AMR Corporation Reports Fourth Quarter 2008 Loss of $340 Million, as Unit Revenue Improved on Capacity Cuts but Higher Year-Over-Year Fuel Prices Drove $133 Million of Additional Fuel Expense
AMR Corporation Reports Fourth Quarter 2008 Loss of $340 Million, as Unit Revenue Improved on Capacity Cuts but Higher Year-Over-Year Fuel Prices Drove $133 Million of Additional Fuel Expense
January 21, 2009
EXCLUDING SPECIAL CHARGES, FOURTH QUARTER LOSS WAS
COMPANY REPORTS
Facing Economic Uncertainty and Fuel Price Volatility in 2009, Company Plans to Further Trim Capacity, Enhance Global Network, Execute on Fleet Replacement, and Focus on Balance Sheet and Dependability
The results for the fourth quarter of 2008 include the impact of two special charges: a$23 million charge for aircraft groundings, facility write-offs and severance related to the Company's previously announced capacity reductions during the last four months of 2008, and a non-cash pension settlement charge of$103 million driven by a large number of early pilot retirements during 2008, which required any unrecognized gains or losses of the related defined benefit pension plan to be recognized on a proportional basis.
Excluding those special charges, the Company lost
The current quarter results compare to a net loss of$69 million for the fourth quarter of 2007, or$0.28 per share, which included: a$138 million gain on the sale of AMR's stake inARINC ; a$39 million gain from the change to the expiration period for AAdvantage(R) miles; and a$63 million charge from the retirement of 24 MD-80 aircraft. Excluding those special items, AMR lost$184 million , or$0.74 per share, in the fourth quarter of 2007. For all of 2008, AMR recorded a net loss of$2.1 billion , or$7.98 per share. In addition to the special charges from the fourth quarter of 2008 totaling approximately$126 million , the full-year results include: a$432 million gain from the sale ofAmerican Beacon Advisors ; facility, severance and aircraft grounding charges of approximately$91 million , and non-cash aircraft and route impairment charges of approximately$1.1 billion related to the Company's capacity reductions in late 2008. Excluding those special items, AMR lost$1.2 billion , or$4.57 per share, for all of 2008. In 2007, AMR reported a net profit of$504 million , or$1.78 per diluted share. In addition to the special items in the fourth quarter of 2007 totaling a net positive impact of$115 million , the 2007 results included a$30 million charge related to prior-period salary and benefit expense accruals. Excluding those special items, AMR earned a profit of$420 million , or$1.50 per diluted share, in 2007. Historically high and volatile jet fuel prices continued to challenge the Company in the fourth quarter of 2008. AMR paid$2.60 per gallon for jet fuel in the fourth quarter versus$2.41 a gallon in the fourth quarter of 2007, an 8 percent increase. The Company paid a record$3.03 per gallon for jet fuel for all of 2008, compared to$2.13 for all of 2007, an increase of 42 percent. As a result, the Company paid$133 million and$2.7 billion more for fuel in the fourth quarter and for all of 2008, respectively, than it would have paid at prevailing prices from the corresponding prior-year periods. "Our fourth quarter and full-year 2008 results reflect the difficulties all airlines faced last year, but we believe our steps to reduce capacity, bolster liquidity, and improve revenue helped us better manage the challenges of record fuel prices and a weak economy," said AMR Chairman and CEOGerard Arpey . "We believe these actions and our fleet renewal efforts have put us on sounder footing as we face continued economic uncertainty, slower travel demand, and fuel price volatility in 2009. We intend to continue managing our business - from capacity and fleet planning to balance sheet repair, fuel hedging and revenue initiatives - conservatively and with discipline. I want to thank employees for their commitment during a difficult 2008. While significant hurdles remain, I am guardedly optimistic we can regain momentum in 2009." Arpey added that American expects to enhance its global network in 2009 by achieving regulatory approval of its antitrust immunity application with fellow oneworld members, which will pave the way for American's planned joint business agreement withBritish Airways and Iberia and help oneworld compete more effectively with other global alliances. The Company also hopes to build on the beginning strides it made last year to improve dependability and the customer experience, Arpey said. AMR today provided an update to the delivery schedule for the incoming 76Boeing 737-800 aircraft that will replace MD-80 aircraft in American's fleet. As a result ofBoeing delivery delays, the Company now expects to receive 29 737s in 2009 (compared to 36 expected previously), 39 in 2010 (compared to 40 expected previously) and eight in the first quarter of 2011. The first deliveries are expected near the end of the first quarter of 2009. As a result of the uncertainty surrounding the economic climate, the Company has decided not to use MD-80s to backfill flying associated with the seven 737s that no longer will be delivered in 2009. Largely as a result of this decision, the Company's 2009 mainline capacity will decline by more than one percentage point compared to previous guidance provided in October. (Capacity expectations for 2009 are outlined in the Guidance section below.)
