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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_____________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of earliest event
reported: October 19, 1994
AMR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-8400 75-1825172
(State of (Commission File Number) (IRS Employer
Incorporation) Identification
No.)
4333 Amon Carter Blvd. Fort Worth, Texas 76155
(Address of principal executive offices) (Zip Code)
(817) 963-1234
(Registrant's telephone number)
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Item 5. Other Events.
Registrant issued a press release, dated October 19,
1994, reporting its financial results for the third quarter of
1994 and certain financial information for the Registrant.
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Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit No. Description
28 Press release dated October 19,
1994, reporting Registrant's
financial results for the third
quarter of 1994 and certain
financial information for the
Registrant.
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Contact: Al Marucci
Corporate Communications
Mail Drop 5575
P.O. Box 619616
DFW Airport, Texas 75261-9616
(817) 931-0177
FOR RELEASE: Wednesday, October 19, 1994
Buoyed by a stronger U.S. economy, as well as rebounding
economic growth abroad, AMR Corporation, parent company of
American Airlines, Inc., today reported third quarter net
earnings of $205 million ($188 million after preferred stock
dividends), or $2.47 per common share ($2.27 fully diluted).
The third quarter 1994 results compare with net earnings of
$118 million, or $1.33 per common share after preferred stock
dividends, for the same period in 1993. The 1993 results include
an extraordinary after-tax loss of $7 million related to the
early retirement of debt.
In addition to improving global economies, AMR attributed
the substantial year-over-year earnings gain to strong showings
on both the revenue and cost sides of the ledger. Operating
revenues increased 0.8 percent to $4.23 billion despite a 5.0
percent year-over-year capacity decline at AMR's largest unit,
American Airlines' Passenger Division. The company cited the
strength of its marketing programs, its
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extensive route network, and the superior performance of its
employees as key factors in mitigating the effects of sub-optimal
industry pricing.
AMR's revenue performance was also enhanced by a 15.2
percent revenue increase at AMR Eagle, Inc., the company's
regional airline affiliate, as well as by a 4.5 percent revenue
increase at the Cargo Division. Additionally, the company's
information technology unit, The SABRE Group, boosted its
revenues by 10.4 percent, and its Management Services Group
increased revenues by 13.3 percent.
AMR's operating expenses declined 2.2 percent in the quarter
to $3.74 billion, due largely to aggressive cost control efforts
and a 3.2 percent drop in the price of jet fuel. However, pay
and benefit costs per employee continued to rise.
The combination of improved revenues and lower costs led to
operating earnings of $489 million in the quarter, an improvement
of 31.5 percent year over year.
"We are heartened by these improved results," said AMR's
Chairman, Robert L. Crandall. "They are a reflection of great
progress in many parts of our operation. Most explicitly, they
are a commentary on the hard work and commitment of our people,
who are offering our customers first-rate service.
"In light of our earnings, some may ask if the company still
needs to change," he said. "The answer is that it clearly does."
Crandall noted that low-cost carriers now compete with
American Airlines for almost 40 percent of its domestic traffic
on nonstop routes, a figure which he said is still growing
rapidly. Thus, he said, "Our biggest challenge still lies ahead.
To be successful in the long term, we must structure our company
to be much more cost competitive than it is today. Our objective
must be to report satisfactory financial results, not just in a
single quarter, but on a regular basis."
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For the first nine months of 1994, AMR recorded net earnings
of $351 million, or $3.95 per common share after preferred stock
dividends. This compares with net earnings of $143 million, or a
$1.30 per common share after preferred stock dividends, for the
same nine-month period in 1993.
For the nine months, the 1994 results include a favorable
adjustment to revenues of $35 million ($22 million after tax, or
$0.28 per common share) produced by a change in the company's
estimate of the usage patterns of miles awarded by participating
companies in American's AAdvantage frequent flyer program. The
nine-month results for 1993 include a $125 million charge ($79
million after-tax) for the retirement of DC-10 aircraft, and a
positive $115 million adjustment to revenues ($67 million net of
related commission expense and taxes) for a change in estimate
related to passenger revenues.
