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: April 18, 2007
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 April 18, 2007 by the Company as Exhibit
99.1 which is included herein. This press release was
issued to report the Company's first quarter 2007 results.
The original press release contained two typographical errors in
the tables reporting entity results for American Airlines, Inc.
RASM for DOT Latin America was reported as 10.54 and should
have been reported as 11.54. The year-over-year change in Load
Factor for DOT Latin America was reported as 1.4 points and
should have been reported as 2.1 points. The amounts have been
corrected in Exhibit 99.1 below.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 Press Release of AMR dated April 18, 2007
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/Kenneth W. Wimberly
Kenneth W. Wimberly
Corporate Secretary
Dated: April 18, 2007
EXHIBIT INDEX
Exhibit Description
99.1 Press Release
Exhibit 99.1
CONTACT: Andy Backover
Corporate Communications
Fort Worth, Texas
817-967-1577
corp.comm@aa.com
FOR RELEASE: Wednesday, April 18, 2007
Editor's Note: A live Webcast reporting first quarter
results will be broadcast on the Internet on April 18 at 2
p.m. EDT. (Windows Media Player required for viewing)
AMR CORPORATION REPORTS A FIRST QUARTER PROFIT OF $81
MILLION, A $173 MILLION IMPROVEMENT YEAR OVER YEAR
DESPITE WEATHER IMPACT, COMPANY CONTINUES MOMENTUM WITH
FOURTH CONSECUTIVE PROFITABLE QUARTER
AMR Strengthens Balance Sheet, Improves Liquidity and
Continues to Reinvest in its Products and Services
FORT WORTH, Texas - AMR Corporation, the parent company
of American Airlines, Inc., today reported a net profit of
$81 million for the first quarter of 2007, or $0.30 per
diluted share.
The current quarter results compare to a net loss of
$92 million, or $0.49 per diluted share, in the first
quarter of 2006.
"In spite of significant weather challenges, we
continued to build on our momentum by generating a profit in
the first quarter. This is our fourth consecutive profitable
quarter and the first time we have generated a profit in the
first quarter since 2000," said AMR Chairman and CEO Gerard
Arpey. "We strengthened our balance sheet and liquidity,
took a key step in our fleet renewal plan and reinvested in
our products and services. While we must continue to improve
our financial performance, we believe our results show that
we have started 2007 on the right track."
Operational Performance
American's mainline passenger revenue per available
seat mile (unit revenue) increased by 4.5 percent in the
first quarter compared to the year-ago quarter. Mainline
capacity, or total available seat miles, in the first
quarter decreased 2.5 percent compared to the same period in
2006.
-- more --
American's mainline load factor - or the percentage of
total seats filled - was a record 78.1 percent during the
first quarter, compared to 77.2 percent in the first quarter
of 2006. American's first-quarter yield, which represents
average fares, increased 3.3 percent compared to the first
quarter of 2006, its eighth consecutive quarter of year-over-
year yield increases.
AMR reported first quarter consolidated revenues of
approximately $5.4 billion, an increase of 1.6 percent year
over year. AMR estimates that severe weather disruptions
reduced first quarter consolidated revenue by approximately
$60 million.
American's mainline cost per available seat mile (unit
cost) in the first quarter was up 0.9 percent year over
year, which was 1.6 percentage points higher than originally
anticipated largely because of weather impacts that caused
American to cancel 2.9 percent of mainline scheduled
departures for the first quarter. Excluding fuel, mainline
unit costs in the first quarter increased by 2.2 percent
year over year.
Balance Sheet Improvement
Arpey noted that AMR continued to strengthen its
balance sheet in the first quarter by reducing debt and
improving its liquidity position.
AMR ended the first quarter with $5.9 billion in cash
and short-term investments, including a restricted balance
of $471 million, compared to a balance of $4.8 billion in
cash and short-term investments, including a restricted
balance of $510 million, at the end of the first quarter of
2006.
AMR reduced Total Debt, which it defines as the
aggregate of its long-term debt, capital lease obligations,
the principal amount of airport facility tax-exempt bonds
and the present value of aircraft operating lease
obligations, to $17.5 billion at the end of the first
quarter of 2007, compared to $19.7 billion a year earlier.
AMR reduced Net Debt, which it defines as Total Debt less
unrestricted cash and short-term investments, from $15.4
billion at the end of the first quarter of 2006 to $12.2
billion in the first quarter of 2007.
AMR contributed $62 million to its employees' defined
benefit pension plans in the first quarter and made an
additional $118 million contribution on April 13, as the
Company continues to meet this important commitment to its
employees.