Financial and Operational Performance
American's mainline passenger revenue per available seat mile (unit revenue), excluding special items, increased by 5.5 percent in the fourth quarter of 2008 compared to the year-ago quarter.
Mainline capacity, or total available seat miles, in the fourth quarter
decreased by 8.3 percent compared to the same period in 2007, as the Company
continued to reduce capacity given economic conditions and still-challenging
fuel prices.
American's mainline load factor - or the percentage of total seats filled
- was 78.3 percent during the fourth quarter, its third-highest fourth quarter
load factor ever, compared to a record 80.2 percent in the fourth quarter of
2007. American's fourth-quarter yield, which represents average fares paid,
excluding special items, increased 8.1 percent compared to the fourth quarter
of 2007, its 15th consecutive quarter of year-over-year yield increases.
AMR reported fourth quarter consolidated revenues of approximately
Other revenues, including sales from such sources as confirmed flight
changes, purchased upgrades, Buy-on-Board food services, and bag fees,
increased 9.7 percent year over year to
AMR reported full-year 2008 revenues of approximately
American's mainline cost per available seat mile (unit cost) in the fourth quarter, excluding special items, increased 6.8 percent year over year. Excluding fuel and special items, mainline unit costs in the fourth quarter increased by 6.8 percent year over year. The fourth quarter increase in mainline unit costs was driven by costs related to the Company's capacity reductions in late 2008, as well as higher material and repair costs, and foreign exchange expense.
Balance Sheet Update
AMR continued to focus on strengthening its balance sheet in the fourth quarter.
AMR ended the fourth quarter with $3.6 billion in cash and short-term
investments, including a restricted balance of $459 million , compared to a
balance of $5.0 billion in cash and short-term investments, including a
restricted balance of $428 million , at the end of the fourth quarter of 2007.
In line with previously disclosed expectations, AMR had posted approximately
$575 million in cash collateral with fuel hedge counterparties at the end of
the fourth quarter of 2008. Also affecting the 2008 year-end cash balance were
more than $1 billion in scheduled principal payments on long-term debt and
capital leases and approximately $880 million in capital expenditures that the
Company made during the year, and the $2.7 billion increase in its 2008 fuel
costs compared to 2007 fuel prices.
In spite of increasingly challenging capital and credit markets, during
2008 AMR raised nearly
AMR's 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, was$15.1 billion at the end of the fourth quarter of 2008, compared to$15.6 billion a year earlier. AMR's Net Debt, which it defines as Total Debt less unrestricted cash and short-term investments, was$12.0 billion at the end of the fourth quarter, compared to$11.0 billion in the fourth quarter of 2007. AMR made the full amount of its required$78 million of contributions to its defined benefit pension plans for employees during 2008. The Company has contributed more than$2 billion to these plans since 2002, as the Company continues to meet this important commitment to employees. Highlights Fourth Quarter 2008 and Recent -- American entered into a purchase agreement withBoeing to acquire an initial 42Boeing 787-9 Dreamliners, with the right to purchase up to 58 additional 787s. The purchase of the initial 42 787-9 aircraft is subject to certain contingency provisions. American believes the 787s will help reduce its fuel and maintenance costs, lessen its environmental impact, and support its goal of providing industry-leading products and services over the long term. -- BeginningSept. 30 , American began offering PriorityAAccess(SM) privileges in U.S. and international airports systemwide. With PriorityAAccess, American's AAdvantage(R) elite status members, First and Business Class travelers, AAirpass customers, and passengers traveling on full-fare Economy Class tickets receive more control and enjoy an easier journey when they travel, with dedicated
PriorityAAccess check-in, security screening lanes (where available),
and exclusive boarding lanes at the gate.
-- American introduced a service that allows customers departing from
select airports to receive boarding passes electronically on their
mobile phones or PDAs. Mobile boarding passes, which use a
two-dimensional barcode, were introduced for passengers departing on
domestic flights from Chicago's O'Hare International , Los Angeles
International (LAX), and John Wayne Orange County (SNA) airports. The
mobile boarding pass program is being rolled out in partnership with
the United States Transportation Security Administration (TSA).
-- American announced daily nonstop service between Dallas/Fort Worth
International Airport (DFW) and Madrid, Spain , starting May 1, 2009 .
