ar10178k.htm
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 17, 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 October 17, 2007 by the Company as Exhibit 99.1, which is included herein.  This press release was issued to report the Company’s third quarter 2007 results.

Item 9.01
  
Financial Statements and Exhibits
    
     
 
(c) Exhibits
  
       
 
Exhibit 99.1
  
Press Release of AMR dated October 17, 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:  October 17, 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, Oct. 17, 2007

Editor's Note:  A live Webcast reporting third quarter results will be broadcast on the Internet on Oct. 17 at 2 p.m. EDT  (Windows Media Player required for viewing)

AMR CORPORATION REPORTS A THIRD QUARTER PROFIT OF $175 MILLION

COMPANY CONTINUES MOMENTUM WITH SIXTH CONSECUTIVE
PROFITABLE QUARTER

AMR Strengthens Balance Sheet, Improves Liquidity and Makes Additional Investments to Improve its Products and Services


FORT WORTH, Texas – AMR Corporation, the parent company of American Airlines, Inc., today reported a net profit of $175 million for the third quarter of 2007, or $0.61 per diluted share.
As disclosed in AMR’s Sept. 21 investor update, the results for the third quarter of 2007 include the impact of a $40 million charge, or $0.13 per diluted share, to reflect an adjustment for additional salary and benefit expense accruals related to years 2003 through 2006 and the first six months of 2007.
The current quarter results compare to a net profit of $15 million for the third quarter of 2006, or $0.06 per diluted share. The year-ago results included a $99 million non-cash charge in Other Income (Expense) to reduce the book value of certain outstanding fuel hedge contracts.
 “While record fuel prices in the third quarter were a reminder of the external challenges that we continue to face, we again demonstrated our ongoing progress by posting our sixth straight profitable quarter and our largest net profit in any third quarter since 2000,” said AMR Chairman and CEO Gerard Arpey. “We continued to improve our

