AMR Corp. Reports Fourth Quarter 2008 Loss of $340 Million

AMR Corporation, the parent company of American Airlines, Inc., reported a net loss of $340 million for the fourth quarter of 2008, or $1.22 per share.

The results for the fourth quarter of 2008 include the impact of two special charges: a $23 million charge for aircraft groundings, facility write-offs and severance related to the Company’s previously announced capacity reductions during the last four months of 2008, and a non-cash pension settlement charge of $103 million driven by a large number of early pilot retirements during 2008, which required any unrecognized gains or losses of the related defined benefit pension plan to be recognized on a proportional basis.

Excluding those special charges, the Company lost $214 million, or $0.77 per share, in the fourth quarter of 2008.

The current quarter results compare to a net loss of $69 million for the fourth quarter of 2007, or $0.28 per share, which included: a $138 million gain on the sale of AMR’s stake in ARINC; a $39 million gain from the change to the expiration period for AAdvantage miles; and a $63 million charge from the retirement of 24 MD-80 aircraft. Excluding those special items, AMR lost $184 million, or $0.74 per share, in the fourth quarter of 2007.

For all of 2008, AMR recorded a net loss of $2.1 billion, or $7.98 per share. In addition to the special charges from the fourth quarter of 2008 totaling approximately $126 million, the full-year results include: a $432 million gain from the sale of American Beacon Advisors; facility, severance and aircraft grounding charges of approximately $91 million, and non-cash aircraft and route impairment charges of approximately $1.1 billion related to the Company’s capacity reductions in late 2008. Excluding those special items, AMR lost $1.2 billion, or $4.57 per share, for all of 2008.

As a result of the uncertainty surrounding the economic climate, the Company has decided not to use MD-80s to backfill flying associated with the seven 737s that no longer will be delivered in 2009. Largely as a result of this decision, the Company’s 2009 mainline capacity will decline by more than one percentage point compared to previous guidance provided in October.