American announced the route with the expectation that its joint
business agreement and antitrust immunity application with British
Airways and Iberia will be approved, and believes DFW-Madrid will be
the first of many opportunities for American to enhance and expand
connections between the
on the application and joint business agreement, visit
-- For the third consecutive year, American was honored as "
for Domestic First Class" by the readers of
The annual GT Tested Awards program surveyed more than 31,400 business
and leisure travelers to determine the best in business and luxury
travel for 2008. Readers of Business Traveler magazine also named
American "Best Airline for First-Class Service in North America " for
2008. The Business Traveler award was based on the magazine's
open-ended survey of its readership.
Guidance
Mainline and Consolidated Capacity
AMR expects its full-year mainline capacity to decrease by more than 6.5
percent in 2009 compared to 2008, with a reduction of domestic capacity of
approximately 9 percent and a reduction of international capacity of more than
2.5 percent compared to 2008 levels. On a consolidated basis, AMR expects
full-year capacity to decrease by nearly 7 percent in 2009 compared to 2008.
AMR expects mainline capacity in the first quarter of 2009 to decrease by
more than 8.5 percent compared to the first quarter of 2008, with domestic
capacity expected to decline by more than 11.5 percent and international
capacity expected to decline by nearly 4 percent compared to first quarter
2008 levels. AMR expects consolidated capacity in the first quarter of 2009 to
decrease by more than 8.5 percent compared to the first quarter of 2008.
AMR expects regional affiliate capacity to decline by about 9.5 percent in the first quarter of 2009 compared to the prior-year period and expects full-year regional affiliate capacity to decline by more than 8 percent in 2009 compared to 2008 levels.
Fuel Expense and Hedging
While the cost of jet fuel remains volatile, AMR is planning for an average system price of$2.04 per gallon in the first quarter of 2009 and$2.06 per gallon for all of 2009. AMR has 45 percent of its anticipated first quarter 2009 fuel consumption hedged at an average cap of$2.58 per gallon of jet fuel equivalent ($93 per barrel crude equivalent), with 42 percent subject to an average floor of$1.97 per gallon of jet fuel equivalent ($68 per barrel crude equivalent). AMR has 35 percent of its anticipated full-year consumption hedged at an average cap of$2.59 per gallon of jet fuel equivalent ($94 per barrel crude equivalent), with 32 percent subject to an average floor of$1.94 per gallon of jet fuel equivalent ($67 per barrel crude equivalent). As ofJan. 16 , the average 2009 market forward price of crude oil was more than$51 per barrel. Consolidated consumption for the first quarter is expected to be 677 million gallons of jet fuel.
Mainline and Consolidated Unit Costs (Excluding the impact of special items)
For the first quarter of 2009, mainline unit costs are expected to decrease 2.9 percent compared to the first quarter of 2008, while first quarter consolidated unit costs are expected to decrease 3.2 percent compared to the first quarter of 2008.
In the first quarter of 2009, mainline unit costs excluding fuel are expected to increase 10.2 percent year over year while consolidated unit costs excluding fuel are expected to increase 9 percent from the first quarter of 2008.
Full-year mainline unit costs are expected to decrease 6.6 percent in 2009 compared to 2008, while full-year consolidated unit costs are expected to decrease 7.1 percent in 2009 compared to 2008.
AMR expects mainline unit costs excluding fuel to be 9.2 percent higher in 2009 versus 2008, while 2009 consolidated unit costs excluding fuel are expected to increase 7.6 percent year over year.
Factors driving the 2009 unit cost increases include: increased defined benefit pension expenses and employee and retiree medical expenses; unit cost pressure associated with capacity reductions in 2009 that were announced today, including increased facility and landing fees; and dependability initiatives.
The largest factor driving increased unit costs is higher pension expense,
largely the result of negative investment returns on the Company's pension
assets in 2008 related to the broader stock market decline. At the end of
2008, the accumulated benefit obligation (ABO) funded status of AMR's pension
plans was approximately 69 percent, compared to 96 percent at the end of 2007.
While a material decline, the Company maintains a conservative investment
portfolio with a significant position in U.S. Treasury and U.S. agency bonds.
As a result, the Company believes that its pension funded status declined less
than that of many companies with defined benefit pension plans. According to
estimates from consulting firm Mercer, the aggregate ABO funded status for
plans sponsored by S&P 1500 companies (including their U.S. and non-U.S.
plans) declined by approximately 33 percentage points from year-end 2007 to
year-end 2008.
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,
January 21 , at 2 p.m. EST . 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.
Editor's Note: A live Webcast reporting fourth quarter results will be
broadcast on the Internet on
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 conditions,
including changes in capacity, revenues and costs; future financing plans and
needs; fleet plans; overall economic and industry conditions; plans and
objectives for future operations; regulatory approvals and actions, including
the Company's application for antitrust immunity with other oneworld alliance
members; 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. Guidance given in this release regarding
capacity, fuel consumption, fuel prices, fuel hedging, and unit costs, and
statements of expectations regarding regulatory approval of the Company's
application for antitrust immunity with other oneworld members, are
forward-looking statements.
