More To Come! Amr Loss

[Hopeful]

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American Air parent loss widens on high fuel costs
Wed Jan 19, 2005 09:03 AM ET
DALLAS, Jan 19 (Reuters) - American Airlines parent AMR Corp. (AMR.N: Quote, Profile, Research) on Wednesday reported a wider quarterly loss from a year ago as record-high fuel prices and stiff ticket-price competition stung its bottom line.
AMR reported a loss of $387 million, or $2.40 per share in the fourth quarter of 2004, which was up from a loss of $111 million, or 70 cents a share in the same quarter in 2003.

Analysts, on average, expected a loss of $3.12 a share, according to Reuters Estimates.


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Should be even better in 2005 since AMR matched Delta's new fare structure!

 

[WingNaPrayer]

FORT WORTH, Texas, Jan. 19 /PRNewswire-FirstCall/ -- AMR Corporation (NYSE: AMR), the parent company of American Airlines, Inc., today reported a net loss of $387 million in the fourth quarter, or $2.40 per share. This compares to last year's fourth quarter loss of $111 million, or $0.70 per share. For the year, AMR posted a net loss of $761 million, compared to 2003's loss of $1.2 billion.

AMR's fourth quarter 2004 and 2003 results include a handful of special items, both gains and losses. Fourth quarter 2004 special items totaled a net gain of $86 million, or $0.54 per share, and primarily included a $146 million gain on the sale of American's interest in Orbitz, $42 million in severance charges, and $21 million in aircraft charges. Fourth quarter 2003 special items totaled a net charge of $16 million, or $0.11 per share. For the full year, special items totaled a net gain of $135 million in 2004, and a net gain of $265 million in 2003.

"As expected, the fourth quarter proved to be a disappointing end to a very difficult year," said AMR Chairman and CEO Gerard Arpey. "AMR's results for the fourth quarter of 2004 reflect the economic woes that plagued the airline industry throughout 2004 -- in particular, high fuel prices and a tough revenue environment."

During the quarter, Arpey said, the company paid 59 cents, or 67 percent, more per gallon of fuel than it did during the same period in 2003. That translated into $477 million in incremental fuel costs, which added about one cent to AMR's cost per available seat mile of 10.69 cents. For the entire year, higher fuel prices cost AMR $1.1 billion. "Unfortunately, low fares and the continuing high price of fuel are masking a lot of the progress we have made in reducing costs," he said.

Meanwhile, American's revenue per available seat mile declined 3.1 percent, driven by a 6.7 percent drop in passenger yield (passenger revenue per passenger mile). "As in the third quarter, low fares were driven by an excess of industry capacity, the continued growth of low cost carriers, and the pricing behavior of distressed competitors," Arpey said. He added that external factors such as these are not an excuse, but rather a reminder that American must sustain its intense focus on reducing costs and increasing revenue wherever and however possible.

"The issues we are grappling with are not new to us, and in fact, in 2004 we made a lot of headway in addressing them," Arpey said. "The productivity of our people, and of our fleet, is higher than it has ever been. We are running a smarter, more efficient airline than we were a year ago. We have improved our performance relative to the rest of the industry on both the revenue and cost sides of the ledger."

While these accomplishments were not enough to overcome a difficult environment, they did enable American to finish 2004 with more than $3.4 billion in total cash and short-term investments (including $478 million in restricted cash and short-term investments), Arpey said. American continued to make payments to all of its pension programs in 2004, contributing $461 million to its defined benefit plans. These payments, on top of those made in recent years, have helped improved the funded level of the defined benefit plans from a low of 72 percent in 2002 to about 80 percent at the end of 2004. Since the beginning of 2005, American has contributed a further $42 million to its defined benefit pension programs.

Arpey said he expects 2005 to be another very difficult year. However, the company does anticipate positive impacts from many initiatives announced or launched in 2004. These include reductions in domestic capacity, additional seats on the airline's MD80, 737, 767 and 777 fleets, several new international routes, a simplified domestic operation and various revenue- producing initiatives.

Several fleet decisions will be particularly helpful to the company going forward, Arpey said. These include decisions to withdraw from American's fleet in 2005 the equivalent of 15 mainline jet aircraft; to forgo delivery of 18 regional jets for the American Eagle affiliate, and to defer the delivery of 54 of 56 mainline jets from Boeing. The arrangement with Boeing allows American to postpone $1.4 billion in capital spending previously planned for 2005 through 2007 and a total of $2.7 billion in capital spending through 2010.

