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 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 October 18, 2006 by the Company as Exhibit
99.1 which is included herein. This press release was
issued to report the Company's third quarter 2006 results.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 Press
Release of AMR dated October 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/Kenneth W. Wimberly
Kenneth W. Wimberly
Corporate Secretary
Dated: October 19, 2006
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, Oct. 18, 2006
Editor's Note: A live Webcast reporting third quarter
results will be broadcast on the Internet on Oct. 18 at 2
p.m. EDT. (Windows Media Player required for viewing)
AMR CORPORATION REPORTS THIRD QUARTER 2006
PROFIT OF $15 MILLION, AN IMPROVEMENT OF
$168 MILLION YEAR OVER YEAR
Excluding Special Items, AMR Records Third Quarter Profit of
$114 Million,
An Improvement of $209 Million Over Year-Ago Results
Despite London Security Incident, Mainline Unit
Revenue Grows 7.7 Percent Year Over Year
FORT WORTH, Texas - AMR Corporation, the parent company
of American Airlines, Inc., today reported a net profit of
$15 million for the third quarter of 2006, or $0.06 per
share fully diluted. The results include a $99 million non-
cash charge in Other Income (Expense) to reduce the book
value of certain outstanding fuel hedge contracts. Excluding
this special item, AMR reported a profit of $114 million, or
$0.45 per share fully diluted.
The current quarter results compare to a net loss of
$153 million, or $0.93 per share fully diluted, in the third
quarter of last year. Excluding the $58 million net negative
impact of two special items, the net loss in the third
quarter of 2005 would have been $95 million, or $0.58 per
share.
"We are pleased to report a profit for the third
quarter, which represents the first time in nearly six years
that we have recorded a profit in two consecutive quarters,"
said AMR Chairman and CEO Gerard Arpey. "These results show
continuing improvements in the Company's core business
operations, even in the face of new challenges. But we also
have more hard work ahead of us as we build a company that
is better positioned for long-term success."
Arpey lauded employees for their resiliency and poise
in the face of heavy summer traffic and the new security
rules imposed after the London security threat in August.
But, he also noted that competition from low-cost carriers
and competitors that have gained cost advantages through the
bankruptcy reorganization process remains a significant
challenge.
AMR reported third quarter consolidated revenues of
more than $5.8 billion, an increase of 6.6 percent year over
year. In the third quarter, Other revenues, including sales
from such sources as confirmed flight changes, purchased
upgrades, buy-on-board food services and third-party
maintenance work, increased 13.3 percent year over year to
$333 million. The Company estimates that the London security
threat in August reduced revenues in August and September by
more than $50 million.
American's mainline load factor - or the percentage of
total seats filled - was a record 81.7 percent during the
third quarter. Yield, which represents average fares,
increased 7.0 percent compared to the third quarter of 2005,
and passenger revenue per available seat mile for the third
quarter increased 7.7 percent year over year.
American's mainline cost per available seat mile in the
quarter was up 3.8 percent year over year. Excluding fuel
and special items, the airline's unit cost for the third
quarter increased 1.0 percent year over year.
Lower fuel prices have reduced the Company's projected
fuel costs for the second half of the year by $528 million
compared to the guidance that AMR provided on July 19, 2006.
"While falling fuel prices provide significant benefits
to our company, fuel prices remain at historically high
levels and continue to be volatile," Arpey said. "That's a
reminder that we must continue our efforts to conserve fuel
and reduce other expenses."
The recent declines in fuel prices resulted in a $99
million non-cash accounting charge in Other Income (Expense)
in the third quarter of 2006 to reduce the book value of
certain outstanding fuel hedge contracts, as required by
Statement of Financial Accounting Standard 133, "Accounting
for Derivative Instruments and Hedging Activities" (SFAS
133). This non-cash charge will largely reverse itself in
subsequent quarters.
AMR regularly uses fuel hedging instruments, including
options and collars, to dampen the impact of volatile fuel
prices. The Company's fuel hedging activities reduced
fuel expenses by more than $300 million during the period
from 2003 through 2005, and have reduced year-to-date 2006
fuel expense by $66 million.
AMR's cash and short-term investment balance was $5.5
billion, including a restricted balance of $464 million, at
the end of the third quarter of 2006. In addition to making
scheduled principal payments of $1.1 billion through the
date of this release, AMR has repurchased approximately $128
million of debt since January 2006. Going forward,
depending on market conditions, AMR's cash position and
other considerations, AMR may from time to time redeem or
repurchase its debt or take other steps to reduce its debt
or lease obligations.