Forward-looking statements are subject to a number of factors that could
cause the Company's actual results to differ materially from the Company's
expectations. The following factors, in addition to other possible factors
not listed, could cause the Company's actual results to differ materially from
those expressed in forward-looking statements: the materially weakened
financial condition of the Company, resulting from its significant losses in
recent years; the ability of the Company to generate additional revenues and
reduce its costs; changes in economic and other conditions beyond the
Company's control, and the volatile results of the Company's operations; the
Company's substantial indebtedness and other obligations; the ability of the
Company to satisfy 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 carriers; low fare levels by
historical standards and the Company's reduced pricing power; the Company's
need to raise substantial 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 Quarterly
Report on Form 10-Q for the quarter ended September 30, 2008 , and the
Company's Annual Report on Form 10-K for the year ended December 31, 2007 .
Detailed financial information follows:
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Three Months Ended
----------------------
December 31, Percent
2008 2007 Change
---------- ---------- -------
Revenues
Passenger - American Airlines $4,174 $4,352 (4.1)
- Regional Affiliates 554 606 (8.5)
Cargo 196 228 (13.9)
Other revenues 545 497 9.7
---------- ---------- -------
Total operating revenues 5,469 5,683 (3.8)
---------- ---------- -------
Expenses
Aircraft fuel 1,819 1,873 (2.9)
Wages, salaries and benefits 1,720 1,723
(0.2)
Other rentals and landing fees 314 308 2.0
Depreciation and amortization 285 310
(7.9)
Maintenance, materials and repairs 294 267 10.2
Commissions, booking fees and credit
card expense 217 241 (10.1)
Aircraft rentals 120 140 (14.6)
Food service 123 135 (9.2)
Special charges 23 63 (63.5)
Other operating expenses 750 692 8.4
---------- ----------
-------
Total operating expenses 5,665 5,752 (1.5)
---------- ---------- -------
Operating Income (196) (69) *
Other Income (Expense)
Interest income 43 80 (46.4)
Interest expense (188) (211) (11.1)
Interest capitalized 10 3 *
Miscellaneous - net (9) 128 *
---------- ---------- -------
Total other income (144) - *
---------- ---------- -------
Income/(Loss) Before Income Taxes (340) (69) *
Income tax - - -
---------- ---------- -------
Net Income $(340) $(69) *
========== ========== =======
Earnings/(Loss) Per Share
Basic $(1.22) $(0.28)
========== ==========
Diluted $(1.22) $(0.28)
========== ==========
Number of Shares Used in Computation
Basic 279 249
Diluted 279 249
* Greater than 100%
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
Three Months Ended
December 31,
--------------------- Percent
2008 2007 Change
---------- --------- ---------
American Airlines, Inc. Mainline Jet
Operations
Revenue passenger miles (millions) 30,379 33,919 (10.4)
Available seat miles (millions) 38,797 42,297 (8.3)
Cargo ton miles (millions) 458 548 (16.4)
Passenger load factor 78.3% 80.2% (1.9)
pts
Passenger revenue yield per passenger
mile (cents) 13.74 12.83 7.1
Passenger revenue per available seat
mile (cents) 10.76 10.29 4.6
Cargo revenue yield per ton mile (cents) 42.81 41.56 3.0
Operating expenses per available seat
mile, excluding Regional Affiliates
(cents) (1) 12.99 12.01 8.2
Fuel consumption (gallons, in millions) 637 704 (9.5)
Fuel price per gallon (cents) 259.6 239.7 8.3
Regional Affiliates
Revenue passenger miles (millions) 2,012 2,380 (15.5)
Available seat miles (millions) 2,918 3,318 (12.1)
Passenger load factor 68.9% 71.7% (2.8) pts
AMR Corporation
Average Equivalent Number of Employees
American Airlines 68,700 72,000
Other 12,400 13,800
---------- ----------
Total 81,100 85,800
========== ==========
(1) Excludes
Regional Affiliates in 2008 and 2007, respectively.
