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: January 18, 2006
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 furnishing herewith a press
release issued on January 18, 2006 by the Company as Exhibit
99.1 which is included herein. This press release was
issued to report the Company's fourth quarter 2005 and full
year results.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 Press Release of AMR
dated January 18, 2006
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: January 18, 2006
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, Jan. 18, 2006
Editor's Note: A live Webcast reporting fourth quarter
results will be broadcast on the Internet on Jan. 18 at 2
p.m. EST. (Windows Media Player required for viewing.)
AMR CORPORATION REPORTS A FOURTH QUARTER LOSS
OF $604 MILLION, AS COMPARED TO A $387 MILLION LOSS IN 2004
High Fuel Prices And Competitors With Lower Costs Continued
To Impact American's Financial Performance
Despite These Headwinds, AMR's Fourth Quarter Results,
Excluding Special Items, Improved Year Over Year
FORT WORTH, Texas - AMR Corporation, parent company of
American Airlines, Inc., today reported a net loss of $604
million in the fourth quarter of 2005, or $3.49 per share,
as compared to a net loss of $387 million, or $2.40 per
share, in the fourth quarter of 2004. The loss for the
fourth quarter of 2005 includes a net $191 million negative
impact of special items, including $155 million for aircraft
charges, $73 million for facility charges and a $37 million
gain related to debt restructuring. Without these special
items, AMR would have recorded a net loss of $413 million,
or $2.39 per share, in 2005. The net loss in the fourth
quarter of 2004 was $473 million, or $2.94 per share,
excluding an $86 million net gain due to special items.
For the year 2005, AMR posted a $93 million operating
loss and a net loss of $861 million, as compared to 2004's
full-year operating loss of $144 million and net loss of
$761 million. Special items resulted in a net charge of
$180 million in 2005 and a net
-- more --
gain of $135 million in 2004. Excluding these special
items, the Company's net loss would have been $681 million
in 2005, with operating earnings of $100 million, and $896
million in 2004, with an operating loss of $133 million.
"Our fourth quarter results close the book on another
very difficult year," said AMR Chairman and CEO Gerard
Arpey. "But while we are dissatisfied with our financial
results, we did make progress in a number of important areas
during the year, including our first annual operating
profit, excluding special items, since the year 2000. As a
result, we have - unlike many of our competitors - continued
to meet our various financial obligations, including funding
our defined benefit pension programs. And, by working
together with our people and our unions, we have continued
to improve the efficiency and productivity of every part of
the company. Our collaborative approach enabled us to
retain control of our destiny in 2005, despite a challenging
revenue environment and higher fuel prices driving a $1.7
billion increase in fuel costs, compared to what we would
have paid at 2004 prices."
During the fourth quarter, the Company paid $433
million more for fuel than it would have paid at 2004 prices
and, on a year over year basis, American's mainline cost per
available seat mile was up by 12.9 percent. Excluding fuel
and special items, mainline unit costs increased 2.8 percent
versus the fourth quarter of 2004. For the full year,
mainline unit costs increased 7.9 percent; however,
excluding fuel and special items, these unit costs decreased
2.0 percent.
Arpey congratulated the airline's employees for
lowering unit costs, excluding fuel and special items, for
the fourth year in a row in 2005. He also pointed out that
good customer service, capacity restraint, new products, and
numerous fleet and schedule changes enabled American to
outperform the industry in generating passenger revenue.
Included in the numerous fleet and schedule changes was the
year-end decision to permanently ground 27 MD80 aircraft, 24
of which had previously been in temporary storage. The
remaining three aircraft were grounded as of Dec. 31, 2005.
For the quarter, American's passenger revenue per
available seat mile was up 13.8 percent year over year.
American's load factor - or percentage of seats filled - for
the fourth quarter was 77.9 percent, up 3.6 points over the
fourth quarter of 2004, while yield, representing average
fares, was up 8.5 percent.
-- more --
"As our revenue performance indicates, we have been
doing a good job of giving customers what they value, and
leveraging our global network, strong brand and well-earned
reputation for customer service," Arpey said. "We expect
these American strengths to continue serving us well in 2006
and beyond, but the fact is we need to do more - on both the
cost and revenue sides of the ledger - to return our company
to sustained profitability."
Arpey noted that the Performance Leadership Initiative
(PLI) - a collaborative effort launched in 2005 - has the
potential to generate substantial improvements, and close
gaps between the company's performance, and what would be
considered best in class. "PLI is the natural next step in
the Turnaround Plan we launched several years ago," Arpey
said. "Every work group in the company has participated in
identifying the areas where more improvement is needed."
Arpey said one important by-product of the company's
collaborative approach has been its ability to meet all of
its pension obligations. During the fourth quarter, AMR
contributed $22 million to its various defined benefit
plans, bringing the 2005 total pension contribution to $310
million.