"As we continue to execute on our Turnaround Plan, we
are seeking to strike the right balance between reinvestment
in the business and the need for further financial
-- more --
improvement," Arpey said. "We have more hard work ahead of
us, but we believe that we have the right strategy in place
to continue building our company for the long term and to
continue delivering benefits to shareholders, customers and
employees."
First Quarter Highlights
- American announced that it had notified Boeing of its
intent to begin pulling forward deliveries of 47 737-800
aircraft to replace a portion of its MD-80 fleet, with the
first three aircraft scheduled for delivery in early 2009.
Arpey cited the fleet renewal announcement as a key step
toward American's goal of improving fleet fuel efficiency by
more than 20 percent by 2020.
- American announced that it would invest up to $100
million in facility, technology and process improvements to
help its Maintenance, Repair and Overhaul (MRO) business
compete for more third-party maintenance contracts.
American's MRO business generated nearly $95 million in
third-party revenue in 2006.
- AMR continued to improve its balance sheet by paying
down the $285 million balance on its revolving credit
facility and by prepaying $79 million in aircraft debt. In
April, the Company also completed the refinancing of $350
million of tax-exempt bonds. These actions are expected to
eliminate approximately $15 million in annual net interest
expense for the Company.
- AMR improved its financial strength by selling 13
million new shares of common stock to raise nearly $500
million.
- AMR was honored by PLANSPONSOR Magazine as Corporate
Plan Sponsor of the Year for the Company's efforts to
protect and preserve its employees' defined benefit pension
plans. In addition to contributing more than $1.5 billion to
its employees' defined benefit pension plans since 2002, the
Company expects to contribute $364 million to these plans in
2007. Through April 13, AMR had made $180 million of its
expected 2007 contributions.
- AMR began to accrue for a potential profit sharing
payout to employees for the 2007 year, payable in 2008.
There can be no assurance that the Company's forecast will
approximate actual results, which are dependent upon many
factors, including fuel prices and economic and industry
conditions.
-- more --
- American launched an initiative to become the clear
airline of choice for passengers in the New York
market, with its commitment demonstrated by additional
routes, enhanced offers and promotions.
- American launched a new online booking tool on AA.com
that makes it easier and more convenient for AAdvantage
program members to redeem earned miles for travel.
- American announced that it began installing new
personal video and audio entertainment devices in Business
Class cabins on its 58 Boeing 767-300 aircraft.
Guidance for the Second Quarter and 2007
Mainline and Consolidated Capacity
AMR expects its full-year mainline capacity to decrease
by 1.8 percent in 2007 compared to 2006, with a 2.0 percent
reduction in domestic capacity and a 0.9 percent decrease in
international capacity. On a consolidated basis, AMR
expects full-year capacity to decrease by 1.5 percent in
2007 compared to 2006. The impact of weather-related
cancellations that occurred in the first quarter is included
in mainline and consolidated capacity forecasts for 2007.
AMR expects mainline capacity in the second quarter of
2007 to decrease by 3.1 percent year over year. It expects
consolidated capacity to decrease by 2.9 percent in the
second quarter of 2007 compared to the prior-year period.
Fuel Expense and Hedging
While the cost of jet fuel remains volatile, as of now
AMR is planning for an average system price of $2.09 per
gallon in the second quarter and $2.09 per gallon for all of
2007. AMR has 34 percent of its anticipated second quarter
fuel consumption capped at an average crude equivalent of
$65 per barrel (jet fuel equivalent of $2.04 per gallon),
with 26 percent of its anticipated full-year consumption
capped at an average crude equivalent of $63 per barrel (jet
fuel equivalent of $1.96 per gallon). Consolidated
consumption for the second quarter is expected to be 791
million gallons of jet fuel.
Mainline and Consolidated Unit Costs
AMR continues to target $300 million in incremental
savings for 2007. It expects mainline unit costs excluding
fuel to be 1.1 percent higher in 2007 versus 2006 while 2007
consolidated unit costs excluding fuel are expected to
increase 1.6 percent year over year.
-- more --
In the second quarter, mainline unit costs excluding
fuel are expected to increase 2.8 percent year over year
while consolidated unit costs excluding fuel are expected to
increase 3.1 percent from the second quarter of 2006.
Following the weather impact in the first quarter, full-
year mainline unit costs are expected to increase 1.6
percent in 2007 compared to 2006, while full-year
consolidated unit costs are expected to increase 2.0 percent
in 2007 compared to 2006.
For the second quarter, mainline unit costs are
expected to increase 2.1 percent compared to the second
quarter of 2006, while second quarter consolidated unit
costs are expected to increase 2.1 percent compared to the
second quarter of 2006.