The workforce reductions American instituted last year, though difficult to make, also will help the company as it works to meet continuing financial challenges in 2005, Arpey said. The reductions resulted from a combination of factors, including fleet decisions, capacity adjustments and steps to simplify operations. Although the full extent of the reductions is still being determined, Arpey said the total impact currently stands at 3,200 jobs.

Despite much progress, AMR anticipates a loss during the first quarter of 2005. "This simply means our work is not done," Arpey said. "We must continue to focus on finding creative ways to lower costs, increase revenue and provide our customers with the kind of service they value."

 

[Hopeful]

Like I said....."More to Come."

As in further cost cutting!

 

[WingNaPrayer]

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

Three Months Ended December 31, Percent
2004 2003 Change
Revenues
Passenger - American Airlines $3,610 $3,589 0.6
- Regional Affiliates 463 407 13.8
Cargo 173 149 16.1
Other revenues 295 246 19.9
Total operating revenues 4,541 4,391 3.4

Expenses
Wages, salaries and benefits 1,680 1,604 4.7
Aircraft fuel 1,188 695 70.9
Depreciation and amortization 329 350 (6.0)
Other rentals and landing fees 286 282 1.4
Commissions, booking fees and
credit card expense 244 267 (8.6)
Maintenance, materials and
repairs 230 219 5.0
Aircraft rentals 151 155 (2.6)
Food service 137 151 (9.3)
Other operating expenses 591 565 4.6
Special charges 60 330 (81.8)
Total operating expenses 4,896 4,618 6.0

Operating Loss (355) (227) 56.4

Other Income (Expense)
Interest income 19 14 35.7
Interest expense (223) (123) 81.3
Interest capitalized 20 17 17.6
Miscellaneous - net 152 128 18.8
(32) 36 *

Loss Before Income Taxes (387) (191) *
Income tax benefit ** --- (80) *
Net Loss $(387) $(111) *
Continued on next page

* Greater than 100%

** The company did not record a net tax benefit associated with its 2004
or 2003 losses due to the company providing a valuation allowance.
However, in 2003, the company reached an agreement with the IRS
covering tax years 1990 through 1995 and as a result recorded an
$80 million tax benefit to reduce previously accrued income tax
liabilities.



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

Three Months Ended December 31,
2004 2003

Basic and Diluted Loss Per Share $(2.40) $(0.70)

Number of Shares Used in Computation
Basic and Diluted 161 160



AMR Corporation
Impact of Fuel Price Variance

Average fuel price per gallon (cents)
Three months ended December 31, 2004 147.7
Three months ended December 31, 2003 88.4
Change in price (cents) 59.3
2004 consumption (gallons, in millions) x 805
Impact of fuel price variance (in millions $477



AMR Corporation
Impact of Fuel Price Variance

Average fuel price per gallon (cents)
Twelve months ended December 31, 2004 121.6
Twelve months ended December 31, 2003 87.7
Change in price (cents) 33.9
2004 consumption (gallons, in millions) x 3,264
Impact of fuel price variance (in millions) $1,106



AMR CORPORATION
OPERATING STATISTICS
(Unaudited)

Three Months Ended
December 31, Percent
2004 2003 Change
American Airlines, Inc. Mainline
Jet Operations
Revenue passenger miles
(millions) 31,893 29,592 7.8
Available seat miles (millions) 42,906 41,348 3.8
Cargo ton miles (millions) 586 532 10.2
Passenger load factor 74.3% 71.6% 2.7 pts.
Passenger revenue yield per
passenger mile (cents) 11.32 12.13 (6.7)
Passenger revenue per available
seat mile (cents) 8.41 8.68 (3.1)
Cargo revenue yield per ton
mile (cents) 29.56 27.91 5.9
Operating expenses per
available seat mile,
excluding Regional
Affiliates (cents) (A) 10.25 10.25 ---
Special charges per available
seat mile (cents) 0.14 0.80 (82.5)
Fuel consumption (gallons,
in millions) 738 732 0.8
Fuel price per gallon (cents) 147.4 88.1 67.3

Regional Affiliates
Revenue passenger miles
(millions) 1,928 1,499 28.6
Available seat miles (millions) 2,877 2,311 24.5
Passenger load factor 67.0% 64.9% 2.1 pts.