AMR ended the year with $4.3 billion in cash and short-
term investments, including a restricted balance of $510
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, Jan. 18, 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.
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,
-- more --
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; changes in the price of the Company's stock; actions
by U.S. or foreign government agencies; the possible occurrence
of additional terrorist attacks; another outbreak of a disease
(such as SARS or Avian Flu) 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 Company's 2004 Form 10-K.
Detailed financial information follows:
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Three Months Ended December 31, Percent
2005 2004 Change
Revenues
Passenger - American Airlines $4,080 $3,610 13.0
- Regional Affiliates 566 463 22.2
Cargo 162 173 (6.4)
Other revenues 360 295 22.0
Total operating revenues 5,168 4,541 13.8
Expenses
Wages, salaries and benefits 1,776 1,680 5.7
Aircraft fuel 1,585 1,188 33.4
Other rentals and landing fees 306 286 7.0
Depreciation and amortization 296 329 (10.0)
Commissions, booking fees and
credit card expense 264 244 8.2
Maintenance, materials and repairs 228 230 (0.9)
Aircraft rentals 148 151 (2.0)
Food service 119 137 (13.1)
Other operating expenses 830 651 27.5
Total operating expenses 5,552 4,896 13.4
Operating Loss (384) (355) 8.2
Other Income (Expense)
Interest income 45 19 *
Interest expense (260) (223) 16.6
Interest capitalized 6 20 (70.0)
Miscellaneous - net (11) 152 *
(220) (32) *
Loss Before Income Taxes (604) (387) 56.1
Income tax - - *
Net Loss $(604) $(387) 56.1
Basic and Diluted Loss Per Share $(3.49) $(2.40)
Number of Shares Used in
Computation
Basic and Diluted 173 161
* Greater than 100%
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
Three Months Ended
December 31, Percent
2005 2004 Change
American Airlines, Inc. Mainline Jet Operations
Revenue passenger miles (millions) 33,226 31,893 4.2
Available seat miles (millions) 42,627 42,906 (0.7)
Cargo ton miles (millions) 573 586 (2.2)
Passenger load factor 77.9% 74.3% 3.6 pts.
Passenger revenue yield per passenger
mile (cents) 12.28 11.32 8.5
Passenger revenue per available seat
mile (cents) 9.57 8.41 13.8
Cargo revenue yield per ton mile (cents) 28.35 29.56 (4.1)
Operating expenses per available seat
mile, excluding Regional Affiliates
(cents) (1) 11.57 10.25 12.9
Fuel consumption (gallons, in millions) 706 738 (4.3)
Fuel price per gallon (cents) 202.1 147.4 37.1
Regional Affiliates
Revenue passenger miles (millions) 2,359 1,928 22.4
Available seat miles (millions) 3,262 2,877 13.4
Passenger load factor 72.3% 67.0% 5.3 pts.
AMR Corporation
Average Equivalent Number of Employees
American Airlines 74,000 77,500
Other 13,200 13,200
Total 87,200 90,700
(1) Excludes $655 million and $561 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 Three Months Ended
Jet Operations December 31,
(in millions, except as noted) 2005 2004
Total operating expenses $5,588 $4,957
Less: Operating expenses incurred
related to Regional Affiliates 655 561
Operating expenses excluding expenses
incurred related to Regional Affiliates $4,933 $4,396
American mainline jet operations
available seat miles 42,627 42,906
Operating expenses per available seat mile,
excluding Regional Affiliates (cents) 11.57 10.25
Impact of special items (cents) (0.44) (0.14)
Fuel cost per available seat mile (cents) (3.35) (2.54)
Operating expenses per available seat mile,
excluding impact of special items and
cost of fuel (cents) 7.78 7.57
Percent change 2.8%
AMR Corporation
Impact of Fuel Price Variance
Average fuel price per gallon (cents)
Three months ended December 31, 2005 203.3
Three months ended December 31, 2004 147.7
Change in price (cents) 55.6
2005 consumption (gallons, in millions) x 779.4
Impact of fuel price variance (in millions) $ 433.3
Note: The Company believes that operating expenses per
available seat mile, excluding special items 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, without regard to special
items.
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
AMR Corporation
Impact of Special Items Three Months Ended
(in millions, except per share amounts) December 31, 2005
Amount EPS
Net loss $(604) $(3.49)
Less: Impact of special items 191 1.10
Net loss excluding special items $(413) $(2.39)
AMR Corporation
Impact of Special Items Three Months Ended
(in millions, except per share amounts) December 31, 2004
Amount EPS
Net loss $(387) $(2.40)
Add: Impact of special items (86) (0.54)
Net loss excluding special items $(473) $(2.94)
Note: The Company believes the loss excluding special items
assists investors in understanding the impact of the special
items on the Company's financial results.
