ST. PAUL, Minn., Jan. 21 /PRNewswire-FirstCall/ --
Northwest Airlines Corporation (Nasdaq: NWAC), the parent of Northwest
Airlines, today reported a fourth quarter net loss of $488 million or $5.68
per common share. This compares to a fourth quarter 2001 net loss of
$216 million or $2.55 per common share.
Excluding unusual items, Northwest reported a fourth quarter 2002 net loss
of $178 million or $2.08 per common share, compared to a fourth quarter 2001
net loss of $256 million or $3.02 per common share. These results were in-
line with consensus estimates of a $2.14 loss per share.
Fourth quarter 2002 results included $464 million in unusual pre-tax
charges, principally attributable to the accelerated retirement of certain
Boeing 747-200 and DC10-30 aircraft, costs associated with the closure of
several facilities, and a partial write-down of the receivable related to the
grant under the Airline Stabilization Act. In addition, the fourth quarter tax
rate reflected a provision of $15 million for tax credits that are expected to
"Although Northwest Airlines outperformed most of its network carrier
competitors in 2002 across relevant financial measures, our absolute
performance was disappointing. While the impact of a slow economy remains a
serious issue for the entire industry, the industry's revenue environment has
permanently changed and we must, and will, operate our airline accordingly,"
said Richard Anderson, chief executive officer.
Anderson continued, "While Northwest has been aggressively managing its
costs since early 2001, we must work even harder with our employees,
suppliers, and other partners to bring our costs in line with expected
revenues. We must be able to compete more effectively with airlines that are
dramatically reducing their operating costs through bankruptcy, as well as the
rapidly growing low cost airlines."
Looking ahead, Anderson added, "There are several uncertainties including
a possible conflict in Iraq, further fuel price increases, and a soft global
economy that make it difficult to forecast when the airline will report a
quarterly profit. However, our management team is convinced that working
together with our employees, labor leaders and suppliers, Northwest will make
the adjustments necessary to be competitive in a permanently changed
For the full year, Northwest reported a net loss of $798 million,
inclusive of unusual items, or $9.32 per common share, which compares to a
full year 2001 reported net loss of $423 million, or $5.03 per common share.
Excluding unusual items, the net loss for the full year 2002 of $488 million
represented a modest improvement versus last year's $536 million net loss.
While not impacting its income statement, Northwest also recorded a
$1.0 billion after-tax reduction to stockholders' equity to reflect the
funding status of its pension plans at year-end.
Photo © Tony Zeljeznjak