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: October 19, 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 furnishing herewith a press
release issued on October 19, 2005 by the Company as Exhibit
99.1 which is included herein. This press release was
issued to report the Company's third quarter 2005 results.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 Press Release of AMR dated October 19,
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: October 19, 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, Oct. 19, 2005
Editor's Note: A live Webcast reporting third quarter
results will be broadcast on the Internet on Oct. 19 at 2
p.m. EDT. (Windows Media Player required for viewing.)
AMR CORPORATION REPORTS A THIRD QUARTER LOSS OF $153 MILLION
American's Financial Performance In the Quarter Was Undermined
By Record High Fuel Prices, The Impact Of Growing Low-Cost
Carriers And Airlines Restructuring In Bankruptcy
FORT WORTH, Texas -- AMR Corporation, the parent
company of American Airlines, Inc., today reported a net
loss of $153 million for the third quarter, or $0.93 per
share fully diluted. The loss includes a net $58 million
negative impact of two special items - an $80 million charge
for a contract termination and a $22 million credit for the
reversal of an insurance reserve. Without these special
items, AMR would have recorded a net loss of $95 million, or
$0.58 per share. The current quarter results compare to a
net loss of $214 million, or $1.33 per share fully diluted,
in the third quarter last year. Excluding a special item of
$18 million, the net loss in the third quarter of 2004 would
have been $232 million, or $1.44 per share fully diluted.
"It is certainly disappointing to have swung to a loss
after recording our first quarterly profit (without special
items) since 2000 in the second quarter of this year," said
AMR Chairman and CEO Gerard Arpey. "The fact that we were
unable to sustain profitability despite robust customer
volumes says a lot about our inability to pass on fuel-price
increases to consumers. This underscores the need to
accelerate our cost-cutting initiatives across the board
under our Turnaround Plan."
-- more --
Arpey also pointed out that Hurricanes Katrina and
Rita, in addition to driving fuel costs significantly
higher, adversely impacted results by temporarily reducing
air travel, disrupting airline operations and increasing
other costs.
American's revenue performance during the third quarter
was marked by record high load factors and significantly
improved yields. The mainline load factor - or percentage
of total seats filled - was 81.2 percent, an increase of 3.3
points compared to a year ago. Yield, which represents
average fares, was up 8 percent.
"Strong demand, combined with capacity restraint,
enabled us to gain some traction on the revenue side of the
ledger," Arpey said. "We saw our first significant yield
increase in some time. But there is still a disconnect
between the price of fuel and the price of air travel. Just
to cover the increase in fuel costs over the past two years,
American would have had to raise fares nearly $75 per
roundtrip ticket. During this time period, our average fare
increased by only $15."
During the third quarter, the Company paid $525 million
more for fuel than it would have paid with last year's fuel
prices - and $204 million more than it would have paid using
the average price from the second quarter. American's
mainline cost per available seat mile in the quarter was up
by 9.7 percent year over year. Excluding fuel and special
items, the mainline unit cost was down by 2.4 percent year
over year.
"The progress we have made in reducing our non-fuel
expenses is a big reason why we are in better shape than
some of our competitors," Arpey said. "But to assure our
future, we must accelerate our rate of progress, and bring
our costs to levels that are competitive with both the low-
cost segment of the industry and the carriers in or emerging
from bankruptcy reorganization."
Arpey noted that American produces a product people
truly enjoy. "Our challenge, as always," he said, "is to
leverage the public's love of travel in a way that is as
rewarding to our shareholders as it is to our customers.
The people of American Airlines are working collaboratively
to make that happen."
-- more --
Arpey pointed out that despite the Company's
challenges, AMR contributed $75 million to its various
defined benefit plans in the third quarter and another $22
million on Oct. 14, bringing its total contributions to the
plans this year to $310 million. AMR ended the period with
$3.9 billion in cash and short-term investments, including a
restricted balance of $499 million.
