if PUP is triggered, anyone want to takes bets on the sale of Eagle being announced?
Just over one year ago, crude oil fell to $51/bbl and that same week, AMR hit $41/sh. Smartly, that same week, AMR sold 12 million new shares to gullible investors for about $41/sh, raising $500 million in new capital. Everyone was giddy about Delta's supposed $12 billion valuation as it emerged from Ch 11. Investors bid up UAUA, CAL, DAL, AMR and even LCC all to new highs. Every legacy airline stock was booming one year ago, not just AMR.
Right after that, crude prices began their slow climb to $100/bbl.
Here is a link showing crude prices: http://tonto.eia.doe.gov/dnav/pet/hist/rwtcd.htm
Have no idea about claims of insider trading or whether AA execs have manipulated the price of AMR. Don't really see why they'd need to, given that the PUP/PSP payouts (about $255 million total for the two years so far) have been beyond any exec's wildest imagination so far. The other day, eolesen confirmed that AMR's price for 2007 relative to the peer group means that PSP payouts have again been triggered even though AMR's price is in the toilet at $12/sh.
When investors are in full denial and are exhibiting irrational exuberance over airline stocks (like they did one year ago), you don't need to manipulate the stock price to loot the place.
Airline stocks now pretty much move inversely to crude prices. Oil goes up, airline stocks go down. If oil drops, airline stocks will go up like crazy.
T
The Goose
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If you think the AMR elite will allow the peons to have one dime of profit sharing, you should be drug-tested (or share).
How does the 2007 pup payout factor into 2007's soon to be announced net results?
T
The Goose
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Only so far as the cost to provided the stock options. These are newly printed shares given to the execs to sell for their 'bone-us'.
These are not stock options - the shares are given to the execs.
The losers are those who presently hold AMR stock. This stock award, like the last one, will lessen the value of their holdings on a per-share basis.
Yes, the $160 million or so paid out in 2007 will reduce 2007 earnings by that amount, just like all other employee compensation. It's already reflected in the 3Q2007 year to date results.