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balance sheet while investing in key customer service initiatives, including taking steps to renew our fleet, add new routes, and enhance several products and services. However, we must step up our continued focus on managing costs, work to improve our profit margins and continue our momentum throughout 2007 and beyond.”
Operational Performance
American’s mainline passenger revenue per available seat mile (unit revenue) increased by 5.0 percent in the third quarter compared to the year-ago quarter.
Mainline capacity, or total available seat miles, in the third quarter decreased 2.8 percent compared to the same period in 2006, as the Company continued to flatten its schedule to more efficiently utilize its fleet and other resources.
American's mainline load factor – or the percentage of total seats filled – was a record 83.9 percent during the third quarter, compared to 81.7 percent in the third quarter of 2006. American’s third-quarter yield, which represents average fares paid, increased 2.3 percent compared to the third quarter of 2006, its 10th consecutive quarter of year-over-year yield increases.
AMR reported third quarter consolidated revenues of approximately $5.9 billion, an increase of 1.7 percent year over year. Other revenues, including sales from such sources as confirmed flight changes, purchased upgrades, Buy-on-Board food services and third-party maintenance work, increased 5.7 percent year over year to $352 million in the third quarter.
American's mainline cost per available seat mile (unit cost) in the third quarter increased 3.9 percent year over year, which was 0.8 percentage points higher than it would have been as a result of the $40 million charge to adjust salary and benefit expense accruals from prior periods. Approximately $30 million of the charge is attributable to years 2003 through 2006 and approximately $10 million is attributable to the first half of 2007.
Third quarter unit costs were also negatively affected by factors such as accelerated depreciation on assets being replaced through planned aircraft cabin refurbishment projects; certain investments to improve the customer experience; higher revenue-related expenses such as food and beverage and credit card fees; and weather cancellations in July.
Excluding fuel and the charge, mainline unit costs in the third quarter increased by 4.0 percent year over year.  Arpey said that the Company continues
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working to achieve $300 million in targeted cost savings for 2007 and continues to focus on cost containment. Among recent examples, American earlier this month announced a consolidation of its reservations offices that will affect the Cincinnati Reservations Office (CRO), effective September 2008.  While all of the CRO employees have been offered jobs within American’s Reservations group, by consolidating its reservations operations American is able to reduce costs.
Balance Sheet Improvement
AMR continued to strengthen its balance sheet in the third quarter by further reducing debt and improving its liquidity position.
AMR ended the third quarter with $5.8 billion in cash and short-term investments, including a restricted balance of $447 million, compared to a balance of $5.5 billion in cash and short-term investments, including a restricted balance of $464 million, at the end of the third 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 $16.6 billion at the end of the third quarter of 2007, compared to $19 billion a year earlier. AMR reduced Net Debt, which it defines as Total Debt less unrestricted cash and short-term investments, from $14 billion at the end of the third quarter of 2006 to $11.2 billion in the third quarter of 2007.
As a result of scheduled principal payments as well as incremental efforts to strengthen its balance sheet, AMR’s net interest expense for the first nine months of 2007 was $133 million lower than in the same period in 2006, a 23 percent reduction.
AMR contributed $200 million to its defined benefit pension plans in the third quarter, as the Company continues to meet this important commitment to its employees.  With the third quarter contribution, the Company has contributed $380 million to these plans in 2007, meeting its projected commitment for the year. The Company has contributed nearly $2 billion to these plans since 2002.
Third Quarter and Recent Highlights
·  
In September, as part of its fleet renewal strategy and efforts to improve fleet fuel efficiency by more than 20 percent by 2020, American accelerated three Boeing 737s for delivery in the second half of 2009. Those three 737s are part of American’s announced plan to accelerate the deliveries of 47 previously ordered
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737s into the 2009-2012 timeframe. In addition, on Oct. 1 American notified Boeing that it was exercising an option to purchase an additional 737 for delivery in early 2009, representing its first 737 commitment in addition to those 47 aircraft. Including the four 737s cited today, American so far has scheduled delivery of a total of 13 737s throughout 2009.
·  
American announced it will begin nonstop service from Chicago O’Hare International Airport to Moscow’s Domodedovo International Airport on Monday, June 2, 2008.  From Chicago, American is – or soon will be – providing links to the world’s key developing economies in Russia, China, and India as well as the established markets of Japan, Europe and Latin America.
·  
American introduced DealFinder, a downloadable, computer desktop tool that offers customers exclusive, targeted, discounted fares to locations throughout American’s network. The tool, available at www.aa.com/dealfinder, searches for the lowest fares, allowing customers to spend less time planning travel.
·  
American Airlines Vacations launched its redesigned Web site that enhances the customer’s shopping and booking experience on AAVacations.com. The enhancements provide customers with convenient and flexible options when customizing vacation plans.
·  
American continued to grow and enhance its New York service into Europe, announcing that it will begin two new routes early next year to Milan, Italy, and Barcelona, Spain, from John F. Kennedy International Airport (JFK), as well as a second daily roundtrip between JFK and London’s Stansted Airport. American also unveiled its state-of-the-art, $1.3 billion terminal at JFK as part of its continuing commitment to become the airline of choice in the New York market.
·  
AMR’s wholly-owned subsidiary, American Eagle Airlines, Inc., made a $32 million aircraft debt prepayment that brought AMR’s prepayment of debt on its Canadair regional jets to $159 million this year. The final payment released 10 CRJ-700 aircraft that were used to secure the debt. Additionally, on Oct. 1 AMR said that American intends to prepay $545 million in aircraft debt in the fourth quarter of 2007. The prepayment is expected to initially eliminate approximately $25 million of annual net interest expense and release 16 aircraft used to secure the loan.