AMR continues to execute on the strategy laid out in
its Turnaround Plan by working together with employees to
identify ways to reduce costs, grow revenues, improve the
customer experience and simplify its operations. A few
recent examples:
American in September signed a 5-year service agreement
with the U.S. Postal Service potentially worth $500 million
in revenue to American, which is the largest single contract
ever awarded to the Company's Cargo division.
Also in September, a team of Transport Workers Union
(TWU) employees at American line maintenance bases and
management set a goal to obtain $95 million of annual value
creation for the airline by the end of 2008. That
announcement followed more than $1 billion in similar goals
set previously by maintenance employees at the Company's
Tulsa, Kansas City and Fort Worth maintenance bases.
The Company last month said it will expand culinary
options and overall service in First and Business class
cabins as part of its investment in premium class services.
Continuing efforts to bolster its international
business, American in July filed an application with the
United States Department of Transportation to operate daily
nonstop service between Dallas/Fort Worth International
Airport and Bejing, China, starting in March 2007. The
proposal has received wide-ranging public support.
The collaboration over the past several years between
management, unions and employees helped produce a positive
result in August, when Congress passed a bill that enhances
AMR's ability to fund its pension obligations. Arpey noted
that AMR was able to contribute $104 million to its various
defined benefit pension plans since the end of the second
quarter, bringing its total 2006 contributions to the plans
to $223 million through October 13, 2006.
Editor's Note: AMR's Chairman, President 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, Oct. 18, 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," "may," "will," "should," 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 conditions, 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 significantly 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 existing financial or
other covenants in certain of its credit agreements;
continued high fuel prices and further increases in the
price of fuel, and the availability of fuel; the
fiercely competitive business environment faced by the
Company, and historically low fare levels; competition with
reorganized and reorganizing carriers; 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 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;
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 for the year ended December 31, 2005.
Detailed financial information follows:
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Three Months Ended September 30, Percent
2006 2005 Change
Revenues
Passenger - American Airlines $ 4,657 $ 4,428 5.2
- Regional Affiliates 644 570 13.0
Cargo 213 193 10.4
Other revenues 333 294 13.3
Total operating revenues 5,847 5,485 6.6
Expenses
Wages, salaries and benefits 1,694 1,664 1.8
Aircraft fuel 1,771 1,582 11.9
Other rentals and landing fees 317 337 (5.9)
Depreciation and amortization 290 292 (0.7)
Commissions, booking fees
and credit card expense 284 292 (2.7)
Maintenance, materials and
repairs 252 269 (6.3)
Aircraft rentals 154 148 4.1
Food service 133 136 (2.2)
Other operating expenses 668 726 (8.0)
Total operating expenses 5,563 5,446 2.1
Operating Income 284 39 *
Other Income (Expense)
Interest income 80 40 100.0
Interest expense (259) (240) 7.9
Interest capitalized 7 12 (41.7)
Miscellaneous - net (97) (4) *
(269) (192) 40.1
Income (Loss) Before Income
Taxes 15 (153) *
Income tax - - -
Net Income (Loss) $ 15 $ (153) *
Earnings Per Share
Basic $ 0.07 $ (0.93)
Diluted $ 0.06 $ (0.93)
Number of Shares Used in
Computation
Basic 213 164
Diluted 237 164
* Greater than 100%
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
Three Months Ended
September 30, Percent
2006 2005 Change
American Airlines, Inc. Mainline Jet
Operations
Revenue passenger miles (millions) 36,382 37,025 (1.7)
Available seat miles (millions) 44,532 45,613 (2.4)
Cargo ton miles (millions) 557 539 3.3
Passenger load factor 81.7% 81.2% 0.5 pts.
Passenger revenue yield per
passenger mile (cents) 12.80 11.96 7.0
Passenger revenue per available
seat mile (cents) 10.46 9.71 7.7
Cargo revenue yield per ton
mile (cents) 38.32 36.03 6.4
Operating expenses per available
seat mile, excluding Regional
Affiliates (cents) (1) 11.02 10.62 3.8
Fuel consumption (gallons, in
millions) 741 763 (2.9)
Fuel price per gallon (cents) 215.8 187.6 15.0
Regional Affiliates
Revenue passenger miles (millions) 2,578 2,386 8.0
Available seat miles (millions) 3,475 3,326 4.5
Passenger load factor 74.2% 71.7% 2.5 pts.
AMR Corporation
Average Equivalent Number of Employees
American Airlines 73,000 75,600
Other 13,400 12,900
Total 86,400 88,500
(1) Excludes $702 million and $650 million of expense
incurred related to Regional Affiliates in 2006 and 2005,
respectively.
