News release just posted:
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AMR Corporation Reports Improved Second-Quarter Financials as Cost Savings And Turnaround Plan Begin Yielding Results
Wednesday July 16, 11:30 am ET
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FORT WORTH, Texas, July 16 /PRNewswire-FirstCall/ -- AMR Corporation (NYSE: AMR - News) continues making progress in its march to profitability, including reporting improved financial results.
For the quarter, AMR reported a net loss of $75 million, or $.47 per share. Included in this amount are a handful of special items, including a $358 million cash payment from the Transportation Security Administration (TSA) under the 2003 Emergency Wartime Supplemental Appropriation Act. Excluding special items, AMR reported a net loss of $357 million, or $2.26 per share. While still a loss, these results represent a sizeable improvement over the second quarter of last year and are dramatically better than the $1.04 billion net loss AMR recorded in this year''s first quarter.
AMR made significant progress over the course of the second quarter. April was a difficult month for the company, with lackluster demand due to the war in Iraq and the outbreak of SARS. In May, however, AMR reported positive operating cash flow driven by year-over-year improvements in unit revenue and the implementation of its new labor agreements. These trends continued in June, and AMR achieved a modest profit for the month.
"Clearly, the tremendous strides we''ve been able to achieve have been the result of the unprecedented labor and nonlabor agreements we reached in May," said Gerard Arpey, AMR''s president and CEO. "The sacrifice of our employee groups is evident in the dramatically improved performance we''ve seen over the past months. But, while we''re encouraged, we must keep in mind that we''re operating in peak summer season right now, and the winter months will be more challenging. We have a lot of work to do before we''re able to achieve sustained profitability at acceptable levels."
The company''s cash position also improved during the quarter, with a total cash and short-term investments balance on June 30 of $2.4 billion (including $550 million in restricted cash and short-term investments), an increase of $555 million compared to the comparable balance at the end of the first quarter. Since June 30, AMR has completed a $250 million aircraft financing, bringing the total balance to $2.7 billion as of today.
As noted earlier, the company''s second-quarter financial results included several special items -- both gains and losses -- resulting mostly from the company''s restructuring efforts. In addition, in keeping with the provisions of SFAS 109, AMR''s second quarter 2003 results do not reflect a benefit for federal and state income taxes. Conversely, AMR''s second quarter 2002 results did reflect a tax benefit. To provide better comparability, after adjusting for these items, the company recorded a loss of $357 million this quarter, or $2.26 per share, versus a loss of $720 million, or $4.64 per share, in the second quarter of last year.
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