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·  
American, American Eagle, and Texas Aero Engine Services Limited (TAESL), an affiliated engine repair facility, received the coveted Federal Aviation Administration’s Diamond Award for excellence in training their Aviation Maintenance Technicians (AMT).
Guidance
Mainline and Consolidated Capacity
AMR expects its full-year mainline capacity to decrease by 2.2 percent in 2007 compared to 2006, with a 2.4 percent reduction in domestic capacity and a 1.9 percent decrease in international capacity.  On a consolidated basis, AMR expects full-year capacity to decrease by 2.1 percent in 2007 compared to 2006.  The impact of weather-related cancellations that occurred in the first three quarters of 2007 is included in mainline and consolidated capacity forecasts.
AMR expects mainline capacity in the fourth quarter of 2007 to increase 0.9 percent year over year. It expects consolidated capacity to increase by 0.8 percent in the fourth quarter of 2007 compared to the prior-year period.  Reasons for the increase include previously announced aircraft density initiatives and general flattening of the schedule.  Mainline departures are expected to be essentially flat year over year, as the Company continues to identify ways to utilize its fleet more productively.
Fuel Expense and Hedging
While the cost of jet fuel remains volatile, as of now AMR is planning for an average system price of $2.27 per gallon in the fourth quarter and $2.10 per gallon for all of 2007. AMR has 40 percent of its anticipated fourth quarter fuel consumption capped at an average crude equivalent of $69 per barrel (jet fuel equivalent of $2.01 per gallon), with 34 percent of its anticipated full-year consumption capped at an average crude equivalent of $66 per barrel (jet fuel equivalent of $1.98 per gallon). Consolidated consumption for the fourth quarter is expected to be 778 million gallons of jet fuel.
Mainline and Consolidated Unit Costs
For the fourth quarter, mainline unit costs are expected to increase 4.5 percent compared to the fourth quarter of 2006, while fourth quarter consolidated unit costs are expected to increase 5.1 percent compared to the fourth quarter of 2006. 
In the fourth quarter, mainline unit costs excluding fuel are expected to decrease 1.7 percent year over year while consolidated unit costs excluding fuel are expected to decrease 0.8 percent from the fourth quarter of 2006.
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Full-year mainline unit costs are expected to increase 3.0 percent in 2007 compared to 2006, while full-year consolidated unit costs are expected to increase 3.3 percent in 2007 compared to 2006.
AMR expects mainline unit costs excluding fuel to be 2.4 percent higher in 2007 versus 2006 while 2007 consolidated unit costs excluding fuel are expected to increase 2.7 percent year over year.
Excluding the impact of fuel and the out-of-period charge in the third quarter relating to years 2003 through 2006, full-year mainline unit costs are expected to increase 2.1 percent in 2007 compared to 2006 while consolidated unit costs are expected to increase 2.5 percent year over year.

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, October 17, 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

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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 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:






 

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AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)

   
Three Months Ended September 30,
    
Percent
  
   
2007
    
2006
    
Change
  
Revenues
                  
    Passenger - American Airlines
   $
4,750
     $
4,657
      
2.0
  
                      - Regional Affiliates
    
648
      
644
      
0.6
  
    Cargo
    
196
      
213
       (8.0 )
    Other revenues
    
352
      
333
      
5.7
  
      Total operating revenues
    
5,946
      
5,847
      
1.7
  
                         
Expenses
                        
  Wages, salaries and benefits
    
1,721
      
1,694
      
1.6
  
  Aircraft fuel
    
1,743
      
1,771
       (1.6 )
  Other rentals and landing fees
    
328
      
317
      
3.5
  
  Depreciation and amortization
    
307
      
290
      
5.9
  
  Maintenance, materials and repairs
    
274
      
252
      
8.7
  
  Commissions, booking fees and credit card expense
    
270
      
284
       (4.9 )
  Aircraft rentals
    
148
      
154
       (3.9 )
  Food service
    
139
      
133
      
4.5
  
  Other operating expenses
    
697
      
668
      
4.3
  
    Total operating expenses
    
5,627
      
5,563
      
1.2
  
                         
Operating Income
    
319
      
284
      
12.3
  
                         
Other Income (Expense)
                        
  Interest income
    
90
      
80
      
12.5
  
  Interest expense
     (227 )     (259 )     (12.4 )
  Interest capitalized
    
3
      
7
       (57.1 )
  Miscellaneous – net
     (10 )     (97 )     (89.7 )
      (144 )     (269 )     (46.5 )
                         
