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: July 19, 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 July 19, 2006 by the Company as Exhibit
99.1 which is included herein. This press release was
issued to report the Company's second quarter 2006 results.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 Press Release of AMR dated July 19, 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: July 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, July 19, 2006
Editor's Note: A live Webcast reporting second quarter
results will be broadcast on the Internet on July 19 at 2
p.m. EDT. (Windows Media Player required for viewing)
AMR CORPORATION REPORTS A SECOND QUARTER 2006
PROFIT OF $291 MILLION
Mainline Unit Revenue Grows 11.7 Percent Year Over Year
Despite Record Load Factors, Rising Fuel Costs Remain A
Burden
FORT WORTH, Texas - AMR Corporation, the parent company
of American Airlines, Inc., today reported a net profit of
$291 million for the second quarter of 2006, or $1.14 per
share fully diluted, compared to a profit of $58 million or
$0.30 per share fully diluted, in the second quarter of
2005.
"We are pleased to have earned a quarterly profit -
just our second in the last 22 quarters without the benefit
of special items," said AMR Chairman and CEO Gerard Arpey.
"Our performance indicates very clearly that we are on the
right track, but also demonstrates - just as clearly - that
we have more work to do to return our company to financial
health."
According to Arpey, the stubbornly high cost of fuel
and ongoing competitive pressures in the industry remain
significant obstacles. "Fuel costs continue to raise the
bar in terms of revenue generation, while the growth of low-
cost carriers and continuing competition from bankrupt
carriers with significant cost advantages drive the need for
increased efficiencies and cost savings across all areas of
our business," Arpey said.
During the second quarter, the Company paid $374
million more for fuel than it would have paid at the fuel
prices prevailing during the same period a year ago.
American's mainline cost per available seat mile in the
quarter was up 8.5 percent year over year. Excluding fuel,
the airline's unit cost for the second quarter was up 1.4
percent year over year.
AMR's full-year 2006 fuel cost estimates have continued
to grow. In January, the Company said it expected a full-
year average price of $1.95 a gallon and, in April, revised
this forecast to $2.07. AMR now forecasts a full-year 2006
average fuel cost of $2.18 a gallon.
In spite of rising fuel costs, Arpey pointed out that
AMR continues to enjoy solid revenue momentum. "The
combination of capacity restraint, the changes we have made
to our network and product offerings, and the consistent,
high-quality service provided by our employees has enabled
us to drive unit revenues to a level approaching the highs
reached in 2000."
American's systemwide load factor - or the percentage
of total seats filled - hit a record of 82.6 percent during
the second quarter. Yield, which represents average fares,
increased 7.6 percent compared to the second quarter of
2005, and passenger revenue per available seat mile for the
second quarter was up 11.7 percent compared to 2005.
AMR reported second quarter consolidated revenues of
approximately $6 billion, an increase of 12.5 percent year
over year. Other revenues in the second quarter, including
such sources as confirmed flight change, purchased upgrades,
Buy-on-Board food services and third-party maintenance work,
increased 20.9 percent year over year to $347 million.
"Our summer is off to a strong start, and as always,
our employees deserve enormous credit for getting millions
of customers where they are going safely, comfortably and on
time," Arpey said.
Arpey also pointed out, however, that the second
quarter is a traditionally strong period for American, so
more performance improvements will be required to sustain
profitability through the rest of 2006.
"These results point the way to our continued
progress," Arpey said. "We need to keep finding new ways to
care for our customers while reducing expenses wherever
possible. It's a tall order, but as today's results
demonstrate, our team is up to the job."
American continues to execute on the fundamentals of
its Turnaround Plan by working together with employees to
identify ways to reduce costs, grow revenues, improve the
customer experience and simplify its operations, Arpey
noted. A few recent examples:
American made a decision in the second quarter to
return 19 non-standard 757 aircraft, originally acquired
from TWA, when their leases expire in 2007 and 2008. The
decision will save more than $50 million in annual lease
costs and also allow the Company to avoid costly upgrades
and higher required maintenance costs.
