UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_____________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of earliest event
reported: July 20, 2005
AMR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-8400 75-1825172
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
4333 Amon Carter Blvd. Fort Worth, Texas 76155
(Address of principal executive offices) (Zip Code)
(817) 963-1234
(Registrant's telephone number)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-
2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-
4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
AMR Corporation (the Company) is filing herewith a press
release issued on July 20, 2005 by the Company as Exhibit
99.1 which is included herein. This press release was
issued to report the Company's second quarter 2005 results.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 Press Release of AMR dated
July 20, 2005
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
AMR CORPORATION
/s/ Charles D. MarLett
Charles D. MarLett
Corporate Secretary
Dated: July 20, 2005
EXHIBIT INDEX
Exhibit Description
99.1 Press Release
Exhibit 99.1
CONTACT: Al Becker
Corporate Communications
Fort Worth, Texas
817-967-1577
corp.comm@aa.com
FOR RELEASE: Wednesday, July 20, 2005
Editor's Note: A live Webcast reporting second quarter
results will be broadcast on the Internet on July 20 at 2
p.m. EDT. (Windows Media Player required for viewing.)
AMR CORPORATION REPORTS A SECOND QUARTER PROFIT
OF $58 MILLION DESPITE HIGH FUEL COSTS AND HISTORICALLY
LOW TICKET PRICES
Continued Focus On Cost Control And Revenue Performance
Produces
American's First Quarterly Profit, Without Benefit Of
Special Items,
Since The Fourth Quarter Of 2000
American Targeting Continued Progress Toward
Required Financial Performance
FORT WORTH, Texas -- AMR Corporation, the parent
company of American Airlines, Inc., today reported a net
profit of $58 million for the second quarter, or $0.30 per
share fully diluted, compared to a net profit of $6 million
(which included a $31 million benefit from special items),
or $0.03 per share fully diluted, in the second quarter last
year. The second quarter was the company's first profitable
quarter, without the benefit of special items, since the
fourth quarter of 2000.
"The fact that we were able to earn a small profit
despite record high fuel prices and a difficult industry
environment speaks volumes about our people, who continue to
meet our many challenges with determination and ingenuity,"
said AMR Chairman and CEO Gerard Arpey.
"Working together, we have made significant progress in
all aspects of the Turnaround Plan that we launched several
years ago," Arpey said. "That progress has become even more
crucial, given record high fuel prices that continue to
afflict the industry."
During the second quarter, the Company paid $434
million more for fuel than it would have paid with last
year's fuel prices.
"The high price of fuel remains one of the biggest
clouds hanging over our company and our industry," Arpey
said, "and unfortunately, there doesn't seem to be any
relief in sight -- oil prices in the second half of the year
are currently projected to be higher than during the second
quarter. As a result, we have no choice but to redouble our
efforts to wring cost and inefficiency out of everything we
do."
American's mainline cost per available seat mile in the
quarter was up 5.6 percent year over year. However,
excluding fuel and last year's special items, the airline's
unit cost was down 4.3 percent year over year. "This is a
reflection of the many cost-saving initiatives we continue
to find," Arpey said. "In addition to the $700 million in
annual savings we built into our 2005 budget, our employees
have identified -- since the beginning of this year --
another $65 million in expected annual savings on a steady-
state basis."
American's revenue performance was buoyed by a
combination of capacity restraint, network and aircraft
changes, and record high traffic levels. During the second
quarter, revenue passenger miles were up 7.4 percent year
over year, while available seat miles grew 2.3 percent
overall, and decreased 1.6 percent domestically. American's
systemwide load factor -- or the percentage of total seats
filled -- hit a record of 79.5 percent. Yield, which
represents average fares, increased 1.9 percent year over
year -- the company's first quarterly yield increase since
the fourth quarter of 2003.
"The improvement we have seen on the revenue side of
the ledger has only been possible as a result of our
people's ability to efficiently and courteously handle an
enormous number of customers," Arpey said. "At the same
time, we are reaping the benefits of the many changes we
have made to our network and product during the past several
years. Our load factor is strong, and fares -- while still
far too low to provide adequate returns -- have improved
somewhat in recent months."
Arpey noted that after 17 quarters of losses, excluding
special items, it feels good to report even a modest profit.
"I hope our people take pride in what we have
accomplished together," Arpey said. "However, we need to be
honest about the fact that -- given the losses of the past
four years -- we are digging our way out of a very deep
hole. What's more, given the strength of the economy and
the public's current appetite for air travel, our second
quarter results should be much better."
"High fuel prices are not an excuse," he said, "but
they are a constant reminder that our industry is changing
and we must change with it to ensure our future. Our
competitors continue to lower their costs either in or
outside of the bankruptcy court, and the currently improving
fare levels are still low by historical standards."
Arpey pointed out that in addition to earning a modest
profit, AMR was able to contribute $75 million to its
various defined benefit pension plans in the second quarter,
bringing its total contributions to the plans this year to
$213 million. AMR also was able to grow its cash balance,
ending the period with $3.9 billion in cash and short-term
investments, including a restricted balance of $492 million.