Income Before Income Taxes
    
175
      
15
      
*
  
Income tax
    
-
      
-
      
-
  
Net Income
   $
175
     $
15
      
*
  

             
Earnings Per Share
            
Basic
   $
0.70
     $
0.07
  
Diluted
   $
0.61
     $
0.06
  
                 
Number of Shares Used in Computation
                
  Basic
    
249
      
213
  
  Diluted
    
300
      
237
  

*      Greater than 100%
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AMR CORPORATION
OPERATING STATISTICS
(Unaudited)

   
Three Months Ended
September 30,
    
Percent
  
   
2007
    
2006
    
Change
  
American Airlines, Inc. Mainline Jet Operations
                  
    Revenue passenger miles (millions)
    
36,290
      
36,382
       (0.3 )
    Available seat miles (millions)
    
43,271
      
44,532
       (2.8 )
    Cargo ton miles (millions)
    
514
      
557
       (7.7 )
    Passenger load factor
     83.9 %     81.7 %  
2.2 pts.
  
    Passenger revenue yield per passenger mile (cents)
    
13.09
      
12.80
      
2.3
  
    Passenger revenue per available seat mile (cents)
    
10.98
      
10.46
      
5.0
  
    Cargo revenue yield per ton mile (cents)
    
38.14
      
38.32
       (0.5 )
    Operating expenses per available seat mile, excluding Regional Affiliates (cents) (1)
    
11.45
      
11.02
      
3.9
  
    Fuel consumption (gallons, in millions)
    
725
      
741
       (2.2 )
    Fuel price per gallon (cents)
    
216.5
      
215.8
      
0.3
  
                         
Regional Affiliates
                        
    Revenue passenger miles (millions)
    
2,611
      
2,578
      
1.3
  
    Available seat miles (millions)
    
3,442
      
3,475
       (0.9 )
    Passenger load factor
     75.9 %     74.2 %  
1.7 pts.
  
                         
AMR Corporation
                        
  Average Equivalent Number of Employees
                        
    American Airlines
    
72,000
      
73,000
          
    Other
    
13,800
      
13,400
          
         Total
    
85,800
      
86,400
          

(1)  
Excludes $701 million and $702 million of expense incurred related to Regional Affiliates in 2007 and 2006, respectively.


 





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AMR CORPORATION
OPERATING STATISTICS
(Unaudited)


OPERATING STATISTICS BY REGIONAL ENTITY

American Airlines, Inc.
  
Three Months Ended September 30, 2007
  
Entity Results
  
RASM1
(cents)
    
Y-O-Y
Change
    
ASMs2
(billions)
    
Y-O-Y
Change
  
                         
DOT Domestic
    
10.7
       4.8 %    
27.4
       (2.5 )%
International
    
11.5
      
5.3
      
15.8
       (3.3 )
   DOT Latin America
    
11.6
      
3.5
      
7.3
      
0.1
  
   DOT Atlantic
    
11.7
      
2.7
      
6.8
       (0.2 )
   DOT Pacific
    
10.9
      
21.0
      
1.7
       (24.2 )

1 Revenue per Available Seat Mile
2 Available Seat Miles



American Airlines, Inc.
  
Three Months Ended September 30, 2007
  
Entity Results
  
Load Factor
(pts)
    
Y-O-Y
Change
(pts)
    
Yield
(cents)
    
Y-O-Y
Change
  
                         
DOT Domestic
    
84.8
      
2.4
      
12.57
       1.8 %
International
    
82.3
      
1.7
      
14.01
      
3.1
  
   DOT Latin America
    
80.6
      
2.8
      
14.33
       (0.1 )
   DOT Atlantic
    
83.4
       (0.4 )    
13.99
      
3.3
  
   DOT Pacific
    
84.6
      
5.3
      
12.83
      
13.4
  





 



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AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)

       
American Airlines, Inc. Mainline Jet Operations
  
Three Months Ended September 30,
  
(in millions, except as noted)
  