Segment Information
Pre-tax earnings for third quarter 1994 in the Air
Transportation Group, which includes American Airlines, Inc.'s
Passenger and Cargo Divisions and AMR Eagle, Inc. were $226
million, which produced a pre-tax margin of 5.8 percent; The
SABRE Group, which includes AMR's information technology
businesses, had pre-tax earnings of $98 million, a pre-tax margin
of 24.9 percent; and the Management Services Group, which
includes AMR's airline management, aviation services, training,
consulting and investment service activities, posted pre-tax
income of $12 million, resulting in a pre-tax margin of 8.8
percent for that unit.
These results compare with third quarter 1993 pre-tax
earnings of $134 million in the Air Transportation Group, a
margin of 3.4 percent; pre-tax earnings of $84 million in The
SABRE Group, a margin of 23.6 percent; and pre-tax earnings of $5
million in the
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Management Services Group, which resulted in a pre-tax margin of
4.2 percent.
For the nine-month period in 1994, pre-tax earnings for the
Air Transportation Group were $274 million, a margin of 2.4
percent; The SABRE Group had pre-tax earnings of $292 million, a
margin of 25.0 percent; and the Management Services Group
recorded pre-tax earnings of $20 million, a margin of 5.1
percent.
Results for January-September 1993 included pre-tax earnings
of $24 million in the Air Transportation Group, a pre-tax margin
of 0.2 percent; pre-tax earnings of $237 million in The SABRE
Group, a margin of 22.9 percent; and $13 million pre-tax earnings
in the Management Services Group, a margin of 3.9 percent.
American Airlines' Passenger and Cargo Division Results
American's Passenger Division available seat miles (ASMs, a
measure of capacity) decreased 5.0 percent, from 41.81 billion in
third quarter 1993 to 39.74 billion this year. For the nine
months, ASMs decreased 6.3 percent, from 122.15 billion in 1993
to 114.40 billion in 1994.
American's Passenger Division flew 27.01 billion revenue
passenger miles (RPMs, the number of seats per mile filled by
passengers), in 1994's third quarter, up 1.5 percent from the
26.62 billion flown in third quarter 1993. For the nine months,
RPMs decreased 1.1 percent, from 74.66 billion in 1993 to 73.83
billion in 1994.
American's Passenger Division third quarter load factor (the
percentage of seats filled with passengers) of 68.0 percent was
above the 63.7 percent reported for
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the same period in 1993. For the nine-month period, load factor
increased from 61.1 percent in 1993 to 64.5 percent this year.
American's Passenger Division yield (the average amount one
passenger pays to fly one mile), decreased 3.6 percent, from
12.95 cents in third quarter 1993 to 12.48 cents for the same
period this year. For the nine months, yield fell to 13.09 cents
in 1994 compared with 13.47 cents for the same period in 1993.
American's Passenger Division passenger revenue per
available seat mile (the average amount of revenue earned per
seat, per mile) increased 2.9 percent in the third quarter, from
8.24 cents in 1993 to 8.48 cents this year. For the nine months,
passenger revenue per available seat mile was 8.45 cents in 1994,
a 2.7 percent increase from 8.23 cents in 1993.
American's Passenger Division operating expense per
available seat mile (the average cost to fly one seat for one
mile) in third quarter 1994 was 8.08 cents, a 0.2 percent
increase from the same period a year ago. For the nine-month
period, operating expenses per available seat mile rose 1.5
percent, from 8.24 cents in 1993 to 8.36 cents this year.
Cargo ton miles increased from 454 million in third quarter
1993 to 504 million this year. For the nine months, cargo ton
miles were 1.44 billion in 1994, up 8.5 percent from 1.33 billion
last year.