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
OPERATING STATISTICS BY REGIONAL ENTITY
(excluding special item)
American Airlines, Inc. Three Months Ended December 31, 2008
--------------------------------------------
Entity Results RASM(1) Y-O-Y ASMs(2) Y-O-Y
(cents) Change (billions) Change
--------- ---------- ---------- ---------
DOT Domestic 10.53 4.8% 23.8 (12.3)%
International 11.12 6.3 15.0 (1.0)
DOT Latin America 12.10 7.3 7.4 0.7
DOT Atlantic 10.01 3.0 5.9 (3.2)
DOT Pacific 10.70 11.0 1.7 (0.3)
American Airlines, Inc. Three Months Ended December 31, 2008
--------------------------------------------
Entity Results Y-O-Y
Load Factor Change Yield Y-O-Y
(pts) (pts) (cents) Change
--------- ---------- ---------- ---------
DOT Domestic 79.6 (1.0) 13.22 6.2%
International 76.2 (3.1) 14.60 10.6
DOT Latin America 74.6 (3.2) 16.23 11.9
DOT Atlantic 77.3 (3.4) 12.95 7.5
DOT Pacific 79.2 (1.8) 13.50 13.5
OPERATING STATISTICS BY REGIONAL ENTITY
(including special item)
American Airlines, Inc. Three Months Ended December 31, 2008
--------------------------------------------
Entity Results RASM(1) Y-O-Y ASMs(2) Y-O-Y
(cents) Change (billions) Change
--------- ---------- ---------- ---------
DOT Domestic 10.53 3.9% 23.8 (12.3)%
International 11.12 5.2 15.0 (1.0)
DOT Latin America 12.10 6.4 7.4 0.7
DOT Atlantic 10.01 1.7 5.9 (3.2)
DOT Pacific 10.70 9.5 1.7 (0.3)
American Airlines, Inc. Three Months Ended December 31, 2008
--------------------------------------------
Entity Results
Y-O-Y
Load Factor Change Yield Y-O-Y
(pts) (pts) (cents) Change
--------- ---------- ---------- ---------
DOT Domestic 79.6 (1.0) 13.22 5.3%
International 76.2 (3.1) 14.60 9.5
DOT Latin America 74.6 (3.2) 16.23 11.0
DOT Atlantic 77.3 (3.4) 12.95 6.2
DOT Pacific 79.2 (1.8) 13.50 12.0
(1) Revenue per Available Seat Mile
(2) Available Seat Miles
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Twelve Months Ended
December 31,
-------------------
Percent
2008 2007 Change
--------- -------- ---------
Revenues
Passenger - American Airlines $18,234 $17,651 3.3
- Regional Affiliates 2,486 2,470 0.7
Cargo 874 825 6.0
Other revenues 2,172 1,989 9.2
--------- --------
---------
Total operating revenues 23,766 22,935 3.6
--------- -------- ---------
Expenses
Aircraft fuel 9,014 6,670 35.1
Wages, salaries and benefits 6,655 6,770
(1.7)
Other rentals and landing fees 1,298 1,278
1.6
Depreciation and amortization 1,207 1,202
0.4
Maintenance, materials and repairs 1,237 1,057 17.0
Commissions, booking fees and credit
card expense 997 1,028 (3.1)
Aircraft rentals 492 591 (16.7)
Food service 518 534 (3.0)
Special charges 1,213 63 *
Other operating expenses 3,024 2,777 8.9
--------- --------
---------
Total operating expenses 25,655 21,970 16.8
--------- -------- ---------
Operating Income (1,889) 965 *
Other Income (Expense)
Interest income 181 337 (46.4)
Interest expense (756) (914) (17.2)
Interest capitalized 33 20 68.1
Miscellaneous - net 360 96 *
--------- -------- ---------
(182) (461) (60.5)
-------- ---------
Income/(Loss) Before Income Taxes (2,071) 504 *
---------
Income tax - - -
--------- -------- ---------
Net Income $(2,071) $504 *
Earnings/(Loss) Per Share
Basic (7.98) $2.06
========= ========
Diluted (7.98) $1.78
========= ========
Number of Shares Used in Computation
Basic 259 245
Diluted 259 299
* Greater than 100%
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
Twelve Months Ended
December 31,
-------------------- Percent
2008 2007 Change
---------- ---------
-----------
American Airlines, Inc. Mainline Jet Operations Revenue passenger miles (millions) 131,757 138,453 (4.8) Available seat miles (millions) 163,532 169,906 (3.8) Cargo ton miles (millions) 2,005 2,122 (5.5) Passenger load factor 80.6% 81.5% (0.9)
pts
Passenger revenue yield per passenger
mile (cents) 13.84 12.75 8.6
Passenger revenue per available seat
mile (cents) 11.15 10.39 7.3
Cargo revenue yield per ton mile (cents) 43.59 38.86 12.2
Operating expenses per available seat
mile, excluding Regional Affiliates
(cents) (1) 13.87 11.38 21.9
Fuel consumption (gallons, in millions) 2,694 2,834 (4.9)
Fuel price per gallon (cents) 302.6 212.1 42.7
Regional Affiliates
Revenue passenger miles (millions) 8,846 9,848 (10.2)
Available seat miles (millions) 12,603 13,414 (6.0)
Passenger load factor 70.2% 73.4% (3.2) pts
AMR Corporation
Average Equivalent Number of Employees
American Airlines 70,900 71,800
Other 13,200 13,700
--------- ---------
Total 84,100 85,500
(1) Excludes $3.1 billion and $2.8 billion of expense incurred related
to Regional Affiliates in 2008 and 2007, respectively.
