The AMR Corporation,the parent company of American Airlines, has reported a 2006 net profit of $231 Million, the company’s first annual profit since 2000 and a $1.1 billion improvement over it’s 2005 results.
AMR Corporation reported
a net profit of $17 million for the fourth quarter of 2006, or $0.07 per
share fully diluted.
  The current quarter results compare to a net loss of $600 million, or
$3.46 per share fully diluted, in the fourth quarter of 2005. Excluding the
$191 million net charge for special items, AMR’s fourth quarter 2005 net
loss was $409 million, or $2.36 per share.
  For 2006, AMR posted a $231 million net profit, or $0.98 per share
fully diluted, compared to a net loss of $857 million, or $5.18 per share
fully diluted, in 2005. AMR’s 2005 loss would have been $677 million
excluding a $180 million net charge for special items.
  “By producing a fourth quarter and full year profit for the first time
since 2000, the people of American Airlines made 2006 a proud milestone in
our ongoing turnaround,” said AMR Chairman and CEO Gerard Arpey. “We
executed on every facet of our Turnaround Plan—from bolstering our
financial and competitive positions to investing in our product and
strengthening our employee pension plans. With the combined effort of the
entire American Airlines team, we expect to build on our momentum in 2007.”
  Arpey noted significant improvement to the Company’s cash balance, a
notable increase in the funding status of its defined benefit pension
plans, and continued debt reduction as examples of AMR’s strong momentum in
2006.
  AMR contributed $323 million to its defined benefit pension plans in
2006, including a $100 million contribution in the fourth quarter that went
beyond the Company’s 2006 funding requirement of $223 million. The
Company’s 2006 pension contributions, along with strong pension fund asset
returns, helped to increase the assets held in trust for its defined
benefit pension plans by $800 million to $8.5 billion at the end of 2006
and also helped to improve the accumulated benefit obligation funding
status of AMR’s pension plans to 85 percent, up from 78 percent at the end
of 2005.
  AMR ended 2006 with $5.2 billion in cash and short-term investments,
including a restricted balance of $468 million, compared to a balance of
$4.3 billion in cash and short-term investments at the end of 2005,
including a restricted balance of $510 million.
  The Company reduced total debt, which includes the principal amount of
airport facility tax-exempt bonds and the present value of aircraft
operating lease obligations, to $18.4 billion at the end of the fourth
quarter of 2006, compared to $20.1 billion a year earlier. In addition to
$1.2 billion in scheduled principal payments that AMR made in 2006, the
Company purchased $190 million of its outstanding debt and lease
obligations during the year. AMR reduced net debt, which is defined as
total debt less unrestricted cash and short-term investments, from $16.3
billion at the end of 2005 to $13.6 billion at the end of 2006.
  AMR reported fourth quarter consolidated revenues of approximately $5.4
billion, an increase of 4.4 percent year over year. Consolidated 2006
revenues totaled $22.6 billion, an 8.9 percent increase over 2005 and a
nearly 30 percent increase over the Company’s $17.4 billion in total
revenue in 2003, the year AMR launched its Turnaround Plan.
  In the fourth quarter, Other revenues, including sales from such
sources as confirmed flight changes, buy-on-board food services, and
third-party maintenance work, increased 11.7 percent year over year to $347
million.
  American’s mainline load factor—or the percentage of total seats
filled—was a record 78.8 percent during the fourth quarter, compared to
77.9 percent in the final quarter of 2005, and yield, which represents
average fares, increased 4.0 percent compared to the fourth quarter of
2005. American’s passenger revenue per available seat mile (unit revenue)
for the fourth quarter increased 5.1 percent compared to the year-ago
quarter. For the full year, unit revenue improved 8.8 percent versus 2005.
  American’s mainline cost per available seat mile (unit cost) in the
fourth quarter was down 5.6 percent year over year. Excluding fuel and
special items, mainline unit cost for the fourth quarter increased 0.5
percent year over year. For the full year, mainline unit costs increased
3.8 percent from 2005, however, excluding fuel and special items, these
costs increased by 1.3 percent.
  During the fourth quarter, AMR paid $120 million less for fuel than it
would have paid at prices prevailing from the prior-year period. The
Company estimates that its Fuel Smart conservation program helps American
save more than 90 million gallons of fuel annually.
  “Our execution under all four tenets of our Turnaround Plan has
improved our financial performance and allowed us to continue to meet our
obligations to shareholders, lenders, employees and customers,” Arpey said.
“We have a lot of work left to do, but the track we are on today is the
right track to position our company for long-term success.”
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