2007
    
2006
  
             
Total operating expenses
   $
5,657
     $
5,610
  
Less: Operating expenses incurred related to Regional Affiliates
    
701
      
702
  
Operating expenses excluding expenses incurred related to Regional Affiliates
   $
4,956
     $
4,908
  
American mainline jet operations available seat miles
    
43,271
      
44,532
  
                 
Operating expenses per available seat mile, excluding Regional Affiliates (cents)
    
11.45
      
11.02
  
                 
Less: Impact of special items (cents)
    
0.09
      
-
  
Operating expenses per available seat mile, excluding impact of special items (cents)
    
11.36
      
11.02
  
                 
Percent change
     3.1 %        

American Airlines, Inc. Mainline Jet Operations
  
Three Months Ended September 30,
  
(in millions, except as noted)
  
2007
    
2006
  
             
Total operating expenses
   $
5,657
     $
5,610
  
Less: Operating expenses incurred related to Regional Affiliates
    
701
      
702
  
Operating expenses excluding expenses incurred related to Regional Affiliates
   $
4,956
     $
4,908
  
American mainline jet operations available seat miles
    
43,271
      
44,532
  
                 
Operating expenses per available seat mile, excluding Regional Affiliates (cents)
    
11.45
      
11.02
  
                 
Less: Impact of special items (cents)
    
0.09
      
-
  
Less: Fuel cost per available seat mile (cents)
    
3.63
      
3.59
  
Operating expenses per available seat mile, excluding impact of special items and the cost of fuel (cents)
    
7.73
      
7.43
  
                 
Percent change
     4.0 %        

Note: The Company believes that operating expenses per available seat mile, excluding the cost of fuel and special items, assists investors in understanding the impact of fuel prices and special items on the Company’s operations.

 
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AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)

 
AMR Corporation
Calculation of Net Debt
  
As of September 30,
  
(in millions, except as noted)
  
2007
    
2006
  
             
Current and long-term debt
   $
11,155
     $
12,971
  
Current and long-term capital lease obligations
    
837
      
942
  
Principal amount of certain airport facility tax-exempt bonds and the present value of aircraft operating lease obligations
    
4,585
      
5,112
  
     
16,577
      
19,025
  
Less:  Unrestricted cash and short-term investments
    
5,390
      
5,054
  
 
Net Debt
   $
11,187
     $
13,971
  

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.






 


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AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)


 
American Airlines, Inc. Mainline Jet Operations
  
Estimate for
Year Ended December 31,
  
(in millions, except as noted)
  
2007
    
2006
  
             
Operating expenses per available seat mile, excluding Regional Affiliates (cents)
    
11.23
      
10.90
  
Less: Fuel expense per available seat mile
    
3.47
      
3.32
  
Operating expenses per available seat mile, excluding Regional Affiliates and fuel expense (cents)
    
7.76
      
7.58
  
                 
Percent change
     2.4 %        

       
 
American Airlines, Inc. Mainline Jet Operations
  
Estimate for
Three Months Ended December 31,
  
(in millions, except as noted)
  
2007
    
2006
  
             
Operating expenses per available seat mile, excluding Regional Affiliates (cents)
    
11.41
      
10.91
  
Less: Fuel expense per available seat mile
    
3.73
      
3.10
  
Operating expenses per available seat mile, excluding Regional Affiliates and fuel expense (cents)
    
7.68
      
7.81
  
                 
Percent change
     (1.7 )%        
   

 
American Airlines, Inc. Mainline Jet Operations
  
Estimate for
Year Ended December 31,
  
(in millions, except as noted)
  
2007
    
2006
  
             
Operating expenses per available seat mile, excluding Regional Affiliates (cents)
    
11.23
      
10.90
  
Less: Impact of special item
    
0.02
      
-
  
Less: Fuel expense per available seat mile
    
3.47
      
3.32
  
Operating expenses per available seat mile, excluding Regional Affiliates and fuel expense (cents)
    
7.74
      
7.58
  
                 
Percent change
     2.1 %        




 

-- more --

AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)