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
American Airlines, Inc. Mainline
Jet Operations Three Months Ended September 30,
(in millions, except as noted) 2006 2005
Total operating expenses $ 5,610 $ 5,495
Less: Operating expenses incurred
related to Regional Affiliates 702 650
Operating expenses excluding expenses
incurred related to Regional
Affiliates $4,908 $ 4,845
American mainline jet operations
available seat miles 44,532 45,613
Operating expenses per available seat
mile, excluding Regional
Affiliates (cents) 11.02 10.62
Less: Impact of special items (cents) - 0.12
Less: Fuel cost per available seat
mile (cents) 3.59 3.14
Operating expenses per available seat
mile, excluding impact of special
items and the cost of fuel (cents) 7.43 7.36
Percent change 1.0%
Note: The Company believes that operating expenses per
available seat mile, excluding special items and the cost
of fuel, assists investors in understanding the impact of
special items and fuel prices on the Company's operations.
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, 2006
Amount EPS
Net income $ 15 $ 0.06
Impact of special items 99 0.39
Income excluding special items $ 114 $ 0.45
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)
Impact of special items 58 0.35
Loss excluding special items $ (95) $(0.58)
Note: The Company believes income (loss) excluding special
items assists investors in understanding the impact of
special items on the Company's operations.
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Nine Months Ended September 30, Percent
2006 2005 Change
Revenues
Passenger - American Airlines $13,621 $12,534 8.7
- Regional Affiliates 1,915 1,582 21.0
Cargo 605 573 5.6
Other revenues 1,025 855 19.9
Total operating revenues 17,166 15,544 10.4
Expenses
Wages, salaries and benefits 5,103 4,979 2.5
Aircraft fuel 4,952 4,030 22.9
Other rentals and
landing fees 967 956 1.2
Depreciation and amortization 868 868 -
Commissions, booking fees
and credit card expense 839 849 (1.2)
Maintenance, materials
and repairs 726 761 (4.6)
Aircraft rentals 449 443 1.4
Food service 386 388 (0.5)
Other operating expenses 2,001 1,979 1.1
Total operating expenses 16,291 15,253 6.8
Operating Income 875 291 *
Other Income (Expense)
Interest income 201 104 93.3
Interest expense (780) (697) 11.9
Interest capitalized 21 59 (64.4)
Miscellaneous - net (103) (14) *
(661) (548) 20.6
Income (Loss) Before
Income Taxes 214 (257) *
Income tax - - -
Net Income (Loss) $ 214 $ (257) *
Earnings Per Share
Basic $ 1.07 $ (1.58)
Diluted $ 0.91 $ (1.58)
Number of Shares Used in
Computation
Basic 201 163
Diluted 259 163
* Greater than 100%
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
Nine Months Ended
September 30, Percent
2006 2005 Change
American Airlines, Inc. Mainline Jet
Operations
Revenue passenger miles (millions) 106,253 105,147 1.1
Available seat miles (millions) 131,883 133,485 (1.2)
Cargo ton miles (millions) 1,640 1,636 0.2
Passenger load factor 80.6% 78.8% 1.8 pts.
Passenger revenue yield per
passenger mile (cents) 12.82 11.92 7.5
Passenger revenue per available
seat mile (cents) 10.33 9.39 10.0
Cargo revenue yield per ton
mile (cents) 36.88 35.02 5.3
Operating expenses per available
seat mile, excluding Regional
Affiliates (cents) (1) 10.90 10.16 7.3
Fuel consumption (gallons, in
millions) 2,183 2,242 (2.6)
Fuel price per gallon (cents) 205.0 162.9 25.8
Regional Affiliates
Revenue passenger miles (millions) 7,522 6,588 14.2
Available seat miles (millions) 10,168 9,452 7.6
Passenger load factor 74.0% 69.7% 4.3 pts.
(1) Excludes $2.0 billion and $1.9 billion of expense
incurred related to Regional Affiliates in 2006 and 2005,
respectively.
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
American Airlines, Inc. Mainline
Jet Operations Nine Months Ended September 30,
(in millions, except as noted) 2006 2005
Total operating expenses $ 16,424 $ 15,419
Less: Operating expenses incurred
related to Regional Affiliates 2,045 1,860
Operating expenses excluding expenses
incurred related to Regional
Affiliates $ 14,379 $ 13,559
American mainline jet operations
available seat miles 131,883 133,485
Operating expenses per available seat
mile, excluding expenses incurred
related to Regional Affiliates (cents) 10.90 10.16
###
Current AMR Corp. news releases can be accessed via the
Internet.
The address is http://www.aa.com