In June, American announced the AAdvance Bag Check SM
program that allows passengers on cruise ships, at hotels
and at convention centers to drop off their luggage for
American flights at select remote locations.
In May, management and Transport Workers Union (TWU)
Local 567 employees at the American Airlines Alliance
Maintenance Base, including Texas Aero Engine Services Ltd.,
American's engine repair facility joint venture with Rolls
Royce, set a "breakthrough goal" of obtaining $400 million
in value for the airline by the end of 2008. Work teams were
formed to focus on such areas as revenue generation,
productivity increases and employee involvement.
Also in May, American began introducing a new service
to accept credit and debit cards for onboard purchases, in
addition to cash, using wireless handheld devices.
Arpey pointed out that in addition to earning a profit,
AMR was able to contribute $149 million to its various
defined benefit pension plans since the end of the first
quarter, bringing its total 2006 contributions to the plans
to $184 million through July 14.
AMR also was able to grow its cash balance, ending the
period with $5.7 billion in cash and short-term investments,
including a restricted balance of $525 million.
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, July 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," "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
June 30, Percent
2006 2005 Change
Revenues
Passenger - American Airlines $4,720 $4,264 10.7
- Regional Affiliates 702 561 25.1
Cargo 206 197 4.6
Other revenues 347 287 20.9
Total operating revenues 5,975 5,309 12.5
Expenses
Wages, salaries and benefits 1,680 1,671 0.5
Aircraft fuel 1,708 1,350 26.5
Other rentals and landing fees 334 319 4.7
Depreciation and amortization 291 286 1.7
Commissions, booking fees
and credit card expense 286 286 -
Maintenance,materials
and repairs 238 257 (7.4)
Aircraft rentals 149 147 1.4
Food service 129 127 1.6
Other operating expenses 684 637 7.4
Total operating expenses 5,499 5,080 8.2
Operating Income 476 229 *
Other Income (Expense)
Interest income 68 29 *
Interest expense (260) (223) 16.6
Interest capitalized 7 24 (70.8)
Miscellaneous - net - (1) *
(185) (171) 8.2
Income Before Income Taxes 291 58 *
Income tax - - -
Net Earnings $ 291 $ 58 *
Earnings Per Share
Basic $ 1.44 $ 0.35
Diluted $ 1.14 $ 0.30
Number of Shares Used in Computation
Basic 202 163
Diluted 262 216
* Greater than 100%
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
Three Months Ended
June 30, Percent
2006 2005 Change
American Airlines, Inc. Mainline
Jet Operations
Revenue passenger miles (millions) 36,857 35,795 3.0
Available seat miles (millions) 44,600 45,018 (0.9)
Cargo ton miles (millions) 562 558 0.7
Passenger load factor 82.6% 79.5% 3.1 pts.
Passenger revenue yield per
passenger mile (cents) 12.81 11.91 7.6
Passenger revenue per available
seat mile (cents) 10.58 9.47 11.7
Cargo revenue yield per ton
mile(cents) 36.59 35.11 4.2
Operating expenses per available
seat mile, excluding Regional
Affiliates (cents) (1) 10.88 10.03 8.5
Fuel consumption (gallons,in
millions) 737 749 (1.6)
Fuel price per gallon (cents) 209.5 163.4 28.2
Regional Affiliates
Revenue passenger miles (millions) 2,666 2,317 15.1
Available seat miles (millions) 3,436 3,211 7.0
Passenger load factor 77.6% 72.2% 5.4 pts.