 
AMR Corporation
  
Estimate for
Year Ended December 31,
  
(in millions, except as noted)
  
2007
    
2006
  
             
Operating expenses per available seat mile (cents)
    
11.84
      
11.46
  
Less: Fuel expense per available seat mile
    
3.57
      
3.41
  
Operating expenses per available seat mile, excluding fuel expense (cents)
    
8.27
      
8.05
  
                 
Percent change
     2.7 %        


 
AMR Corporation
  
Estimate for
Three Months Ended December 31,
  
(in millions, except as noted)
  
2007
    
2006
  
             
Operating expenses per available seat mile (cents)
    
12.04
      
11.45
  
Less: Fuel expense per available seat mile
    
3.84
      
3.18
  
Operating expenses per available seat mile, excluding fuel expense (cents)
    
8.20
      
8.27
  
                 
Percent change
     (0.8 )%        

 
AMR Corporation
  
Estimate for
Year Ended December 31,
  
(in millions, except as noted)
  
2007
    
2006
  
             
Operating expenses per available seat mile (cents)
    
11.84
      
11.46
  
Less: Impact of special item
    
0.02
      
-
  
Less: Fuel expense per available seat mile
    
3.57
      
3.41
  
Operating expenses per available seat mile, excluding fuel expense (cents)
    
8.25
      
8.05
  
                 
Percent change
     2.5 %        


 


-- more --

AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)

AMR Corporation
Impact of Special Items
(in millions, except per share amounts)
  
Three Months Ended
September 30, 2007
   
Amount
    
EPS
  
             
Net income
   $
175
     $
0.61
  
Impact of special items
    
40
      
0.13
  
Income excluding special items
   $
215
     $
0.74
  
     
AMR Corporation
Impact of Special Items
(in millions, except per share amounts)
  
Three Months Ended
September 30, 2006
   
Amount
    
EPS
  
                 
Net income
   $
15
     $
0.06
  
Impact of special items
    
99
      
0.39
  
Income excluding special items
   $
114
     $
0.45
  

Note: The Company believes income excluding special items assists investors in understanding the impact of special items on the Company’s operations.di


 




-- more --

AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)

   
Nine Months Ended September 30,
    
Percent
  
   
2007
    
2006
    
Change
  
Revenues
                  
    Passenger - American Airlines
   $
13,749
     $
13,621
      
0.9
  
                      - Regional Affiliates
    
1,864
      
1,915
       (2.7 )
    Cargo
    
597
      
605
       (1.3 )
    Other revenues
    
1,042
      
1,025
      
1.7
  
      Total operating revenues
    
17,252
      
17,166
      
0.5
  
                         
Expenses
                        
  Wages, salaries and benefits
    
5,047
      
5,103
       (1.1 )
  Aircraft fuel
    
4,797
      
4,952
       (3.1 )
  Other rentals and landing fees
    
970
      
967
      
0.3
  
  Depreciation and amortization
    
892
      
868
      
2.8
  
  Maintenance, materials and repairs
    
790
      
726
      
8.8
  
  Commissions, booking fees and credit card expense
    
787
      
839
       (6.2 )
  Aircraft rentals
    
451
      
449
      
0.4
  
  Food service
    
399
      
386
      
3.4
  
  Other operating expenses
    
2,085
      
2,001
      
4.2
  
    Total operating expenses
    
16,218
      
16,291
       (0.4 )
                         
Operating Income
    
1,034
      
875
      
18.2
  
                         
Other Income (Expense)
                        
  Interest income
    
257
      
201
      
27.9
  
  Interest expense
     (703 )     (780 )     (9.9 )
  Interest capitalized
    
17
      
21
       (19.0 )
  Miscellaneous – net
     (32 )     (103 )     (68.9 )
      (461 )     (661 )     (30.3 )
                         
Income Before Income Taxes
    
573
      
214
      
*
  
Income tax
    
-
      
-
      
-
  
Net Income
   $
573
     $
214
      
*
  

Earnings Per Share
            
Basic
   $
2.35
     $
1.07
  
Diluted
   $
1.98
     $
0.91
  
                 
Number of Shares Used in Computation
                
  Basic
    
244
      
201
  
  Diluted
    
300
      
259
  

*   Greater than 100%

-- more --

AMR CORPORATION
OPERATING STATISTICS
(Unaudited)