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
OPERATING STATISTICS BY REGIONAL ENTITY
(excluding special items)
American Airlines, Inc. Twelve Months Ended December 31, 2008
-------------------------------------------
Entity Results RASM(1) Y-O-Y ASMs(2) Y-O-Y
(cents) Change (billions) Change
-------- -------- -------- --------
DOT Domestic 10.81 5.7% 101.9 (6.1)%
International 11.71 10.4 61.7 0.5
DOT Latin America 12.47 12.2 30.3 2.2
DOT Atlantic 10.96 7.0 24.6 (1.4)
DOT Pacific 11.04 13.6 6.7 (0.4)
American Airlines, Inc. Twelve Months Ended December 31, 2008
------------------------------------------
Entity Results Y-O-Y
Load Factor Change Yield Y-O-Y
(pts) (pts) (cents) Change
-------- -------- -------- --------
DOT Domestic 81.8 (1.0) 13.22 7.0%
International 78.6 (0.6) 14.91 11.3
DOT Latin America 77.8 0.3 16.03 11.7
DOT Atlantic 78.6 (1.6) 13.94 9.1
DOT Pacific 81.8 (1.1) 13.49 15.1
OPERATING STATISTICS BY REGIONAL ENTITY
(including special items)
American Airlines, Inc. Twelve Months Ended December 31, 2008
--------------------------------------------
Entity Results RASM(1) Y-O-Y ASMs(2) Y-O-Y
(cents) Change (billions) Change
-------- -------- ------------ --------
DOT Domestic 10.81 5.5% 101.9 (6.1)%
International 11.71 10.1 61.7 0.5
DOT Latin America 12.47 11.9 30.3 2.2
DOT Atlantic 10.96 6.6 24.6 (1.4)
DOT Pacific 11.04 13.2 6.7 (0.4)
American Airlines, Inc. Twelve Months Ended December 31, 2008
------------------------------------------
Entity Results Y-O-Y
Load Factor Change Yield Y-O-Y
(pts) (pts) (cents) Change
------- -------- --------- --------
DOT Domestic 81.8 (1.0) 13.22 6.8%
International 78.6 (0.6) 14.91 11.0
DOT Latin America 77.8 0.3 16.03 11.5
DOT Atlantic 78.6 (1.6) 13.94 8.8
DOT Pacific 81.8 (1.1) 13.49 14.7
(1) Revenue per Available Seat Mile
(2) Available Seat Miles
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
American Airlines, Inc. Mainline Jet Operations Three Months Ended
December 31,
--------------------
(in millions, except as noted) 2008 2007
--------- ---------
Passenger revenue per available seat mile, (cents) 10.76 10.29
Less: Impact of special items (cents) - 0.09
--------- ---------
Passenger revenue per available seat mile,
excluding impact of special items (cents) 10.76 10.20
========= =========
Percent change 5.5%
Three Months Ended
American Airlines, Inc. Mainline Jet Operations December 31,
(in millions, except as noted) --------------------
2008 2007
--------- ---------
Passenger yield (cents) 13.74 12.83
Less: Impact of special items (cents) - 0.12
--------- ---------
Passenger yield, excluding impact of special
items (cents) 13.74 12.71
========= =========
Percent change 8.1%
Three Months Ended
December 31,
AMR Corporation Consolidated --------------------
(in millions, except as noted) 2008 2007
--------- ---------
Passenger revenue per available seat mile (cents) 11.33 10.87
Less: Impact of special item (cents) - 0.09
--------- ---------
Passenger revenue per available seat mile,
excluding special item (cents) 11.33 10.78
========= =========
Percent change 5.1%
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
Three Months Ended
AMR Corporation Consolidated December 31,
--------------------
(in millions, except as noted) 2008 2007
--------- ---------
Total operating revenue (millions) 5,469 5,683
Less: Impact of special items (millions) - 39
--------- ---------
Total operating revenue, excluding special
items (millions) 5,469 5,644
========= =========
Percent change (3.1)%
Year Ended
December 31,
AMR Corporation Consolidated --------------------