Looking forward, the Company expects to post - at the
current level of fuel prices - a significant loss in the
fourth quarter.
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, Oct. 19, 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
-- more --
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:
-- more --
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Three Months Ended
September 30, Percent
2005 2004 Change
Revenues
Passenger - American Airlines $4,428 $3,838 15.4
- Regional Affiliates 570 488 16.8
Cargo 152 149 2.0
Other revenues 335 287 16.7
Total operating revenues 5,485 4,762 15.2
Expenses
Wages, salaries and benefits 1,664 1,696 (1.9)
Aircraft fuel 1,582 1,056 49.8
Other rentals and landing fees 337 295 14.2
Depreciation and amortization 292 317 (7.9)
Commissions, booking fees and
credit card expense 292 288 1.4
Maintenance, materials and repairs 269 265 1.5
Aircraft rentals 148 152 (2.6)
Food service 136 145 (6.2)
Other operating expenses 726 593 22.4
Special charges (credits) - (18) *
Total operating expenses 5,446 4,789 13.7
Operating Income (Loss) 39 (27) *
Other Income (Expense)
Interest income 40 19 *
Interest expense (240) (219) 9.6
Interest capitalized 12 22 (45.5)
Miscellaneous - net (4) (9) (55.6)
(192) (187) 2.7
Loss Before Income Taxes (153) (214) (28.5)
Income tax - - -
Net Loss $(153) $(214) (28.5)
Basic and Diluted Loss Per Share $(0.93) $(1.33)
Number of Shares Used in
Computation
Basic and Diluted 164 161
* Greater than 100%
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
Three Months Ended
September 30, Percent
2005 2004 Change
American Airlines, Inc. Mainline Jet Operations
Revenue passenger miles (millions) 37,025 34,659 6.8
Available seat miles (millions) 45,613 44,515 2.5
Cargo ton miles (millions) 539 529 1.9
Passenger load factor 81.2% 77.9% 3.3 pts
Passenger revenue yield per passenger
mile (cents) 11.96 11.07 8.0
Passenger revenue per available seat
mile (cents) 9.71 8.62 12.6
Cargo revenue yield per ton mile (cents) 28.23 28.11 0.4
Operating expenses per available seat mile,
excluding Regional Affiliates (cents) (1) 10.62 9.68 9.7
Fuel consumption (gallons, in millions) 763 773 (1.3)
Fuel price per gallon (cents) 187.6 125.4 49.6
Regional Affiliates
Revenue passenger miles (millions) 2,386 1,959 21.8
Available seat miles (millions) 3,326 2,840 17.1
Passenger load factor 71.7% 69.0% 2.7 pts.
AMR Corporation
Average Equivalent Number of Employees
American Airlines 75,600 80,300
Other 12,900 13,000
Total 88,500 93,300
(1) Excludes $650 million and $539 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 Operations Three Months Ended
(in millions, except as noted) September 30,
2005 2004
Total operating expenses $5,496 $4,846
Less: Operating expenses incurred related
to Regional Affiliates 650 539
Operating expenses excluding expenses incurred
related to Regional Affiliates $4,846 $4,307
American mainline jet operations available seat miles 45,613 44,515
Operating expenses per available seat mile,
excluding Regional Affiliates (cents) 10.62 9.68
Impact of special items (cents) (0.12) 0.04
Fuel cost per available seat mile (cents) (3.14) (2.18)
Operating expenses per available seat mile,
excluding impact of special items and the cost
of fuel (cents) 7.36 7.54
Percent change (2.4)%
AMR Corporation
Fuel Price vs. 3rd Quarter 2004
Average fuel price per gallon (cents)
Three months ended September 30, 2005 188.5
Three months ended September 30, 2004 125.9
Change in price (cents) 62.6
2005 consumption (gallons, in millions) x 839.1
Impact of fuel price variance (in $ millions) 525.3
AMR Corporation
Fuel Price vs. 2nd Quarter 2005
Average fuel price per gallon (cents)
Three months ended September 30, 2005 188.5
Three months ended June 30, 2005 164.2
Change in price (cents) 24.3
2005 consumption (gallons, in millions) x 839.1
Impact of fuel price variance (in $ millions) 203.9
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) September 30, 2005
Amount EPS
Net loss $(153) $(0.93)
Less: Impact of special items 58 0.35
Net loss excluding special items $ (95) $(0.58)
AMR Corporation
Impact of Special Items Three Months Ended
(in millions, except per share amounts) September 30, 2004
Amount EPS
Net loss $(214) $(1.33)
Add: Impact of special items (18) (0.11)
Net loss excluding special items $(232) $(1.44)
Note: The Company believes the loss excluding special items
assists investors in understanding the impact of the current
quarter special items on the Company's financial results.