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AMR CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Three Months Ended
September 30, Percent
1994 1993 Change
Revenues
Air Transportation Group:
Passenger - American Airlines $ 3,370 $ 3,447 (2.2)
- AMR Eagle 220 191 15.2
Cargo 163 156 4.5
Other 170 134 26.9
3,923 3,928 (0.1)
The SABRE Group 393 356 10.4
AMR Management Services Group 136 120 13.3
Less: Intergroup revenues (219) (205) 6.8
Total operating revenues 4,233 4,199 0.8
Expenses
Wages, salaries and benefits 1,391 1,332 4.4
Aircraft fuel 421 464 (9.3)
Commissions to agents 346 401 (13.7)
Depreciation and amortization 298 293 1.7
Other rentals and landing fees 216 226 (4.4)
Aircraft rentals 172 186 (7.5)
Food service 172 187 (8.0)
Maintenance materials and repairs 149 160 (6.9)
Other operating expenses 579 578 0.2
Total operating expenses 3,744 3,827 (2.2)
Operating Income 489 372 31.5
Other Income (Expense)
Interest income 13 13 -
Interest expense (157) (164) (4.3)
Interest capitalized 6 11 (45.5)
Miscellaneous - net (15) (9) 66.7
(153) (149) 2.7
Earnings Before Income Taxes 336 223 50.7
Income tax provision 131 98 33.7
Net Earnings Before 205 125 64.0
Extraordinary Loss Net of Tax - (7) (100.0)
Net Earnings 205 118 73.7
Preferred stock dividends 17 16 6.2
Earnings Applicable to
Common Shares $ 188 $ 102 84.3
Earnings Per Common Share:
Primary:
Before Extraordinary Loss $ 2.47 $ 1.43
Extraordinary Loss - (0.10)
Net Earnings $ 2.47 $ 1.33
Fully diluted:
Before Extraordinary Loss $ 2.27 $ 1.34
Extraordinary Loss - (0.08)
Net Earnings $ 2.27 $ 1.26
Number of Shares Used in
Computation:
Primary 76 76
Fully diluted 90 98
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AMR CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Nine Months Ended Percent
September 30,
1994 1993 Change
Revenues
Air Transportation Group:
Passenger - American Airlines(1) $ 9,665 $ 10,058 (3.9)
- AMR Eagle 608 536 13.4
Cargo 484 472 2.5
Other 458 402 13.9
11,215 11,468 (2.2)
The SABRE Group 1,167 1,033 13.0
AMR Management Services Group 394 331 19.0
Less: Intergroup revenues (634) (607) 4.4
Total operating revenues 12,142 12,225 (0.7)
Expenses
Wages, salaries and benefits 4,155 4,008 3.7
Aircraft fuel 1,204 1,434 (16.0)
Commissions to agents 1,011 1,112 (9.1)
Depreciation and amortization 938 889 5.5
Other rentals and landing fees 633 652 (2.9)
Aircraft rentals 523 556 (5.9)
Food service 505 537 (6.0)
Maintenance materials and repairs 441 506 (12.8)
Other operating expenses 1,683 1,679 0.2
Total operating expenses 11,093 11,373 (2.5)
Operating Income 1,049 852 23.1
Other Income (Expense)
Interest income 26 45 (42.2)
Interest expense (463) (507) (8.7)
Interest capitalized 17 41 (58.5)
Miscellaneous - net (2) (43) (157) (72.6)
(463) (578) (19.9)
Earnings Before Income Taxes 586 274 *
Income tax provision 235 124 89.5
Net Earnings Before
Extraordinary Loss 351 150 *
Extraordinary Loss Net of Tax(3) - (7) (100.0)
Net Earnings 351 143 *
Preferred stock dividends 50 43 16.3
Earnings Applicable to
Common Shares $ 301 $ 100 *
Earnings Per Common Share
Primary:
Before Extraordinary Loss $ 3.95 $ 1.40
Extraordinary Loss - (0.10)
Net Earnings $ 3.95 $ 1.30
Fully diluted:
Before Extraordinary Loss $ 3.89 $ 1.40
Extraordinary Loss - (0.10)
Net Earnings $ 3.89 $ 1.30
Number of Shares Used in
Computation
Primary 76 76
Fully diluted 90 76
* Exceeds 100%.