AMR Corporation
Average Equivalent Number of Employees
American Airlines 73,100 75,100
Other 13,400 13,400
Total 86,500 88,500
(1) Excludes $688 million and $627 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 Three Months Ended June 30,
Jet Operations 2006 2005
(in millions, except as noted)
Total operating expenses $5,539 $5,143
Less: Operating expenses incurred
related to Regional Affiliates 688 627
Operating expenses excluding expenses
incurred related to Regional Affiliates $4,851 $4,516
American mainline jet operations
available seat miles 44,600 45,018
Operating expenses per available seat
mile, excluding Regional
Affiliates (cents) 10.88 10.03
Less: Fuel cost per available seat
mile (cents) 3.47 2.72
Operating expenses per available seat
mile, excluding Regional
Affiliates and fuel expense (cents) 7.41 7.31
Percent change 1.4%
AMR Corporation
Impact of Fuel Price Variance
Average fuel price per gallon (cents)
Three months ended June 30, 2006 210.2
Three months ended June 30, 2005 164.2
Change in price (cents) 46.0
2006 consumption (gallons, in millions) x 812.4
Impact of fuel price variance (in millions) $ 373.7
Note: The Company believes that operating expenses per
available seat mile, excluding the cost of fuel, as well as
the impact of fuel price increases, assist investors in
understanding the impact of volatile fuel prices on the
Company's operations.
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Six Months Ended June 30, Percent
2006 2005 Change
Revenues
Passenger - American Airlines $ 8,964 $ 8,106 10.6
- Regional Affiliates 1,271 1,012 25.6
Cargo 392 380 3.2
Other revenues 692 561 23.4
Total operating revenues 11,319 10,059 12.5
Expenses
Wages, salaries and benefits 3,409 3,315 2.8
Aircraft fuel 3,181 2,448 29.9
Other rentals and landing fees 650 619 5.0
Depreciation and amortization 578 576 0.3
Commissions, booking fees
and credit card expense 555 557 (0.4)
Maintenance, materials
and repairs 474 492 (3.7)
Aircraft rentals 295 295 -
Food service 253 252 0.4
Other operating expenses 1,333 1,253 6.4
Total operating expenses 10,728 9,807 9.4
Operating Income 591 252 *
Other Income (Expense)
Interest income 121 64 89.1
Interest expense (521) (457) 14.0
Interest capitalized 14 47 (70.2)
Miscellaneous - net (6) (10) (40.0)
(392) (356) 10.1
Income (Loss) Before Income
Taxes 199 (104) *
Income tax - - -
Net Income (Loss) $ 199 $ (104) *
Earnings Per Share
Basic $ 1.03 $ (0.64)
Diluted $ 0.84 $ (0.64)
Number of Shares Used in Computation
Basic 194 162
Diluted 253 162
* Greater than 100%
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
Six Months Ended
June 30, Percent
2006 2005 Change
American Airlines, Inc. Mainline
Jet Operations
Revenue passenger miles (millions) 69,872 68,123 2.6
Available seat miles (millions) 87,351 87,872 (0.6)
Cargo ton miles (millions) 1,083 1,098 (1.4)
Passenger load factor 80.0% 77.5% 2.5 pts.
Passenger revenue yield per
passenger mile (cents) 12.83 11.90 7.8
Passenger revenue per available
seat mile (cents) 10.26 9.22 11.3
Cargo revenue yield per ton
mile (cents) 36.15 34.53 4.7
Operating expenses per available
seat mile, excluding Regional
Affiliates (cents) (1) 10.84 9.92 9.3
Fuel consumption (gallons, in
millions) 1,442 1,478 (2.4)
Fuel price per gallon (cents) 199.5 150.2 32.8
Regional Affiliates
Revenue passenger miles (millions) 4,943 4,202 17.6
Available seat miles (millions) 6,693 6,126 9.3
Passenger load factor 73.9% 68.6% 5.3 pts.
(1) Excludes $1.3 billion and $1.2 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 Six Months Ended June 30,
Jet Operations 2006 2005
(in millions, except as noted)
Total operating expenses $10,814 $ 9,924
Less: Operating expenses incurred
related to Regional Affiliates 1,343 1,210
Operating expenses excluding expenses
incurred related to Regional Affiliates $ 9,471 $ 8,714
American mainline jet operations
available seat miles 87,351 87,872
Operating expenses per available seat
mile, excluding expenses incurred
related to Regional Affiliates (cents) 10.84 9.92
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The address is http://www.aa.com