AMR Corporation
Average Equivalent Number
of Employees
American Airlines 77,500 78,900
Other 13,200 11,700
Total 90,700 90,600

(A) Excludes $561 million and $451 million of expense incurred related
to Regional Affiliates in 2004 and 2003, respectively.



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

Twelve Months Ended December 31, Percent
2004 2003 Change
Revenues
Passenger - American Airlines $15,021 $14,332 4.8
- Regional Affiliates 1,876 1,519 23.5
Cargo 625 558 12.0
Other revenues 1,123 1,031 8.9
Total operating revenues 18,645 17,440 6.9

Expenses
Wages, salaries and benefits 6,719 7,264 (7.5)
Aircraft fuel 3,969 2,772 43.2
Depreciation and amortization 1,292 1,377 (6.2)
Other rentals and landing fees 1,187 1,173 1.2
Commissions, booking fees and
credit card expense 1,107 1,063 4.1
Maintenance, materials and
repairs 971 860 12.9
Aircraft rentals 609 687 (11.4)
Food service 558 611 (8.7)
Other operating expenses 2,366 2,428 (2.6)
Special charges 11 407 (97.3)
U.S. government grant --- (358) *
Total operating expenses 18,789 18,284 2.8

Operating Loss (144) (844) (82.9)

Other Income (Expense)
Interest income 66 55 20.0
Interest expense (871) (703) 23.9
Interest capitalized 80 71 12.7
Miscellaneous - net 108 113 (4.4)
(617) (464) 33.0

Loss Before Income Taxes (761) (1,308) (41.8)
Income tax benefit ** --- (80) *
Net Loss $(761) $(1,228) (38.0)
Continued on next page

* Greater than 100%

** The company did not record a net tax benefit associated with its 2004
or 2003 losses due to the company providing a valuation allowance.
However, in 2003, the company reached an agreement with the IRS
covering tax years 1990 through 1995 and as a result recorded an
$80 million tax benefit to reduce previously accrued income tax
liabilities.



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

Twelve Months Ended December 31,
2004 2003

Basic and Diluted Loss Per Share $(4.74) $(7.76)

Number of Shares Used in Computation
Basic and Diluted 161 158



AMR CORPORATION
OPERATING STATISTICS
(Unaudited)

Twelve Months Ended December 31, Percent
2004 2003 Change
American Airlines, Inc. Mainline
Jet Operations
Revenue passenger miles
(millions) 130,164 120,328 8.2
Available seat miles
(millions) 174,015 165,209 5.3
Cargo ton miles (millions) 2,203 2,000 10.2
Passenger load factor 74.8% 72.8% 2.0 pts.
Passenger revenue yield per
passenger mile (cents) 11.54 11.91 (3.1)
Passenger revenue per available
seat mile (cents) 8.63 8.67 (0.5)
Cargo revenue yield per
ton mile (cents) 28.36 27.87 1.8
Operating expenses per
available seat mile,
excluding Regional
Affiliates (cents) (A) 9.73 10.15 (4.1)
Special charges and U.S.
government grant per
available seat mile (cents) 0.01 0.05 (80.0)
Fuel consumption (gallons,
in millions) 3,014 2,956 2.0
Fuel price per gallon (cents) 121.2 87.5 38.5

Regional Affiliates
Revenue passenger miles
(millions) 7,283 5,516 32.0
Available seat miles
(millions) 10,835 8,597 26.0
Passenger load factor 67.2% 64.2% 3.0 pts.

(A) Excludes $2,104 million and $1,757 million of expense incurred
related to Regional Affiliates in 2004 and 2003, respectively.