Editor's Note: 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, July 20, from 2 p.m.
to 2:45 p.m. EDT. Following the analyst call, they will
hold a question-and-answer conference call for media from 3
p.m. to 3:45 p.m. EDT. Reporters interested in listening to
the presentation or participating in the media Q&A should
call 817-967-1577.
Statements in this release contain various forward-looking
statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which represent
the Company's expectations or beliefs concerning future
events. When used in this release, the words "expects,"
"plans," "anticipates," "indicates," "believes," "forecast,"
"guidance," "outlook" and similar expressions are intended
to identify forward-looking statements. Forward-looking
statements include, without limitation, the Company's
expectations concerning operations and financial conditions,
including changes in capacity, revenues and costs, future
financing plans and needs, overall economic conditions,
plans and objectives for future operations, and the impact
on the Company of its results of operations in recent years
and the sufficiency of its financial resources to absorb
that impact. Other forward-looking statements include
statements which do not relate solely to historical facts,
such as, without limitation, statements which discuss the
possible future effects of current known trends or
uncertainties or which indicate that the future effects of
known trends or uncertainties cannot be predicted,
guaranteed or assured. All forward-looking statements in
this release are based upon information available to the
Company on the date of this release. The Company undertakes
no obligation to publicly update or revise any forward-
looking statement, whether as a result of new information,
future events, or otherwise.
Forward-looking statements are subject to a number of
factors that could cause the Company's actual results to
differ materially from the Company's expectations. The
following factors, in addition to other possible factors not
listed, could cause the Company's actual results to differ
materially from those expressed in forward-looking
statements: changes in economic, business and financial
conditions; the Company's substantial indebtedness;
continued high fuel prices and the availability of fuel;
further increases in the price of fuel; the impact of events
in Iraq; conflicts in the Middle East or elsewhere; the
highly competitive business environment faced by the
Company, characterized by increasing pricing transparency
and competition from low cost carriers and financially
distressed carriers; historically low fare levels and fare
simplification initiatives (both of which could result in a
further deterioration of the revenue environment); the
ability of the Company to reduce its costs further without
adversely affecting operational performance and service
levels; uncertainties with respect to the Company's
international operations; changes in the Company's business
strategy; actions by U.S. or foreign government agencies;
the possible occurrence of additional terrorist attacks;
another outbreak of a disease (such as SARS) that affects
travel behavior; uncertainties with respect to the Company's
relationships with unionized and other employee work groups;
the inability of the Company to satisfy existing financial
or other covenants in certain of its credit agreements; the
availability and terms of future financing; the ability of
the Company to reach acceptable agreements with third
parties; and increased insurance costs and potential
reductions of available insurance coverage. Additional
information concerning these and other factors is contained
in the Company's Securities and Exchange Commission filings,
including but not limited to the 2004 Form 10-K.
Detailed financial information follows:
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Three Months Ended June 30, Percent
2005 2004 Change
Revenues
Passenger - American Airlines $4,264 $3,895 9.5
- Regional Affiliates 561 505 11.1
Cargo 157 155 1.3
Other revenues 327 275 18.9
Total operating revenues 5,309 4,830 9.9
Expenses
Wages, salaries and benefits 1,671 1,703 (1.9)
Aircraft fuel 1,350 917 47.2
Other rentals and landing fees 319 301 6.0
Depreciation and amortization 286 320 (10.6)
Commissions, booking fees and
credit card expense 286 287 (0.3)
Maintenance, materials and repairs 257 245 4.9
Aircraft rentals 147 153 (3.9)
Food service 127 139 (8.6)
Other operating expenses 637 600 6.2
Special charges - (31) *
Total operating expenses 5,080 4,634 9.6
Operating Income 229 196 16.8
Other Income (Expense)
Interest income 29 14 *
Interest expense (223) (217) 2.8
Interest capitalized 24 20 20.0
Miscellaneous - net (1) (7) (85.7)
(171) (190) (10.0)
Income Before Income Taxes 58 6 *
Income tax - - -
Net Earnings $ 58 $ 6 *
Earnings Per Share
Basic $ 0.35 $ 0.04
Diluted $ 0.30 $ 0.03
Number of Shares Used in
Computation
Basic 163 160
Diluted 216 183
* Greater than 100%
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
Three Months Ended
June 30, Percent
2005 2004 Change
American Airlines, Inc. Mainline Jet
Operations
Revenue passenger miles (millions) 35,795 33,323 7.4
Available seat miles (millions) 45,018 43,997 2.3
Cargo ton miles (millions) 558 567 (1.6)
Passenger load factor 79.5% 75.7% 3.8 pts.
Passenger revenue yield per
passenger mile (cents) 11.91 11.69 1.9
Passenger revenue per available
seat mile (cents) 9.47 8.85 7.0
Cargo revenue yield per ton
mile (cents) 28.14 27.24 3.3
Operating expenses per available
seat mile, excluding Regional
Affiliates (cents) (1) 10.03 9.50 5.6
Fuel consumption (gallons, in
millions) 749 762 (1.7)
Fuel price per gallon (cents) 163.4 111.2 46.9
Regional Affiliates
Revenue passenger miles (millions) 2,317 1,857 24.8
Available seat miles (millions) 3,211 2,665 20.5
Passenger load factor 72.2% 69.7% 2.5 pts.