Editor's Note: AMR's Chairman and Chief Executive Officer,
Gerard Arpey, and its Executive Vice President and Chief
Financial Officer, Thomas Horton, will make a presentation
to analysts during a teleconference on Wednesday, April 18,
at 2 p.m. EDT. Following the analyst call, they will hold a
question-and-answer conference call for media. 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," "may," "will," "should," "seeks,"
"targets" and similar expressions are intended to identify
forward-looking statements. Similarly, statements that
describe the Company's objectives, plans or goals are
forward-looking statements. Forward-looking statements
include, without limitation, the Company's expectations
concerning operations and financial condition, including
changes in capacity, revenues and costs; future financing
plans and needs; overall economic and industry 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: the materially weakened financial condition of
the Company, resulting from its significant losses in recent
years; the ability of the Company to generate additional
revenues and reduce its costs; changes in economic and other
conditions beyond the Company's control, and the volatile
results of the Company's operations; the Company's
substantial indebtedness and other obligations; the ability
of the Company to satisfy
-- more --
existing financial or other covenants in certain of its
credit agreements; continued high and volatile fuel prices
and further increases in the price of fuel, and the
availability of fuel; the
fiercely and increasingly competitive business environment
faced by the Company; industry consolidation; competition
with reorganized and reorganizing carriers; low fares by
historical standards and the Company's reduced pricing
power; the Company's likely need to raise additional funds
and its ability to do so on acceptable terms; changes in the
Company's corporate or business strategy; government
regulation of the Company's business; conflicts overseas or
terrorist attacks; uncertainties with respect to the
Company's international operations; outbreaks of a disease
(such as SARS or avian flu) that affects travel behavior;
labor costs that are higher than those of the Company's
competitors; uncertainties with respect to the Company's
relationships with unionized and other employee work groups;
increased insurance costs and potential reductions of
available insurance coverage; the Company's ability to
retain key management personnel; potential failures or
disruptions of the Company's computer, communications or
other technology systems; changes in the price of the
Company's common stock; and the ability of the Company to
reach acceptable agreements with third parties. 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 Annual Report on
Form 10-K/A for the year ended December 31, 2006.
Detailed financial information follows:
-- more --
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Three Months Ended Percent
March 31,
2007 2006 Change
Revenues
Passenger - American Airlines $4,326 $4,244 1.9
- Regional Affiliates 558 569 (1.9)
Cargo 201 186 8.1
Other revenues 342 345 (0.9)
Total operating revenues 5,427 5,344 1.6
Expenses
Wages, salaries and benefits 1,671 1,729 (3.4)
Aircraft fuel 1,410 1,473 (4.3)
Other rentals and landing fees 329 316 4.1
Depreciation and amortization 290 287 1.0
Commissions, booking fees and
credit card expense 249 269 (7.4)
Maintenance, materials and repairs 248 236 5.1
Aircraft rentals 151 146 3.4
Food service 127 124 2.4
Other operating expenses 704 649 8.5
Total operating expenses 5,179 5,229 (1.0)
Operating Income 248 115 *
Other Income (Expense)
Interest income 77 53 45.3
Interest expense (241) (261) (7.7)
Interest capitalized 9 7 28.6
Miscellaneous - net (12) (6) 100.0
(167) (207) (19.3)
Earnings (Loss) Before Income Taxes 81 (92) *
Income tax - - -
Net Income (Loss) $ 81 $ (92) *
Basic Earnings (Loss) Per Share $0.35 $(0.49)
Diluted Earnings (Loss) Per Share $0.30 $(0.49)
Number of Shares Used in
Computation
Basic 236 186
Diluted 298 186
- Greater than 100%
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
Three Months Ended
March 31, Percent
2007 2006 Change
American Airlines, Inc. Mainline Jet
Operations
Revenue passenger miles (millions) 32,575 33,015 (1.3)
Available seat miles (millions) 41,691 42,752 (2.5)
Cargo ton miles (millions) 524 521 0.6
Passenger load factor 78.1% 77.2% 0.9 pts.
Passenger revenue yield per
passenger mile (cents) 13.28 12.85 3.3
Passenger revenue per available
seat mile (cents) 10.38 9.93 4.5
Cargo revenue yield per ton
mile (cents) 38.36 35.65 7.6
Operating expenses per available
seat mile, excluding Regional
Affiliates (cents) (1) 10.91 10.81 0.9
Fuel consumption (gallons, in
millions) 692 705 (1.8)
Fuel price per gallon (cents) 184.2 189.0 (2.5)
Regional Affiliates
Revenue passenger miles (millions) 2,262 2,277 (0.7)
Available seat miles (millions) 3,274 3,257 0.5
Passenger revenue yield per
passenger mile (cents) 24.64 24.97 (1.3)
Passenger revenue per available
seat mile (cents) 17.03 17.46 (2.5)
Passenger load factor 69.1% 69.9% (0.8) pts.