(in millions, except as noted) 2008 2007
--------- ---------
Total operating revenue (millions) 23,766 22,935
Less: Impact of special items (millions) - 39
--------- ---------
Total operating revenue, excluding special
items (millions) 23,766 22,895
========= =========
Percent change 3.8%
AMR Corporation Consolidated Three Months Ended
December 31,
--------------------
(in millions, except as noted) 2008 2007
---------
---------
Total passenger revenue (millions) 4,728 4,958
Less: Impact of special items (millions) - 39
---------
---------
Total operating revenue, excluding special
items (millions) 4,728 4,919
========= =========
Percent change (3.9)%
AMR Corporation Three Months Ended
December 31,
--------------------
(in millions, except as noted) 2008 2007
---------
---------
Operating expenses per available seat mile (cents) 13.58 12.61
Less: Impact of special item (cents) 0.30 0.14
---------
---------
Operating expenses per available seat mile,
excluding special item (cents) 13.28 12.47
--------- ---------
Percent change 6.5%
Less: Fuel expense per available seat mile (cents) 4.36 4.11
---------
---------
Operating expenses per available seat mile,
excluding fuel expense and special item (cents) 8.92 8.36
========= =========
Percent change 6.6%
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
American Airlines, Inc. Mainline Jet Operations Three Months Ended
December 31,
--------------------
(in millions, except as noted) 2008 2007
--------- ---------
Total operating expenses $5,680 $5,796
Less: Operating expenses incurred related to
Regional Affiliates 640 717
--------- ---------
Operating expenses excluding expenses incurred
related to Regional Affiliates $5,041 $5,079
American mainline jet operations available
seat miles 38,797 42,297
Operating expenses per available seat mile,
excluding Regional Affiliates (cents) 12.99 12.01
Less: Impact of special items (cents) 0.32 0.15
--------- ---------
Operating expenses per available seat mile,
excluding impact of special items (cents) 12.67 11.86
========= =========
Percent change 6.8%
American Airlines , Inc. Mainline Jet Operations
Three Months Ended
December 31,
--------------------
(in millions, except as noted) 2008 2007
--------- ---------
Total operating expenses $5,680 $5,796
Less: Operating expenses incurred related to
Regional Affiliates 640 717
--------- ---------
Operating expenses excluding expenses incurred
related to Regional Affiliates $5,041 $5,079
American mainline jet operations available
seat miles 38,797 42,297
Operating expenses per available seat mile,
excluding Regional Affiliates (cents) 12.99 12.01
Less: Impact of special items (cents) 0.32 0.15
Less: Fuel cost per available seat mile (cents) 4.26 3.99
--------- ---------
Operating expenses per available seat mile,
excluding impact of special items and the
cost of fuel (cents) 8.41 7.87
========= =========
Percent change 6.8%
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.
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
AMR Corporation
Calculation of Net Debt
As of December 31
-----------------
(in millions, except as noted) 2008 2007
------- -------
Current and long-term debt $10,269 $10,315
Current and long-term capital lease obligations 689 828
Principal amount of certain airport facility
tax-exempt bonds and the present value of
aircraft operating lease obligations 4,180 4,424
------- -------
15,138 15,567
Less: Unrestricted cash and short-term investments 3,107 4,535
------- -------
Net Debt $12,031 $11,032
======= =======
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.