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AMR CORPORATION
FINANCIAL HIGHLIGHTS
(in millions)
(Unaudited)
ATG TSG MSG AMR
Three Months Ended
September 30, 1994:
Revenues $ 3,923 $ 393 $ 136 $ 4,233
Earnings Before Income Taxes 226 98 12 336
Pre-tax Margin 5.8% 24.9% 8.8% 7.9%
Three Months Ended
September 30, 1993:
Revenues $ 3,928 $ 356 $ 120 $ 4,199
Earnings Before Income Taxes 134 84 5 223
Pre-tax Margin 3.4% 23.6% 4.2% 5.3%
Nine Months Ended
September 30, 1994:
Revenues $ 11,215 $ 1,167 $ 394 $ 12,142
Earnings Before Income Taxes 274 292 20 586
Pre-tax Margin 2.4% 25.0% 5.1% 4.8%
Nine Months Ended
September 30, 1993:
Revenues $ 11,468 $ 1,033 $ 331 $ 12,225
Earnings Before Income Taxes 24 237 13 274
Pre-tax Margin 0.2% 22.9% 3.9% 2.2%
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AMR CORPORATION
FINANCIAL HIGHLIGHTS
(in millions)
(Unaudited)
Three Months Ended Percent
September 30,
1994 1993 Change
Air Transportation Group
Revenues
Passenger - American Airlines $ 3,370 $ 3,447 (2.2)
- AMR Eagle 220 191 15.2
Cargo 163 156 4.5
Other 170 134 26.9
3,923 3,928 (0.1)
Expenses
Wages, salaries and benefits 1,226 1,200 2.2
Aircraft fuel 421 464 (9.3)
Commissions to agents 346 401 (13.7)
Depreciation and amortization 242 238 1.7
Other operating expenses 1,323 1,352 (2.1)
Total operating expenses 3,558 3,655 (2.7)
Operating Income 365 273 33.7
Other Income (Expense) (139) (139) -
Earnings Before Income Taxes $ 226 $ 134 68.7
The SABRE Group
Revenues $ 393 $ 356 10.4
Expenses
Wages, salaries and benefits 124 105 18.1
Depreciation and amortization 44 44 -
Other operating expenses 115 122 (5.7)
Total operating expenses 283 271 4.4
Operating Income 110 85 29.4
Other Income (Expense) (12) (1) *
Earnings Before Income Taxes $ 98 $ 84 16.7
AMR Management Services Group
Revenues $ 136 $ 120 13.3
Expenses
Wages, salaries and benefits 41 27 51.9
Other operating expenses 81 79 2.5
Total operating expenses 122 106 15.1
Operating Income 14 14 -
Other Income (Expense) (2) (9) (77.8)
Earnings Before Income Taxes $ 12 $ 5 *
* Exceeds 100%.
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AMR CORPORATION
FINANCIAL HIGHLIGHTS
(in millions)
(Unaudited)
Nine Months Ended Percent
September 30,
1994 1993 Change
Air Transportation Group
Revenues
Passenger - American Airlines(1) $ 9,665 $ 10,058 (3.9)
- AMR Eagle 608 536 13.4
Cargo 484 472 2.5
Other 458 402 13.9
11,215 11,468 (2.2)
Expenses
Wages, salaries and benefits 3,669 3,622 1.3
Aircraft fuel 1,204 1,434 (16.0)
Commissions to agents 1,011 1,112 (9.1)
Depreciation and amortization 768 728 5.5
Other operating expenses 3,865 3,996 (3.3)
Total operating expenses 10,517 10,892 (3.4)
Operating Income 698 576 21.2
Other Income (Expense) (2) (424) (552) 23.2
Earnings Before Income Taxes $ 274 $ 24 *
The SABRE Group
Revenues $ 1,167 $ 1,033 13.0
Expenses
Wages, salaries and benefits 367 309 18.8
Depreciation and amortization 135 131 3.1
Other operating expenses 351 352 (0.3)
Total operating expenses 853 792 7.7
Operating Income 314 241 30.3
Other Income (Expense) (22) (4) *
Earnings Before Income Taxes $ 292 $ 237 23.2
AMR Management Services Group
Revenues $ 394 $ 331 19.0
Expenses
Wages, salaries and benefits 119 77 54.5
Other operating expenses 238 219 8.7
Total operating expenses 357 296 20.6
Operating Income 37 35 5.7
Other Income (Expense) (17) (22) 22.7
Earnings Before Income Taxes $ 20 $ 13 53.8
* Exceeds 100%.