AMR Corporation
Average Equivalent Number of Employees
American Airlines 71,500 73,200
Other 13,600 13,400
Total 85,100 86,600
(1) Excludes $668 million and $654 million of expense
incurred related to Regional Affiliates in 2007 and 2006,
respectively.
OPERATING STATISTICS BY REGIONAL ENTITY
American Airlines, Inc. Three Months Ended March 31, 2007
Entity Results RASM1 Y-O-Y ASMs2 Y-O-Y
(cents) Change (billions) Change
DOT Domestic 10.19 1.0% 26.8 (3.1)%
International 10.71 11.3 14.9 (1.4)
DOT Latin America 11.54 10.3 7.8 1.3
DOT Atlantic 9.94 9.7 5.4 (2.1)
DOT Pacific 9.29 19.3 1.7 (10.5)
1 Revenue per Available Seat Mile
2 Available Seat Miles
American Airlines, Inc. Three Months Ended March 31, 2007
Entity Results Load Y-O-Y
Factor Change Yield Y-O-Y
(pts) (pts) (cents) Change
DOT Domestic 79.6 0.5 12.80 0.4%
International 75.4 1.8 14.19 8.7
DOT Latin America 75.9 2.1 15.21 7.3
DOT Atlantic 72.8 (0.3) 13.65 10.2
DOT Pacific 82.1 7.3 11.32 8.7
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
Three Months Ended
American Airlines, Inc. Mainline March 31,
Jet Operations
(in millions, except as noted) 2007 2006
Total operating expenses as reported $5,218 $5,275
Less: Operating expenses incurred
related to Regional Affiliates 668 654
Operating expenses, excluding
expenses incurred related to
Regional Affiliates $4,550 $4,621
American mainline jet operations 41,691 42,752
available seat miles
Operating expenses per available
seat mile, excluding Regional
Affiliates (cents) 10.91 10.81
Operating expenses, excluding
expenses incurred related to
Regional Affiliates $4,550 $4,621
Less: Fuel expense 1,275 1,332
Operating expenses, excluding expenses
incurred related to Regional
Affiliates and fuel expense $3,275 $3,289
American mainline jet operations
available seat miles 41,691 42,752
Operating expenses per available seat
mile, excluding Regional Affiliates
and fuel expense (cents) 7.86 7.69
Percent change 2.2%
Note: The Company believes that operating expenses per
available seat mile, excluding the cost of fuel, assists
investors in understanding the impact of fuel prices on
the Company's operations.
AMR Corporation
Calculation of Net Debt As of March 31
(in millions, except as noted) 2007 2006
Current and long-term debt $11,885 $13,340
Current and long-term capital lease
obligations 875 1,009
Principal amount of certain airport
facility tax-exempt bonds and the
present value of aircraft operating
lease obligations 4,775 5,350
17,535 19,700
Less: Unrestricted cash and
short-term investments 5,383 4,268
Net Debt $12,152 $15,432
Estimate for
American Airlines, Inc. Mainline Year Ended December 31,
Jet Operations
(in millions, except as noted) 2007 2006
Operating expenses per available
seat mile, excluding Regional
Affiliates (cents) 11.08 10.90
Less: Fuel expense per available
seat mile 3.42 3.32
Operating expenses per available seat
mile, excluding Regional Affiliates
and fuel expense (cents) 7.66 7.58
Percent change 1.1%
Estimate for
American Airlines, Inc. Mainline Three Months Ended June 30,
Jet Operations
(in millions, except as noted) 2007 2006
Operating expenses per available
seat mile, excluding Regional
Affiliates (cents) 11.10 10.88
Less: Fuel expense per available
seat mile 3.48 3.47
Operating expenses per available seat
mile, excluding Regional Affiliates
and fuel expense (cents) 7.62 7.41
Percent change 2.8%
Estimate for
AMR Year Ended December 31,
(in millions, except as noted) 2007 2006
Operating expenses per available
seat mile (cents) 11.69 11.46
Less: Fuel expense per available
seat mile 3.51 3.41
Operating expenses per available
seat mile, excluding Regional
Affiliates and fuel expense (cents) 8.18 8.05
Percent change 1.6%
Estimate for
AMR Three Months Ended June 30,
(in millions, except as noted) 2007 2006
Operating expenses per available
seat mile (cents) 11.69 11.45
Less: Fuel expense per available
seat mile 3.55 3.56
Operating expenses per available
seat mile, excluding Regional
Affiliates and fuel expense (cents) 8.14 7.89
Percent change 3.1%
Note: The Company believes the Net Debt metric assists
investors in understanding changes in the Company's
liquidity and the results of its efforts to build a
financial foundation under the Company's Turnaround Plan.
Current AMR Corp. news releases can be accessed on the
Internet.
The address is: http://www.aa.com