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
Estimate for
American Airlines, Inc. Mainline Jet Operations Year Ended
December 31,
------------------
(in millions, except as noted) 2009 2008
------- -------
Operating expenses per available seat mile,
excluding Regional Affiliates (cents) 12.28 13.87
Less: Impact of special items (cents) - 0.73
------- -------
Operating expenses per available seat mile,
excluding Regional Affiliates, special items(cents) 12.28 13.14
======= =======
Percent change (6.6%)
Less: Fuel expense per available seat mile (cents) 3.37 4.99
------- -------
Operating expenses per available seat mile,
excluding Regional Affiliates, special items,
fuel expense (cents) 8.91 8.15
======= =======
Percent change 9.2%
Estimate for
American Airlines, Inc. Mainline Jet Operations Three Months Ended
March 31,
------------------
(in millions, except as noted) 2009 2008
------- -------
Operating expenses per available seat mile,
excluding Regional Affiliates (cents) 12.27 12.63
Less: Impact of special items (cents) - -
------- -------
Operating expenses per available seat mile,
excluding Regional Affiliates, special items
(cents) 12.27 12.63
======= =======
Percent change (2.9)%
Less: Fuel expense per available seat mile (cents) 3.33 4.52
------- -------
Operating expenses per available seat mile,
excluding Regional Affiliates, special items,
fuel expense (cents) 8.94 8.11
======= =======
Percent change 10.2%
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
Estimate for
Year Ended
AMR Corporation December 31,
------------------
(in millions, except as noted) 2009 2008
------- -------
Operating expenses per available seat mile (cents) 12.84 14.57
Less: Impact of special items (cents) - 0.75
------- -------
Operating expenses per available seat mile,
excluding special items(cents) 12.84 13.82
======= =======
Percent change (7.1)%
Less: Fuel expense per available seat mile
(cents) 3.48 5.12
------- -------
Operating expenses per available seat mile,
excluding special items, fuel expense (cents) 9.36 8.70
======= =======
Percent change 7.6%
Estimate for
Three Months Ended
AMR Corporation March 31,
------------------
(in millions, except as noted) 2009 2008
------- -------
Operating expenses per available seat mile (cents) 12.90 13.32
------- -------
Less: Impact of special items (cents) - -
Operating expenses per available seat mile,
excluding special items(cents) 12.90 13.32
======= =======
Percent change (3.2)%
Less: Fuel expense per available seat mile (cents) 3.44 4.64
------- -------
Operating expenses per available seat mile,
excluding special items, fuel expense (cents) 9.46 8.68
======= =======
Percent change 9.0%
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
AMR Corporation
Reclassification of AAdvantage Mileage Third-Party
Sales Revenue
Three Months Ended
March 31, 2007
-------------------------
(in millions, except as noted) As Reported
Reclassified
-----------
------------
Passenger revenue -
$4,176 Other revenues 342 492 ----------- ------------ Total $4,668 $4,668 =========== ============ Available seat miles 41,691 41,691 =========== ============ Passenger revenue per available seat mile (cents) 10.38 10.02 Three Months Ended June 30, 2007 ------------------------- (in millions, except as noted) As Reported Reclassified ----------- ------------ Passenger revenue - American Airlines $4,673 $4,525 Other revenues 348 496 ----------- ------------ Total $5,021 $5,021 =========== ============ Available seat miles 42,647 42,647 =========== ============ Passenger revenue per available seat mile (cents) 10.96 10.61 Three Months Ended September 30, 2007 ------------------------- (in millions, except as noted) As Reported Reclassified ------------ ----------- Passenger revenue - American Airlines $4,750 $4,598 Other revenues 352 504 ------------ ----------- Total $5,102 $5,102 ============ =========== Available seat miles 43,271 43,271 ============ =========== Passenger revenue per available seat mile (cents) 10.98 10.63 Three Months Ended December 31, 2007 ------------------------- (in millions, except as noted) As Reported Reclassified ------------ ------------ Passenger revenue - American Airlines $4,486 $4,352 Other revenues 363 497 ------------ ------------ Total $4,849 $4,849 ============ ============ Available seat miles 42,297 42,297 ============ ============ Passenger revenue per available seat mile (cents) 10.61 10.29 AMR CORPORATION NON-GAAP AND OTHER RECONCILIATIONS (Unaudited) AMR Corporation Impact of Special Items Three Months Ended (in millions, except per share amounts) December 31, 2008 ------------------------- Amount EPS ------------ ----------- Net income/(loss) $(340) $(1.22) Impact of special items 126 0.45 ----------- ----------- Income/(loss) excluding special items $(214) $(0.77) ============ =========== AMR Corporation Impact of Special Items Three Months Ended (in millions, except per share amounts) December 31, 2007 ------------------------- Amount EPS ------------ ----------- Net income/(loss) $(69) $(0.28) Impact of special items (115) (0.46) ------------ ----------- Income/(loss) excluding special items $(184) $(0.74) ============ =========== Note: The Company believes income excluding special items assists investors in understanding the impact of special items on the Company's operations. AMR CORPORATION NON-GAAP AND OTHER RECONCILIATIONS (Unaudited) AMR Corporation Impact of Special Items Year Ended (in millions, except per share amounts) December 31, 2008 ------------------------- Amount EPS ------------ ------------ Net income/(loss) $(2,071) $(7.98) Impact of special items 885 3.41 ------------ ------------ Income/(loss) excluding special items $(1,186) $(4.57) ============ ============ AMR Corporation Impact of Special Items Year Ended (in millions, except per share amounts) December 31, 2007 ------------------------- Amount EPS ------------ ------------ Net income $504 $1.78 Impact of special items (84) (0.28) ------------ ------------ Income excluding special items $420 $1.50 ============
============
Note: The Company believes income excluding special items assists
investors in understanding the impact of special items on the Company's
operations.
Current
SOURCE AMR Corporation
CONTACT:
Andy Backover
Corporate Communications of American Airlines,
Inc.
+1-817-967-1577
corp.comm@aa.com