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AMR CORPORATION
NOTES TO CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
1.Included in Passenger Revenues for the nine months ended
September 30, 1994, is a favorable adjustment of $35 million
produced by a change in the Company's estimate of the usage
patterns of miles awarded by participating companies in
American's AAdvantage frequent flyer program. Included in
Passenger Revenues for the nine months ended September 30,
1993, is a favorable adjustment of $115 million resulting from
a change in estimate relating to certain earned passenger
revenues.
2.Included in Miscellaneous - net for the nine months ended
September 30, 1993, is a $125 million charge related to the
retirement of 31 DC-10 aircraft. The charge represents the
Company's best estimate of the expected loss based upon the
anticipated method of disposition. However, should the
ultimate method of disposition differ, the actual loss could
be different than the amount estimated.
3.In the third quarter of 1993 AMR retired prior to maturity $59
million in face value of long-term debt. The retirement
resulted in an extraordinary loss of $7 million, net of tax
benefit of $5 million.
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Air Transportation Group
Operating Statistics
(Unaudited)
Three Months Ended Percent
September 30,
1994 1993 Change
American Airlines Passenger
Division:
Revenue passenger miles 27,011 26,622 1.5
(millions)
Available seat miles 39,736 41,812 (5.0)
(millions)
Passenger load factor 68.0% 63.7% 4.3 pts.
Passenger revenue yield
per passenger mile (cents) 12.48 12.95 (3.6)
Passenger revenue per
available seat mile (cents) 8.48 8.24 2.9
Operating expenses
per available seat mile (cents) 8.08 8.06 0.2
(cents)
Fuel consumption (gallons, in 711 765 (7.1)
millions)
Fuel price per gallon (cents) 56.9 58.8 (3.2)
American Airlines Cargo
Division:
Cargo ton miles (millions) 504 454 11.0
Revenue yield per ton mile 31.96 34.14 (6.4)
(cents)
AMR Eagle, Inc.
Revenue passenger miles millions) 692 595 16.3
Available seat miles (millions) 1,192 998 19.4
Passenger load factor 58.1% 59.6% (1.5) pts.
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Air Transportation Group
Operating Statistics
(Unaudited)
Nine Months Ended Percent
September 30,
1994 1993 Change
American Airlines Passenger
Division:
Revenue passenger miles 73,833 74,656 (1.1)
(millions)
Available seat miles 114,404 122,149 (6.3)
(millions)
Passenger load factor 64.5% 61.1% 3.4 pts.
Passenger revenue yield
per passenger mile (cents) 13.09 13.47 (2.8)
Passenger revenue per
available 8.45 8.23 2.7
seat mile (cents)
Operating expenses
per available seat mile (cents) 8.36 8.24 1.5
Fuel consumption (gallons, in 2,055 2,244 (8.4)
millions)
Fuel price per gallon (cents) 56.5 62.0 (8.9)
Operating aircraft at period-end 650 681 (4.6)
American Airlines Cargo
Division:
Cargo ton miles (millions) 1,441 1,328 8.5
Revenue yield per ton mile (cents) 33.17 35.27 (6.0)
AMR Eagle, Inc.
Revenue passenger miles (millions) 1,874 1,572 19.2
Available seat miles (millions) 3,308 2,850 16.1
Passenger load factor 56.7% 55.2% 1.5 pts.
Operating aircraft at period-end 275 275 -
AMR Corporation
Average Number of Equivalent
Employees
Air Transportation Group 90,600 94,100 (3.7)
The SABRE Group 11,800 11,200 5.4
AMR Management Services Group 7,300 5,500 32.7
Total 109,700 110,800 (1.0)
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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, thereunto duly
authorized.
AMR CORPORATION
/s/ Charles D. MarLett
Charles D. MarLett
Corporate Secretary
Dated: October 19, 1994
- 16 -
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1,000,000
QTR-3 9-MOS
DEC-31-1994 DEC-31-1994
SEP-30-1994 SEP-30-1994
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
4,233 12,142
4,233 12,142
0 0
3,744 11,093
0 0
0 0
157 463
336 586
131 235
205 351
0 0
0 0
0 0
205 351
2.47 3.95
2.27 3.89