AMR Corporation
Average Equivalent Number of Employees
American Airlines 75,100 79,900
Other 13,400 12,600
Total 88,500 92,500
(1) Excludes $627 million and $517 million of expense
incurred related to Regional Affiliates in 2005 and 2004,
respectively.
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
American Airlines, Inc. Mainline Jet Three Months Ended June 30,
Operations(in millions, except as noted) 2005 2004
Total operating expenses $5,143 $4,698
Less: Operating expenses incurred
related to Regional Affiliates 627 517
Operating expenses excluding expenses
incurred related to Regional
Affiliates $4,516 $4,181
American mainline jet operations
available seat miles 45,018 43,997
Operating expenses per available seat mile,
excluding Regional Affiliates (cents) 10.03 9.50
Less: Impact of special items (cents) - (0.07)
Less: Fuel cost per available seat mile
(cents) 2.72 1.93
Operating expenses per available seat mile,
excluding impact of special items and
the cost of fuel (cents) 7.31 7.64
Percent change (4.3)%
AMR Corporation
Impact of Fuel Price Variance
Average fuel price per gallon (cents)
Three months ended June 30, 2005 164.2
Three months ended June 30, 2004 111.4
Change in price (cents) 52.8
2005 consumption (gallons, in millions) x 822.3
Impact of fuel price variance (in millions) $ 434.2
Note: The Company believes that operating expenses per
available seat mile, excluding special items (which
relate to prior periods) and the cost of fuel, as well as
the impact of fuel price increases, assist investors in
understanding the impact of fuel prices on the Company's
operations.
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Six Months Ended June 30, Percent
2005 2004 Change
Revenues
Passenger - American Airlines $8,106 $7,573 7.0
- Regional Affiliates 1,012 925 9.4
Cargo 308 303 1.7
Other revenues 633 541 17.0
Total operating revenues 10,059 9,342 7.7
Expenses
Wages, salaries and benefits 3,315 3,343 (0.8)
Aircraft fuel 2,448 1,725 41.9
Other rentals and landing fees 619 606 2.1
Depreciation and amortization 576 646 (10.8)
Commissions, booking fees and
credit card expense 557 575 (3.1)
Maintenance, materials and repairs 492 476 3.4
Aircraft rentals 295 306 (3.6)
Food service 252 276 (8.7)
Other operating expenses 1,253 1,182 6.0
Special charges - (31) *
Total operating expenses 9,807 9,104 7.7
Operating Income 252 238 5.9
Other Income (Expense)
Interest income 64 28 *
Interest expense (457) (429) 6.5
Interest capitalized 47 38 23.7
Miscellaneous - net (10) (35) (71.4)
(356) (398) (10.6)
Loss Before Income Taxes (104) (160) 35.0
Income tax - - *
Net Loss $(104) $(160) 35.0
Basic and Diluted Loss Per Share $(0.64) $ (1.00)
Number of Shares Used in
Computation
Basic and Diluted 162 160
* Greater than 100%
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
Six Months Ended
June 30, Percent
2005 2004 Change
American Airlines, Inc. Mainline Jet
Operations
Revenue passenger miles (millions) 68,123 63,613 7.1
Available seat miles (millions) 87,872 86,594 1.5
Cargo ton miles (millions) 1,098 1,088 0.9
Passenger load factor 77.5% 73.5% 4.0 pts.
Passenger revenue yield per
passenger mile (cents) 11.90 11.90 -
Passenger revenue per available
seat mile (cents) 9.22 8.75 5.4
Cargo revenue yield per ton
mile (cents) 28.08 27.83 0.9
Operating expenses per available
seat mile, excluding Regional
Affiliates (cents) (1) 9.92 9.49 4.5
Fuel consumption (gallons, in
millions) 1,478 1,503 (1.7)
Fuel price per gallon (cents) 150.2 106.2 41.4
Regional Affiliates
Revenue passenger miles (millions) 4,202 3,396 23.7
Available seat miles (millions) 6,126 5,118 19.7
Passenger load factor 68.6% 66.3% 2.3 pts.
(1) Excludes $1.2 billion and $1.0 billion of expense
incurred related to Regional Affiliates in 2005 and 2004,
respectively.
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
American Airlines, Inc. Mainline Jet Six Months Ended June 30,
Operations(in millions, except as noted) 2005 2004
Total operating expenses $9,924 $9,226
Less: Operating expenses incurred
related to Regional Affiliates 1,210 1,004
Operating expenses excluding expenses
incurred related to Regional
Affiliates $8,714 $8,222
American mainline jet operations
available seat miles 87,872 86,594
Operating expenses per available seat mile,
excluding expenses incurred related
to Regional Affiliates (cents) 9.92 9.49
###
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The address is http://www.aa.com