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Nine Months Ended
September 30, Percent
2005 2004 Change
Revenues
Passenger - American Airlines $12,534 $11,411 9.8
- Regional Affiliates 1,582 1,413 12.0
Cargo 460 452 1.8
Other revenues 968 828 16.9
Total operating revenues 15,544 14,104 10.2
Expenses
Wages, salaries and benefits 4,979 5,039 (1.2)
Aircraft fuel 4,030 2,781 44.9
Other rentals and landing fees 956 901 6.1
Depreciation and amortization 868 963 (9.9)
Commissions, booking fees and
credit card expense 849 863 (1.6)
Maintenance, materials and repairs 761 741 2.7
Aircraft rentals 443 458 (3.3)
Food service 388 421 (7.8)
Other operating expenses 1,979 1,775 11.5
Special charges (credits) - (49) *
Total operating expenses 15,253 13,893 9.8
Operating Income (Loss) 291 211 37.9
Other Income (Expense)
Interest income 104 47 *
Interest expense (697) (648) 7.6
Interest capitalized 59 60 (1.7)
Miscellaneous - net (14) (44) (68.2)
(548) (585) (6.3)
Loss Before Income Taxes (257) (374) (31.3)
Income tax - - *
Net Loss $(257) $(374) (31.3)
Basic and Diluted Loss Per Share $(1.58) $ (2.33)
Number of Shares Used in
Computation
Basic and Diluted 163 160
* Greater than 100%
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
Nine Months Ended
September 30, Percent
2005 2004 Change
American Airlines, Inc. Mainline Jet Operations
Revenue passenger miles (millions) 105,147 98,271 7.0
Available seat miles (millions) 133,485 131,109 1.8
Cargo ton miles (millions) 1,636 1,617 1.2
Passenger load factor 78.8% 75.0% 3.8 pts
Passenger revenue yield per passenger
mile (cents) 11.92 11.61 2.7
Passenger revenue per available seat
mile (cents) 9.39 8.70 7.9
Cargo revenue yield per ton mile (cents) 28.11 27.92 0.7
Operating expenses per available seat mile,
excluding Regional Affiliates (cents) (1) 10.16 9.56 6.3
Fuel consumption (gallons, in millions) 2,242 2,276 (1.5)
Fuel price per gallon (cents) 162.9 112.7 44.5
Regional Affiliates
Revenue passenger miles (millions) 6,588 5,355 23.0
Available seat miles (millions) 9,452 7,958 18.8
Passenger load factor 69.7% 67.3% 2.4 pts.
(1) Excludes $1.9 billion and $1.5 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 Nine Months Ended
(in millions, except as noted) September 30,
2005 2004
Total operating expenses $15,419 $14,072
Less: Operating expenses incurred related
to Regional Affiliates 1,860 1,543
Operating expenses excluding expenses incurred
related to Regional Affiliates $13,559 $12,529
American mainline jet operations available seat miles 133,485 131,109
Operating expenses per available seat mile,
excluding Regional Affiliates (cents) 10.16 9.56
Current AMR Corp. news releases can be accessed on the
Internet.
The address is: http://www.aa.com