AMERICAN AIRLINES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions) (Unaudited)

Three Months Ended December 31, Percent
2004 2003 Change
Revenues
Passenger - American Airlines $3,610 $3,589 0.6
- Regional Affiliates 463 407 13.8
Cargo 173 149 16.1
Other revenues 285 238 19.7
Total operating revenues 4,531 4,383 3.4

Expenses
Wages, salaries and benefits 1,554 1,496 3.9
Aircraft fuel 1,088 645 68.7
Regional carrier payments 504 401 25.7
Depreciation and amortization 286 309 (7.4)
Other rentals and landing fees 255 262 (2.7)
Commissions, booking fees and
credit card expense 244 268 (9.0)
Maintenance, materials and
repairs 190 179 6.1
Aircraft rentals 145 151 (4.0)
Food service 135 150 (10.0)
Other operating expenses 497 498 (0.2)
Special charges 59 330 (82.1)
Total operating expenses 4,957 4,689 5.7

Operating Loss (426) (306) 39.2

Other Income (Expense)
Interest income 19 14 35.7
Interest expense (165) (74) *
Interest capitalized 21 16 31.3
Related party interest - net (1) --- *
Miscellaneous - net 151 130 16.2
25 86 (70.9)

Loss Before Income Taxes (401) (220) 82.3
Income tax benefit ** --- (91) *
Net Loss $(401) $(129) *

* Greater than 100%

** The company did not record a net tax benefit associated with its 2004
or 2003 losses due to the company providing a valuation allowance.
However, in 2003, the company reached an agreement with the IRS
covering tax years 1990 through 1995 and as a result recorded a
$91 million tax benefit to reduce previously accrued income tax
liabilities.



AMERICAN AIRLINES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions) (Unaudited)

Twelve Months Ended December 31, Percent
2004 2003 Change
Revenues
Passenger - American Airlines $15,021 $14,332 4.8
- Regional Affiliates 1,876 1,519 23.5
Cargo 625 558 12.0
Other revenues 1,086 994 9.3
Total operating revenues 18,608 17,403 6.9

Expenses
Wages, salaries and benefits 6,224 6,831 (8.9)
Aircraft fuel 3,653 2,586 41.3
Regional payments 1,869 1,550 20.6
Depreciation and amortization 1,124 1,213 (7.3)
Other rentals and landing fees 1,066 1,084 (1.7)
Commissions, booking fees and
credit card expense 1,107 1,064 4.0
Maintenance, materials and
repairs 821 714 15.0
Aircraft rentals 588 666 (11.7)
Food service 552 606 (8.9)
Other operating expenses 2,015 2,126 (5.2)
Special charges 10 407 (97.5)
U.S. government grant --- (315) *
Total operating expenses 19,029 18,532 2.7

Operating Loss (421) (1,129) (62.7)

Other Income (Expense)
Interest income 64 54 18.5
Interest expense (650) (524) 24.0
Interest capitalized 77 66 16.7
Related party interest - net (2) 7 *
Miscellaneous - net 111 117 (5.1)
(400) (280) 42.9

Loss Before Income Taxes (821) (1,409) (41.7)
Income tax benefit ** --- (91) *
Net Loss $(821) $(1,318) (37.7)

* Greater than 100%

** The company did not record a net tax benefit associated with its 2004
or 2003 losses due to the company providing a valuation allowance.
However, in 2003, the company reached an agreement with the IRS
covering tax years 1990 through 1995 and as a result recorded a
$91 million tax benefit to reduce previously accrued income tax
liabilities.

Current AMR Corp. news releases can be accessed via the Internet.
The address is http://www.aa.com
SOURCE AMR Corporation
-0- 01/19/2005
/EDITORS' ADVISORY: A live Webcast reporting fourth quarter results will
be broadcast on the Internet on Jan. 19 at 2 p.m. EST. [Windows Media Player
required for viewing.]
AMR's Chairman, President and Chief Executive Officer, Gerard Arpey, and
its Chief Financial Officer, James Beer, will make a presentation to analysts
during a teleconference on Wednesday, Jan. 19, from 2 p.m. to 2:45 p.m. EST.
Following the analyst call, they will hold a question-and-answer conference
call for media from 3 p.m. to 3:45 p.m. EST. Reporters interested in
listening to the presentation or participating in the media Q&A should call
817-967-1577 for details./
/CONTACT: Al Becker, Corporate Communications of AMR Corporation,
+1-817-967-1577, or corp.comm@aa.com /
/Web site: http://www.aa.com /
(AMR)

CO: AMR Corporation; American Airlines, Inc.
ST: Texas
IN: AIR TRA LEI
SU: ERN ERP CCA MAV

 

[Borescope]

BOHICA

 

[MCI transplant]

BOHICA

[post="240449"][/post]​

<_< Profound statement boro!!!!