   
Nine Months Ended
September 30,
    
Percent
  
   
2007
    
2006
    
Change
  
American Airlines, Inc. Mainline Jet Operations
                  
    Revenue passenger miles (millions)
    
104,534
      
106,253
       (1.6 )
    Available seat miles (millions)
    
127,609
      
131,883
       (3.2 )
    Cargo ton miles (millions)
    
1,574
      
1,640
       (4.0 )
    Passenger load factor
     81.9 %     80.6 %  
1.3 pts.
  
    Passenger revenue yield per passenger mile (cents)
    
13.15
      
12.82
      
2.6
  
    Passenger revenue per available seat mile (cents)
    
10.77
      
10.33
      
4.3
  
    Cargo revenue yield per ton mile (cents)
    
37.91
      
36.88
      
2.8
  
    Operating expenses per available seat mile, excluding Regional Affiliates (cents) (1)
    
11.17
      
10.90
      
2.5
  
    Fuel consumption (gallons, in millions)
    
2,129
      
2,183
       (2.5 )
    Fuel price per gallon (cents)
    
203.0
      
205.0
       (1.0 )
                         
Regional Affiliates
                        
    Revenue passenger miles (millions)
    
7,468
      
7,522
       (0.7 )
    Available seat miles (millions)
    
10,096
      
10,168
       (0.7 )
    Passenger load factor
     74.0 %     74.0 %    
-
  
                         

(1)  
Excludes $2.1 billion and $2.0 billion of expense incurred related to Regional Affiliates in 2007 and 2006, respectively.





 


-- more --

AMR CORPORATION
OPERATING STATISTICS
(Unaudited)


OPERATING STATISTICS BY REGIONAL ENTITY

American Airlines, Inc.
  
Nine Months Ended September 30, 2007
  
Entity Results
  
RASM1
(cents)
    
Y-O-Y
Change
    
ASMs2
(billions)
    
Y-O-Y
Change
  
                         
DOT Domestic
    
10.6
       2.6 %    
81.4
       (3.4 )%
International
    
11.1
      
7.3
      
46.3
       (2.9 )
   DOT Latin America
    
11.3
      
5.8
      
22.3
      
0.4
  
   DOT Atlantic
    
11.1
      
4.8
      
18.9
       (1.2 )
   DOT Pacific
    
10.2
      
21.9
      
5.1
       (19.8 )

1 Revenue per Available Seat Mile
2 Available Seat Miles



American Airlines, Inc.
  
Nine Months Ended September 30, 2007
  
Entity Results
  
Load Factor
(pts)
    
Y-O-Y
Change
(pts)
    
Yield
(cents)
    
Y-O-Y
Change
  
                         
DOT Domestic
    
83.5
      
1.4
      
12.68
       0.8 %
International
    
79.1
      
1.2
      
14.02
      
5.7
  
   DOT Latin America
    
77.4
      
2.1
      
14.65
      
2.9
  
   DOT Atlantic
    
80.0
       (1.0 )    
13.81
      
6.1
  
   DOT Pacific
    
83.5
      
5.8
      
12.21
      
13.4
  



 

-- more --

AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)

       
American Airlines, Inc. Mainline Jet Operations
  
Nine Months Ended September 30,
  
(in millions, except as noted)
  
2007
    
2006
  
             
Total operating expenses
   $
16,335
     $
16,424
  
Less: Operating expenses incurred related to Regional Affiliates
    
2,078
      
2,045
  
Operating expenses excluding expenses incurred related to Regional Affiliates
   $
14,257
     $
14,379
  
American mainline jet operations available seat miles
    
127,609
      
131,883
  
Operating expenses per available seat mile, excluding expenses incurred related to Regional Affiliates (cents)
    
11.17
      
10.90
  
                 


 





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