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Twelve Months Ended December 31, Percent
2005 2004 Change
Revenues
Passenger - American Airlines $16,614 $15,021 10.6
- Regional Affiliates 2,148 1,876 14.5
Cargo 622 625 (0.5)
Other revenues 1,328 1,123 18.3
Total operating revenues 20,712 18,645 11.1
Expenses
Wages, salaries and benefits 6,755 6,719 0.5
Aircraft fuel 5,615 3,969 41.5
Other rentals and landing fees 1,262 1,187 6.3
Depreciation and amortization 1,164 1,292 (9.9)
Commissions, booking fees and
credit card expense 1,113 1,107 0.5
Maintenance, materials and repairs 989 971 1.9
Aircraft rentals 591 609 (3.0)
Food service 507 558 (9.1)
Other operating expenses 2,809 2,377 18.2
Total operating expenses 20,805 18,789 10.7
Operating Loss (93) (144) (35.4)
Other Income (Expense) 149 66 *
Interest income (957) (871) 9.9
Interest expense 65 80 (18.8)
Interest capitalized (25) 108 *
Miscellaneous - net (768) (617) 24.5
Loss Before Income Taxes (861) (761) 13.1
Income tax - - *
Net Loss (861) (761) 13.1
Basic and Diluted Loss Per Share $(5.21) $(4.74)
Number of Shares Used in
Computation
Basic and Diluted 165 161
* Greater than 100%
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
Twelve Months Ended
December 31, Percent
2005 2004 Change
American Airlines, Inc. Mainline
Jet Operations
Revenue passenger miles (millions) 138,374 130,164 6.3
Available seat miles (millions) 176,112 174,015 1.2
Cargo ton miles (millions) 2,209 2,203 0.3
Passenger load factor 78.6% 74.8% 3.8 pts.
Passenger revenue yield per
passenger mile (cents) 12.01 11.54 4.1
Passenger revenue per available
seat mile (cents) 9.43 8.63 9.3
Cargo revenue yield per ton mile
(cents) 28.21 28.36 (0.5)
Operating expenses per available
seat mile, excluding Regional
Affiliates (cents) (1) 10.50 9.73 7.9
Fuel consumption (gallons, in
millions) 2,948 3,014 (2.2)
Fuel price per gallon (cents) 172.3 121.2 42.2
Regional Affiliates
Revenue passenger miles (millions) 8,946 7,283 22.8
Available seat miles (millions) 12,714 10,835 17.3
Passenger load factor 70.4% 67.2% 3.2 pts.
(1) Excludes $2.5 billion and $2.1 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 Operations Twelve Months Ended
(in millions, except as noted) December 31,
2005 2004
Total operating expenses $21,008 $19,029
Less: Operating expenses incurred related
to Regional Affiliates 2,515 2,104
Operating expenses excluding expenses
incurred related to Regional Affiliates $18,493 $16,925
American mainline jet operations available
seat miles 176,112 174,015
Operating expenses per available seat mile,
excluding expenses incurred related to
Regional Affiliates (cents) 10.50 9.73
Impact of special items (cents) (0.11) (0.01)
Fuel cost per available seat mile (cents) (2.91) (2.09)
Operating expenses per available seat mile,
excluding impact of special items and the
cost of fuel (cents) 7.48 7.63
Percent change (2.0%)
AMR Corporation
Impact of Fuel Price Variance
Average fuel price per gallon (cents)
Twelve months ended December 31, 2005 173.5
Twelve months ended December 31, 2004 121.6
Change in price (cents) 51.9
2005 consumption (gallons, in millions) x 3,237.0
Impact of fuel price variance (in millions) $ 1,680.0
Note: The Company believes that operating expenses per
available seat mile, excluding special items 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, without regard to special items.
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
AMR Corporation
Impact of Special Items Twelve Months Ended
(in millions, except per share amounts) December 31, 2005
Amount EPS
Net loss $(861) $(5.21)
Less: Impact of special items 180 1.09
Net loss excluding special items $(681) $(4.12)
AMR Corporation
Impact of Special Items Twelve Months Ended
(in millions, except per share amounts) December 31, 2004
Amount EPS
Net loss $(761) $(4.74)
Add: Impact of special items (135) (0.84)
Net loss excluding special items $(896) $(5.58)
AMR Corporation
Impact of Special Items on Operating Earnings Twelve Months Ended
(in millions, except per share amounts) December 31
2005 2004
Operating income (loss) $(93) $(144)
Less: Impact of special items (1) 193 11
Operating income (loss) excluding special items $100 $(133)
(1) Certain special items in 2005 and 2004 did not impact
operating earnings.
Note: The Company believes the operating income/(loss) and
net loss excluding special items assists investors in
understanding the impact of the special items on the
Company's financial results.
Current AMR Corp. news releases can be accessed on the
Internet.
The address is: http://www.aa.com